-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WzJ4QlevffFMnba6UNda4mSZ9s0rz2Ev0XxRTQ7IbfY1fQuTcn0G26cFMDmDr1xY UXq78GWLpcYcepp+NGSYGg== 0000836687-05-000569.txt : 20051026 0000836687-05-000569.hdr.sgml : 20051026 20051026172152 ACCESSION NUMBER: 0000836687-05-000569 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20051026 DATE AS OF CHANGE: 20051026 EFFECTIVENESS DATE: 20051101 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEPARATE ACCOUNT B OF ING USA ANNUITY LIFE INSURANCE CO CENTRAL INDEX KEY: 0000836687 IRS NUMBER: 000000000 STATE OF INCORPORATION: IA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 333-30180 FILM NUMBER: 051157818 BUSINESS ADDRESS: STREET 1: 1475 DUNWOODY DRIVE STREET 2: SUITE 400 CITY: WEST CHESTER STATE: PA ZIP: 19380-1478 BUSINESS PHONE: 610-425-3400 MAIL ADDRESS: STREET 1: 1475 DUNWOODY DRIVE STREET 2: P.O. BOX 2700 CITY: WEST CHESTER STATE: PA ZIP: 19380-2700 FORMER COMPANY: FORMER CONFORMED NAME: SEPARATE ACCOUNT B OF ING USA ANNUITY & LIFE INSURANCE CO DATE OF NAME CHANGE: 20031230 FORMER COMPANY: FORMER CONFORMED NAME: SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE CO DATE OF NAME CHANGE: 19930506 FORMER COMPANY: FORMER CONFORMED NAME: SPECIALTY MANAGERS SEPARATE ACCOUNT B DATE OF NAME CHANGE: 19910529 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEPARATE ACCOUNT B OF ING USA ANNUITY LIFE INSURANCE CO CENTRAL INDEX KEY: 0000836687 IRS NUMBER: 000000000 STATE OF INCORPORATION: IA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-05626 FILM NUMBER: 051157819 BUSINESS ADDRESS: STREET 1: 1475 DUNWOODY DRIVE STREET 2: SUITE 400 CITY: WEST CHESTER STATE: PA ZIP: 19380-1478 BUSINESS PHONE: 610-425-3400 MAIL ADDRESS: STREET 1: 1475 DUNWOODY DRIVE STREET 2: P.O. BOX 2700 CITY: WEST CHESTER STATE: PA ZIP: 19380-2700 FORMER COMPANY: FORMER CONFORMED NAME: SEPARATE ACCOUNT B OF ING USA ANNUITY & LIFE INSURANCE CO DATE OF NAME CHANGE: 20031230 FORMER COMPANY: FORMER CONFORMED NAME: SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE CO DATE OF NAME CHANGE: 19930506 FORMER COMPANY: FORMER CONFORMED NAME: SPECIALTY MANAGERS SEPARATE ACCOUNT B DATE OF NAME CHANGE: 19910529 485BPOS 1 n4landmark.txt REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on October 26, 2005 Registration Nos. 333-30180; 811-05626 - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. ___ [ ] Post-Effective Amendment No. 25 [X] and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. [X] (Check appropriate box or boxes) SEPARATE ACCOUNT B (Exact Name of Registrant) ING USA ANNUITY AND LIFE INSURANCE COMPANY (Name of Depositor) 1475 Dunwoody Drive West Chester, Pennsylvania 19380-1478 (Address of Depositor's Principal Executive Offices) (Zip Code) Depositor's Telephone Number, including Area Code (610) 425-3400 Linda E. Senker, Esq. James A. Shuchart, Esq. ING ING 1475 Dunwoody Drive 1475 Dunwoody Drive West Chester, PA 19380-1478 West Chester, PA 19380-1478 (610) 425-4139 (610) 425-3563 (Name and Address of Agent for Service) Approximate Date of Proposed Public Offering: As soon as practical after the effective date of the Registration Statement It is proposed that this filing will become effective (check appropriate box): [ ] immediately upon filing pursuant to paragraph (b) of Rule 485 [X] on November 1, 2005 pursuant to paragraph (b) of Rule 485 [ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485 [ ] on (date) pursuant to paragraph (a)(1) of Rule 485 If appropriate, check the following box: [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment. Title of Securities Being Registered: Interests in a separate account under flexible premium deferred variable annuity contracts. - -------------------------------------------------------------------------------- PART A - -------------------------------------------------------------------------------- ING USA Annuity and Life Insurance Company Separate Account B of ING USA Annuity and Life Insurance Company Prospectus Supplement Dated November 1, 2005 to your current variable annuity prospectus for Deferred Combination Variable and Fixed Annuity Contracts issued by ING USA Annuity and Life Insurance Company For use only in the Commonwealth of Massachusetts The information in this supplement updates and amends certain information contained in your prospectus. You should read and keep this supplement along with the prospectus. For Contracts issued in the Commonwealth of Massachusetts, the following provisions apply: 1. The Fixed Interest Division is not available. 2. TSA loans are not available. 3. The Nursing Home Surrender Charge Waiver is not available. ING USA Annuity and Life Insurance Company ING USA Annuity and Life Insurance Company is a stock company domiciled in Iowa. MA Supplement - 137952 11/01/2005 ING USA ANNUITY AND LIFE INSURANCE COMPANY SEPARATE ACCOUNT B OF ING USA ANNUITY AND LIFE INSURANCE COMPANY PROSPECTUS SUPPLEMENT DATED NOVEMBER 1, 2005 TO YOUR CURRENT VARIABLE ANNUITY PROSPECTUS FOR DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY CONTRACTS ISSUED BY ING USA ANNUITY AND LIFE INSURANCE COMPANY ("PROSPECTUSES") FOR USE ONLY IN THE STATE OF WASHINGTON The information in this supplement updates and amends certain information contained in your current variable annuity prospectus. You should read and keep this supplement along with the prospectus. For Contracts issued in the State of Washington, the following provisions apply: 1. The Fixed Account is not available. 2. The following amendments are made to the section entitled, "Minimum Guaranteed Income Benefit Rider (MGIB)": a. The Fixed Interest Division is designated as an Excluded Fund. b. The section entitled, "Determining the MGIB Charge Base" is amended as follows: The MGIB Charge Base is a percentage of the greatest sum of the MGIB Charge Base for Covered Funds and the MGIB Charge Base for Special Funds, on any date since the date on which the last charge was deducted, or the rider date for the first deduction. c. The quarterly charge for the MGIB rider is deducted only from the contract value of the subaccounts in which you are invested. No deduction will be made from the Fixed Interest Division. 3. The following describes the death benefit options for Contracts issued for delivery in the State of Washington. Other than as described below, please see the prospectus for a full description of your death benefit options and other Contract features. We use the Base Death Benefit to help determine the minimum death benefit payable under each of the death benefit options described below. You do not elect the Base Death Benefit. The Base Death Benefit is equal to the greater of: 1) the contract value; and 2) the cash surrender value. The STANDARD DEATH BENEFIT equals the GREATEST of the Base Death Benefit, the floor, and the Standard Minimum Guaranteed Death Benefit. WA--137954 1 of 4 11/01/2005 The Standard Minimum Guaranteed Death Benefit equals the initial premium payment, increased by premium payments after issue, and reduced by a pro-rata adjustment for any withdrawal. THE FLOOR FOR THE DEATH BENEFIT IS the total premium payments made under the Contract reduced by a pro-rata adjustment for any withdrawal. ENHANCED DEATH BENEFIT OPTIONS. Under the Enhanced Death Benefit options, if you die before the annuity start date, your beneficiary will receive the greater of the Standard Death Benefit and the Enhanced Death Benefit option elected. For purposes of calculating the 5.5% Solution Enhanced Death Benefit and the Max 5.5 Enhanced Death Benefit, certain investment portfolios, and the Fixed Account are designated as "Special Funds." For Contracts issued on or after May 1, 2003, the following investment options are designated as Special Funds: the ING Liquid Assets Portfolio; the ING Limited Maturity Bond Portfolio; the ING VP Intermediate Bond Portfolio; the ING PIMCO Core Bond Portfolio; the Fixed Account; the Fixed Interest Division; and the TSA Special Fixed Account. For Contracts issued before May 1, 2003, the ING VP Intermediate Bond Portfolio and the ING PIMCO Core Bond Portfolio are not designated as Special Funds. For Contracts issued on or after September 2, 2003, the ProFunds VP Rising Rates Opportunity Portfolio is designated as a Special Fund. We may, with 30 days notice to you, designate any investment portfolio as a Special Fund on existing contracts with respect to new premiums added to such investment portfolio and also with respect to new transfers to such investment portfolio. Selecting a Special Fund may limit or reduce the 5.5% Max Enhanced Death Benefit. For the period during which a portion of the contract value is allocated to a Special Fund, we may, at our discretion, reduce the mortality and expense risk charge attributable to that portion of the contract value. The reduced mortality and expense risk charge will be applicable only during that period. The 5.5% Solution is not available as a standalone death benefit, but the calculation is used to determine the Max 5.5 Enhanced Death Benefit. The 5.5% SOLUTION ENHANCED DEATH BENEFIT, equals the GREATEST of: 1) the Standard Death Benefit; 2) the floor; and 3) the sum of the contract value allocated to Special Funds and the 5.5% Solution Minimum Guaranteed Death Benefit for Non-Special Funds. The 5.5% Solution Minimum Guaranteed Death Benefit for Special and Non-Special Funds equals premiums, adjusted for withdrawals and transfers, accumulated at 5.5% until the attainment of age 80 and thereafter at 0%, subject to a floor as described below. Withdrawals of up to 5.5% per year of cumulative premiums are referred to as special withdrawals. Special withdrawals reduce the 5.5% Solution Minimum Guaranteed Death Benefit by the amount of contract value withdrawn. For any other withdrawals (withdrawals in excess of the amount available as a special withdrawal), a pro-rata adjustment to the 5.5% Solution Minimum Guaranteed Death Benefit is made. The amount of the pro-rata adjustment for withdrawals from Non-Special Funds will equal (a) times (b) divided by (c): where (a) is the 5.5% Solution Minimum Guaranteed Death Benefit for Non-Special Funds prior to the withdrawal; (b) is the contract value of the withdrawal; and (c) is the contract value allocated to Non-Special Funds before the withdrawal. The amount of the pro-rata adjustment for withdrawals from Special Funds will equal (a) times (b) divided by (c): where (a) is the 5.5% Solution Minimum Guaranteed Death Benefit for Special Funds prior to the withdrawal; (b) is the contract value of the withdrawal; and (c) is the contract value allocated to Special Funds before the withdrawal. WA--137954 2 of 4 11/01/2005 Transfers from Special to Non-Special Funds will reduce the 5.5% Solution Minimum Guaranteed Death Benefit for Special Funds on a pro-rata basis. The resulting increase in the 5.5% Solution Minimum Guaranteed Death Benefit in Non-Special Funds will equal the lesser of the reduction in the 5.5% Solution Minimum Guaranteed Death Benefit in Special Funds and the contract value transferred. Transfers from Non-Special to Special Funds will reduce the 5.5% Solution Minimum Guaranteed Death Benefit in Non-Special Funds on a pro-rata basis. The resulting increase in the 5.5% Solution Minimum Guaranteed Death Benefit for Special Funds will equal the reduction in the 5.5% Solution Minimum Guaranteed Death Benefit for Non-Special Funds. THE FLOOR FOR THE 5.5 % SOLUTION ENHANCED DEATH BENEFIT is determined by the same calculations described above for the 5.5% Solution Minimum Guaranteed Death Benefit except as follows: If you transfer contract value to a Special Fund, the minimum floor will not be reduced by the transfer. Instead, a portion of the floor (equal to the percentage of contract value transferred) just prior to the transfer will be frozen (with 0% subsequent growth) unless the contract value is transferred back to the Non-Special Funds. Upon such transfer back to Non-Special Funds, we will resume accumulating that portion of the floor at the 5.5% annual effective rate as described above, subject to the age limit described above. Similarly, for contract value allocated directly to Special Funds, that portion of the floor will be the contract value allocated, and will not accumulate while invested in Special Funds. Withdrawals will reduce the floor as described for the minimum guaranteed death benefit above. Your death benefit will be the greater of the floor and the death benefit determined as described above. The ANNUAL RATCHET ENHANCED DEATH BENEFIT equals the GREATER OF: 1) the Standard Death Benefit; and 2) the Annual Ratchet Minimum Guaranteed Death Benefit. The Annual Ratchet Minimum Guaranteed Death Benefit equals: 1) the initial premium payment; 2) increased dollar for dollar by any premium added after issue; 3) adjusted on each anniversary that occurs on or prior to attainment of age 90 to the greater of the Annual Ratchet Minimum Guaranteed Death Benefit from the prior anniversary (adjusted for new premiums and partial withdrawals) and the current contract value. Withdrawals reduce the Annual Ratchet Minimum Guaranteed Death Benefit on a pro-rata basis, based on the amount withdrawn. The amount of the pro-rata adjustment for withdrawals will equal (a) times (b) divided by (c): where (a) is the Annual Ratchet Minimum Guaranteed Death Benefit prior to the withdrawal; (b) is the contract value of the withdrawal; and (c) is the contract value before withdrawal. The MAX 5.5 ENHANCED DEATH BENEFIT equals the greater of the 5.5% Solution Enhanced Death Benefit and the Annual Ratchet Enhanced Death Benefit. Under this death benefit option, the 5.5% Solution Enhanced Death Benefit and the Annual Ratchet Enhanced Death Benefit are calculated in the same manner as if each were the elected benefit. Note: In all cases described above, the amount of the death benefit could be reduced by premium taxes owed and withdrawals not previously deducted. The enhanced death benefits may not be available in all states. DEATH BENEFIT FOR EXCLUDED FUNDS We will be designating certain investment portfolios as "Excluded Funds." Excluded Funds will include certain investment portfolios that, due to their volatility, will be excluded from the death benefit guarantees that might otherwise be provided. We may add new portfolios as Excluded Funds. WA--137954 3 of 4 11/01/2005 We may also reclassify an existing portfolio as an Excluded Fund or remove such classification upon 30 days notice to you. Such reclassification will apply only to amounts transferred or otherwise added to such portfolio after the effective date of the reclassification. Investment in Excluded Funds will impact your death benefit. For the period of time, and to the extent, that you allocate premium or contract value to Excluded Funds, your death benefit attributable to that allocation will equal the contract value of that allocation. Any guarantee of death benefit in excess of contract value otherwise provided with regard to allocations to Non-Excluded Funds, does not apply to allocations to Excluded Funds. The death benefit provided under the Contract may be reduced to the extent that you allocate premium or contract value to Excluded Funds. Transfers from Excluded Funds to Non-Excluded funds will reduce all death benefit components for Excluded Funds on a pro-rata basis. Except with respect to any maximum guaranteed death benefit, the resulting increase in the Non-Excluded Funds death benefit component will equal the lesser of the reduction in the death benefit for Excluded Funds and the contract value transferred. With respect to the maximum guaranteed death benefit, where applicable, the resulting increase in the Non-Excluded Funds maximum guaranteed death benefit will equal the reduction in the maximum guaranteed death benefit for Excluded Funds. Transfers from Non-Excluded Funds to Excluded Funds will reduce the Non-Excluded Funds death benefit components on a pro-rata basis. The resulting increase in the death benefit components of Excluded Funds will equal the reduction in the Non-Excluded Funds death benefit components. 4. The charges, fees and expenses are as described in the prospectus for the applicable variable annuity contract with the exception of the mortality and expense risk charges for the Max 5.5 Enhanced Death Benefit. The mortality and expense risk charges for the Max 5.5 Enhanced Death Benefit are as follows: - --------------------------------------------------------------------------- PRODUCT MAX 5.5 - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- Access 1.95% ESII* 1.65% Landmark** 1.90% Premium Plus 1.80% - --------------------------------------------------------------------------- * Includes Generations, Opportunities and Wells Fargo Opportunities ** Includes Wells Fargo Landmark - --------------------------------------------------------------------------- The mortality and expense risk charge is deducted each business day at the rate of 0.005395% (Access), 0.004558% (ESII), 0.005255% (Landmark) or 0.0049767% (Premium Plus) for each day since the previous business day. ING USA ANNUITY AND LIFE INSURANCE COMPANY ING USA Annuity and Life Insurance Company is a stock company domiciled in Iowa. WA--137954 4 of 4 11/01/2005 ING USA ANNUITY AND LIFE INSURANCE COMPANY AND ITS SEPARATE ACCOUNT B SUPPLEMENT DATED NOVEMBER 1, 2005 This supplement amends certain information contained in the most recent variable annuity prospectus. Please read it carefully and keep it with your variable annuity prospectus for future reference. ---------------------------------------------------------------------- THE "INDUSTRY DEVELOPMENTS - TRADING" SUB-SECTION OF THE PROSPECTUS IS HEREBY DELETED AND REPLACED WITH THE FOLLOWING: INDUSTRY DEVELOPMENTS - TRADING As with many financial services companies, the Company and its affiliates have received informal and formal requests for information from various state and federal governmental agencies and self-regulatory organizations in connection with inquiries and investigations of the products and practices of the financial services industry. In each case, the Company and its affiliates have been and are providing full cooperation. FUND REGULATORY ISSUES Since 2002, there has been increased governmental and regulatory activity relating to mutual funds and variable insurance products. This activity has primarily focused on inappropriate trading of fund shares, revenue sharing and directed brokerage, compensation, sales practices and suitability, arrangements with service providers, pricing, compliance and controls, and adequacy of disclosure. In addition to responding to governmental and regulatory requests on fund regulatory issues, ING management, on its own initiative, conducted, through special counsel and a national accounting firm, an extensive internal review of mutual fund trading in ING insurance, retirement, and mutual fund products. The goal of this review was to identify any instances of inappropriate trading in those products by third parties or by ING investment professionals and other ING personnel. The internal review identified several isolated arrangements allowing third parties to engage in frequent trading of mutual funds within the variable insurance and mutual fund products of certain affiliates of the Company, and identified other circumstances where frequent trading occurred despite measures taken by ING intended to combat market timing. Each of the arrangements has been terminated and disclosed to regulators, to the independent trustees of ING Funds (U.S.) and in Company reports previously filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended. As previously reported, ING Funds Distributors, LLC ("IFD"), the distributor of certain ING Funds (U.S.) and an affiliate of the Company, received notice from the staff of the National Association of Securities Dealers ("NASD") that the staff made a preliminary determination to recommend disciplinary action against IFD and one of its registered persons for violations of the NASD Conduct Rules and federal securities laws in connection with certain frequent trading arrangements. In September of 2005 IFD settled an administrative proceeding with the NASD regarding these arrangements. Under the terms of the Letter of Acceptance, Waiver and Consent ("AWC") with the NASD, under which IFD neither admitted nor denied the allegations or findings, IFD consented to the following sanctions: (i) a censure; (ii) a fine of $1.5 million; (iii) restitution of approximately $1.44 million to certain ING Funds (U.S.) for losses attributable to excessive trading described in the AWC; and (iv) agreement to make certification to the NASD regarding the review and establishment of certain procedures. IFD's settlement of this administrative proceeding is not material to the Company. ING USA - 137951 Page 1 of 2 November 2005 Other regulators, including the Securities and Exchange Commission ("SEC") and the New York Attorney General, are also likely to take some action with respect to certain ING affiliates before concluding their investigation of ING relating to fund trading. The potential outcome of such action is difficult to predict but could subject certain affiliates to adverse consequences, including, but not limited to, settlement payments, penalties, and other financial liability. It is not currently anticipated, however, that the actual outcome of such action will have a material adverse effect on ING or ING's U.S.-based operations, including the Company. ING has agreed to indemnify and hold harmless the ING Funds from all damages resulting from wrongful conduct by ING or its employees or from ING's internal investigation, any investigations conducted by any governmental or self-regulatory agencies, litigation or other formal proceedings, including any proceedings by the SEC. Management reported to the ING Funds Board that ING management believes that the total amount of any indemnification obligations will not be material to ING or ING's U.S.-based operations, including the Company. OTHER REGULATORY MATTERS The New York Attorney General and other regulators are also conducting broad inquiries and investigations involving the insurance industry. These initiatives currently focus on, among other things, compensation and other sales incentives, potential conflicts of interest, potential anti-competitive activity, marketing practices, certain financial reinsurance arrangements, and disclosure. It is likely that the scope of these investigations will further broaden before the investigations are concluded. U.S. affiliates of ING have received formal and informal requests in connection with such investigations, and are cooperating fully with each request for information. These initiatives may result in new legislation and regulation that could significantly affect the financial services industry, including businesses in which the Company is engaged. In light of these and other developments, U.S. affiliates of ING, including the Company, periodically review whether modifications to their business practices are appropriate. ING USA - 137951 Page 2 of 2 November 2005 - -------------------------------------------------------------------------------- ING USA ANNUITY AND LIFE INSURANCE COMPANY SEPARATE ACCOUNT B OF ING USA ANNUITY AND LIFE INSURANCE COMPANY DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY PROSPECTUS ING GOLDENSELECT LANDMARK - -------------------------------------------------------------------------------- NOVEMBER 1, 2005 This prospectus describes ING GoldenSelect Landmark, a group and individual deferred variable annuity contract (the "Contract") offered by ING USA Annuity and Life Insurance Company ("ING USA," the "Company," "we," "us" or "our"). The Contract is available in connection with certain retirement plans that qualify for special federal income tax treatment ("qualified Contracts") as well as those that do not qualify for such treatment ("non-qualified Contracts"). The Contract provides a means for you to invest your premium payments in one or more mutual fund investment portfolios. You may also allocate premium payments to our Fixed Account with guaranteed interest periods. Your contract value will vary daily to reflect the investment performance of the investment portfolio(s) you select and any interest credited to your allocations in the Fixed Account. For Contracts sold in some states, not all Fixed Interest Allocations or subaccounts are available. The investment portfolios available under your Contract are listed on the next page. You have a right to return a Contract within 10 days after you receive it for a refund of the adjusted contract value (which may be more or less than the premium payments you paid), or if required by your state, the original amount of your premium payment. Longer free look periods apply in some states and in certain situations. REPLACING AN EXISTING ANNUITY WITH THE CONTRACT MAY NOT BE BENEFICIAL TO YOU. YOUR EXISTING ANNUITY MAY BE SUBJECT TO FEES OR PENALTIES ON SURRENDER, AND THE CONTRACT MAY HAVE NEW CHARGES. This prospectus provides information that you should know before investing and should be kept for future reference. A Statement of Additional Information ("SAI"), dated April 29, 2005, has been filed with the Securities and Exchange Commission ("SEC"). It is available without charge upon request. To obtain a copy of this document, write to our Customer Service Center at P.O. Box 9271, Des Moines, Iowa 50306-9271 or call (800) 366-0066, or access the SEC's website (http://www.sec.gov). The table of contents of the SAI is on the last page of this prospectus and the SAI is made part of this prospectus by reference. THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN ANY SUBACCOUNT THROUGH A TRUST OR FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED BY ANY BANK OR BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. - -------------------------------------------------------------------------------- THE INVESTMENT PORTFOLIOS ARE LISTED ON THE NEXT PAGE. - -------------------------------------------------------------------------------- Landmark - 136957 The investment portfolios available under your Contract are: ING INVESTORS TRUST ING AllianceBerstein Mid Cap Growth Portfolio (Class S) ING American Funds Growth Portfolio ING American Funds Growth-Income Portfolio ING American Funds International Portfolio ING Capital Guardian Small/Midcap Portfolio (Class S) ING Capital Guardian U.S. Equities Portfolio (Class S) ING Eagle Asset Capital Appreciation Portfolio (Class S) ING Evergreen Health Sciences Portfolio (Class S) ING Evergreen Omega Portfolio (Class S) ING FMR(SM) Diversified Mid Cap Portfolio (Class S) ING FMR(SM) Earnings Growth Portfolio (Class S) ING Global Resources Portfolio (Class S) ING Goldman Sachs Tollkeeper(SM) Portfolio (Class S) ING Janus Contrarian Portfolio (Class S) ING JPMorgan Emerging Markets Equity Portfolio (Class S) ING JPMorgan Small Cap Equity Portfolio (Class S) ING JPMorgan Value Opportunities Portfolio (Class S) ING Julius Baer Foreign Portfolio (Class S) ING Legg Mason Value Portfolio (Class S) ING LifeStyle Aggressive Growth Portfolio (Class S1) ING LifeStyle Growth Portfolio (Class S1) ING LifeStyle Moderate Growth Portfolio (Class S1) ING LifeStyle Moderate Portfolio (Class S1) ING Liquid Assets Portfolio (Class S) ING Lord Abbett Affiliated Portfolio (Class S) ING MarketPro Portfolio (Class S) ING Marsico Growth Portfolio (Class S) ING Marisco International Opportunities Portfolio (Class S) ING Mercury Large Cap Growth Portfolio (Class S) ING Mercury Large Cap Value Portfolio (Class S) ING MFS Mid Cap Growth Portfolio (Class S) ING MFS Total Return Portfolio (Class S) ING MFS Utilities Portfolio (Class S) ING Oppenheimer Main Street Portfolio (Class S) ING PIMCO Core Bond Portfolio (Class S) ING PIMCO High Yield Portfolio (Class S) ING Pioneer Fund Portfolio (Class S) ING Pioneer Mid Cap Value Portfolio (Class S) ING Salomon Brothers All Cap Portfolio (Class S) ING T. Rowe Price Capital Appreciation Portfolio (Class S) ING T. Rowe Price Equity Income Portfolio (Class S) ING Templeton Global Growth Portfolio (Class S) ING UBS U.S. Allocation Portfolio (Class S) ING Van Kampen Equity Growth Portfolio (Class S) ING Van Kampen Global Franchise Portfolio (Class S) ING Van Kampen Growth and Income Portfolio (Class S) ING Van Kampen Real Estate Portfolio (Class S) ING VP Index Plus International Equity Portfolio (Class S) ING Wells Fargo Mid Cap Disciplined Portfolio (Class S) ING Wells Fargo Small Cap Disciplined Portfolio (Class S) ING PARTNERS, INC. ING Baron Small Cap Growth Portfolio (Service Class) ING Davis Venture Value Portfolio (Service Class) ING Fundamental Research Portfolio (Service Class) ING JPMorgan Fleming International Portfolio (Service Class) ING Oppenheimer Global Portfolio (Service Class) ING Salomon Brothers Aggressive Growth Portfolio (Service Class) ING UBS U.S. Large Cap Equity Portfolio (Service Class) ING Van Kampen Comstock Portfolio (Service Class) ING Van Kampen Equity and Income Portfolio (Service Class) ING VARIABLE INSURANCE TRUST ING VP Global Equity Dividend Portfolio ING VARIABLE PORTFOLIOS, INC. ING VP Index Plus LargeCap Portfolio (Class S) ING VP Index Plus MidCap Portfolio (Class S) ING VP Index Plus SmallCap Portfolio (Class S) ING VARIABLE PRODUCTS TRUST ING VP Financial Services Portfolio (Class S) ING VP SmallCap Opportunities Portfolio (Class S) ING VP INTERMEDIATE BOND PORTFOLIO (CLASS S) AIM VARIABLE INSURANCE FUNDS AIM V.I. Leisure Fund (Series I) FIDELITY VARIABLE INSURANCE PRODUCTS PORTFOLIO Fidelity VIP Contrafund Portfolio (Service Class 2) Fidelity VIP Equity-Income Portfolio (Service Class 2) LIBERTY VARIABLE INSURANCE TRUST Colonial Small Cap Value Fund (Class B) PROFUNDS VP(1) ProFund VP Bull ProFund VP Europe 30 ProFund VP Rising Rates Opportunity ProFund VP Small-Cap - ---------- (1) Please note that these portfolios are not available for Contracts offered through Smith Barney and Citicorp Investment Services. i Landmark - 136957 - -------------------------------------------------------------------------------- TABLE OF CONTENTS - -------------------------------------------------------------------------------- PAGE Index of Special Terms..................................................... ii Fees and Expenses.......................................................... 1 Condensed Financial Information............................................ 8 Accumulation Unit....................................................... 8 The Net Investment Factor............................................... 9 Performance Information................................................. 9 Financial Statements.................................................... 10 ING USA Annuity and Life Insurance Company................................. 10 ING USA Separate Account B................................................. 11 The Trusts and Funds....................................................... 11 Covered Funds, Special Funds and Excluded Funds ........................ 12 Charges and Fees........................................................... 12 Charge Deduction Subaccount............................................. 13 Charges Deducted from the Contract Value................................ 13 Surrender Charge................................................... 13 Waiver of Surrender Charge for Extended Medical Care............ .. 13 Free Withdrawal Amount............................................. 13 Surrender Charge for Excess Withdrawals............................ 13 Premium Taxes...................................................... 14 Administrative Charge.............................................. 14 Transfer Charge.................................................... 14 Charges Deducted from the Subaccounts................................... 15 Mortality and Expense Risk Charge.................................. 15 Asset-Based Administrative Charge.................................. 15 Earnings Multiplier Benefit Charge................................. 15 Optional Rider Charges............................................. 15 Trust and Fund Expenses................................................. 16 The Annuity Contract....................................................... 18 Contract Date and Contract Year ........................................ 18 Contract Owner.......................................................... 18 Annuity Start Date...................................................... 19 Annuitant............................................................... 19 Beneficiary............................................................. 19 Purchase and Availability of the Contract............................... 20 Crediting of Premium Payments........................................... 20 Administrative Procedures............................................... 22 Contract Value.......................................................... 22 Cash Surrender Value.................................................... 23 Addition, Deletion or Substitution of Subaccounts and Other Changes..... 23 The Fixed Account....................................................... 23 Optional Riders......................................................... 24 Rider Date.............................................................. 24 No Cancellation......................................................... 24 Termination............................................................. 24 Minimum Guaranteed Income Benefit Rider................................. 24 Minimum Guaranteed Withdrawal Benefit Rider............................. 29 Other Contracts............................................................ 32 Withdrawals ............................................................... 32 Transfers Among Your Investments........................................... 36 Death Benefit Choices...................................................... 40 Death Benefit During the Accumulation Phase...... ...................... 40 Standard Death Benefit.................................................. 41 Enhanced Death Benefit Options.......................................... 41 Earnings Multiplier Benefit Rider....................................... 43 Death Benefit During the Income Phase................................... 44 Continuation After Death -- Spouse...................................... 44 Continuation After Death -- Not a Spouse................................ 44 Required Distributions Upon Contract Owner's Death...................... 45 The Annuity Options........................................................ 46 Other Contract Provisions.................................................. 48 Other Information.......................................................... 51 Federal Tax Considerations................................................. 52 Statement of Additional Information Table of Contents.......................................................SAI-1 Appendix A Condensed Financial Information......................................... A1 Appendix B The Investment Portfolios............................................... B1 Appendix C Fixed Account II........................................................ C1 Appendix D Fixed Interest Division................................................. D1 Appendix E Surrender Charge for Excess Withdrawals Example ....................... E1 Appendix F Special Funds and Excluded Funds Examples............................... F1 Appendix G Minimum Guaranteed Income Benefit Calculation Examples.................. G1 Appendix H ING LifePay Withdrawal Examples......................................... H1 Appendix I MGWB For Contracts In States Where ING LifePay Not Available............ I1 Appendix J MGWB Excess Withdrawal Amount Examples Contracts In States Where ING LifePay Not Available .............................. J1 ii Landmark - 136957 - -------------------------------------------------------------------------------- INDEX OF SPECIAL TERMS - -------------------------------------------------------------------------------- The following special terms are used throughout this prospectus. Refer to the page(s) listed for an explanation of each term: - ------------------------------------------------------------------------------- SPECIAL TERM PAGE - ------------------------------------------------------------------------------- Accumulation Unit 8 - ------------------------------------------------------------------------------- Annuitant 19 - ------------------------------------------------------------------------------- Annuity Start Date 19 - ------------------------------------------------------------------------------- Cash Surrender Value 23 - ------------------------------------------------------------------------------- Contract Date 18 - ------------------------------------------------------------------------------- Claim Date 40 - ------------------------------------------------------------------------------- Contract Owner 18 - ------------------------------------------------------------------------------- Contract Value 22 - ------------------------------------------------------------------------------- Contract Year 18 - ------------------------------------------------------------------------------- Covered Fund 12 - ------------------------------------------------------------------------------- Earnings Multiplier Benefit 41 - ------------------------------------------------------------------------------- Excluded Fund 12 - ------------------------------------------------------------------------------- Free Withdrawal Amount 13 - ------------------------------------------------------------------------------- Market Value Adjustment C1 - ------------------------------------------------------------------------------- Max 7 Enhanced Death Benefit 42 - ------------------------------------------------------------------------------- Net Investment Factor 9 - ------------------------------------------------------------------------------- Net Rate of Return 9 - ------------------------------------------------------------------------------- Quarterly Ratchet Enhanced Death Benefit 41 - ------------------------------------------------------------------------------- Restricted Fund 11 - ------------------------------------------------------------------------------- Rider Date 24 - ------------------------------------------------------------------------------- 7% Solution Death Benefit Element 42 - ------------------------------------------------------------------------------- Special Fund 12 - ------------------------------------------------------------------------------- Standard Death Benefit 41 - ------------------------------------------------------------------------------- The following terms as used in this prospectus have the same or substituted meanings as the corresponding terms currently used in the Contract: - -------------------------------------------------------------------------------- TERM USED IN THIS PROSPECTUS CORRESPONDING TERM USED IN THE CONTRACT - -------------------------------------------------------------------------------- Accumulation Unit Value Index of Investment Experience - -------------------------------------------------------------------------------- Annuity Start Date Annuity Commencement Date - -------------------------------------------------------------------------------- Contract Owner Owner or Certificate Owner - -------------------------------------------------------------------------------- Contract Value Accumulation Value - -------------------------------------------------------------------------------- Transfer Charge Excess Allocation Charge - -------------------------------------------------------------------------------- Fixed Interest Allocation Fixed Allocation - -------------------------------------------------------------------------------- Free Look Period Right to Examine Period - -------------------------------------------------------------------------------- Guaranteed Interest Period Guarantee Period - -------------------------------------------------------------------------------- ING LifePay Base MGWB Base - -------------------------------------------------------------------------------- Subaccount(s) Division(s) - -------------------------------------------------------------------------------- Net Investment Factor Experience Factor - -------------------------------------------------------------------------------- Regular Withdrawals Conventional Partial Withdrawals - -------------------------------------------------------------------------------- Withdrawals Partial Withdrawals - -------------------------------------------------------------------------------- iii Landmark - 136957 - -------------------------------------------------------------------------------- FEES AND EXPENSES - -------------------------------------------------------------------------------- The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the Contract. The first table describes the fees and expenses that you will pay at the time that you buy the Contract, surrender the Contract, or transfer contract value between investment options. State premium taxes may also be deducted. CONTRACT OWNER TRANSACTION EXPENSES (1) Surrender Charge: COMPLETE YEARS ELAPSED 0 1 2 3 4+ SINCE PREMIUM PAYMENT SURRENDER CHARGE (AS A PERCENTAGE OF PREMIUM 6% 5% 4% 3% 0% PAYMENT) Transfer Charge (2).................................... $25 per transfer, if you make more than 12 transfers in a contract year (1) If you invested in a Fixed Interest Allocation, a Market Value Adjustment may apply to certain transactions. This may increase or decrease your contract value and/or your transfer or surrender amount. (2) We currently do not impose this charge, but may do so in the future. The next table describes the fees and expenses that you will pay periodically during the time that you own the Contract, not including Trust or Fund fees and expenses. ANNUAL CONTRACT ADMINISTRATIVE CHARGE (3).................................. $30 (We waive this charge if the total of your premium payments is $100,000 or more or if your contract value at the end of a contract year is $100,000 or more.) (3) We deduct this charge on each contract anniversary and on surrender. SEPARATE ACCOUNT ANNUAL CHARGES (4) -------------------------------------------------------------------------- ENHANCED DEATH BENEFITS STANDARD ----------------------- DEATH QUARTERLY BENEFIT RATCHET MAX 7 -------------------------------------------------------------------------- Mortality & Expense Risk Charge 1.50% 1.75% 2.05% Asset-Based Administrative Charge 0.15% 0.15% 0.15% ---- ---- ---- Total 1.65% 1.90% 2.20% -------------------------------------------------------------------------- (4) As a percentage of average daily assets in each subaccount. The Separate Account Annual Charges are deducted daily. EARNINGS MULTIPLIER BENEFIT RIDER CHARGE (5) -------------------------------------------------------------------------- AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE -------------------------------------------------------------------------- 0.30% of contract value 0.08% of contract value -------------------------------------------------------------------------- (5) We deduct the rider charge from the subaccounts in which you are invested on each quarterly contract anniversary and pro-rata on termination of the Contract; if the value in the subaccounts is insufficient, the rider charge will be deducted from the Fixed Interest Allocation(s) nearest maturity, and the amount deducted may be subject to a Market Value Adjustment. 1 Landmark - 136957 OPTIONAL RIDER CHARGES (6) MINIMUM GUARANTEED INCOME BENEFIT RIDER: -------------------------------------------------------------------------- AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE -------------------------------------------------------------------------- 0.75% of the MGIB Benefit Base(7) 0.19% of the MGIB Benefit Base(7) -------------------------------------------------------------------------- ING LIFEPAY MINIMUM GUARANTEED WITHDRAWAL BENEFIT RIDER(8):
------------------------------------------------------------------------------------------------------------------ AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE MAXIMUM ANNUAL CHARGE IF RESET BENEFIT ELECTED(8) ------------------------------------------------------------------------------------------------------------------ 0.50% of contract value 0.125% of contract value 1.20% of contract value ------------------------------------------------------------------------------------------------------------------
(6) We deduct optional rider charges from the subaccounts in which you are invested on each quarterly contract anniversary, in arrears, and pro-rata on termination of the Contract; if the value in the subaccounts is insufficient, the optional rider charges will be deducted from the Fixed Interest Allocation(s) nearest maturity, and the amount deducted may be subject to a Market Value Adjustment. (7) Please see "Charges and Fees - Optional Rider Charges" and "Optional Riders" later in this prospectus. (8) If you elect the Reset Benefit on or after the fifth rider anniversary, we reserve the right to increase the charge for the ING LifePay rider to a maximum annual charge of 1.20% of contract value. Please see "ING LifePay Minimum Guarantee Withdrawal Benefit - ING LifePay Reset Option." TABLE OF SEPARATE ACCOUNT CHARGES This table shows the total charges as a percentage of contract value that you would pay if you elect the earnings multiplier benefit and the ING LifePay Withdrawal Benefit. -------------------------------------------------------------------------- ENHANCED DEATH BENEFITS STANDARD ----------------------- DEATH QUARTERLY BENEFIT RATCHET MAX 7 -------------------------------------------------------------------------- Mortality & Expense Risk Charge 1.40% 1.65% 1.95% Asset-Based Administrative Charge 0.15% 0.15% 0.15% Earning Multiplier Benefit Rider 0.30% 0.30% 0.30% ING LifePay Minimum Guaranteed Withdrawal Benefit Rider 0.50% 0.50% 0.50% ---- ---- ---- Total 2.35% 2.60% 2.90% -------------------------------------------------------------------------- If you elect the Minimum Guaranteed Income Benefit instead of the ING LifePay Withdrawal Benefit, your total separate account charges as a percentage of contract value would be as follows, but the Minimum Guaranteed Income Benefit charge of 0.75% of MGIB Benefit Base would be deducted in addition to these charges: -------------------------------------------------------------------------- ENHANCED DEATH BENEFITS STANDARD ----------------------- DEATH QUARTERLY BENEFIT RATCHET MAX 7 -------------------------------------------------------------------------- Mortality & Expense Risk Charge 1.40% 1.65% 1.95% Asset-Based Administrative Charge 0.15% 0.15% 0.15% Earning Multiplier Benefit Rider 0.30% 0.30% 0.30% ----- ----- ----- Total 1.85% 2.10% 2.40% -------------------------------------------------------------------------- As noted in the expense examples below, your charges will be higher if you elect the Minimum Guaranteed Income Benefit than they would if you elect the ING LifePay Withdrawal Benefit. 2 Landmark - 136957 TRUST OR FUND EXPENSES The next item shows the minimum and maximum total operating expenses charged by the Trust or Fund that you may pay periodically during the time that you own the Contract. More detail concerning each Trust or Fund's fees and expenses is contained in the prospectus for each Trust or Fund. -------------------------------------------------------------------------- TOTAL ANNUAL TRUST OR FUND OPERATING EXPENSES(9) MINIMUM MAXIMUM -------------------------------------------------------------------------- (expenses that are deducted from Trust or Fund assets, including management fees, distribution and/or service (12b-1) fees(10), and other expenses): 0.54% 1.78% -------------------------------------------------------------------------- (9) The minimum and maximum total operating expenses charged by a Trust or a Fund including applicable expense reimbursement or fee waiver arrangements would also be 0.54% to 1.78%. The expense reimbursement or fee arrangement reflected is contractual and expected to continue through May 1, (2006.) (10) The Company may receive compensation from each of the funds or the funds' affiliates based on an annual percentage of the average net assets held in that fund by the Company. The percentage paid may vary from one fund company to another. For certain funds, some of this compensation may be paid out of 12b-1 fees or service fees that are deducted from fund assets. Any such fees deducted from fund assets are disclosed in the Fund or Trust prospectuses. The Company may also receive additional compensation from certain funds for administrative, recordkeeping or other services provided by the Company to the funds or the funds' affiliates. These additional payments are made by the funds or the funds' affiliates to the Company and do not increase, directly or indirectly, the fees and expenses shown above. The following table shows the annual operating expenses separately for each Trust or Fund. FUND EXPENSE TABLE(1) The column labeled "Total Fund Annual Expenses Without Waivers or Reductions" shows the total annual operating expenses charged by a Trust or Fund, absent expense reimbursement or fee waiver arrangements. The column labeled "Net Fund Annual Expenses After Waivers or Reductions" shows such total annual operating expenses after applicable expense reimbursement or fee waiver arrangements where such reimbursement or waiver is contractual and is expected to continue through May 1, 2006. Expenses shown are actual expenses for the year ended 12/31/04 unless otherwise noted. 3 Landmark - 136957
DISTRIBUTION NET FUND ANNUAL AND/OR TOTAL FUND TOTAL EXPENSES INVESTMENT SERVICE ANNUAL EXPENSES WAIVERS AFTER ADVISORY (12B-1) OTHER WITHOUT WAIVERS OR WAIVERS OR FUND NAME FEES FEES EXPENSES OR REDUCTIONS REDUCTIONS REDUCTIONS - ------------------------------------------------------------------------------------------------------------------------------------ ING INVESTORS TRUST - ------------------------------------------------------------------------------------------------------------------------------------ ING AllianceBernstein Mid Cap Growth Portfolio (Class S)(3)(6)(23) 0.77% 0.25% 0.01% 1.03% 0.00% 1.03% - ------------------------------------------------------------------------------------------------------------------------------------ ING American Funds Growth Portfolio (4)(5) 0.35% 0.75% 0.04% 1.14% 0.00% 1.14% - ------------------------------------------------------------------------------------------------------------------------------------ ING American Funds Growth-Income Portfolio (4)(5) 0.29% 0.75% 0.05% 1.09% 0.00% 1.09% - ------------------------------------------------------------------------------------------------------------------------------------ ING American Funds International Portfolio (4)(5) 0.54% 0.75% 0.08% 1.37% 0.00% 1.37% - ------------------------------------------------------------------------------------------------------------------------------------ ING Capital Guardian Small/Mid Cap Portfolio (Class S)(3)(6) 0.66% 0.25% 0.01% 0.92% 0.00% 0.92% - ------------------------------------------------------------------------------------------------------------------------------------ ING Capital Guardian U.S. Equities Portfolio (Class S)(3)(6)(9) 0.74% 0.25% 0.01% 1.00% 0.00% 1.00% - ------------------------------------------------------------------------------------------------------------------------------------ ING Eagle Asset Capital Appreciation Portfolio (Class S) (3)(6) 0.66% 0.25% 0.01% 0.92% 0.00% 0.92% - ------------------------------------------------------------------------------------------------------------------------------------ ING Evergreen Health Sciences Portfolio (Class S)(3a) 0.75% 0.25% 0.00% 1.00% 0.00% 1.00% - ------------------------------------------------------------------------------------------------------------------------------------ ING Evergreen Omega Portfolio (Class S) (3a) 0.60% 0.25% 0.00% 0.85% 0.00% 0.85% - ------------------------------------------------------------------------------------------------------------------------------------ ING FMR(SM) Diversified Mid Cap Portfolio (Class S)(3) 0.75% 0.25% 0.01% 1.01% 0.00% 1.01% - ------------------------------------------------------------------------------------------------------------------------------------ ING FMR(SM) Earnings Growth Portfolio (Class S)(7)(8) 0.62% 0.25% 0.15% 1.02% 0.02% 1.00% - ------------------------------------------------------------------------------------------------------------------------------------ ING Global Resources Portfolio (Class S)(3) 0.66% 0.25% 0.00% 0.91% 0.00% 0.91% - ------------------------------------------------------------------------------------------------------------------------------------ ING Goldman Sachs Tollkeeper(SM) Portfolio (Class S)(3)(8) 1.35% 0.25% 0.01% 1.61% 0.21% 1.40% - ------------------------------------------------------------------------------------------------------------------------------------ ING Janus Contrarian Portfolio (Class S)(3)(6) 0.80% 0.25% 0.01% 1.06% 0.00% 1.06% - ------------------------------------------------------------------------------------------------------------------------------------ ING JPMorgan Emerging Markets Equity Portfolio (Class S)(3) 1.25% 0.25% 0.02% 1.52% 0.00% 1.52% - ------------------------------------------------------------------------------------------------------------------------------------ ING JPMorgan Small Cap Equity Portfolio (Class S)(3)(6)(9) 0.90% 0.25% 0.00% 1.15% 0.03% 1.12% - ------------------------------------------------------------------------------------------------------------------------------------ ING JPMorgan Value Opportunities Portfolio (Class S)(7)(8) 0.40% 0.25% 0.15% 0.80% 0.02% 0.78% - ------------------------------------------------------------------------------------------------------------------------------------ ING Julius Baer Foreign Portfolio (Class S) (3) 0.96% 0.25% 0.00% 1.21% 0.00% 1.21% - ------------------------------------------------------------------------------------------------------------------------------------ ING Legg Mason Value Portfolio (Class S) (3)(6) 0.80% 0.25% 0.01% 1.06% 0.00% 1.06% - ------------------------------------------------------------------------------------------------------------------------------------ ING Lifestyles Aggressive Growth Portfolio (Class S1)(10)(11) 1.19% 0.00% 0.05% 1.24% 0.05% 1.19% - ------------------------------------------------------------------------------------------------------------------------------------ ING Lifestyles Growth Portfolio (Class S1)(10)(11) 1.15% 0.00% 0.05% 1.20% 0.06% 1.14% - ------------------------------------------------------------------------------------------------------------------------------------ ING Lifestyles Moderate Growth Portfolio (Class S1)(10)(11) 1.11% 0.00% 0.05% 1.16% 0.06% 1.10% - ------------------------------------------------------------------------------------------------------------------------------------ ING Lifestyles Moderate Portfolio (Class S1)(10)(11) 1.05% 0.00% 0.05% 1.10% 0.06% 1.04% - ------------------------------------------------------------------------------------------------------------------------------------ ING Liquid Assets Portfolio (Class S)(3) 0.27% 0.25% 0.02% 0.54% 0.00% 0.54% - ------------------------------------------------------------------------------------------------------------------------------------ ING Lord Abbett Affiliated Portfolio (Class S)(3)(27) 0.74% 0.25% 0.01% 1.00% 0.00% 1.00% - ------------------------------------------------------------------------------------------------------------------------------------ ING MarketPro Portfolio (Class S)(25)(26) 0.70% 0.25% 0.10% 1.05% 0.00% 1.05% - ------------------------------------------------------------------------------------------------------------------------------------ ING Marsico Growth Portfolio (Class S) (3)(6) 0.77% 0.25% 0.01% 1.03% 0.00% 1.03% - ------------------------------------------------------------------------------------------------------------------------------------ ING Marsico International Opportunities Portfolio (Class S)(7)(8) 0.54% 0.25% 0.17% 0.96% 0.03% 0.93% - ------------------------------------------------------------------------------------------------------------------------------------ ING Mercury Large Cap Growth Portfolio (Class S)(3)(9) 0.80% 0.25% 0.00% 1.05% 0.05% 1.00% - ------------------------------------------------------------------------------------------------------------------------------------ ING Mercury Large Cap Value Portfolio (Class S)(3)(9) 0.80% 0.25% 0.00% 1.05% 0.05% 1.00% - ------------------------------------------------------------------------------------------------------------------------------------ ING MFS Mid Cap Growth Portfolio (Class S)(3)(6)(12) 0.64% 0.25% 0.00% 0.89% 0.00% 0.89% - ------------------------------------------------------------------------------------------------------------------------------------ ING MFS Total Return Portfolio (Class S) (3)(6) 0.64% 0.25% 0.00% 0.89% 0.00% 0.89% - ------------------------------------------------------------------------------------------------------------------------------------ ING MFS Utilities Portfolio (Class S)(7)(8) 0.60% 0.25% 0.15% 1.00% 0.00% 1.00% - ------------------------------------------------------------------------------------------------------------------------------------ ING Oppenheimer Main Street Portfolio (Class S)(3)(6) 0.64% 0.25% 0.00% 0.89% 0.00% 0.89% - ------------------------------------------------------------------------------------------------------------------------------------ ING PIMCO Core Bond Portfolio (Class S)(3) 0.60% 0.25% 0.01% 0.86% 0.00% 0.86% - ------------------------------------------------------------------------------------------------------------------------------------ ING PIMCO High Yield Portfolio (Class S)(3a) 0.49% 0.25% 0.00% 0.74% 0.00% 0.74% - ------------------------------------------------------------------------------------------------------------------------------------ ING Pioneer Fund Portfolio (Class S)(8) 0.75% 0.25% 0.01% 1.01% 0.05% 0.96% - ------------------------------------------------------------------------------------------------------------------------------------ ING Pioneer Mid Cap Value Portfolio (Class S)(8) 0.64% 0.25% 0.01% 0.90% 0.00% 0.90% - ------------------------------------------------------------------------------------------------------------------------------------ ING Salomon Brothers All Cap Portfolio (Class S)(3)(6) 0.74% 0.25% 0.01% 1.00% 0.00% 1.00% - ------------------------------------------------------------------------------------------------------------------------------------ ING T. Rowe Price Capital Appreciation Portfolio (Class S)(3)(6) 0.66% 0.25% 0.01% 0.92% 0.00% 0.92% - ------------------------------------------------------------------------------------------------------------------------------------ ING T. Rowe Price Equity Income Portfolio (Class S)(3)(6) 0.66% 0.25% 0.01% 0.92% 0.00% 0.92% - ------------------------------------------------------------------------------------------------------------------------------------ ING Templeton Global Growth Portfolio (Class S)(6)(24) 0.97% 0.25% 0.01% 1.23% 0.00% 1.23% - ------------------------------------------------------------------------------------------------------------------------------------ ING UBS U.S. Allocation Portfolio (Class S)(3)(9) 0.75% 0.25% 0.01% 1.01% 0.02% 0.99% - ------------------------------------------------------------------------------------------------------------------------------------ ING Van Kampen Equity Growth Portfolio (Class S)(3)(9) 0.65% 0.25% 0.00% 0.90% 0.05% 0.85% - ------------------------------------------------------------------------------------------------------------------------------------ ING Van Kampen Global Franchise Portfolio (Class S)(3) 1.00% 0.25% 0.00% 1.25% 0.00% 1.25% - ------------------------------------------------------------------------------------------------------------------------------------ ING Van Kampen Growth and Income Portfolio (Class S)(3)(6) 0.66% 0.25% 0.01% 0.92% 0.00% 0.92% - ------------------------------------------------------------------------------------------------------------------------------------ ING Van Kampen Real Estate Portfolio (Class S)(3) 0.66% 0.25% 0.00% 0.91% 0.00% 0.91% - ------------------------------------------------------------------------------------------------------------------------------------ ING VP Index Plus International Equity Portfolio (Class S)(28) 0.45% 0.25% 0.22% 0.92% 0.12% 0.80% - ------------------------------------------------------------------------------------------------------------------------------------ ING Wells Fargo Mid Cap Disciplined Portfolio (Class S)(3)(6) 0.66% 0.25% 0.01% 0.92% 0.00% 0.92% - ------------------------------------------------------------------------------------------------------------------------------------ ING Wells Fargo Small Cap Disciplined Portfolio (Class S)(28) 0.77% 0.25% 0.21% 1.23% 0.11% 1.12% - ------------------------------------------------------------------------------------------------------------------------------------
4 Landmark - 136957
DISTRIBUTION NET FUND ANNUAL AND/OR TOTAL FUND TOTAL EXPENSES INVESTMENT SERVICE ANNUAL EXPENSES WAIVERS AFTER ADVISORY (12B-1) OTHER WITHOUT WAIVERS OR WAIVERS OR FUND NAME FEES FEES EXPENSES OR REDUCTIONS REDUCTIONS REDUCTIONS - ------------------------------------------------------------------------------------------------------------------------------------ ING PARTNERS, INC. - ------------------------------------------------------------------------------------------------------------------------------------ ING Baron Small Cap Growth Portfolio (Service Class)(14) 0.85% 0.25% 0.40% 1.50% 0.05% 1.45% - ------------------------------------------------------------------------------------------------------------------------------------ ING Davis Venture Value Portfolio (Service Class)(28) 0.80% 0.25% 0.00% 0.10% 0.00% 1.15% - ------------------------------------------------------------------------------------------------------------------------------------ ING Fundamental Research Portfolio (Service Class) 0.60% 0.25% 0.20% 1.05% 0.00% 1.05% - ------------------------------------------------------------------------------------------------------------------------------------ ING JPMorgan Fleming International Portfolio (Service Class) 0.80% 0.25% 0.20% 1.25% 0.00% 1.25% - ------------------------------------------------------------------------------------------------------------------------------------ ING Oppenheimer Global Portfolio (Service Class)(15) 0.60% 0.25% 0.06% 0.91% 0.00% 0.91% - ------------------------------------------------------------------------------------------------------------------------------------ ING Salomon Brothers Aggressive Growth Portfolio (Service Class) 0.69% 0.25% 0.13% 1.07% 0.00% 1.07% - ------------------------------------------------------------------------------------------------------------------------------------ ING UBS U.S. Large Cap Equity Portfolio (Service Class) 0.70% 0.25% 0.15% 1.10% 0.00% 1.10% - ------------------------------------------------------------------------------------------------------------------------------------ ING Van Kampen Comstock Portfolio (Service Class)(14) 0.60% 0.25% 0.35% 1.20% 0.07% 1.13% - ------------------------------------------------------------------------------------------------------------------------------------ ING Van Kampen Equity and Income Portfolio (Service Class)(15) 0.55% 0.25% 0.02% 0.82% 0.00% 0.82% - ------------------------------------------------------------------------------------------------------------------------------------ ING VARIABLE INSURANCE TRUST - ------------------------------------------------------------------------------------------------------------------------------------ ING VP Global Equity Dividend Portfolio (16)(17) 1.00% 0.00% 0.20% 1.20% (0.03%) 1.23% - ------------------------------------------------------------------------------------------------------------------------------------ ING VARIABLE PORTFOLIOS, INC. - ------------------------------------------------------------------------------------------------------------------------------------ ING VP Index Plus LargeCap Portfolio (Class S)(18)(19) 0.35% 0.25% 0.09% 0.69% 0.00% 0.69% - ------------------------------------------------------------------------------------------------------------------------------------ ING VP Index Plus MidCap Portfolio (Class S)(18)(19) 0.40% 0.25% 0.09% 0.74% 0.00% 0.74% - ------------------------------------------------------------------------------------------------------------------------------------ ING VP Index Plus SmallCap Portfolio (Class S)(18)(19) 0.40% 0.25% 0.09% 0.74% 0.00% 0.74% - ------------------------------------------------------------------------------------------------------------------------------------ ING VARIABLE PRODUCTS TRUST - ------------------------------------------------------------------------------------------------------------------------------------ ING VP Financial Services Portfolio (Service Class S)(20)(21) 0.75% 0.25% 0.25% 1.25% 0.20% 1.05% - ------------------------------------------------------------------------------------------------------------------------------------ ING VP SmallCap Opportunities Portfolio (Service Class S)(20)(21) 0.75% 0.25% 0.19% 1.19% 0.09% 1.10% - ------------------------------------------------------------------------------------------------------------------------------------ ING VP INTERMEDIATE BOND PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------------------ ING VP Intermediate Bond Portfolio (Class S)(20) 0.40% 0.25% 0.08% 0.73% 0.00% 0.73% - ------------------------------------------------------------------------------------------------------------------------------------ AIM VARIABLE INSURANCE FUNDS - ------------------------------------------------------------------------------------------------------------------------------------ AIM V.I. Leisure Fund (Series I)(22) 0.75% 0.00% 0.59% 1.34% 0.04% 1.30% - ------------------------------------------------------------------------------------------------------------------------------------ FIDELITY VARIABLE INSURANCE - ------------------------------------------------------------------------------------------------------------------------------------ PRODUCTS PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------------------ Fidelity(R) VIP Contrafund Portfolio (Service Class 2) 0.57% 0.25% 0.11% 0.93% 0.00% 0.93% - ------------------------------------------------------------------------------------------------------------------------------------ Fidelity(R) VIP Equity-Income Portfolio (Service Class 2) 0.47% 0.25% 0.11% 0.83% 0.00% 0.83% - ------------------------------------------------------------------------------------------------------------------------------------ LIBERTY VARIABLE INSURANCE TRUST - ------------------------------------------------------------------------------------------------------------------------------------ Colonial Small Cap Value Fund (Class B) 0.80% 0.25% 0.17% 1.22% 0.00% 1.22% - ------------------------------------------------------------------------------------------------------------------------------------ PROFUNDS VP - ------------------------------------------------------------------------------------------------------------------------------------ ProFund VP Bull 0.75% 0.25% 0.78% 1.78% 0.00% 1.78% - ------------------------------------------------------------------------------------------------------------------------------------ ProFund VP Europe 30 0.75% 0.25% 0.61% 1.61% 0.00% 1.61% - ------------------------------------------------------------------------------------------------------------------------------------ ProFund Rising Rates Opportunity 0.75% 0.25% 0.78% 1.78% 0.00% 1.78% - ------------------------------------------------------------------------------------------------------------------------------------ ProFund VP Small-Cap 0.75% 0.25% 0.75% 1.75% 0.00% 1.75% - ------------------------------------------------------------------------------------------------------------------------------------
Footnotes to the "Fund Expense Table" (1) The Company may receive compensation from each of the funds or the funds' affiliates based on an annual percentage of the average net assets held in that fund by the Company. The percentage paid may vary from one fund company to another. For certain funds, some of this compensation may be paid out of 12b-1 fees or service fees that are deducted from fund assets. Any such fees deducted from fund assets are disclosed in this Fund Expense Table and the fund prospectuses. The Company may also receive additional compensation from certain funds for administrative, recordkeeping or other services provided by the Company to the funds or the funds' affiliates. These additional payments are made by the funds or the funds' affiliates to the Company and do not increase, directly or indirectly, the fees and expenses shown above. See "Fees - Fund Expenses" for additional information. 5 Landmark - 136957 (2) In the case of fund companies affiliated with the Company, where the Company or an affiliated investment adviser employs subadvisers to manage the funds, no payments are made to the Company or the affiliated investment adviser by the subadvisers. However, the investment management fee shown in the table is apportioned between the Company or other affiliated investment adviser and subadviser. This apportionment varies by subadviser, resulting in varying amounts of revenue retained by the investment adviser, including the Company. This apportionment of the investment advisory fee does not increase, directly or indirectly, the fees and expenses shown above. See "Fees - Fund Expenses" for additional information. (3) The amounts shown are estimated operating expenses for Class S shares of each Portfolio as a ratio of expenses to average daily net assets based on each Portfolio's actual operating expenses for Class S shares for its most recently completed fiscal year, as adjusted for contractual changes, if any, and fee waivers to which Directed Services, Inc. (DSI) as adviser to each Portfolio, has agreed for each Portfolio for the current fiscal year. Effective March 1, 2004, the management fee structure for ING JPMorgan Emerging Markets Equity Portfolio was revised. Effective January 1, 2005, the management fee structure for ING Capital Guardian Managed Global Portfolio was revised. Through a "bundled fee" arrangement, DSI, the Trust's manager, is paid a single fee for advisory, administrative, custodial, transfer agency, auditing and legal services necessary for the ordinary operation of the Portfolios. The Portfolios would also bear any extraordinary expenses. (3a) The amounts shown are estimated operating expenses for Class S shares of each Portfolio as a ratio of expenses to average daily net assets. Operating expenses for each Portfolio are based on estimated amounts for the current fiscal year as they had not had a full year of operations as of December 31, 2004. Through a "bundled fee" arrangement, DSI, the Trust's manager, is paid a single fee for advisory, administrative, custodial, transfer agency, auditing and legal services necessary for the ordinary operation of the Portfolios. The Portfolios would also bear any extraordinary expenses. (4) This table shows the estimated operating expenses for the Portfolios as a ratio of expenses to average daily net assets. These estimates are based on each Portfolio's actual operating expenses for its most recently completed fiscal year. This table reflects the aggregate annual operating expenses of each Portfolio and its corresponding Master Fund (Class 2 shares of American Funds Insurance Series(R) - Growth Fund, Growth-Income Fund, and International Fund.) Each Master Fund pays Capital Research Management Company (CRMC), the investment adviser to the Master Funds, a management fee for advisory expenses at current asset levels of the Master Funds of 0.35%, 0.53% and 0.28%, respectively. Pursuant to its investment management agreement with the Trust, ING Investments, LLC may charge an annual advisory fee at asset levels that are the same as the current asset levels of the Master Funds equal to 0.35%, 0.29% and 0.54% of average daily net assets for the ING American Funds Growth Portfolio, the ING American Funds Growth-Income Portfolio, and the ING American Funds International Portfolio, respectively, if the respective Portfolio does not invest substantially all of its assets in another investment company. If a Portfolio invests substantially all of its assets in another investment company, ING Investments, LLC does not charge an advisory fee. Each Portfolio anticipates investing substantially all of its assets in another investment company. CRMC has voluntarily agreed to waive a portion of its management fee. Including this waiver, the Total Fund Annual Operating Expenses for the ING American Funds Growth Portfolio, the ING American Funds Growth-Income Portfolio, and the ING American Funds International Portfolio would have been 1.13%, 1.08%, and 1.36%, respectively. This arrangement may be discontinued by CRMC at any time. (5) Shares of each Portfolio are subject to a Rule 12b-1 fee at an annual rate of 0.50% of average daily net assets payable to Directed Services, Inc. In addition, Class 2 shares of each of the Master Funds pay 0.25% of average net assets annually pursuant to a Plan of Distribution or 12b-1 plan. Shareholders of the Class 2 shares of the Master Funds pay only their proportionate share of 12b-1 plan expenses. Pursuant to its administration agreement with the Trust, ING Funds Services, LLC may receive an annual administration fee equal to 0.10% of average daily net assets for ING American Funds Growth Portfolio, ING American Funds Growth-Income Portfolio, and ING American Funds International Portfolio, respectively, if the respective Portfolio does not invest substantially all of its assets in another investment company. If a Portfolio invests substantially all of its assets in another investment company, ING Funds Services, LLC does not charge an administration fee. Each Portfolio anticipates investing substantially all of its assets in another investment company. (6) A portion of the brokerage commissions that the ING AIM Mid Cap Growth, ING Alliance Mid Cap Growth, ING Capital Guardian Managed Global, ING Capital Guardian Small/Mid Cap, ING Capital Guardian U.S. Equities, ING Eagle Asset Capital Appreciation, ING Janus Contrarian, ING Wells Fargo Mid Cap Disciplined Portfolio, ING JPMorgan Small Cap Equity, ING Legg Mason Value, ING Marsico Growth, ING MFS Mid Cap Growth, ING MFS Total Return, ING Oppenheimer Main Street, ING Salomon Brothers All Cap, ING T. Rowe Price Capital Appreciation, ING T. Rowe Price Equity Income and ING Van Kampen Growth and Income Portfolios pay is used to reduce each Portfolio's expenses. Including these reductions and the MFS Voluntary Management fee waiver the Total Annual Fund Operating Expenses for each Portfolio for the year ended December 31, 2004 would have been 0.87%, 0.97%, 1.26%, 0.91%, 0.99%, 0.91%, 1.05%, 0.88%, 1.12%, 1.06%, 1.00%, 0.87%, 0.88%, 0.86%, 0.97%, 0.90%, 0.91%, and 0.90%, respectively. This arrangement may be discontinued at any time. 6 Landmark - 136957 (7) The amounts shown are estimated operating expenses for Class S shares of each Portfolio as a ratio of expenses to average daily net assets. Operating expenses for each Portfolio are estimated as they had not commenced operations as of December 31, 2004. Pursuant to its administration agreement with the Trust, ING Funds Services, LLC may receive an annual administration fee equal to 0.10% of average daily net assets for this Portfolio. Other Expenses for each Portfolio are estimated because the Portfolio did not have a full calendar year of operations as of December 31, 2004 (the Portfolio's fiscal year end). (8) DirectedServices, Inc. ("DSI"), the Adviser, has entered into a written expense limitation agreement with respect to ING JPMorgan Value Opportunities Portfolio, ING Marsico International Opportunities Portfolio, ING MFS Utilities Portfolio, and ING Pioneer Mid Cap Value Portfolio under which it will limit expenses of these Portfolios, excluding taxes, brokerage and extraordinary expenses, subject to possible recoupment by DSI within three years. The amount of these Portfolios' expenses that are proposed to be waived or reimbursed in the ensuing fiscal year is shown under the heading "Waivers, Reimbursements, and Recoupments." For ING MFS Utilities Portfolio, the expense limitation agreement will continue through at least May 1, 2006. For ING JPMorgan Value Opportunities Portfolio, ING Marsico International Opportunities Portfolio, and ING Pioneer Mid Cap Value Portfolio, the expense limitation agreement will continue through at least September 23, 2007. The expense limitation agreements are contractual and shall renew automatically for one-year terms unless DSI provides written notice of the termination of the expense limitation agreement at least 90 days prior to the end of the then current terms or upon termination of the management agreement. Pursuant to a side agreement effective September 23, 2005, DSI has effected an expense limit for ING Pioneer Fund Portfolio through September 23, 2007. There is no guarantee that this side agreement will continue after that date. This side agreement will only renew if DSI elects to renew it. (9) Directed Services, Inc. (DSI), the adviser, has contractually agreed to waive a portion of the management fee for the Portfolio. Based upon net assets as of December 31, 2004, the management fee waiver for each Portfolio would equal 0.00% for ING Capital Guardian U.S. Equities Portfolio; 0.03% for ING JPMorgan Small Cap Equity Portfolio; 0.05% for ING Mercury Large Cap Value Portfolio; 0.05% for ING Mercury Large Cap Growth Portfolio; 0.02% for ING UBS U.S. Allocation Portfolio; and 0.05% for ING Van Kampen Equity Growth Portfolio. This expense waiver will continue through at least May 1, 2006. There is no guarantee that this waiver will continue after this date. This agreement will only renew if DSI elects to renew it. (10) The table reflects the net operating expenses paid directly and indirectly by each Portfolio. Shareholders in each Portfolio indirectly bear the proportionate expenses of the Service Class shares of the Underlying Funds. Because a weighted average is used in calculating expenses attributable to a Portfolio, the amount of the expenses of Underlying Funds indirectly borne by a Portfolio will vary based on the Portfolio's allocation of assets to, and the annualized net operating expenses of, the particular Underlying Funds during the Portfolio's fiscal year. For information regarding expenses of the Underlying Funds, see the Fund's prospectus. Other Expenses are estimated for each Portfolio's current fiscal year. (11) ING Investments, LLC, the investment adviser to each Portfolio, has entered into a written expense limitation agreement with respect to each Portfolio under which it will limit expenses of the LifeStyle Portfolios, excluding interest, taxes, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments, LLC within three years. The amount of each Portfolio's expenses that are proposed to be waived or reimbursed in the ensuing fiscal year is shown under the heading Fees and Expenses Waived or Reimbursed. The expense limitation agreement will continue through at least May 1, 2006. For further information regarding the expense limitation agreements, see the Fund's prospectus. (12) Directed Services, Inc. (DSI) has voluntarily agreed to waive a portion of its management fee for ING MFS Mid Cap Growth Portfolio. Including this waiver, the Net Annual Fund Operating Expenses for the Portfolio for the year ended December 31, 2004, would have been 0.87%. This arrangement may be discontinued by DSI at any time. (13) The amounts shown are estimated operating expenses for Class S shares of each Portfolio as a ratio of expenses to average daily net assets. Operating expenses for each Portfolio are estimated as they had not commenced operations as of December 31, 2004. Through a "bundled fee" arrangement, DSI, the Trust's manager, is paid a single fee for advisory, administrative, custodial, transfer agency, auditing and legal services necessary for the ordinary operation of the Portfolios. The Portfolios would also bear any extraordinary expenses. Other Expenses for each Portfolio are estimated because the Portfolio did not have a full calendar year of operations as of December 31, 2004 (the Portfolio's fiscal year end). (14) The Administrator of the Fund has contractually agreed to waive all or a portion of its administrative services fees and/or reimburse administrative expenses for ING American Century Small Cap Value, ING Baron Small Cap Growth, and ING Van Kampen Comstock Portfolios so that the Net Annual Fund Operating Expenses for these Portfolios shall not exceed 1.55%, 1.45%, and 1.13%, respectively, through May 1, 2006. Without this waiver, the Net Annual Fund Operating Expenses would be 1.65% for ING American Century Small Cap Value, 1.50% for ING Baron Small Cap Growth and 1.20% for ING Van Kampen Comstock Portfolios. 7 Landmark - 136957 (15) Effective December 1, 2004, Management (Advisory) Fees were restated to reflect a decrease from 0.85% to 0.55% for ING Van Kampen Equity and Income Portfolio. Effective December 1, 2004, the administrative fees (included in Other Expenses) were restated to reflect an increase/decrease as follows: from 0.20% to 0.02% for ING Van Kampen Equity and Income Portfolio and from 0.60% to 0.06% for ING Oppenheimer Global Portfolio. (16) The amounts shown are the estimated operating expenses for shares of the Portfolio as a ratio of expenses to average daily net assets. These estimates are based on the Portfolio's actual operating expenses for its most recently completed fiscal year, as adjusted for contractual changes, if any, and a fee waiver to which ING Investments, LLC, the investment adviser to the Portfolio, has agreed for the Portfolio. (17) ING Investments, LLC has entered into a written expense limitation agreement with the Portfolio under which it will limit expenses of the Portfolio, excluding interest, taxes, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments, LLC within three years. The amount of the Portfolio's expenses waived, reimbursed or recouped during the last fiscal year by ING Investments, LLC is shown under the heading Fees and Expenses Waived or Reimbursed. Recoupments are shown as negative numbers. The expense limit for the Portfolio is shown as Net Annual Fund Operating Expenses. The expense limit will continue through at least May 1, 2006. In addition, effective January 1, 2005, pursuant to a side agreement which is not reflected in the fund expense table, ING Investments, LLC has lowered the expense limit for the Portfolio to 1.15% through at least December 31, 2005. There is no guarantee that this side agreement will continue after that date. Any fees waived pursuant to the side agreement shall not be eligible for recoupment. For further information regarding the expense limitation agreements, see the Fund's prospectus. (18) The amounts shown are estimated operating expenses for Class S shares of each Portfolio as a ratio of expenses to average daily net assets. These estimates, unless otherwise noted, are based on each Portfolio's actual operating expenses for its most recently completed fiscal year, adjusted for contractual changes, if any, and fee waivers to which ING Investments, LLC, the investment adviser to each Portfolio, has agreed for each Portfolio. ING Funds Services, LLC receives an annual administrative fee (included in Other Expenses) equal to 0.055% on the first $5 billion of daily net assets and 0.03% thereafter. (19) ING Investments, LLC, the investment adviser to each Portfolio, has entered into written expense limitation agreements with each Portfolio under which it will limit expenses of the Portfolios, excluding interest, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments, LLC within three years. The amount of each Portfolio's expenses waived, reimbursed or recouped during the last fiscal year is shown under the heading Fees and Expenses Waived or Reimbursed. Recoupments are shown as negative numbers under Fees and Expenses Waived or Reimbursed. The expense limits will continue through at least May 1, 2006. For further information regarding the expense limitation agreements, see the Fund's prospectus. (20) For the ING VP Financial Services Portfolio, which has not had a full year of operations, expenses are based on estimated amounts for the current fiscal year. In each case, the estimated operating expenses for the Class S shares are based on a ratio of expenses to average daily net assets. For all other Portfolios, estimated operating expenses are based on each Portfolio's actual operating expenses for Class S shares for its most recently completed fiscal year, as adjusted for contractual changes, if any, and fee waivers to which ING Investments, LLC, the investment adviser, has agreed for each Portfolio for the current fiscal year. (21) ING Funds Services, LLC receives an annual administration fee (included in Other Expenses) equal to 0.10% of each Portfolio's average daily net assets. ING Investments, LLC has entered into a written expense limitation agreement with ING Variable Products Trust under which it will limit expenses of the Portfolios, excluding interest, taxes, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments, LLC within three years. The amount of each Portfolio's expenses waived, reimbursed or recouped during the last fiscal year by ING Investments, LLC is shown under the heading Fees and Expenses Waived or Reimbursed. The amount of expenses proposed to be waived during the current fiscal year by ING Investments, LLC for ING VP Financial Services Portfolio is shown under the heading Fees and Expenses Waived or Reimbursed. For the Portfolio, the expense limits will continue through at least May 1, 2006. For further information regarding the expense limitation agreements, see the Fund's prospectus. (22) The Fund's advisor and/or distributor has contractually agreed to waive advisory fees and/or reimburse expenses of Series II shares to the extent necessary to limit Total Annual Fund Operating Expenses (excluding certain items as discussed in the fund's prospectus) of Series II shares to 1.45% of average daily net assets for each series portfolio of AIM Variable Insurance Funds. The expense limitation agreements are in effect through April 30, 2006. Please refer to the fund's prospectus for more detailed information. (23) Effective December 5, 2005, the portfolio name "ING Alliance Mid Cap Growth Portfolio" is changed to "ING AllianceBernstein Mid Cap Growth Portfolio". (24) Effective December 5, 2005, the portfolio name "ING Capital Guardian Managed Global Portfolio" is changed to "ING Templeton Global Growth Portfolio". 8 Landmark - 136957 (25) In addition to the expenses of each Portfolio, each Portfolio will indirectly bear the proportionate expenses of the Institutional Class shares of the Underlying Funds. Because the Fund uses a weighted average in calculating expenses attributable to a Portfolio, the amount of the expenses of Underlying Funds indirectly borne by a Portfolio will vary based on the Portfolio's allocation of assets to, and the annualized net operating expenses of, the particular Underlying Funds during the Portfolio's fiscal year. The fees reflected in the Fund Expense Table, above, are the aggregate annual net expense ratios (as an annual percentage of average daily net assets) for each Portfolio and its Underlying Funds as of December 31, 2004. (26) ING Investments, the investment advisor to each Portfolio, has entered into a written expense limitation agreement with respect to each Portfolio under which it will limit expenses of the Portfolios, excluding interest, taxes, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments within three years. The amount of each Portfolio's expenses that are proposed to be waived or reimbursed in the ensuing fiscal year is shown under the heading, "Total Waivers or Reductions." The expense limitation agreement will continue through at least May 1, 2007. The expense limitation agreements are contractual and shall renew automatically for one-year terms unless ING Investments provides written notice of the termination of an expense limitation agreement at least 90 days prior to the end of the then current term or upon termination of the investment management agreement. (27) Effective December 5, 2005, the portfolio name "ING Salomon Brothers Investors Portfolio" is changed to "ING Lord Abbett Affiliated Portfolio". (28) Effective December 5, 2005, this portfolio is available as an investment option under the contract. Premium taxes (which currently range from 0% to 3.5% of premium payments) may apply, but are not reflected in the above table or in the example below. EXAMPLE: This example is intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity contracts. These costs include contract owner transaction expenses, contract fees, separate account annual expenses, and Trust or Fund fees and expenses. The example assumes that you invest $10,000 in the Contract for the time periods indicated. The example also assumes that your investment has a 5% return each year and assumes the maximum fees and expenses of any of the Trusts or Funds. Specifically, the example assumes election of the Max 7 Enhanced Death Benefit and election of the earnings multiplier benefit rider with a charge of 0.30% of the contract value annually. The example reflects the deduction of a mortality and expense risk charge, an asset-based administrative charge, and the annual contract administrative charge as an annual charge of 0.01% of assets. The example also assumes you elected the Minimum Guaranteed Income Benefit Rider. Note that surrender charges may apply if you choose to annuitize your Contract within the first 4 contract years. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: -------------------------------------------------------------------------- 1) If you surrender your contract at the end of the applicable time period: -------------------------------------------------------------------------- 1 year 3 years 5 years 10 years $1,142 $2,019 $2,686 $5,315 -------------------------------------------------------------------------- 2) If you annuitize at the end of the applicable time period: -------------------------------------------------------------------------- 1 year 3 years 5 years 10 years $1,142 $2,019 $2,686 $5,315 -------------------------------------------------------------------------- 3) If you do not surrender your contract: -------------------------------------------------------------------------- 1 year 3 years 5 years 10 years $542 $1,619 $2,686 $5,315 -------------------------------------------------------------------------- Compensation is paid for the sale of the Contracts. For information about this compensation, see "Selling the Contract." 9 Landmark - 136957 - -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION - -------------------------------------------------------------------------------- ACCUMULATION UNIT We use accumulation units to calculate the value of a Contract. Each subaccount of Separate Account B has its own accumulation unit value. The accumulation units are valued each business day that the New York Stock Exchange is open for trading. Their values may increase or decrease from day to day according to a Net Investment Factor, which is primarily based on the investment performance of the applicable investment portfolio. Shares in the investment portfolios are valued at their net asset value. Tables containing (i) the accumulation unit value history of each subaccount of ING USA Separate Account B offered in this prospectus and (ii) the total investment value history of each such subaccount are presented in Appendix A -- Condensed Financial Information. The numbers show the year-end unit values of each subaccount from the time purchase payments were first received in the subaccounts under the Contract. THE NET INVESTMENT FACTOR The Net Investment Factor is an index number which reflects certain charges under the Contract and the investment performance of the subaccount. The Net Investment Factor is calculated for each subaccount as follows: 1) We take the net asset value of the subaccount at the end of each business day. 2) We add to (1) the amount of any dividend or capital gains distribution declared for the subaccount and reinvested in such subaccount. We subtract from that amount a charge for our taxes, if any. 3) We divide (2) by the net asset value of the subaccount at the end of the preceding business day. 4) We then subtract the applicable daily mortality and expense risk charge and the daily asset-based administrative charge from the subaccount. Calculations for the subaccounts are made on a per share basis. The Net Rate of Return equals the Net Investment Factor minus one. PERFORMANCE INFORMATION From time to time, we may advertise or include in reports to contract owners performance information for the subaccounts of Separate Account B, including the average annual total return performance, yields and other nonstandard measures of performance. Such performance data will be computed, or accompanied by performance data computed, in accordance with standards defined by the SEC. Except for the Liquid Assets subaccount, quotations of yield for the subaccounts will be based on all investment income per unit (contract value divided by the accumulation unit) earned during a given 30-day period, less expenses accrued during such period. Information on standard total average annual return performance will include average annual rates of total return for 1, 5 and 10 year periods, or lesser periods depending on how long Separate Account B has been investing in the portfolio. We may show other total returns for periods of less than one year. We will base total return figures on the actual historic performance of the subaccounts of Separate Account B, assuming an investment at the beginning of the period when the separate account first invested in the portfolios, and withdrawal of the investment at the end of the period, adjusted to reflect the deduction of all applicable portfolio and current contract charges. We may also show rates of total return on amounts invested at the beginning of the period with no withdrawal at the end of the period. Total return figures which assume no withdrawals at the end of the period will reflect all recurring charges, but will not reflect the surrender charge. In addition, we may present historic performance data for the investment portfolios since their inception reduced by some or all of the fees and charges under the Contract. Such adjusted historic performance includes data that precedes the inception dates of the subaccounts of Separate Account B. This data is designed to show the performance that would have resulted if the Contract had been in existence before the separate account began investing in the portfolios. 10 Landmark - 136957 Current yield for the Liquid Assets subaccount is based on income received by a hypothetical investment over a given 7-day period, less expenses accrued, and then "annualized" (i.e., assuming that the 7-day yield would be received for 52 weeks). We calculate "effective yield" for the Liquid Assets subaccount in a manner similar to that used to calculate yield, but when annualized, the income earned by the investment is assumed to be reinvested. The "effective yield" will thus be slightly higher than the "yield" because of the compounding effect of earnings. We calculate quotations of yield for the remaining subaccounts on all investment income per accumulation unit earned during a given 30-day period, after subtracting fees and expenses accrued during the period, assuming no surrender. YOU SHOULD BE AWARE THAT THERE IS NO GUARANTEE THAT THE LIQUID ASSETS SUBACCOUNT WILL HAVE A POSITIVE OR LEVEL RETURN. We may compare performance information for a subaccount to: (i) the Standard & Poor's 500 Stock Index, Dow Jones Industrial Average, Donoghue Money Market Institutional Averages, or any other applicable market indices, (ii) other variable annuity separate accounts or other investment products tracked by Lipper Analytical Services (a widely used independent research firm which ranks mutual funds and other investment companies), or any other rating service, and (iii) the Consumer Price Index (measure for inflation) to determine the real rate of return of an investment in the Contract. Our reports and promotional literature may also contain other information including the ranking of any subaccount based on rankings of variable annuity separate accounts or other investment products tracked by Lipper Analytical Services or by similar rating services. Performance information reflects only the performance of a hypothetical contract and should be considered in light of other factors, including the investment objective of the investment portfolio and market conditions. Please keep in mind that past performance is not a guarantee of future results. FINANCIAL STATEMENTS The statement of assets and liabilities of Separate Account B as of December 31, 2004, and the related statement of operations for the year then ended, and the statements of changes in net assets for each of the two years in the period then ended are included in the Statement of Additional Information. The consolidated financial statements and schedules of ING USA Annuity and Life Insurance Company as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004 are included in the Statement of Additional Information. - -------------------------------------------------------------------------------- ING USA ANNUITY AND LIFE INSURANCE COMPANY - -------------------------------------------------------------------------------- ING USA Annuity and Life Insurance Company ("ING USA") is an Iowa stock life insurance company, which was originally incorporated in Minnesota on January 2, 1973. ING USA is a wholly owned subsidiary of Lion Connecticut Holdings Inc. ("Lion Connecticut"), which in turn is a wholly owned subsidiary of ING Groep N.V. ("ING"), a global financial services holding company based in The Netherlands. ING USA is authorized to sell insurance and annuities in all states, except New York, and the District of Columbia. ING USA's consolidated financial statements appear in the Statement of Additional Information. Lion Connecticut is the holding company for Directed Services, Inc., the investment manager of the ING Investors Trust and the distributor of the Contracts, and other interests. ING also owns ING Investments, LLC and ING Investment Management Co., portfolio managers of the ING Investors Trust, and the investment managers of the ING Variable Insurance Trust and ING Variable Products Trust and ING Variable Product Portfolios, respectively. ING also owns Baring International Investment Limited, another portfolio manager of the ING Investors Trust. 11 Landmark - 136957 Our principal office is located at 1475 Dunwoody Drive, West Chester, Pennsylvania 19380. - -------------------------------------------------------------------------------- ING USA SEPARATE ACCOUNT B - -------------------------------------------------------------------------------- ING USA Separate Account B ("Separate Account B") was established as a separate account of the Company on July 14, 1988. It is registered with the SEC as a unit investment trust under the Investment Company Act of 1940, as amended (the "1940 Act"). Separate Account B is a separate investment account used for our variable annuity contracts. We own all the assets in Separate Account B but such assets are kept separate from our other accounts. Separate Account B is divided into subaccounts. Each subaccount invests exclusively in shares of one investment portfolio of a Trust or Fund. Each investment portfolio has its own distinct investment objectives and policies. Income, gains and losses, realized or unrealized, of a portfolio are credited to or charged against the corresponding subaccount of Separate Account B without regard to any other income, gains or losses of the Company. Assets equal to the reserves and other contract liabilities with respect to each are not chargeable with liabilities arising out of any other business of the Company. They may, however, be subject to liabilities arising from subaccounts whose assets we attribute to other variable annuity contracts supported by Separate Account B. If the assets in Separate Account B exceed the required reserves and other liabilities, we may transfer the excess to our general account. We are obligated to pay all benefits and make all payments provided under the Contracts. Note: We currently offer other variable annuity contracts that invest in Separate Account B, but are not discussed in this prospectus. Separate Account B may also invest in other investment portfolios which are not available under your Contract. Under certain circumstances, we may make certain changes to the subaccounts. For more information, see "The Annuity Contract -- Addition, Deletion, or Substitution of Subaccounts and Other Changes." - -------------------------------------------------------------------------------- THE TRUSTS AND FUNDS - -------------------------------------------------------------------------------- YOU WILL FIND INFORMATION ABOUT THE TRUSTS AND FUNDS CURRENTLY AVAILABLE UNDER YOUR CONTRACT IN APPENDIX B -- THE INVESTMENT PORTFOLIOS. A PROSPECTUS CONTAINING MORE COMPLETE INFORMATION ON EACH TRUST OR FUND MAY BE OBTAINED BY CALLING OUR CUSTOMER SERVICE CENTER AT 800-366-0066. YOU SHOULD READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. Certain funds are designated as "Master-Feeder", "LifeStyle Funds" or "MarketPro Funds". Funds offered in a Master-Feeder structure (such as the American Funds) or fund of funds structure (such as the LifeStyle or MarketPro Funds) may have higher fees and expenses than a fund that invests directly in debt and equity securities. See "Trust and Fund Expenses". Also, you should discuss with your registered representative whether the LifeStyle or MarketPro Funds are appropriate for you, particularly if you are a conservative investor. If, due to differences in tax treatment or other considerations, the interests of contract owners of various contracts participating in the Trusts or Funds conflict, we, the Boards of Trustees or Directors of the Trusts or Funds, and any other insurance companies participating in the Trusts or Funds will monitor events to identify and resolve any material conflicts that may arise. RESTRICTED FUNDS We may, with 30 days notice to you, designate any investment option as a Restricted Fund and limit the amount you may allocate or transfer to a Restricted Fund. We may also change the limitations on existing contracts with respect to new premiums added to investment portfolios and with respect to new transfers to investment portfolios. We may establish any limitations, at our discretion, as a percentage of premium or contract value, or as a specified dollar amount, and change the limitation at any time. 12 Landmark - 136957 Currently, we have not designated any investment option as a Restricted Fund. If we designate an investment option as a Restricted Fund or set applicable limitations, such change will apply only to transactions made after the designation. We limit your investment in the Restricted Funds on an aggregate basis for all Restricted Funds and for each individual Restricted Fund. Currently, we limit an investment in Restricted Funds to the following limitations: no more than $999,999,999, and no more than 30 percent of contract value. We may change these limits, in our discretion, for new contracts, premiums, transfers or withdrawals. We monitor the aggregate and individual limits on investments in Restricted Funds for each transaction (e.g. premium payments, reallocations, withdrawals, dollar cost averaging). If the contract value in the Restricted Funds has increased beyond the applicable limit due to market growth, we will not require the reallocation or withdrawal of contract value from the Restricted Funds. However, if the contract value in the Restricted Funds exceed the aggregate limit, if you take a withdrawal, it must come from either the Restricted Funds or pro-rata from all investment options in which contract value is allocated, so that the percentage of contract value in the Restricted Funds following the withdrawal is less than or equal to the percentage of contract value in the Restricted Funds prior to the withdrawal. We will not permit a transfer to the Restricted Funds if it would increase the contract value in the Restricted Fund or in all Restricted Funds to more than the applicable limits set forth above. We will not limit transfers from Restricted Funds. If the multiple reallocations lower the percentage of total contract value in Restricted Funds, we will permit the reallocation even if the percentage of contract value in a Restricted Fund is greater than its limit. Please see "Withdrawals" and "Transfers Among Your Investments" in this prospectus for more information on the effect of Restricted Funds. - -------------------------------------------------------------------------------- COVERED FUNDS, SPECIAL FUNDS AND EXCLUDED FUNDS - -------------------------------------------------------------------------------- For purposes of determining death benefits and benefits under the optional benefit riders (but not the earnings multiplier benefit rider), we assign the investment options to one of three categories of funds. The categories are: 1) Covered Funds; 2) Special Funds; and 3) Excluded Funds. Allocations to Covered Funds participate fully in all guaranteed benefits. Allocations to Special Funds could affect the death benefit and/or optional benefit rider guarantee that may otherwise be provided. Allocations to Excluded Funds do not participate in any guaranteed benefits, due to their potential for volatility. No investment options are currently designated as Excluded Funds. Designation of investment options under these categories may vary by benefit. For example, we may designate an investment option a Special Fund for purposes of calculating a benefit under an optional benefit rider, but not a death benefit, or for calculating one death benefit and not another. We may, with 30 days notice to you, designate any investment option as a Special or Excluded Fund with respect to new premiums added to such investment option and also with respect to new transfers to such investment option. Please see Appendix F for examples. 13 Landmark - 136957 - -------------------------------------------------------------------------------- CHARGES AND FEES - -------------------------------------------------------------------------------- We deduct the contract charges described below to compensate us for our costs and expenses, services provided and risks assumed under the Contracts. We incur certain costs and expenses for distributing and administering the Contracts, including compensation and expenses paid in connection with sales of the Contracts, for paying the benefits payable under the Contracts and for bearing various risks associated with the Contracts. The amount of a contract charge will not always correspond to the actual costs associated with the charge. For example, the surrender charge collected may not fully cover all of the distribution expenses incurred by us with the service or benefits provided. If there are any profits from fees and charges deducted under the Contract, including the mortality and expense risk charge and rider and benefit charges, we may use such profits to finance the distribution of Contracts. CHARGE DEDUCTION SUBACCOUNT You may elect to have all charges against your contract value deducted directly from a single subaccount designated by the Company. Currently we use the Liquid Assets subaccount for this purpose. If you do not elect this option, or if the amount of the charges is greater than the amount in the designated subaccount, we will deduct the charges as discussed below. You may cancel this option at any time by sending satisfactory notice to our Customer Service Center. CHARGES DEDUCTED FROM THE CONTRACT VALUE We deduct the following charges from your contract value: SURRENDER CHARGE. We will deduct a contingent deferred sales charge (a "surrender charge") if you surrender your Contract or if you take a withdrawal in excess of the Free Withdrawal Amount during the 4-year period from the date we receive and accept a premium payment. We base the surrender charge on a percentage of each premium payment withdrawn. The surrender charge is based on the amount requested for withdrawal. The surrender charge is deducted from the contract value remaining after you have received the amount requested for withdrawal. This charge is intended to cover sales expenses that we have incurred. We may reduce or waive the surrender charge in certain situations. We will never charge more than the maximum surrender charges. The percentage of premium payments deducted at the time of surrender or excess withdrawal depends on the number of complete years that have elapsed since that premium payment was made. We determine the surrender charge as a percentage of each premium payment as follows: COMPLETE YEARS ELAPSED 0 1 2 3 4+ SINCE PREMIUM PAYMENT SURRENDER CHARGE (AS A PERCENTAGE OF PREMIUM 6% 5% 4% 3% 0% PAYMENT) WAIVER OF SURRENDER CHARGE FOR EXTENDED MEDICAL CARE. We will waive the surrender charge in most states in the following events: (i) you begin receiving qualified extended medical care on or after the first contract anniversary for at least 45 days during a 60-day period and we receive your request for the surrender or withdrawal, together with all required documentation at our Customer Service Center during the term of your care or within 90 days after the last day of your care; or (ii) you are first diagnosed by a qualified medical professional, on or after the first contract anniversary, as having a qualifying terminal illness. We have the right to require an examination by a physician of our choice. If we require such an examination, we will pay for it. You are required to send us satisfactory written proof of illness. See your Contract for more information. The waiver of surrender charge may not be available in all states. 14 Landmark - 136957 FREE WITHDRAWAL AMOUNT. The Free Withdrawal Amount is the greater of (i) any earnings less previous withdrawals, and (ii) 10% of premium payments paid within 4 years prior to the date of withdrawal and not previously withdrawn, less any previous withdrawals taken in the same contract year. SURRENDER CHARGE FOR EXCESS WITHDRAWALS. We will deduct a surrender charge for excess withdrawals, which may include a withdrawal you make to satisfy required minimum distribution requirements under the Internal Revenue Code (the "Code"). We consider a withdrawal to be an excess withdrawal when the amount you withdraw in any contract year exceeds the Free Withdrawal Amount. When you are receiving systematic withdrawals, any combination of regular withdrawals taken and any systematic withdrawals expected to be received in a contract year will be included in determining the amount of the excess withdrawal. Such a withdrawal will be considered a partial surrender of the Contract and we will impose a surrender charge and any associated premium tax. We will deduct such charges from the contract value in proportion to the contract value in each subaccount or Fixed Interest Allocation from which the excess withdrawal was taken. In instances where the excess withdrawal equals the entire contract value in such subaccounts or Fixed Interest Allocations, we will deduct charges proportionately from all other subaccounts and Fixed Interest Allocations in which you are invested. ANY WITHDRAWAL FROM A FIXED INTEREST ALLOCATION MORE THAN 30 DAYS BEFORE ITS MATURITY DATE WILL TRIGGER A MARKET VALUE ADJUSTMENT. See Appendix C and the Fixed Account II prospectus for more information. For the purpose of calculating the surrender charge for an excess withdrawal: (i) we treat premiums as being withdrawn on a first-in, first-out basis; and (ii) amounts withdrawn which are not considered an excess withdrawal are not considered a withdrawal of any premium payments. We have included an example of how this works in Appendix E. Although we treat premium payments as being withdrawn before earnings for purpose of calculating the surrender charge for excess withdrawals, the federal tax law treats earnings as withdrawn first. PREMIUM TAXES. We may charge for state and local premium taxes depending on your state of residence. These taxes can range from 0% to 3.5% of the premium payment. We have the right to change this amount to conform with changes in the law or if you change your state of residence. We deduct the premium tax from your contract value or from the MGIB Benefit Base, if exercised, on the annuity start date. However, some jurisdictions impose a premium tax at the time initial and additional premiums are paid, regardless of when the annuity payments begin. In those states we may defer collection of the premium taxes from your contract value and deduct it when you surrender the Contract, when you take an excess withdrawal or on the annuity start date. ADMINISTRATIVE CHARGE. We deduct an annual administrative charge on each contract anniversary. If you surrender your Contract prior to a contract anniversary, we deduct an administrative charge when we determine the cash surrender value payable to you. The charge is $30 per Contract. We waive this charge if your contract value is $100,000 or more at the end of a contract year or the total of your premium payments is $100,000 or more or under other under conditions established by ING USA. We deduct the charge proportionately from all subaccounts in which you are invested. If there is no contract value in those subaccounts, we will deduct the charge from your Fixed Interest Allocations starting with the guaranteed interest periods nearest their maturity dates until the charge has been paid. TRANSFER CHARGE. We currently do not deduct any charges for transfers made during a contract year. We have the right, however, to assess up to $25 for each transfer after the twelfth transfer in a contract year. The charge will not apply to any transfers due to the election of dollar cost averaging or automatic rebalancing. REDEMPTION FEES. If applicable, we may deduct the amount of any redemption fees imposed by the underlying portfolios as a result of withdrawals, transfers or other fund transactions you initiate. Redemption fees, if any, are separate and distinct from any transaction charges or other charges deducted from your contract value. 15 Landmark - 136957 CHARGES DEDUCTED FROM THE SUBACCOUNTS MORTALITY AND EXPENSE RISK CHARGE. The amount of the mortality and expense risk charge depends on the death benefit you have elected. The charge is deducted on each business day and is a percentage of average daily assets based on the assets you have in each subaccount. The mortality and expense risk charge compensates the Company for death benefit and annuitization risks and the risk that expense charges will not cover actual expenses. If there are any profits from the mortality and expense risk charge, we may use such profits to finance the distribution of Contracts. - -------------------------------------------------------------------------------- QUARTERLY RATCHET MAX 7 STANDARD ENHANCED ENHANCED DEATH BENEFIT DEATH BENEFIT DEATH BENEFIT - -------------------------------------------------------------------------------- Annual Annual Annual Charge Charge Charge Expressed Expressed Expressed Annual as Daily Annual as Daily Annual as Daily Charge Rate Charge Rate Charge Rate 1.50% 0.004141% 1.75% 0.004837% 2.05% 0.005675% - -------------------------------------------------------------------------------- ASSET-BASED ADMINISTRATIVE CHARGE. The amount of the asset-based administrative charge, on an annual basis, is equal to 0.15% of the assets you have in each subaccount. We deduct the charge from your assets in each subaccount on each business day at the rate of 0.000411% for each day since the previous business day. EARNINGS MULTIPLIER BENEFIT CHARGE. Subject to state availability, you may purchase the earnings multiplier benefit rider for a non-qualified Contract either at issue or on the next contract anniversary following the introduction of the benefit in your state, if later. So long as the rider is in effect, we will deduct a separate quarterly charge for the rider through a pro-rata reduction of the contract value of the subaccounts in which you are invested. If there is insufficient contract value in the subaccounts, we will deduct the charges from your Fixed Interest Allocations starting with the allocation nearest its maturity date. If that is insufficient, we will deduct the charge from the allocation next nearest its maturity date, and so on. We deduct the rider charge on each quarterly contract anniversary in arrears, meaning we deduct the first charge on the first quarterly anniversary following the rider date. If you surrender or annuitize your Contract, we will deduct a pro-rata portion of the charge for the current quarter based on the current contract value immediately prior to the surrender or annuitization. The quarterly charge for the earnings multiplier benefit rider is 0.08% (0.30% annually). For a description of the rider, see "Earnings Multiplier Benefit Rider." OPTIONAL RIDER CHARGES. Subject to state availability, you may purchase one of two optional benefit riders that you may elect at issue. So long as the rider is in effect, we will deduct a separate quarterly charge for each optional benefit rider through a pro-rata reduction of the contract value of the subaccounts in which you are invested. If there is insufficient contract value in the subaccount, we will deduct the charges from your Fixed Interest Allocations nearest their maturity date. We deduct each rider charge on each quarterly contract anniversary in arrears, meaning we deduct the first charge on the first quarterly anniversary following the rider date. For a description of the riders and the defined terms used in connection with the riders, see "The Annuity Contract -- Optional Riders." 16 Landmark - 136957 MINIMUM GUARANTEED INCOME BENEFIT (MGIB). The charge for the MGIB rider is as follows: -------------------------------------------------------------------- AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE -------------------------------------------------------------------- 0.75% of the MGIB Benefit Base 0.19% of the MGIB Benefit Base -------------------------------------------------------------------- Please see "Optional Riders-Minimum Guaranteed Income Benefit" for a description of the MGIB Benefit Base and MGIB Rate. ING LIFEPAY MINIMUM GUARANTEED WITHDRAWAL BENEFIT (ING LIFEPAY). The annual charge for the ING LifePay rider is 0.50% (0.125% quarterly) of the contract value. The charge is deducted from the contract value in the subaccounts on each quarterly contract anniversary date, in arrears. We will deduct charges during the period starting on the rider date and up to your rider's Lifetime Automatic Periodic Benefit ("LAPB") Status. LAPB Status will occur if your contract value is reduced to zero and other conditions are met. Please see "ING LifePay Minimum Guaranteed Withdrawal Benefit Rider - Lifetime Automatic Periodic Benefit Status" later in this prospectus. If you surrender or annuitize your Contract, we will deduct a pro-rata portion of the charge for the current quarter based on the current quarterly charge rate immediately prior to the surrender or annuitization. TRUST AND FUND EXPENSES As shown in the Fund Expense Table, each fund deducts management fees from the amounts allocated to the funds. In addition, each fund deducts other expenses which may include service fees which are used to compensate service providers, including the Company and its affiliates, for administrative and contract owner services provided on behalf of the fund. Furthermore, certain funds deduct a distribution or 12b-1 fee, which is used to finance any activity that is primarily intended to result in the sale of fund shares. FOR A MORE COMPLETE DESCRIPTION OF THE FUNDS' FEES AND EXPENSES, REVIEW EACH FUND'S PROSPECTUS. The Company, or its U.S. affiliates, receives from each of the funds or the funds' affiliates varying levels and types of revenue with respect to each of the funds available through the Contract. In terms of total dollar amounts received, the greatest amount of revenue comes from assets allocated to funds managed by ING Investments, LLC or other Company affiliates, which funds may or may not also be sub-advised by another Company affiliate. Assets allocated to funds managed by a Company affiliate, Directed Services, Inc., for example, but which are sub-advised by unaffiliated third parties generate the next greatest amount of revenue. Finally, assets allocated to unaffiliated funds generate the least amount of revenue. TYPES OF REVENUE RECEIVED FROM AFFILIATED FUNDS Affiliated funds are (a) funds managed by ING Investments, LLC or other Company affiliates, which may or may not also be sub-advised by a Company affiliate; and (b) funds managed by a Company affiliate but which are sub-advised by unaffiliated third parties. Revenues received by the Company from affiliated funds include: o Service fees that are deducted from fund assets and included within the "Other Expenses" column of the Fund Expense Table contained in this prospectus. o For certain share classes, the Company may also receive compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "Distribution and/or Service (12b-1) Fees" column of the Fund Expense Table. o Additionally, the Company receives other revenues from affiliated funds and/or their affiliates which may be based either on an annual percentage of average net assets held in the fund by the Company or a percentage of the management fees shown in the Fund Expense Table. These revenues may be received as cash payments or according to a variety of financial accounting techniques which are used to allocate revenue and profits across ING businesses. For funds sub-advised by unaffiliated third parties, once the sub-adviser has been paid, the adviser may share a portion of the remaining management fee with the Company. Because sub-advisory fees vary by sub-adviser, varying amounts of revenue are retained by the affiliated investment adviser and ultimately shared with the Company. 17 Landmark - 136957 TYPES OF REVENUE RECEIVED FROM UNAFFILIATED FUNDS Revenues received from each of the unaffiliated funds or their affiliates is based on an annual percentage of the average net assets held in that fund by the Company. Some unaffiliated funds or their affiliates pay us more than others and some of the amounts we receive may be significant. Revenues received by the Company from unaffiliated funds include: o For certain funds, compensation paid from 12b-1 fees or service fees that are deducted from fund assets. Any such fees deducted from fund assets are disclosed in the Fund Expense Table. o We may also receive additional payments for administrative, recordkeeping or other services which we provide to the funds or their affiliates or as an incentive for us to make the funds available through the Contract. These additional payments are not disclosed in the Fund Expense Table. These additional payments may be used by us to finance distribution of the Contract. The following table shows the unaffiliated fund families which have funds currently offered through the Contract, ranked according to total dollar amounts they paid to the Company or its affiliates in 2004: Fidelity Variable Insurance Products Portfolio ProFunds VP AIM Variable Insurance Funds Liberty Variable Insurance Trust If the revenues received from affiliated funds were included in the table above, payments to the Company or its affiliates by ING Investments, LLC and other Company affiliates would be at the top of the list. Management personnel of the Company, and of its affiliated broker-dealers, may receive additional compensation if the overall amount of investments in funds advised by the Company or its affiliates meets certain target levels or increases over time. Compensation for certain management personnel, including sales management personnel, may be enhanced if the overall amount of investments in the contracts and other products issued or advised by the Company or its affiliates increases over time. Certain sales management personnel may also receive compensation that is a specific percentage of the commissions paid to distributors or of purchase payments received under the contracts. Certain funds are designated as "Master-Feeder" or "LifeStyle Funds." Funds offered in a Master Feeder structure (such as the American Funds) or fund of funds structure (such as LifeStyle Funds) may have higher fees and expenses than a fund that invests directly in debt and equity securities. The Fund Expense Table included in "Fees and Expenses" reflects the aggregate annual operating expenses of each portfolio and its corresponding underlying fund or funds. These funds are identified in the Fund Expense Table. See "Fees and Expenses -- Trust or Fund Expenses." - -------------------------------------------------------------------------------- THE ANNUITY CONTRACT - -------------------------------------------------------------------------------- The Contract described in this prospectus is a deferred combination variable and fixed annuity contract. The Contract provides a means for you to invest in one or more of the available mutual fund portfolios of the Trusts and Funds through Separate Account B. It also provides a means for you to invest in a Fixed Interest Allocation through the Fixed Account. See Appendix C and the Fixed Account II prospectus for more information on the Fixed Interest Allocation and Fixed Account. If you have any questions concerning this Contract, contact your registered representative or call our Customer Service Center at 1-800-366-0066. 18 Landmark - 136957 CONTRACT DATE AND CONTRACT YEAR The date the Contract became effective is the contract date. Each 12-month period following the contract date is a contract year. CONTRACT OWNER You are the contract owner. You have the rights and options described in the Contract. One or more persons may own the Contract. If there are multiple owners named, the age of the oldest owner will determine the applicable death benefit if such death benefit is available for multiple owners. In the event a selected death benefit is not available, the Standard Death Benefit will apply. The death benefit becomes payable when you die. In the case of a sole contract owner who dies before the annuity start date, we will pay the beneficiary the death benefit then due. The sole contract owner's estate will be the beneficiary if no beneficiary has been designated or the beneficiary has predeceased the contract owner. In the case of a joint owner of the Contract dying before the annuity start date, we will designate the surviving contract owner as the beneficiary. This will override any previous beneficiary designation. See "Joint Owner" below. If the contract owner is a trust and a beneficial owner of the trust has been designated, the beneficial owner will be treated as the contract owner for determining the death benefit. If a beneficial owner is changed or added after the contract date, we will treat this as a change of contract owner for determining the death benefit (likely a taxable event). If no beneficial owner of the trust has been designated, the availability of Enhanced Death Benefits will be based on the age of the annuitant at the time you purchase the Contract. JOINT OWNER. For non-qualified Contracts only, joint owners may be named in a written request before the Contract is in effect. Joint owners may independently exercise transfers and other transactions allowed under the Contract. All other rights of ownership must be exercised by both owners. Joint owners own equal shares of any benefits accruing or payments made to them. All rights of a joint owner end at death of that owner if the other joint owner survives. The entire interest of the deceased joint owner in the Contract will pass to the surviving joint owner and the death benefit will be payable. Joint owners may only select the Standard Death Benefit option. The earnings multiplier benefit rider is not available when there are joint owners. Any addition or deletion of a joint owner is treated as a change of owner which may affect the amount of the death benefit. See "Change of Contract Owner or Beneficiary" below. If you have elected an Enhanced Death Benefit, and you add a joint owner after issue, the Enhanced Death Benefit from the date of change will end. If the older joint owner is attained age 85 or under, the Standard Death Benefit will apply. If the older joint owner is attained age 86 or over on the date of the ownership change, the death benefit will be the cash surrender value. The mortality and expense risk charge going forward will reflect the change in death benefit. If you elected the earnings multiplier benefit rider, it will terminate if you add a joint owner after issue. Note that returning a Contract to single owner status will not restore any Enhanced Death Benefit or the earnings multiplier benefit. Unless otherwise specified, the term "age" when used for joint owners shall mean the age of the oldest owner. ANNUITY START DATE The annuity start date is the date you start receiving annuity payments under your Contract. The Contract, like all deferred variable annuity contracts, has two phases: the accumulation phase and the income phase. The accumulation phase is the period between the contract date and the annuity start date. The income phase begins when you start receiving regular annuity payments from your Contract on the annuity start date. ANNUITANT The annuitant is the person designated by you to be the measuring life in determining annuity payments. You are the annuitant unless you name another annuitant in the application. The annuitant's age determines when the income phase must begin and the amount of the annuity payments to be paid. The contract owner will receive the annuity benefits of the Contract if the annuitant is living on the annuity start date. You may not change the annuitant after the Contract is in effect. 19 Landmark - 136957 If the contract owner is an individual, and the annuitant dies before the annuity start date and you have named a contingent annuitant, the contingent annuitant becomes the annuitant. If the annuitant dies before the annuity start date and there is no contingent annuitant, the contract owner will become the annuitant. The contract owner may designate a new annuitant within 60 days of the death of the annuitant. If the annuitant was the sole contract owner and there is no beneficiary designation, the annuitant's estate will be the beneficiary. If the contract owner is not an individual, and the annuitant dies before the annuity start date, we will pay the designated beneficiary the death benefit then due. If a beneficiary has not been designated, or if there is no designated beneficiary living, the contract owner will be the beneficiary. Regardless of whether a death benefit is payable, if the annuitant dies and any contract owner is not an individual, distribution rules under federal tax law will apply. You should consult your tax adviser for more information if the contract owner is not an individual. BENEFICIARY The beneficiary is named by you in a written request. The beneficiary is the person who receives any death benefit proceeds. We pay death benefits to the primary beneficiary (unless there are joint owners, in which case death proceeds are payable to the surviving owner(s)). If the beneficiary dies before the annuitant or the contract owner, we pay the death benefit proceeds to the contingent beneficiary, if any. If there is no surviving beneficiary, we pay the death benefit proceeds to the contract owner's estate. One or more persons may be a beneficiary or contingent beneficiary. In the case of more than one beneficiary, we will assume any death benefit proceeds are to be paid in equal shares to the surviving beneficiaries unless you indicate otherwise in writing. CHANGE OF CONTRACT OWNER OR BENEFICIARY. During the annuitant's lifetime, you may transfer ownership of a non-qualified Contract. A change in ownership may affect the amount of the death benefit, the guaranteed minimum death benefit and/or the death benefit option applied to the Contract, the amount of the earnings multiplier benefit, if applicable, and the continuation of any other optional rider that you have elected. The new owner's age, as of the date of the change, will be used as the basis for determining the applicable benefits and charges. The new owner's death will determine when a death benefit is payable. If you have elected the Standard Death Benefit option, the minimum guaranteed death benefit will continue if the new owner is age 85 or under on the date of the ownership change. For the Enhanced Death Benefit options, if the new owner is age 79 or under on the date that ownership changes, the minimum guaranteed death benefit will continue. If the new owner is age 80 to 85, the Enhanced Death Benefit will end, and the death benefit will become the Standard Death Benefit. For all death benefit options, 1) if the new owner's attained age is 86 or over on the date of the ownership change, or 2) if the new owner is not an individual (other than a trust for the benefit of the owner or annuitant), the death benefit will be the cash surrender value. The mortality and expense risk charge going forward will reflect the change in death benefit. Please note that once a death benefit has been changed due to a change in owner, a subsequent change to a younger owner will not restore any Enhanced Death Benefits. If you have elected the earnings multiplier benefit rider, and the new owner is under age 76, the rider will continue. The benefit will be adjusted to reflect the attained age of the new owner as the issue age. We will use the Maximum Base and Benefit Base percentages in effect on the original rider date to calculate the benefit. If the new owner is age 76 or over, the rider will terminate. If you have not elected the earnings multiplier benefit rider, the new owner may not add the rider upon the change of ownership. If you have elected another optional rider, the rider will terminate upon a change of ownership. A change of owner likely has tax consequences. See "Federal Tax Considerations" in this prospectus. 20 Landmark - 136957 You have the right to change beneficiaries during the annuitant's lifetime unless you have designated an irrevocable beneficiary. If you have designated an irrevocable beneficiary, you and the irrevocable beneficiary may have to act together to exercise some of the rights and options under the Contract. You may also restrict a beneficiary's right to elect an annuity option or receive a lump sum payment. If so, such rights or options will not be available to the beneficiary. All requests for changes must be in writing and submitted to our Customer Service Center. Please date your requests. The change will be effective as of the day we receive the request. The change will not affect any payment made or action taken by us before recording the change. PURCHASE AND AVAILABILITY OF THE CONTRACT We will issue a Contract only if both the annuitant and the contract owner are age 80 or younger. The initial premium payment must be $10,000 or more ($1,500 for qualified Contracts). You may make additional payments of $500 or more ($50 for qualified Contracts) at any time after the free look period, and up to the contract anniversary after your 85th birthday. Under certain circumstances, we may waive the minimum premium payment requirement. We may also change the minimum initial or additional premium requirements for certain group or sponsored arrangements. An initial or additional premium payment that would cause the contract value of all annuities that you maintain with us to exceed $1,000,000 requires our prior approval. The Contract may not be available to all ages through all broker dealers. The Contract is designed for people seeking long-term tax-deferred accumulation of assets, generally for retirement or other long-term purposes. The tax-deferred feature is more attractive to people in high federal and state tax brackets. YOU SHOULD NOT BUY THIS CONTRACT: (I) IF YOU ARE LOOKING FOR A SHORT-TERM INVESTMENT; (II) IF YOU CANNOT RISK GETTING BACK LESS MONEY THAN YOU PUT IN; OR (III) IF YOUR ASSETS ARE IN A PLAN WHICH PROVIDES FOR TAX-DEFERRAL AND YOU SEE NO OTHER REASON TO PURCHASE THIS CONTRACT. IRAs and other qualified plans already have the tax-deferral feature found in this Contract. For an additional cost, the Contract provides other features and benefits including death benefits and the ability to receive a lifetime income. You should not purchase a qualified Contract unless you want these other features and benefits, taking into account their cost. See "Fees and Expenses" in this prospectus. IF YOU ARE CONSIDERING AN ENHANCED DEATH BENEFIT OPTION AND/OR THE EARNINGS MULTIPLIER BENEFIT RIDER AND YOUR CONTRACT WILL BE AN IRA, SEE "TAXATION OF QUALIFIED CONTRACTS -- INDIVIDUAL RETIREMENT ANNUITIES" AND "TAX CONSEQUENCES OF ENHANCED DEATH BENEFIT" IN THIS PROSPECTUS. CREDITING OF PREMIUM PAYMENTS We will process your initial premium within 2 business days after receipt, if the application and all information necessary for processing the Contract are complete. We will process subsequent premium payments within 1 business day if we receive all information necessary. In certain states we also accept initial and additional premium payments by wire order. Wire transmittals must be accompanied by sufficient electronically transmitted data. We may retain your initial premium payment for up to 5 business days while attempting to complete an incomplete application. If the application cannot be completed within this period, we will inform you of the reasons for the delay. We will also return the premium payment immediately unless you direct us to hold the premium payment until the application is completed. If you choose to have us hold the premium payment, it will be held in a non-interest bearing account. We will allocate your initial payment according to the instructions you specified. If a subaccount is not available or requested in error, we will make inquiry about a replacement subaccount. If we are unable to reach you or your representative, we will consider the application incomplete. For initial premium payments designated for a subaccount of Separate Account B, we will credit the payment at the accumulation unit value next determined after we receive your premium payment and the completed application. Once the completed application is received, we will allocate the payment to the subaccounts and/or Fixed Interest Allocation of Separate Account B specified by you within 2 business days. 21 Landmark - 136957 If your premium payment was transmitted by wire order from your broker/dealer, we will follow one of the following two procedures after we receive and accept the wire order and investment instructions. The procedure we follow depends on state availability and the procedures of your broker/dealer. 1) If either your state or broker/dealer do not permit us to issue a Contract without an application, we reserve the right to rescind the Contract if we do not receive and accept a properly completed application or enrollment form within 5 days of the premium payment. If we do not receive the application or form within 5 days of the premium payment, we will refund the contract value plus any charges we deducted, and the Contract will be voided. Some states require that we return the premium paid. 2) If your state and broker/dealer allow us to issue a Contract without an application, we will issue and mail the Contract to you or your representative, together with a Contract Acknowledgement and Delivery Statement for your execution. Until our Customer Service Center receives the executed Contract Acknowledgement and Delivery Statement, neither you nor the broker/dealer may execute any financial transactions on your Contract unless they are requested in writing by you. We may require additional information before complying with your request (e.g., signature guarantee). We will ask about any missing information related to subsequent payments. We will allocate the subsequent payment(s) pro-rata according to the current variable subaccount allocation unless you specify otherwise. Any fixed allocation(s) will not be considered in the pro-rata calculations. If a subaccount is no longer available or requested in error, we will allocate the subsequent payment(s) proportionally among the other subaccount(s) in your current allocation or your allocation instructions. For any subsequent premium payments, we will credit the payment designated for a subaccount of Separate Account B at the accumulation unit value next determined after receipt of your premium payment and instructions. Once we allocate your premium payment to the subaccounts selected by you, we convert the premium payment into accumulation units. We divide the amount of the premium payment allocated to a particular subaccount by the value of an accumulation unit for the subaccount to determine the number of accumulation units of the subaccount to be held in Separate Account B with respect to your Contract. The net investment results of each subaccount vary with its investment performance. In some states, we may require that an initial premium designated for a subaccount of Separate Account B or the Fixed Account be allocated to a subaccount specially designated by the Company (currently, the Liquid Assets subaccount) during the free look period. After the free look period, we will convert your contract value (your initial premium plus any earnings less any expenses) into accumulation units of the subaccounts you previously selected. The accumulation units will be allocated based on the accumulation unit value next computed for each subaccount. Initial premiums designated for Fixed Interest Allocations will be allocated to a Fixed Interest Allocation with the guaranteed interest period you have chosen; however, in the future we may allocate the premiums to the specially designated subaccount during the free look period. We may also refuse to accept certain forms of premium payments or loan repayments, if applicable, (traveler's checks, for example) or restrict the amount of certain forms of premium payments or loan repayments (money orders totaling more than $500, for example). In addition, we may require information as to why a particular form of payment was used (third party checks, for example) and the source of the funds of such payment in order to determine whether or not we will accept it. Use of an unacceptable form of payment may result in us returning your premium payment and not issuing the contract. ADMINISTRATIVE PROCEDURES We may accept a request for Contract service in writing, by telephone, or other approved electronic means, subject to our administrative procedures, which vary depending on the type of service requested and may include proper completion of certain forms, providing appropriate identifying information, and/or other administrative requirements. We will process your request at the contract value next determined only after you have met all administrative requirements. Please be advised that with regard to withdrawal requests, the risk of a fraudulent transaction is increased by the use of a facsimile withdrawal request form, even if appropriate identifying information is provided. 22 Landmark - 136957 CONTRACT VALUE We determine your contract value on a daily basis beginning on the contract date. Your contract value is the sum of (i) the contract value in the Fixed Interest Allocations, and (ii) the contract value in each subaccount in which you are invested. CONTRACT VALUE IN FIXED INTEREST ALLOCATIONS. The contract value in your Fixed Interest Allocation is the sum of premium payments allocated to the Fixed Interest Allocation under the Contract, plus contract value transferred to the Fixed Interest Allocation, plus credited interest, minus any transfers and withdrawals from the Fixed Interest Allocation (including any Market Value Adjustment applied to such withdrawal), contract fees (including, in some cases, fees for optional benefit riders) and premium taxes. CONTRACT VALUE IN THE SUBACCOUNTS. On the contract date, the contract value in the subaccount in which you are invested is equal to the initial premium paid and designated to be allocated to the subaccount. On the contract date, we allocate your contract value to each subaccount and/or a Fixed Interest Allocation specified by you, unless the Contract is issued in a state that requires the return of premium payments during the free look period, in which case, the portion of your initial premium not allocated to a Fixed Interest Allocation may be allocated to a subaccount specially designated by the Company during the free look period for this purpose (currently, the Liquid Assets subaccount). On each business day after the contract date, we calculate the amount of contract value in each subaccount as follows: 1) We take the contract value in the subaccount at the end of the preceding business day. 2) We multiply (1) by the subaccount's Net Rate of Return since the preceding business day. 3) We add (1) and (2). 4) We add to (3) any additional premium payments, and then add or subtract any transfers to or from that subaccount. 5) We subtract from (4) any withdrawals and any related charges, and then subtract any contract fees and premium taxes. CASH SURRENDER VALUE The cash surrender value is the amount you receive when you surrender the Contract. The cash surrender value will fluctuate daily based on the investment results of the subaccounts in which you are invested and interest credited to Fixed Interest Allocations and any Market Value Adjustment. See Appendix C and the ING USA Fixed Account II prospectus for a description of the calculation of cash surrender value under any Fixed Interest Allocation. We do not guarantee any minimum cash surrender value. On any date during the accumulation phase, we calculate the cash surrender value as follows: we start with your contract value, adjust for any Market Value Adjustment, and then we deduct any surrender charge, any charge for premium taxes, the annual contract administrative fee (unless waived), any optional benefit rider charge, and any other charges incurred but not yet deducted. SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE. You may surrender the Contract at any time while the annuitant is living and before the annuity start date. A surrender is effective on the date we receive your written request and the Contract at our Customer Service Center. After we receive all paperwork required for us to process your surrender, we will determine and pay the cash surrender value at the price next determined. Once paid, all benefits under the Contract will terminate. For administrative purposes, we will transfer your money to a specially designated subaccount (currently the Liquid Assets subaccount) prior to processing the surrender. This transfer will have no effect on your cash surrender value. You may receive the cash surrender value in a single sum payment or apply it under one or more annuity options. We will usually pay the cash surrender value within 7 days. 23 Landmark - 136957 Consult your tax adviser regarding the tax consequences associated with surrendering your Contract. A surrender made before you reach age 59 1/2 may result in a 10% tax penalty. See "Federal Tax Considerations" for more details. ADDITION, DELETION OR SUBSTITUTION OF SUBACCOUNTS AND OTHER CHARGES We may make additional subaccounts available to you under the Contract. These subaccounts will invest in investment portfolios we find suitable for your Contract. We may also withdraw or substitute investment portfolios, subject to the conditions in your Contract and compliance with regulatory requirements. We may amend the Contract to conform to applicable laws or governmental regulations. If we feel that investment in any of the investment portfolios has become inappropriate to the purposes of the Contract, we may, with approval of the SEC (and any other regulatory agency, if required) substitute another portfolio for existing and future investments. If you elected the dollar cost averaging, systematic withdrawals or automatic rebalancing programs, or if you have other outstanding instructions and we substitute or otherwise eliminate a portfolio subject to those instructions, we will execute your instructions using the substituted or proposed replacement portfolio, unless you request otherwise. The substitute or proposed replacement portfolio may have higher fees and charges than any portfolio it replaces. We will provide you with written notice before we make these changes. We reserve the right to: (i) deregister Separate Account B under the 1940 Act; (ii) operate Separate Account B as a management company under the 1940 Act if it is operating as a unit investment trust; (iii) operate Separate Account B as a unit investment trust under the 1940 Act if it is operating as a managed separate account; (iv) restrict or eliminate any voting rights as to Separate Account B; and (v) combine Separate Account B with other accounts. We will provide you with written notice before we make any of these changes. THE FIXED ACCOUNT The Fixed Account is a segregated asset account which contains the assets that support a contract owner's Fixed Interest Allocations. See Appendix C and the Fixed Account II prospectus for more information. OPTIONAL RIDERS Subject to state availability, you may elect one of the two optional benefit riders discussed below. YOU MAY ADD ONLY ONE OF THESE TWO RIDERS TO YOUR CONTRACT. EACH RIDER HAS A SEPARATE CHARGE. Once elected, the riders generally may not be cancelled. You may not remove the rider and charges will be assessed regardless of the performance of your Contract. Please see "Charges and Fees -- Optional Rider Charges" for information on rider charges. THE OPTIONAL RIDERS MAY NOT BE AVAILABLE FOR ALL INVESTORS. YOU SHOULD ANALYZE EACH RIDER THOROUGHLY AND UNDERSTAND IT COMPLETELY BEFORE YOU SELECT ONE. THE OPTIONAL RIDERS DO NOT GUARANTEE ANY RETURN OF PRINCIPAL OR PREMIUM PAYMENTS AND DO NOT GUARANTEE PERFORMANCE OF ANY SPECIFIC INVESTMENT PORTFOLIO UNDER THE CONTRACT. YOU SHOULD CONSULT A QUALIFIED FINANCIAL ADVISER IN EVALUATING THE RIDERS. THE OPTIONAL RIDERS MAY NOT BE APPROVED IN ALL STATES. CHECK WITH OUR CUSTOMER SERVICE CENTER FOR AVAILABILITY IN YOUR STATE. THE TELEPHONE NUMBER IS (800) 366-0066. RIDER DATE. The rider date is the date the optional benefit rider becomes effective. The rider date is also the contract date if you purchase the rider when the Contract is issued. NO CANCELLATION. Once you purchase a rider, you may not cancel it unless you cancel the Contract during the Contract's free look period, surrender, annuitize or otherwise terminate the Contract. These events automatically cancel any rider. Once the Contract continues beyond the free look period, you may not cancel the rider. The Company may, at its discretion, cancel and/or replace a rider at your request in order to renew or reset a rider. 24 Landmark - 136957 TERMINATION. The optional riders are "living benefits," which means the guaranteed benefits offered by the riders are intended to be available to you while you are living and while your Contract is in the accumulation phase. The optional riders automatically terminate if you: o annuitize, surrender or otherwise terminate your Contract during the accumulation phase; or o die during the accumulation phase (first owner to die if there are multiple contract owners, or at death of annuitant if contract owner is not a natural person), unless your spouse beneficiary elects to continue the Contract. The optional riders will also terminate if there is a change in contract ownership (other than a spousal beneficiary continuation on your death). Other circumstances which may cause a particular optional rider to terminate automatically are discussed below with each rider. MINIMUM GUARANTEED INCOME BENEFIT RIDER (MGIB). The MGIB rider is an optional benefit which guarantees a minimum amount of annuity income will be available to you if you annuitize on the MGIB Date, regardless of fluctuating market conditions. The amount of the Minimum Guaranteed Income Benefit will depend on the amount of premiums you pay during the five contract years after you purchase the rider, the amount of contract value you allocate or transfer to Special Funds or Excluded Funds, the MGIB Rate, the adjustment for Special Fund or Excluded Fund transfers, and any withdrawals you take while the rider is in effect. Thus, investing in Special Funds or Excluded Funds may limit the MGIB benefit. The charge we deduct under the MGIB Rider is 0.75% of the MGIB Benefit Base. The calculation of the MGIB Benefit Base is described in "Determining the MGIB Annuity Income", below. Ordinarily, the amount of income that will be available to you on the annuity start date is based on your contract value, the annuity option you selected and the guaranteed or the income factors in effect on the date you annuitize. If you purchase the MGIB rider, the amount of income that will be available to you upon annuitization on the MGIB Date is the greatest of: 1) your annuity income based on your contract value on the MGIB Date adjusted for any Market Value Adjustment (see Appendix C and the Fixed Account II prospectus) applied to the guaranteed income factors specified in your Contract for the annuity option you selected; 2) your annuity income based on your contract value on the MGIB Date adjusted for any Market Value Adjustment (see Appendix C and the Fixed Account II prospectus) applied to the then-current income factors in effect for the annuity option you selected; or 3) the MGIB annuity income based on your MGIB Benefit Base on the MGIB Date applied to the MGIB income factors specified in your rider for the MGIB annuity option you selected. Prior to applying the MGIB income factors, we will adjust the MGIB Benefit Base for any premium tax recovery and Market Value Adjustment (see Appendix C and the Fixed Account II prospectus) that would otherwise apply at annuitization. The guaranteed factors contained in the MGIB rider generally provide lower payout per $1,000 of value applied than the guaranteed factors found in your Contract. Although the minimum income provided under the rider can be determined in advance, the contract value in the future is unknown, so the income provided under a contract with the MGIB rider attached may be greater or less than the income that would be provided under the Contract without the rider. Generally, the income calculated under the rider will be greater than the income provided under the Contract whenever the MGIB Benefit Base (greater of the Rollup and Ratchet Bases) is sufficiently in excess of the contract value to offset the additional conservatism reflected in the rider's income factors compared to those in the Contract. The income factors in the MGIB rider generally reflect a lower interest rate and more conservative mortality than the income factors in the Contract. The degree of relative excess that the income factors require to produce more income will vary for each individual circumstance. If the contract value exceeds the MGIB Benefit Base at time of annuitization, the Contract will always produce greater income than the rider. Please see Appendix G -- Examples of Minimum Guaranteed Income Benefit Calculation. 25 Landmark - 136957 The MGIB Benefit Base is only a calculation used to determine the MGIB annuity income. The MGIB Benefit Base does not represent a contract value, nor does it guarantee performance of the subaccounts in which you are invested. It is also not used in determining the amount of your cash surrender value and death benefits. Any reset of contract value under provisions of the Contract or other riders will not increase the MGIB Benefit Base or Maximum MGIB Base. The MGIB Benefit Base is tracked separately for Covered, Special and Excluded Funds, based on initial allocation of eligible premium (or contract value) if applicable, and subsequently allocated eligible premiums, withdrawals and transfers. Contract value (not eligible premium) is used as the initial value if the rider is added after the contract date. The following investment options are designated as Special Funds for purposes of calculating the MGIB Benefit Base: the ING Liquid Assets Portfolio, the ING PIMCO Core Bond Portfolio, ING VP Intermediate Bond Portfolio, TSA Special Fixed Account, the Fixed Account, the Fixed Interest Division and the ProFunds VP Rising Rates Opportunity Portfolio. Please see "The Trust and Funds -- Covered Funds and Special Funds." No investment options are currently designated as Excluded Funds. Prior to your latest annuity start date, you may choose to exercise your right to receive payments under the MGIB rider. Payments under the rider begin on the MGIB Date. We require a 10-year waiting period before you can annuitize the MGIB rider benefit. The MGIB must be exercised in the 30-day period prior to the end of the waiting period or any subsequent contract anniversary. At your request, the Company may in its discretion extend the latest contract annuity start date without extending the MGIB Date. DETERMINING THE MGIB ANNUITY INCOME. On the MGIB Date, we calculate your MGIB annuity income as follows: 1) WE FIRST DETERMINE YOUR MGIB BENEFIT BASE: The MGIB Benefit Base is equal to the greater of the MGIB Rollup Base and the MGIB Ratchet Base. A) CALCULATION OF MGIB ROLLUP BASE The MGIB Rollup Base is equal to the lesser of the Maximum MGIB Base and the sum of (a), (b) and (c) where: (a) is the MGIB Rollup Base for Covered Funds; (b) is the MGIB Rollup Base for Special Funds; and (c) is the contract value of Excluded Funds. The Maximum MGIB Base applicable to the MGIB Rollup Base is 300% of eligible premiums adjusted pro-rata for withdrawals. This means that the Maximum MGIB Base is reduced for withdrawals by the same proportion that the withdrawal reduces the contract value. The Maximum MGIB Base is not allocated by Fund category. THE MGIB ROLLUP BASE ALLOCATED TO COVERED FUNDS equals the eligible premiums allocated to Covered Funds, adjusted for subsequent withdrawals and transfers taken or made while the MGIB rider is in effect, accumulated at the MGIB Rate to the earlier of the oldest owner reaching age 80 and the MGIB Rollup Base reaching the Maximum MGIB Base. The MGIB Rollup Base accumulates at 0% thereafter. The MGIB Rate is currently 7%. The MGIB Rate is an annual effective rate. We may, at our discretion, discontinue offering this rate. The MGIB Rate will not change for those contracts that have already purchased the MGIB rider. 26 Landmark - 136957 THE MGIB ROLLUP BASE ALLOCATED TO SPECIAL FUNDS equals the eligible premiums allocated to Special Funds, adjusted for subsequent withdrawals and transfers taken or made while the MGIB rider is in effect. The MGIB Rate does not apply to the MGIB Rollup Base allocated to Special Funds, so the MGIB Rollup Base allocated to Special Funds does not accumulate. THE MGIB ROLLUP BASE ALLOCATED TO EXCLUDED FUNDS equals the eligible premiums allocated to Excluded Funds, adjusted for subsequent withdrawals and transfers taken or made while the MGIB rider is in effect, accumulated at the MGIB rate to the earlier of the oldest owner reaching age 80 and the MGIB Rollup Base reaching the Maximum MGIB Base, and at 0% thereafter. THE MGIB ROLLUP BASE ALLOCATED TO EXCLUDED FUNDS IS USED ONLY FOR TRANSFER ADJUSTMENTS AND RIDER CHARGES. IT IS NOT INCLUDED IN THE MGIB ROLLUP BASE USED TO DETERMINE BENEFITS. Eligible premiums are those added more than 5 years before the earliest MGIB Date. This means that, generally, premiums must be paid within five years of purchasing the MGIB rider to be considered eligible premiums. Premiums paid after that are excluded from the MGIB Rollup Base. Withdrawals reduce the MGIB Rollup Base on a pro-rata basis. The percentage reduction in the MGIB Rollup Base for each Fund category (i.e. Covered, Special or Excluded) equals the percentage reduction in contract value in that Fund category resulting from the withdrawal. This means that the MGIB Rollup Base for Covered Funds, Special Funds or Excluded Funds is reduced for withdrawals by the same proportion that the withdrawal reduces the contract value allocated to Covered Funds, Special Funds or Excluded Funds. For example, if the contract value in Covered Funds is reduced by 25% as the result of a withdrawal, the MGIB Rollup Base allocated to Covered Funds is also reduced by 25% (rather than by the amount of the withdrawal). Because the MGIB Rollup Base is tracked separately for Covered, Special and Excluded Funds, when you make transfers between Covered, Special Funds and Excluded Funds, there is an impact on the MGIB Rollup Base. Net transfers between Covered Funds and Special Funds will reduce the MGIB Rollup Base allocated to Covered Funds or Special Funds, as applicable, on a pro-rata basis. This means that the MGIB Rollup Base allocated to Covered Funds or Special Funds will be reduced by the same percentage as the transfer bears to the contract value allocated to Covered Funds or Special Funds. For example, if the contract value in Covered Funds is reduced by 25% as the result of the transfer, the MGIB Rollup Base allocated to Covered Funds is also reduced by 25% (rather than by the amount of the transfer). The resulting increase in the MGIB Rollup Base allocated to Special or Excluded Funds, as applicable, will equal the reduction in the MGIB Rollup Base allocated to Covered Funds. Transfers from Special Funds to Covered Funds are treated in the same way. Net transfers from Excluded Funds will reduce the MGIB Rollup Base allocated to Excluded Funds on a pro-rata basis. The resulting increase in the MGIB Rollup Base allocated to Covered or Special Funds, as applicable, will equal the lesser of the contract value transferred and the reduction in the MGIB Rollup Base allocated to Excluded Funds. 27 Landmark - 136957 B) CALCULATION OF MGIB RATCHET BENEFIT BASE The MGIB Ratchet Benefit Base is equal to the sum of (a) and (b) where: (a) is the MGIB Ratchet Base for Covered Funds and Special Funds; and (b) is the contract value for Excluded Funds. THE MGIB RATCHET BASE FOR COVERED FUNDS, SPECIAL FUNDS AND EXCLUDED FUNDS equals: o on the rider date, eligible premiums or the contract value, (if the rider is added after the contract date,) allocated to Covered Funds, Special Funds and Excluded Funds; o on each "quarterly anniversary date" prior to attainment of age 90, the MGIB Ratchet Base for Covered Funds, Special Funds and Excluded Funds is set equal to the greater of : 1) the current contract value allocated to Covered Funds, Special Funds and Excluded Funds (after any deductions occurring on that date); and 2) the MGIB Ratchet Base for Covered Funds, Special Funds and Excluded Funds from the most recent prior quarterly anniversary date, adjusted for any new eligible premiums and withdrawals attributable to Covered Funds, Special Funds or Excluded Funds and transfers. o at other times, the MGIB Ratchet Base for Covered Funds, Special Funds and Excluded Funds is the MGIB Ratchet Base from the prior quarterly anniversary date, adjusted for subsequent eligible premiums and withdrawals attributable to Covered Funds, Special Funds or Excluded Funds and transfers. THE MGIB RATCHET BASE ALLOCATED TO EXCLUDED FUNDS IS USED ONLY FOR TRANSFER ADJUSTMENTS AND RIDER CHARGES. IT IS NOT INCLUDED IN THE MGIB RATCHET BENEFIT BASE USED TO DETERMINE BENEFITS. A "quarterly anniversary date" is the date three months from the contract date that falls on the same date in the month as the contract date. For example, if the contract date is February 12, the quarterly anniversary date is May 12. If there is no corresponding date in the month, the quarterly anniversary date will be the last date of such month. If the quarterly anniversary date falls on a weekend or holiday, we will use the value as of the subsequent business day. 2) THEN WE DETERMINE THE MGIB ANNUITY INCOME BY MULTIPLYING YOUR MGIB BENEFIT BASE (ADJUSTED FOR ANY SURRENDER CHARGE AND PREMIUM TAXES) BY THE INCOME FACTOR, AND THEN DIVIDE BY $1,000. MGIB INCOME OPTIONS The following are the MGIB Income Options available under the MGIB Rider: (i) Income for Life (Single Life or Joint with 100% Survivor) and 10-20 year certain. (ii) Income for 20-30 year certain. (iii) Any other income plan offered by the Company in conjunction with the MGIB rider on the MGIB Date. 28 Landmark - 136957 Once during the life of the Contract, you have the option to elect to apply up to 50% of the MGIB Benefit Base to one of the MGIB Income Options available under the Rider. This option may only be exercised on a contract anniversary at or after the end of the waiting period. The portion of the MGIB Benefit Base so applied will be used to determine the MGIB income, as is otherwise described in the prospectus. The contract value will be reduced on a pro-rata basis. Any subsequent exercise of your right to receive payments under the MGIB rider must be for 100% of the remaining value. The exercise of this partial annitization of the MGIB Benefit Base does not affect your right to annuitize under the Contract without regard to the rider. The amount applied to the partial annuitization will be treated as a withdrawal for purposes of adjusting contract and rider values. PLEASE NOTE THAT IF YOU ELECT PARTIAL ANNUITIZATION, INCOME PAYMENTS RECEIVED WILL BE TAXED AS WITHDRAWALS. PLEASE CONSULT YOUR TAX ADVISER BEFORE MAKING THIS ELECTION, AS THE TAXATION OF PARTIAL ANNUITIZATION IS UNCERTAIN. PURCHASE. To purchase the MGIB rider, you must be age 79 or younger on the rider date and the ten-year waiting period must end at or prior to the latest annuity start date. Some broker dealers may limit availability of the rider to younger ages. The MGIB rider must be purchased (i) on the contract date, or (ii) within thirty days after the contract date. For contracts issued more than 30 days before the date this rider first became available in your state, the Company may in its discretion allow purchase of this rider during the 30-day period preceding the first contract anniversary after the date of this prospectus, or the date of state approval, whichever is later. There is a ten-year waiting period before you can annuitize under the MGIB rider. THE MGIB DATE. If you purchased the MGIB rider on the contract date or added the MGIB rider within 30 days following the contract date, the MGIB Date is the contract anniversary on or after the tenth contract anniversary when you decide to exercise your right to annuitize under the MGIB rider. If you added the MGIB rider at any other time, your MGIB Date is the contract anniversary at least 10 years after the rider date when you decide to exercise your right to annuitize under the MGIB rider. NO CHANGE OF ANNUITANT. Once you purchase the MGIB rider, the annuitant may not be changed except for the following exception. If an annuitant who is not a contract owner dies prior to annuitization, a new annuitant may be named in accordance with the provisions of your Contract. The MGIB Benefit Base is unaffected and continues to accumulate. NOTIFICATION. On or about 30 days prior to the MGIB Date, we will provide you with notification which will include an estimate of the amount of MGIB annuity benefit available if you choose to exercise it. We will determine the actual amount of the MGIB annuity benefit as of the MGIB Date. THE MGIB RIDER DOES NOT RESTRICT OR LIMIT YOUR RIGHT TO ANNUITIZE THE CONTRACT AT ANY TIME PERMITTED UNDER THE CONTRACT. THE MGIB RIDER DOES NOT RESTRICT YOUR RIGHT TO ANNUITIZE THE CONTRACT USING CONTRACT VALUES THAT MAY BE HIGHER THAN THE MGIB ANNUITY BENEFIT. THE BENEFITS ASSOCIATED WITH THE MGIB RIDER ARE AVAILABLE ONLY IF YOU ANNUITIZE YOUR CONTRACT UNDER THE RIDER AND IN ACCORDANCE WITH THE PROVISIONS SET FORTH ABOVE. ANNUITIZING USING THE MGIB MAY RESULT IN A MORE FAVORABLE STREAM OF INCOME PAYMENTS, AND DIFFERENT TAX CONSEQUENCES, UNDER YOUR CONTRACT. BECAUSE THE MGIB RIDER IS BASED ON CONSERVATIVE ACTUARIAL FACTORS, THE LEVEL OF LIFETIME INCOME THAT IT GUARANTEES MAY BE LESS THAN THE LEVEL THAT MIGHT BE PROVIDED BY THE APPLICATION OF YOUR CONTRACT VALUE TO THE CONTRACT'S APPLICABLE ANNUITY FACTORS. YOU SHOULD CONSIDER ALL OF YOUR OPTIONS AT THE TIME YOU BEGIN THE INCOME PHASE OF YOUR CONTRACT. ING LIFEPAY MINIMUM GUARANTEED WITHDRAWAL BENEFIT ("ING LIFEPAY") RIDER. The ING LifePay rider is an optional benefit which guarantees that if your contract value is reduced to zero by a withdrawal equal to or less than the Maximum Annual Withdrawal ("MAW"), we will pay an amount equal to the MAW annually until the death of the annuitant. 29 Landmark - 136957 LIFETIME GUARANTEED WITHDRAWAL STATUS. This status begins on the date the rider is issued (the "effective date of the rider") and continues until the earliest of: 1) the annuity commencement date; 2) reduction of the contract value to zero by a withdrawal in excess of the MAW (see "Lifetime Automatic Periodic Benefit Status" below); 3) reduction of the contract value to zero by a withdrawal less than or equal to the MAW; 4) the surrender or annuitization of the Contract; or 5) the death of the owner, or first owner, in the case of joint owners. PURCHASE. In order to elect the ING LifePay rider, the annuitant must be the owner or one of the owners. The only exception is if the owner is a non-natural owner. The minimum issue age is 50 and the maximum issue age is 80. The applicable age is the age of the owner (if there are joint owners or the owner is non-natural, the annuitant) on the contract anniversary on which the rider is effective. Some broker dealers may limit availability of the rider to younger ages. The ING LifePay rider will not be issued if the initial allocation to investment options is not in accordance with the investment option restrictions described below. The Company in its discretion may allow the rider to be elected during the 30-day period preceding a contract anniversary. Such election must be received in good order, including compliance with the investment option restrictions described below. The rider will be effective as of that contract anniversary. The ING LifePay Withdrawal Benefit rider has two phases. The first phase, called the Growth Phase, begins on the effective date of the rider. The Growth Phase ends as of the business day before the first withdrawal is taken (or when the annuity commencement date is reached). The second phase is called the Withdrawal Phase. This phase begins as of the date of the first withdrawal or the annuity commencement date, whichever occurs first. The ING LifePay Base (referred to as the "MGWB Base" in the Contract) is used to determine the MAW, 1) If you purchased the ING LifePay rider on the contract date: the initial ING LifePay Base is equal to the initial premium. 2) If you purchased the ING LifePay rider after the contract date: the initial ING LifePay Base is equal to the contract value on the effective date of the rider. The ING LifePay Base is increased dollar-for-dollar by any additional eligible premiums. Eligible premiums are premiums received during the Growth Phase. The ING LifePay Base is also increased to equal the contract value, if the contract value is greater, on each contract quarterly anniversary after the effective date of the rider and during the Growth Phase. Any additional premiums paid during the Withdrawal Phase are not eligible premiums for purposes of determining the ING LifePay Base or the MAW. However, premiums received during the Withdrawal Phase increase the contract value used to determine the reset MAW if you choose to reset the ING LifePay rider (see "ING LifePay Reset Option", below). We reserve the right to discontinue allowing premium payments during the Withdrawal Phase. DETERMINATION OF THE MAW. The MAW is determined on the date the Withdrawal Phase begins. It equals a percentage of the greater of the contract value and the ING LifePay Base as of the last day of the Growth Phase. The first withdrawal after the effective date of the rider (which causes the end of the Growth Phase) is treated as occurring on the first day of the Withdrawal Phase, immediately after the MAW is determined. The MAW percentage, which varies by age of the annuitant on the date the Withdrawal Phase begins, is as follows: 30 Landmark - 136957 --------------------------------------------------------- Annuitant Age MAW % --------------------------------------------------------- 50-59 4% --------------------------------------------------------- 60-75 5% --------------------------------------------------------- 76-80 6% --------------------------------------------------------- 81+ 7% --------------------------------------------------------- Once determined, the MAW percentage never changes for the Contract, except as provided for under spousal continuation. See "Continuation After Death- Spouse" below. If the rider is in Lifetime Guaranteed Withdrawal Status, and the annuity commencement date is reached, the rider will enter the Withdrawal Phase and will be annuitized. If a lifetime only annuitization option is elected, we will pay the greater of the annuity payout from the Contract and annual payments equal to the MAW. If withdrawals in any contract year exceed the MAW, the MAW will be reduced on a pro-rata basis. This means that the MAW will be reduced by the same proportion that the withdrawal in excess of the MAW is of the contract value determined: 1) before the withdrawal for the amount in excess of the MAW; and 2) after the withdrawal for the amount withdrawn up to the MAW without regard to the excess withdrawal. Please see Appendix H, ING LifePay Partial Withdrawal Examples. Whenever a withdrawal is made, the total withdrawals taken in a contract year are compared with the current MAW. To the extent that the withdrawal taken causes the total withdrawals in that year to exceed the current MAW, that withdrawal is considered excess. For purposes of determining whether the MAW has been exceeded, any applicable Market Value Adjustment or surrender charges will not be applied to the withdrawal. However, for purposes of determining the MAW reduction after an excess withdrawal, any surrender charges and/or Market Value Adjustment are considered to be part of the withdrawal. REQUIRED MINIMUM DISTRIBUTIONS. Withdrawals taken from this Contract to satisfy the Required Minimum Distribution rules of the Internal Revenue Code of 1986, as amended ("RMD"), that exceed the MAW for a specific contract year, will not be deemed excess withdrawals in that contract year, subject to the following rules: 1. If your RMD for a calendar year (determined on a date on or before January 31 of that year, applicable to this Contract, is greater than the MAW on that date, an Additional Withdrawal Amount will be set equal to that portion of the RMD that exceeds the MAW. 2. You may withdraw the Additional Withdrawal Amount from this Contract without it being deemed an excess withdrawal. 3. Any withdrawals taken in a Contract Year will count first against the MAW for that contract year. 4. Once the MAW for the then current contract year has been taken, additional amounts withdrawn in excess of the MAW, other than RMD's will count against and reduce any Additional Withdrawal Amount. 5. Withdrawals that exceed the Additional Withdrawal Amount are excess withdrawals and will reduce the MAW on a pro-rata basis, as described above. 6. The Additional Withdrawal Amount is reset to zero at the end of each calendar year, and remains at zero until it is reset on January 31 of the following calendar year. 7. If the Contract is still in the Growth Phase on January 31, but enters the Withdrawal Phase later during that calendar year, the Additional Withdrawal Amount will be set equal to the excess, if any, of the RMD for that year over the MAW on the date the MAW is established. INVESTMENT ADVISORY FEES. Withdrawals taken pursuant to a program established by the owner for the payment of investment advisory fees to a named third party investment adviser for advice on management of this contract's values will not cause the Withdrawal Phase to begin. During the Growth Phase, such withdrawals reduce the ING LifePay Base on a pro-rata basis, and during the Withdrawal Phase, these withdrawals are treated as any other withdrawal. 31 Landmark - 136957 ING LIFEPAY RESET OPTION. Beginning one year after the Withdrawal Phase begins, you may choose to reset the MAW, if the MAW percentage times the contract value would be greater than your current MAW. You must elect to reset by a request in a form satisfactory to us. On the date the request is received (the "Reset Effective Date"), the MAW will increase to be equal to the MAW percentage times the contract value on the Reset Effective Date. After exercising the reset option, you must wait one year before electing to reset again. We will not accept a request to reset if the new MAW on the date the request is received would be less than your current MAW. If the reset option is exercised, the charge for the ING LifePay rider will be equal to the charge then in effect for a newly purchased rider but will not exceed the maximum annual charge of 1.20%. However, we guarantee that the rider charge will not increase for resets exercised within the first five contract years. INVESTMENT OPTION RESTRICTIONS. While the ING LifePay rider is in effect, there are limits on the portfolios to which your contract value may be allocated. To the extent your contract value is not allocated to Accepted Funds, your allocations will be rebalanced to maintain at least 20% of such contract value in Fixed Allocation Funds. See "Fixed Allocation Fund Automatic Rebalancing ('FAFAR')" below. ACCEPTED FUNDS. The Accepted Funds are as follows: ING LifeStyle Moderate Portfolio, ING LifeStyle Moderate Growth Portfolio, ING LifeStyle Growth Portfolio, ING MarketPro Portfolio, ING Liquid Assets Portfolio and Fixed Account II. We may change these designations at any time upon 30 days notice to you. If a change is made, the change will apply to contract value allocated to such portfolios after the date of the change. FIXED ALLOCATION FUNDS. The Fixed Allocation Fund is the ING VP Intermediate Bond Fund. While the rider is in effect, any allocation of contract value to a Fixed Allocation Fund will be considered a Covered Fund allocation for purposes of calculating any applicable death benefit guaranteed under the Contract. We may change these designations at any time upon 30 days notice to you. If a change is made, the change will apply to contract value allocated to such portfolios after the date of the change. OTHER FUNDS. All portfolios available under the Contract that are not Accepted Funds or Fixed Allocation Funds are considered Other Funds. FIXED ALLOCATION FUND AUTOMATIC REBALANCING ("FAFAR"). If the contract value in Fixed Allocation Funds is less than 20% of the contract value not Allocated to Accepted Funds on any ING LifePay Rebalancing Date, we will automatically rebalance the contract value allocated to Fixed Allocation Funds and Other Funds to restore the required allocation. Accepted Funds are excluded from FAFAR. Any rebalancing is done on a pro-rata basis among Fixed Allocation Funds and Other Funds and will be the last transaction processed on that date. The ING LifePay Rebalancing Dates occur on each contract anniversary and after the following transactions: 1. receipt of additional premiums; 2. transfer or reallocation among Fixed Allocation Funds or Other Funds, whether automatic or specifically directed by you; 3. withdrawals from a Fixed Allocation Fund or Other Fund. FAFAR is separate from any other automatic rebalancing under the Contract. However, if the other automatic rebalancing under the Contract causes the allocations to not be in accordance with the investment option restrictions, FAFAR will occur immediately after that to restore the required allocations. 32 Landmark - 136957 LIFETIME AUTOMATIC PERIODIC BENEFIT ("LAPB") STATUS. If the contract value is reduced to zero (other than by a withdrawal in excess of the MAW), while the rider is in Lifetime Guaranteed Withdrawal Status, the status of the rider changes to LAPB Status and you are entitled to receive periodic payments in an annual amount equal to the MAW. If the contract value is reduced to zero by a withdrawal in excess of the MAW, the Contract and the rider will terminate due to the pro-rata reduction described above. When the rider enters LAPB Status, 1) the Contract will provide no further benefits other than as provided in the ING LifePay rider; 2) no further premium payments will be accepted; 3) any other riders attached to the Contract will terminate, unless otherwise specified in the rider. During LAPB Status, we will pay you periodic payments equal to the MAW. These payments will cease upon the death of the annuitant at which time both the rider and the Contract will terminate. The rider will remain in LAPB Status until it terminates without value upon the annuitant's death. The periodic payments will begin on the last day of the first full contract year following the date the rider enters LAPB Status and will continue to be paid annually thereafter. If, at the time the rider enters LAPB Status, you are receiving systematic withdrawals under the Contract more frequently than annually, the periodic payments will be made at the same frequency in equal amounts such that the sum of the payments in each contract year will equal the annual MAW. Such payments will be made on the same payment dates as previously set up, if the payments were being made monthly or quarterly. If the payments were being made semi-annually or annually, the payments will be made at the end of the half-contract year or contract year, as applicable. DEATH OF OWNER OR ANNUITANT. The ING LifePay rider and charges terminate on the earlier of: 1) if the rider is in Lifetime Guaranteed Withdrawal status, the date of receipt of due proof of death ("claim date") of the owner or first owner, in the case of joint owners, or the annuitant if there is a non-natural owner; 2) date the rider enters LAPB status. Under 1), above, the rider terminates on the death of the first owner, even if the owner is not the annuitant. Thus, you should not purchase this rider with multiple owners, unless the owners are spouses. CONTINUATION AFTER DEATH -- SPOUSE. If the surviving spouse of the deceased owner continues the contract (see, "Death Benefit Choices- Continuation After Death- Spouse"), this rider will also continue, provided the following conditions are met: 33 Landmark - 136957 1) The spouse is at least 50 years old on the date the Contract is continued; and 2) The spouse becomes the annuitant and sole owner. If the rider is in the Growth Phase at the time of spousal continuation: 1) The rider will continue in the Growth Phase; 2) On the date the rider is continued, the ING LifePay Base will be reset to equal the then current contract value; 3) The ING LifePay charges will restart and be the same as were in effect prior to the claim date; and 4) The MAW percentage will be determined as of the date of the first withdrawal, whenever it occurs, and will be based on the spouse's age on that date. If the rider is in the Withdrawal Phase at the time of spousal continuation: 1) The rider will continue in the Withdrawal Phase; 2) On the contract anniversary following the date the rider is continued, a. If the surviving spouse had not been the annuitant before the owner's death, i. The MAW is recalculated as the MAW percentage based on the surviving spouse's age on that contract anniversary multiplied by the current contract value on that contract anniversary. ii. The MAW is considered to be zero from the claim date to that contract anniversary. Withdrawals are permitted pursuant to the other provisions of the Contract. Withdrawals causing the contract value to fall to zero will terminate the Contract and rider. b. If the surviving spouse had been the annuitant before the owner's death, i. The MAW is recalculated as the greater of the MAW on the claim date (adjusted for excess withdrawals thereafter) and the MAW resulting from multiplying the original MAW percentage by the current contract value on that contract anniversary. ii. The MAW does not go to zero on the claim date. Withdrawals may continue under the rider provisions. 3) The rider charges will restart on the contract anniversary following the date the rider is continued and will be the same as were in effect prior to the claim date; CHANGE OF OWNER OR ANNUITANT. Other than as provided above under "Continuation After Death- Spouse", you may not change the annuitant. The rider and rider charges will terminate upon change of owner, including adding an additional owner, except for the following ownership changes: 1) spousal continuation as described above; 2) change of owner from one custodian to another custodian; 34 Landmark - 136957 3) change of owner from a custodian for the benefit of an individual to the same individual; 4) change of owner from an individual to a custodian for the benefit of the same individual; 5) collateral assignments; 6) change in trust as owner where the individual owner and the grantor of the trust are the same individual; 7) change of owner from an individual to a trust where the individual owner and the grantor of the trust are the same individual; and 8) change of owner from a trust to an individual where the individual owner and the grantor of the trust are the same individual. TERMINATION OF THE RIDER. The ING LifePay rider may not be cancelled unless the Contract is surrendered or annuitized, other than as described above under "Lifetime Guaranteed Withdrawal Status" and "Death of Owner or Annuitant".For a discussion of the charges we deduct under the ING LifePay rider, see "Charges and Fees -- Optional Rider Charges." Each payment you receive under the ING LifePay rider will be taxed as a withdrawal and may be subject to a penalty tax. See "Withdrawals" and "Federal Tax Considerations" for more information. OTHER CONTRACTS We and our affiliates offer various other products with different features and terms than the Contracts, and that may offer some or all of the same investment portfolios. These products have different benefits, fees and charges, and may or may not better match your needs. Please note that some of the Company's management personnel and certain other employees may receive a portion of their employment compensation based on the amount of Contract values allocated to investment portfolios of Trusts or Funds affiliated with ING. You should be aware that there are alternative options available, and, if you are interested in learning more about these other products, contact our Customer Service Center or your registered representative. - -------------------------------------------------------------------------------- WITHDRAWALS - -------------------------------------------------------------------------------- Except under certain qualified Contracts, you may withdraw all or part of your money any time during the accumulation phase and before the death of the contract owner. If you request a withdrawal for more than 90% of the cash surrender value, and the remaining cash surrender value after the withdrawal is less than $2,500, we will treat it as a request to surrender the Contract. If any single withdrawal or the sum of withdrawals exceeds the Free Withdrawal Amount, you will incur a surrender charge. The Free Withdrawal Amount is the greater of (i) any earnings less previous withdrawals, and (ii) 10% of premium payments paid within 4 years prior to the date of the withdrawal and not previously withdrawn, less any withdrawals taken in the same contract year. You need to submit to us a written request specifying the Fixed Interest Allocations or subaccounts from which to withdraw amounts, otherwise we will make the withdrawal on a pro-rata basis from all of the subaccounts in which you are invested. If there is not enough contract value in the subaccounts, we will deduct the balance of the withdrawal from your Fixed Interest Allocations starting with the guaranteed interest periods nearest their maturity dates until we have honored your request. We will apply a Market Value Adjustment to any withdrawal from your Fixed Interest Allocation taken more than 30 days before its maturity date. Definitive guidance on the proper federal tax treatment of the Market Value Adjustment has not been issued. You may want to discuss the potential tax consequences of a Market Value Adjustment with your tax adviser. We will determine the contract value as of the close of business on the day we receive your withdrawal request at our Customer Service Center. The contract value may be more or less than the premium payments made. 35 Landmark - 136957 If you have elected the ING LifePay rider, your withdrawals will be subject to surrender charges if they exceed the free withdrawal amount. However, once your contract value is zero, the periodic payments paid under the ING LifePay rider are not subject to surrender charges. If the aggregate percentage cap on allocations to the Restricted Funds has been exceeded, any subsequent withdrawals must be taken so that the percentage of contract value in the Restricted Funds following the withdrawal would not be greater than the percentage of contract value in the Restricted Funds prior to the withdrawal. If a requested withdrawal would cause the percentage cap to be exceeded, the amount of the withdrawal in excess of the cap would be taken pro-rata from all variable subaccounts. For administrative purposes, we will transfer your money to a specially designated subaccount (currently, the Liquid Assets subaccount) prior to processing the withdrawal. This transfer will not affect the withdrawal amount you receive. Please be aware that the benefit we pay under certain optional benefit riders will be reduced by any withdrawals you take while the optional benefit rider is in effect. See "Optional Riders." We offer the following three withdrawal options: REGULAR WITHDRAWALS After the free look period, you may make regular withdrawals. Each withdrawal must be a minimum of $100. We will apply a Market Value Adjustment to any regular withdrawal you take from a Fixed Interest Allocation more than 30 days before its maturity date. See Appendix C and the Fixed Account II prospectus for more information on the application of the Market Value Adjustment. SYSTEMATIC WITHDRAWALS You may choose to receive automatic systematic withdrawal payments (i) from the contract value in the subaccounts in which you are invested, or (ii) from the interest earned in your Fixed Interest Allocations. You may not elect the systematic withdrawal option if you are taking IRA withdrawals. Systematic withdrawals may be taken monthly, quarterly or annually. If you have contract value allocated to one or more Restricted Funds, and you elect to receive systematic withdrawals from the subaccounts in which you are invested, the systematic withdrawals must be taken pro-rata from all subaccounts in which contract value is invested. If you do not have contract value allocated to a Restricted Fund and choose systematic withdrawals on a non pro-rata basis, we will monitor the withdrawals annually. If you subsequently allocate contract value to one or more Restricted Funds, we will require you to take your systematic withdrawals on a pro-rata basis from all subaccounts in which contract value is invested. There is no additional charge for this feature. You decide when you would like systematic payments to start as long as it is at least 28 days after your contract date. You also select the date on which the systematic withdrawals will be made, but this date cannot be later than the 28th day of the month. If you have elected to receive systematic withdrawals but have not chosen a date, we will make the withdrawals on the same calendar day of each month as your contract date. If your contract date is after the 28th day of the month, your systematic withdrawal will be made on the first day of each month. Each systematic withdrawal amount must be a minimum of $100. The amount of your systematic withdrawal can either be (i) a fixed dollar amount or (ii) an amount based on a percentage of the premiums not previously withdrawn from the subaccounts in which you are invested. Both forms of systematic withdrawals are subject to the following maximum, which is calculated on each withdrawal date: 36 Landmark - 136957 ---------------------------------------------------------------------- MAXIMUM PERCENTAGE FREQUENCY OF PREMIUMS NOT PREVIOUSLY WITHDRAWN ---------------------------------------------------------------------- Monthly 0.84% Quarterly 2.50% Annually 10.00% ---------------------------------------------------------------------- If your systematic withdrawal is a fixed dollar amount and the amount to be withdrawn would exceed the applicable maximum percentage of your premium payments not previously withdrawn on any withdrawal date, we will automatically reduce the amount withdrawn so that it equals such percentage. Thus, your fixed dollar systematic withdrawals will never exceed the maximum percentage. If you want fixed dollar systematic withdrawals to exceed the maximum percentage and are willing to incur associated surrender charges, consider the Fixed Dollar Systematic Withdrawal Feature discussed below which you may add to your regular fixed dollar systematic withdrawal program. If your systematic withdrawal is based on a percentage of the premiums not previously withdrawn from the subaccounts in which you are invested and the amount to be withdrawn based on that percentage would be less than $100, we will automatically increase the amount to $100 as long as it does not exceed the maximum percentage. If the systematic withdrawal would exceed the maximum percentage, we will send the amount, and then automatically cancel your systematic withdrawal option. We limit systematic withdrawals from Fixed Interest Allocations to interest earnings during the prior month, quarter, or year, depending on the frequency you chose. Systematic withdrawals are not subject to a Market Value Adjustment, unless you have added the Fixed Dollar Systematic Withdrawal Feature discussed below and the payments exceed interest earnings. Systematic withdrawals from Fixed Interest Allocations under the Fixed Dollar Systematic Withdrawal Feature are available only in connection with Section 72(q) and 72(t) distributions. A Fixed Interest Allocation may not participate in both the systematic withdrawal option and the dollar cost averaging program at the same time. You may change the amount or percentage of your systematic withdrawal once each contract year or cancel this option at any time by sending satisfactory notice to our Customer Service Center at least 7 days before the next scheduled withdrawal date. If you submit a subsequent premium payment after you have applied for systematic withdrawals, we will not adjust future withdrawals under the systematic withdrawal program unless you specifically request that we do so. The systematic withdrawal option may commence in a contract year where a regular withdrawal has been taken but you may not change the amount or percentage of your withdrawals in any contract year during which you have previously taken a regular withdrawal. Subject to availability, a spousal or non-spousal beneficiary may elect to receive death benefits as payments over the beneficiary's lifetime ("stretch"). Stretch payments will be subject to the same limitations as systematic withdrawals, and non-qualified stretch payments will be reported on the same basis as other systematic withdrawals. FIXED DOLLAR SYSTEMATIC WITHDRAWAL FEATURE. You may add the Fixed Dollar Systematic Withdrawal Feature to your regular fixed dollar systematic withdrawal program. This feature allows you to receive a systematic withdrawal in a fixed dollar amount in addition to your systematic withdrawal program regardless of any surrender charges or Market Value Adjustments. Systematic withdrawals from Fixed Interest Allocations under the Fixed Dollar Systematic Withdrawal Feature are available only in connection with Section 72(q) and 72(t) distributions. You choose the amount of the fixed systematic withdrawals, which may total up to an annual maximum of 10% of your premium payments not previously withdrawn as determined on the day we receive your election of this feature. We will not recalculate the maximum limit when you make additional premium payments, unless you instruct us to do so. We will assess a surrender charge on the withdrawal date if the withdrawal exceeds the maximum limit as calculated on the withdrawal date. We will assess a Market Value Adjustment on the withdrawal date if the withdrawal from a Fixed Interest Allocation exceeds your interest earnings on the withdrawal date. We will apply the surrender charge and any Market Value Adjustment directly to your contract value (rather than to the withdrawal) so that the amount of each systematic withdrawal remains fixed. 37 Landmark - 136957 Flat dollar systematic withdrawals which are intended to satisfy the requirements of Section 72(q) or 72(t) of the Tax Code may exceed the maximum. Such withdrawals are subject to surrender charges and Market Value Adjustments when they exceed the applicable maximum percentage. IRA WITHDRAWALS If you have a non-Roth IRA Contract and will be at least age 70 1/2 during the current calendar year, you may elect to have distributions made to you to satisfy requirements imposed by federal tax law. IRA withdrawals provide payout of amounts required to be distributed by the Internal Revenue Service ("IRS") rules governing mandatory distributions under qualified plans. We will send you a notice before your distributions commence. You may elect to take IRA withdrawals at that time, or at a later date. You may not elect IRA withdrawals and participate in systematic withdrawals at the same time. If you do not elect to take IRA withdrawals, and distributions are required by federal tax law, distributions adequate to satisfy the requirements imposed by federal tax law may be made. Thus, if you are participating in systematic withdrawals, distributions under that option must be adequate to satisfy the mandatory distribution rules imposed by federal tax law. You may choose to receive IRA withdrawals on a monthly, quarterly or annual basis. You may elect payments to start as early as 28 days after the contract date. You select the day of the month when the withdrawals will be made, but it cannot be later than the 28th day of the month. If no date is selected, we will make the withdrawals on the same calendar day of the month as the contract date. If your contract date is after the 28th day of the month, your IRA withdrawal will be made on the first day of each month. You may request us to calculate the amount you are required to withdraw from your Contract each year based on the information you give us and various choices you make. For information regarding the calculation and choices you have, see the SAI. Or, we will accept your written instructions regarding the calculated amount required to be withdrawn from your Contract each year. The minimum dollar amount you can withdraw is $100. When we determine the required IRA withdrawal amount for a taxable year based on the frequency you select, if that amount is less than $100, we will pay $100. At any time where the IRA withdrawal amount is greater than the contract value, we will cancel the Contract and send you the amount of the cash surrender value. You may change the payment frequency of your IRA withdrawals once each contract year or cancel this option at any time by sending satisfactory notice to our Customer Service Center at least 7 days before the next scheduled withdrawal date. An IRA withdrawal from a Fixed Interest Allocation in excess of the amount allowed under systematic withdrawals will be subject to a Market Value Adjustment. CONSULT YOUR TAX ADVISER REGARDING THE TAX CONSEQUENCES ASSOCIATED WITH TAKING WITHDRAWALS. You are responsible for determining that withdrawals comply with applicable law. A withdrawal made before the taxpayer reaches age 59 1/2 may result in a 10% penalty tax. See "Federal Tax Considerations" for more details. - -------------------------------------------------------------------------------- TRANSFERS AMONG YOUR INVESTMENTS - -------------------------------------------------------------------------------- Between the end of the free look period and the annuity start date, you may transfer your contract value among the subaccounts in which you are invested and your Fixed Interest Allocations. We currently do not charge you for transfers made during a contract year, but reserve the right to charge for each transfer after the twelfth transfer in a contract year. WE ALSO RESERVE THE RIGHT TO LIMIT THE NUMBER OF TRANSFERS YOU MAY MAKE AND MAY OTHERWISE MODIFY OR TERMINATE TRANSFER PRIVILEGES IF REQUIRED BY OUR BUSINESS JUDGMENT OR IN ACCORDANCE WITH APPLICABLE LAW. We will apply a Market Value Adjustment to transfers from a Fixed Interest Allocation taken more than 30 days before its maturity date, unless the transfer is made under the dollar cost averaging program. Keep in mind that transfers between Covered Funds, Special Funds and Excluded Funds and other investment portfolios may negatively impact your death benefit or rider benefits. 38 Landmark - 136957 If you allocate contract value to an investment option that has been designated as a Restricted Fund, your ability to transfer contract value to the Restricted Fund may be limited. A transfer to the Restricted Funds will not be permitted to the extent that it would increase the contract value in the Restricted Fund to more than the applicable limits following the transfer. We do not limit transfers from Restricted Funds. If the result of multiple reallocations is to lower the percentage of total contract value in the Restricted Fund, the reallocation will be permitted even if the percentage of contract value in the Restricted Fund is greater than the limit. Please be aware that the benefit we pay under an optional benefit rider may be affected by certain transfers you make while the rider is in effect. Transfers, including those involving Special Funds or Excluded Funds, may also affect your optional rider base. See "The Annuity Contract -- Optional Riders." The minimum amount that you may transfer is $100 or, if less, your entire contract value held in a subaccount or a Fixed Interest Allocation. To make a transfer, you must notify our Customer Service Center and all other administrative requirements must be met. We will determine transfer values at the end of the business day on which we receive the transfer request at our Customer Service Center. If we receive your transfer request after 4 p.m. eastern time or the close of regular trading of the New York Stock Exchange, we will make the transfer on the next business day. Separate Account B and the Company will not be liable for following instructions communicated by telephone or other approved electronic means that we reasonably believe to be genuine. We may require personal identifying information to process a request for transfer made over the telephone, over the internet or other approved electronic means. LIMITS IMPOSED BY UNDERLYING FUNDS. Orders for the purchase of fund shares may be subject to acceptance or rejection by the underlying fund. We reserve the right to reject, without prior notice, any allocation of a premium payment to a subaccount if the subaccount's investment in its corresponding fund is not accepted by the fund for any reason. LIMITS ON FREQUENT OR DISRUPTIVE TRANSFERS. The Contract is not designed to serve as a vehicle for frequent trading. Frequent trading can disrupt management of a fund and raise its expenses through: 1) increased trading and transaction costs; 2) forced and unplanned portfolio turnover; 3) lost opportunity costs; and 4) large asset swings that decrease the fund's ability to provide maximum investment return to all contract owners. This in turn can have an adverse effect on fund performance. Accordingly, individuals or organizations that use market-timing investment strategies and make frequent transfers should not purchase the Contract. We monitor transfer activity. With regard to frequent transfers, in the event that an individual's or organization's transfer activity: 1. exceeds our then-current monitoring standard for frequent trading; 2. is identified as problematic by an underlying fund even if the activity does not exceed our monitoring standard for frequent trading; or 3. if we determine in our sole discretion that such transfer activity may not be in the best interests of other contract owners, we will take the following actions to deter such activity. Upon the first violation, we will send a one time warning letter. A second violation will result in the suspension of trading privileges via facsimile, telephone, email and internet, and limit trading privileges to submission by regular U.S. mail for a period of six months. At the end of that period, trading privileges will be reinstated. If there is another violation after such rights are reinstated, we will suspend such privileges permanently. We will notify you in writing if we take any of these actions. 39 Landmark - 136957 With regard to transfers initiated by a market-timing organization or individual or other party authorized to give transfer instructions on behalf of multiple contract owners, we will also take the following actions, without prior notice: (1) not accepting transfer instructions from an agent acting on behalf of more than one contract owner; and (2) not accepting preauthorized transfer forms from market timers or other entities acting on behalf of more than one contract owner at a time. Our current definition of frequent trading is more than one purchase and sale of the same underlying fund within a 30-day period. We do not count transfers associated with scheduled dollar cost averaging or automatic rebalancing programs, transfers involving funds that affirmatively permit short-term trading in their fund shares, such as the ProFund portfolios, movement between such funds and the Liquid Assets Portfolio, and transfers involving certain de minimis amounts when determining whether trading activity is excessive. We reserve the right to modify our general standard, or the standard as it may apply to a particular fund, at any time without prior notice, depending on, among other factors, the needs of the underlying fund(s), the best interests of contract owners and fund investors and/or state or federal regulatory requirements. If we modify such standard, it will be applied uniformly to all contract owners or, as applicable, to all contract owners investing in the underlying fund. In addition, if, due to the excessive dollar amounts of trades, even though not within our then current definition of frequent trading, an individual's or organization's transfer activity is determined, in our sole discretion, to be disruptive, we will take the same actions as are described above to limit frequent transfers. The Company does not allow waivers to the above policy. Our excessive trading policy may not be completely successful in preventing market timing or excessive trading activity. We currently require that orders received via facsimile to effect transactions in subaccounts that invest in ProFund portfolios be received at our Customer Service Center no later than 3 p.m. eastern time. DOLLAR COST AVERAGING You may elect to participate in our dollar cost averaging program if you have at least $1,200 of contract value in (i) the Liquid Assets subaccount, or (ii) a Fixed Interest Allocation with either a 6-month or a 1-year guaranteed interest period. These subaccounts or Fixed Interest Allocations serve as the source accounts from which we will, on a monthly basis, automatically transfer a set dollar amount of money to other subaccounts selected by you. We also may offer DCA Fixed Interest Allocations, which are 6-month and 1-year Fixed Interest Allocations available exclusively for use with the dollar cost averaging program. The DCA Fixed Interest Allocations require a minimum premium payment of $1,200 directed into a DCA Fixed Interest Allocation. A Fixed Interest Allocation or DCA Fixed Interest Allocation may not participate in the dollar cost averaging program and in systematic withdrawals at the same time. There is no additional charge for this feature. The dollar cost averaging program is designed to lessen the impact of market fluctuation on your investment. Since we transfer the same dollar amount to other subaccounts each month, more units of a subaccount are purchased if the value of its unit is low and fewer units are purchased if the value of its unit is high. Therefore, a lower than average value per unit may be achieved over the long term. However, we cannot guarantee this. When you elect the dollar cost averaging program, you are continuously investing in securities regardless of fluctuating price levels. You should consider your tolerance for investing through periods of fluctuating price levels. Unless you have a DCA Fixed Interest Allocation, you elect the dollar amount you want transferred under this program. Each monthly transfer must be at least $100. If your source account is the Liquid Assets subaccount or a 1-year Fixed Interest Allocation, the maximum amount that can be transferred each month is your contract value in such source account divided by 12. If your source account is a 6-month Fixed Interest Allocation, the maximum amount that can be transferred each month is your contract value in such source account divided by 6. You may change the transfer amount once each contract year. If you have a DCA Fixed Interest Allocation, there is no minimum or maximum transfer amount. We will transfer all your money allocated to that source account into the subaccount(s) in equal payments over the selected 6-month or 1-year period. The last payment will include earnings accrued over the course of the selected period. If you make an additional premium payment into a Fixed Interest Allocation subject to dollar cost averaging, the amount of your transfers under the dollar cost averaging program remains the same, unless you instruct us to increase the transfer amount. 40 Landmark - 136957 Transfers from a Fixed Interest Allocation or a DCA Fixed Interest Allocation under the dollar cost averaging program are not subject to a Market Value Adjustment. However, if you terminate the dollar cost averaging program for a DCA Fixed Interest Allocation and there is money remaining in the DCA Fixed Interest Allocation, we will transfer the remaining money to the Liquid Assets subaccount. Such transfer will trigger a Market Value Adjustment if the transfer is made more than 30 days before the maturity date of the DCA Fixed Interest Allocation. If you do not specify to which subaccounts you want to transfer the dollar amount of the source account, we will transfer the money to the subaccounts in which you are invested on a proportional basis. The transfer date is the same day each month as your contract date. If, on any transfer date, your contract value in a source account is equal or less than the amount you have elected to have transferred, the entire amount will be transferred and the program will end. You may terminate the dollar cost averaging program at any time by sending satisfactory notice to our Customer Service Center at least 7 days before the next transfer date. You are permitted to transfer contract value to a Restricted Fund, subject to the limitations described above in this section and in "Appendix B -- The Investment Portfolios." Compliance with the individual and aggregate Restricted Fund limits will be reviewed when the dollar cost averaging program is established. Transfers under the dollar cost averaging program must be within those limits. We will not review again your dollar cost averaging election for compliance with the individual and aggregate limits for investment in the Restricted Funds except in the case of the transactions described below. o Amount added to source account: If you add amounts to the source account which would increase the amount to be transferred under the dollar cost averaging program, we will review the amounts to be transferred to ensure that the individual and aggregate limits are not being exceeded. If such limits would be exceeded, we will require that the dollar cost averaging transfer amounts be changed to ensure that the transfers are within the limits based on the then-current allocation of contract value to the Restricted Fund(s) and the then-current value of the amount designated to be transferred to that Restricted Fund(s). o Additional premium paid: Up to the individual Restricted Fund percentage limit may be allocated to a Restricted Fund. If you request more than the individual limit be allocated to a Restricted Fund, we will look at the aggregate limit, subtract the current allocation to Restricted Funds, and subtract the current value of amounts to be transferred under the dollar cost averaging program to Restricted Funds. The excess, if any, is the maximum that may be allocated pro-rata to the Restricted Funds. o Reallocation request is made while the dollar cost averaging program is active: If the reallocation would increase the amount allocated to Restricted Funds, the maximum that may be so allocated is the individual Restricted Fund percentage limit, less the current allocation to Restricted Funds and less the current value of any remaining amounts to be transferred under the dollar cost averaging program to the Restricted Funds. We may offer additional subaccounts or withdraw any subaccount or Fixed Interest Allocation to or from the dollar cost averaging program, stop offering DCA Fixed Interest Allocations or otherwise modify, suspend or terminate this program. Such change will not affect any dollar cost averaging programs in operation at the time. 41 Landmark - 136957 AUTOMATIC REBALANCING If you have at least $10,000 of contract value invested in the subaccounts of Separate Account B, you may elect to have your investments in the subaccounts automatically rebalanced. Automatic rebalancing is not available if you participate in dollar cost averaging. Automatic rebalancing will not take place during the free look period. Transfers made pursuant to automatic rebalancing do not count toward the 12-transfer limit on free transfers. There is no additional charge for this feature. You are permitted to reallocate between Restricted and non-Restricted Funds, subject to the limitations described above, in this section and in Appendix B -- The Investment Portfolios. If the reallocation would increase the amount allocated to the Restricted Funds, the maximum that may be so allocated is the individual Restricted Fund percentage limit, less the current allocation to all Restricted Funds. We will transfer funds under your Contract on a quarterly, semi-annual, or annual calendar basis among the subaccounts to maintain the investment blend of your selected subaccounts. The minimum size of any allocation must be in full percentage points. Rebalancing does not affect any amounts that you have allocated to the Fixed Account. The program may be used in conjunction with the systematic withdrawal option only if withdrawals are taken pro-rata. To participate in automatic rebalancing, send satisfactory notice to our Customer Service Center. We will begin the program on the last business day of the period in which we receive the notice. You may cancel the program at any time. The program will automatically terminate if you choose to reallocate your contract value among the subaccounts or if you make an additional premium payment or partial withdrawal on other than a pro-rata basis. Additional premium payments and partial withdrawals made on a pro-rata basis will not cause the automatic rebalancing program to terminate. - -------------------------------------------------------------------------------- DEATH BENEFIT CHOICES - -------------------------------------------------------------------------------- DEATH BENEFIT DURING THE ACCUMULATION PHASE During the accumulation phase, a death benefit (and earnings multiplier benefit, if elected) is payable when either the contract owner, or the first of joint owners or the annuitant (when a contract owner is not an individual) dies. Assuming you are the contract owner, your beneficiary will receive a death benefit unless the beneficiary is your surviving spouse and elects to continue the Contract. We calculate the death benefit value as of the close of the business day on which we receive written notice and due proof of death, as well as any required paperwork, at our Customer Service Center ("claim date"). If your beneficiary wants to receive the death benefit on a date later than this, it may affect the amount of the benefit payable in the future. The proceeds may be received in a single sum, applied to any of the annuity options, or, if available, paid over the beneficiary's lifetime. (See "Systematic Withdrawals" above). A beneficiary's right to elect an annuity option or receive a lump-sum payment may have been restricted by the contract owner. If so, such rights or options will not be available to the beneficiary. If we do not receive a request to apply the death benefit proceeds to an annuity option, we will make a single sum distribution. Unless you elect otherwise, the distribution will be made into an interest bearing account, backed by our general account, that is accessed by the beneficiary through a checkbook feature. The beneficiary may access death benefit proceeds at any time without penalty. We will generally distribute death benefit proceeds within 7 days after our Customer Service Center has received sufficient information to make the payment. For information on required distributions under federal income tax laws, you should see "Required Distributions upon Contract Owner's Death." Interest earned on this account may be less than interest paid on other settlement options. Your death benefit and mortality and expense risk charge depend on the category of contract owners to which you belong and on the death benefit that you choose. 42 Landmark - 136957 You may choose one of the following Death Benefits: (i) the Standard Death Benefit, (ii) the Quarterly Ratchet Enhanced Death Benefit or (iii) the Max 7 Enhanced Death Benefit. The Quarterly Ratchet Enhanced Death Benefit and the Max 7 Enhanced Death Benefit are available only if the contract owner or the annuitant (if the contract owner is not an individual) is not more than 79 years old at the time of purchase. The Enhanced Death Benefits are available only at the time you purchase your Contract. The Enhanced Death Benefits are not available where a Contract is owned by joint owners. Not all death benefits are available in every state. If you do not choose a death benefit, your death benefit will be the Standard Death Benefit. ONCE YOU CHOOSE A DEATH BENEFIT, YOU CANNOT CHANGE IT. We may stop or suspend offering any of the Enhanced Death Benefit options to new Contracts. A change in ownership of the Contract may affect the amount of the death benefit and the Enhanced Death Benefit. The ING LifePay rider may also affect the death benefit. The death benefit may be subject to certain mandatory distribution rules required by federal tax law. We use the BASE DEATH BENEFIT to help determine the minimum death benefit payable under each of the death benefit options described below. You do not elect the Base Death Benefit. The Base Death Benefit is equal to the greater of: 1) the contract value; or 2) the cash surrender value. The STANDARD DEATH BENEFIT equals the GREATER of: 1) the Base Death Benefit; and 2) the Standard Minimum Guaranteed Death Benefit ("Standard MGDB") for amounts allocated to Covered Funds plus the contract value allocated to Excluded Funds. The Standard MGDB allocated to Covered Funds equals premiums allocated to Covered Funds less pro-rata adjustments for any withdrawals and transfers. The Standard MGDB allocated to Excluded Funds equals premiums allocated to Excluded Funds less pro-rata adjustments for any withdrawals and transfers. This calculation is not used for benefit purposes, but only to determine the impact of transfers to and from Excluded Funds. Withdrawals reduce the Standard MGDB on a pro-rata basis. The percentage reduction in the Standard MGDB for each Fund category (i.e. Covered or Excluded) equals the percentage reduction in contract value in that Fund category resulting from the withdrawal. The pro-rata adjustment is based on the change in contract value resulting from the withdrawal, not the amount requested. Transfers among Fund categories do not reduce the overall Standard MGDB. o Net transfers from Covered Funds to Excluded Funds will reduce the Standard MGDB in the Covered Funds on a pro-rata basis. The increase in the Standard MGDB allocated to Excluded Funds will equal the decrease in the Standard MGDB in Covered Funds. o Net transfers from Excluded Funds to Covered Funds will reduce the Standard MGDB in Excluded Funds on a pro-rata basis. The increase in the Standard MGDB allocated to Covered Funds will equal the lesser of the net contract value transferred and the decrease in the Standard MGDB in Excluded Funds. ENHANCED DEATH BENEFIT OPTIONS. Under the Enhanced Death Benefit options, if you die before the annuity start date, your beneficiary will receive the greater of the Standard Death Benefit or the Enhanced Death Benefit option elected. We may, with 30 days notice to you, designate any investment portfolio as a Special Fund or Excluded Fund on existing Contracts with respect to new premiums added to such investment portfolio and also with respect to new transfers to such investment portfolio. Selecting a Special Fund or Excluded Fund may limit or reduce the Enhanced Death Benefit. 43 Landmark - 136957 For the period during which a portion of the contract value is allocated to a Special Fund or Excluded Fund, we may, at our discretion, reduce the mortality and expense risk charge attributable to that portion of the contract value. The reduced mortality and expense risk charge will be applicable only during that period. The QUARTERLY RATCHET ENHANCED DEATH BENEFIT equals the greater of: 1) the Standard Death Benefit; and 2) the Quarterly Ratchet Minimum Guaranteed Death Benefit ("Quarterly Ratchet MGDB") allocated to Covered Funds plus the contract value allocated to Excluded Funds. No funds are currently designated as Excluded Funds for purposes of the Quarterly Ratchet MGDB. The Quarterly Ratchet MGDB allocated to Covered Funds on the contract date equals the premium allocated to Covered Funds. On each quarterly anniversary (three months from the contract date and each three month anniversary of that date) that occurs on or prior to attainment of age 90, the Quarterly Ratchet MGDB in Covered Funds will be set to the greater of: 1) the current contract value in Covered Funds (after deductions occurring as of that date); or 2) the Quarterly Ratchet MGDB in Covered Funds from the prior quarterly anniversary (after deductions occurring on that date), adjusted for new premiums and partial withdrawals attributable to Covered Funds, and transfers. Other than on quarterly anniversaries, the Quarterly Ratchet MGDB in the Covered Funds is equal to the Quarterly Ratchet MGDB in the Covered Funds from the last quarterly anniversary, adjusted for new premiums and partial withdrawals attributable to Covered Funds, and transfers. The Quarterly Ratchet MGDB allocated to Excluded Funds on the contract date equals the premium allocated to Excluded Funds. The calculation is not used for benefit purposes, but only to determine the impact of transfers to and from Excluded Funds. On each quarterly anniversary that occurs on or prior to attainment of age 90, the Quarterly Ratchet MGDB in Excluded Funds will be set to the greater of: 1) the current contract value in Excluded Funds (after deductions occurring as of that date); or 2) the Quarterly Ratchet MGDB in the Excluded Funds from the prior quarterly anniversary (after deductions occurring on that date), adjusted for new premiums and partial withdrawals attributable to Excluded Funds, and transfers. Other than on quarterly anniversaries, the Quarterly Ratchet MGDB in the Excluded Funds is equal to the Quarterly Ratchet MGDB in the Excluded Funds from the last quarterly anniversary, adjusted for new premiums and partial withdrawals attributable to Excluded Funds, and transfers. Withdrawals reduce the Quarterly Ratchet MGDB on a pro-rata basis. The pro-rata adjustment is based on the change in contract value resulting from the withdrawal, not the amount requested. Net transfers from Covered Funds to Special or Excluded Funds will reduce the Quarterly Ratchet MGDB in Covered Funds on a pro-rata basis. The increase in the Quarterly Ratchet MGDB allocated to Special or Excluded Funds, as applicable, will equal the decrease in the Quarterly Ratchet MGDB in Covered Funds. Net transfers from Excluded Funds to Covered Funds will reduce the Quarterly Ratchet MGDB in Excluded Funds on a pro-rata basis. The increase in the Quarterly Ratchet MGDB allocated to Covered Funds will equal the lesser of the net contract value transferred and the reduction in the Quarterly Ratchet MGDB in Excluded Funds. The MAX 7 ENHANCED DEATH BENEFIT equals the greater of the Quarterly Ratchet Enhanced Death Benefit and the 7% Solution Death Benefit Element. Each element of the Max 7 Enhanced Death Benefit is determined independently of the other at all times. 44 Landmark - 136957 The 7% SOLUTION DEATH BENEFIT ELEMENT is the greater of: 1) the Standard Death Benefit; and 2) the lesser of: a) 3 times all premium payments, adjusted for withdrawals (the "cap"); or b) the SUM OF the 7% Solution Minimum Guaranteed Death Benefit ("7% MGDB") allocated to Covered Funds, the 7% MGDB allocated to Special Funds, and the contract value allocated to Excluded Funds. For purposes of calculating the 7% Solution Death Benefit Element, the following investment options are designated as Special Funds: the ING Liquid Assets Portfolio, the ING VP Intermediate Bond Portfolio, the ING PIMCO Core Bond Portfolio, the ProFunds VP Rising Rates Opportunity Portfolio, the Fixed Account, the Fixed Interest Division, and the TSA Special Fixed Account. For Contracts issued prior to May 1, 2003, the ING VP Intermediate Bond Portfolio and the ING PIMCO Core Bond Portfolio are not designated as Special Funds. For Contracts issued prior to September 2, 2003, the ProFunds VP Rising Rates Opportunity Portfolio is not designated as a Special Fund. No investment options are currently designated as Excluded Funds. The 7% MGDB allocated to Covered Funds equals premiums allocated to Covered Funds, adjusted for withdrawals and transfers, accumulated at 7% until age 80 or the 7% MGDB reaches the cap. There is no accumulation once the cap is reached. Payment of additional premiums may cause the accumulation to resume, but there is no catch-up for any period where accumulation was suspended. The 7% MGDB allocated to Special Funds equals premiums allocated to Special Funds, adjusted for withdrawals and transfers. There is no accumulation of Minimum Guaranteed Death Benefit allocated to Special Funds. The 7% MGDB allocated to Excluded Funds is determined in the same way as the 7% MGDB for Covered Funds, but the calculation is not used for benefit purposes, but only to determine the impact of transfers to and from Excluded Funds. Withdrawals reduce the 7% MGDB on a pro-rata basis. The percentage reduction in the 7% MGDB for each Fund category (i.e. Covered, Special or Excluded) equals the percentage reduction in contract value in that Fund category resulting from the withdrawal. The percentage reduction in the cap equals the percentage reduction in total contract value resulting from the withdrawal. The pro-rata adjustment is based on the change in contract value resulting from the withdrawal, not the amount requested. Transfers among Fund categories do not reduce the overall 7% MGDB, but do affect the amount of the 7% MGDB in a particular Fund category. Net transfers from among the Funds will reduce the 7% MGDB in the Funds on a pro-rata basis. Note: In all cases described above, the amount of the death benefit could be reduced by premium taxes owed and withdrawals not previously deducted. The enhanced death benefits may not be available in all states. EARNINGS MULTIPLIER BENEFIT RIDER. The earnings multiplier benefit rider is an optional rider that provides a separate death benefit in addition to the death benefit provided under the death benefit options described above. The rider is subject to state availability and is available only for issue ages 75 or under. You may add it at issue of the Contract or, if not yet available in your state, on the next contract anniversary following introduction of the rider in your state. The date on which the rider is added is referred to as the "rider effective date." 45 Landmark - 136957 If the rider is added at issue, the rider provides a benefit equal to a percentage of the gain under the Contract, up to a gain equal to 150% of premiums adjusted for withdrawals ("Maximum Base"). Currently, if added at issue, the earnings multiplier benefit is equal to 55% (30% for issue ages 70 and above) of the lesser of: i) the Maximum Base; and ii) the contract value on the claim date minus premiums adjusted for withdrawals. If added after issue, the earnings multiplier benefit is equal to 55% (30% for issue ages 70 and above) of the lesser of: i) 150% of the contract value on the rider effective date, plus subsequent premiums adjusted for subsequent withdrawals; and ii) the contract value on the claim date minus the contract value on the rider effective date, minus subsequent premiums adjusted for subsequent withdrawals. The adjustment to the benefit for withdrawals is pro-rata, meaning that the benefit will be reduced by the proportion that the withdrawal bears to the contract value at the time of the withdrawal. There is an extra charge for the earnings multiplier benefit rider and once selected, it may not be revoked. The rider does not provide a benefit if there is no gain under the Contract. As such, the Company would continue to assess a charge for the rider, even though no benefit would be payable at death under the rider if there are no gains under the Contract. Please see "Charges and Fees -- Earnings Multiplier Benefit Charge" for a description of the charge. The rider is available for both non-qualified and qualified contracts. Please see the discussions of possible tax consequences in "Federal Tax Considerations," "Individual Retirement Annuities," "Taxation of Qualified Contracts," and "Tax Consequences of Enhanced Death Benefit," in this prospectus. DEATH BENEFIT DURING THE INCOME PHASE If any contract owner or the annuitant dies after the annuity start date, we will pay the beneficiary any certain benefit remaining under the annuity in effect at the time. CONTINUATION AFTER DEATH -- SPOUSE If at the contract owner's death, the surviving spouse of the deceased contract owner is the beneficiary and such surviving spouse elects to continue the Contract as his or her own, the following will apply: If the guaranteed death benefit as of the date we receive due proof of death, minus the contract value on that date is greater than zero, we will add such difference to the contract value. We will allocate such addition to the variable subaccounts in proportion to the contract value in the subaccounts, unless you direct otherwise. If there is no contract value in any subaccount, we will allocate the addition to the Liquid Assets subaccount, or its successor. Such addition to contract value will not affect the guaranteed death benefit or any living benefit rider values. Any addition to contract value is available only to the spouse of the owner as of the date of death of the owner if such spouse under the provisions of the Contract elects to continue the Contract as his or her own. The death benefits under each of the available options will continue, based on the surviving spouse's age on the date that ownership changes. At subsequent surrender, we will waive any surrender charge applicable to premiums paid prior to the date we receive due proof of death of the contract owner. Any premiums paid later will be subject to any applicable surrender charge. If you elected the earnings multiplier benefit rider, and the benefit would otherwise be payable, we will add the benefit to the contract value and allocate the benefit among the variable subaccounts in proportion to the contract value in the subaccounts, unless you direct otherwise. If there is no contract value in any subaccount, we will allocate the benefit to the Liquid Assets subaccount, or its successor. The earnings multiplier benefit rider will continue, if the surviving spouse is eligible based on his or her attained age. If the surviving spouse is older than the maximum rider issue age, the rider will terminate. The Maximum Base and the percentages will be reset based on the adjusted contract value. The calculation of the benefit going forward will be: (i) based on the attained age of the spouse at the time of the ownership change using current values as of that date; (ii) computed as if the rider were added to the Contract after issue and after the increase; and (iii) based on the Maximum Base and percentages in effect on the original rider date. However, we may permit the surviving spouse to elect to use the then-current Maximum Base and percentages in the benefit calculation. 46 Landmark - 136957 CONTINUATION AFTER DEATH -- NOT A SPOUSE If the beneficiary or surviving joint owner is not the spouse of the owner, the Contract may continue in force subject to the required distribution rules of the Code. See next section, "Required Distributions Upon Contract Owner's Death." If the guaranteed death benefit as of the date we receive due proof of death, minus the contract value also on that date, is greater than zero, we will add such difference to the contract value. Such addition will be allocated to the variable subaccounts in proportion to the contract value in the subaccounts, unless we are directed otherwise. If there is no contract value in any subaccount, the addition will be allocated to the Liquid Assets subaccount, or its successor. The death benefit will then terminate. At subsequent surrender, any surrender charge applicable to premiums paid prior to the date we receive due proof of death of the contract owner will be waived. No additional premium payments may be made. If you elected the earnings multiplier benefit rider, and the benefit would otherwise be payable, we will add the benefit to the contract value and allocate the benefit among the variable subaccounts in proportion to the contract value in the subaccounts, unless you direct otherwise. If there is no contract value in any subaccount, we will allocate the benefit to the Liquid Assets subaccount, or its successor. The earnings multiplier benefit rider then terminates, whether or not a benefit was payable under the terms of the rider. REQUIRED DISTRIBUTIONS UPON CONTRACT OWNER'S DEATH We will not allow any payment of benefits provided under a non-qualified Contract which does not satisfy the requirements of Section 72(s) of the Code. If any contract owner of a non-qualified Contract dies before the annuity start date, we will distribute the death benefit payable to the beneficiary as follows: (a) the death benefit must be completely distributed within 5 years of the contract owner's date of death; or (b) the beneficiary may elect, within the 1-year period after the contract owner's date of death, to receive the death benefit in the form of an annuity from us, provided that (i) such annuity is distributed in substantially equal installments over the life of such beneficiary or over a period not extending beyond the life expectancy of such beneficiary; and (ii) such distributions begin not later than 1 year after the contract owner's date of death. Notwithstanding (a) and (b) above, if the sole contract owner's beneficiary is the deceased owner's surviving spouse, then such spouse may elect to continue the Contract under the same terms as before the contract owner's death. Upon receipt of such election from the spouse at our Customer Service Center: (i) all rights of the spouse as contract owner's beneficiary under the Contract in effect prior to such election will cease; (ii) the spouse will become the owner of the Contract and will also be treated as the contingent annuitant, if none has been named and only if the deceased owner was the annuitant; and (iii) all rights and privileges granted by the Contract or allowed by us will belong to the spouse as contract owner of the Contract. We deem the spouse to have made this election if such spouse makes a premium payment to the Contract or fails to make a timely election as described in this paragraph. If the owner's beneficiary is not a spouse, the distribution provisions described in subparagraphs (a) and (b) above, will apply even if the annuitant and/or contingent annuitant are alive at the time of the contract owner's death. Subject to availability, and our then current rules, a spousal or non-spousal beneficiary may elect to receive death benefits as payments over the life expectancy of the beneficiary ("stretch"). "Stretch" payments will be subject to the same limitations as systematic withdrawals, and non-qualified "stretch" payments will be reported on the same basis as other systematic withdrawals. If we do not receive an election from an owner's beneficiary who is not a spouse within the 1-year period after the contract owner's date of death, then we will pay the death benefit to the owner's beneficiary in a cash payment within five years from the date of death. We will determine the death benefit as of the date we receive proof of death. Such cash payment will be in full settlement of all our liability under the Contract. 47 Landmark - 136957 If a contract owner dies after the annuity start date, all of the contract owner's rights granted under the Contract or allowed by us will pass to the contract owner's beneficiary. If a Contract has joint owners we will consider the date of death of the first joint owner as the death of the contract owner, and the surviving joint owner will become the beneficiary of the Contract. If any contract owner is not an individual, the death of an annuitant shall be treated as the death of a contract owner. EFFECT OF ING LIFEPAY RIDER ON DEATH BENEFIT If you die before Lifetime Automatic Periodic Benefit Status under the ING LifePay rider, the death benefit is payable, but the rider terminates. However, if the beneficiary is the owner's spouse, and the spouse elects to continue the Contract, the death benefit is not payable until the spouse's death. Please see "ING LifePay Minimum Guaranteed Withdrawal Benefit Rider-Death or Change of Owner/Annuitant" for a description of the impact of the owner's death on the ING LifePay rider. If you die during Lifetime Automatic Periodic Benefit Status, we will continue to pay the periodic payments that you were receiving under the ING LifePay rider to the annuitant. No other death benefit is payable. Please see "ING LifePay Minimum Guaranteed Withdrawal Benefit Rider". - -------------------------------------------------------------------------------- THE ANNUITY OPTIONS - -------------------------------------------------------------------------------- ANNUITIZATION OF YOUR CONTRACT If the annuitant and contract owner are living on the annuity start date, we will begin making payments to the contract owner under an income plan. We will make these payments under the annuity option you chose. You may change an annuity option by making a written request to us at least 30 days before the annuity start date. The amount of the payments will be determined by applying your contract value, adjusted for any applicable Market Value Adjustment, on the annuity start date in accordance with the annuity option you chose. You may also elect an annuity option on surrender of the Contract for its cash surrender value or you may choose one or more annuity options for the payment of death benefit proceeds while it is in effect and before the annuity start date. If, at the time of the contract owner's death or the annuitant's death (if the contract owner is not an individual), no option has been chosen for paying death benefit proceeds, the beneficiary may choose an annuity option within 60 days. In all events, payments of death benefit proceeds must comply with the distribution requirements of applicable federal tax law. The minimum monthly annuity income payment that we will make is $20. We may require that a single sum payment be made if the contract value is less than $2,000 or if the calculated monthly annuity income payment is less than $20. For each annuity option we will issue a separate written agreement putting the annuity option into effect. Before we pay any annuity benefits, we require the return of your Contract. If your Contract has been lost, we will require that you complete and return the applicable lost Contract form. Various factors will affect the level of annuity benefits, such as the annuity option chosen, the applicable payment rate used and the investment performance of the portfolios and interest credited to the Fixed Interest Allocations. Our current annuity options provide only for fixed payments. Fixed annuity payments are regular payments, the amount of which is fixed and guaranteed by us. Some fixed annuity options provide fixed payments either for a specified period of time or for the life of the annuitant. The amount of life income payments will depend on the form and duration of payments you chose, the age of the annuitant or beneficiary (and gender, where appropriate under applicable law), the total contract value applied to periodic income payments, and the applicable payment rate. 48 Landmark - 136957 Our approval is needed for any option where: 1) The person named to receive payment is other than the contract owner or beneficiary; 2) The person named is not a natural person, such as a corporation; or 3) Any income payment would be less than the minimum annuity income payment allowed. SELECTING THE ANNUITY START DATE You select the annuity start date, which is the date on which the annuity payments commence. Unless we consent, the annuity start date must be at least 5 years from the contract date but before the month immediately following the annuitant's 90th birthday, or 10 years from the contract date, if later. If, on the annuity start date, a surrender charge remains, the elected annuity option must include a period certain of at least 5 years. If you do not select an annuity start date, it will automatically begin in the month following the annuitant's 90th birthday, or 10 years from the contract date, if later. If the annuity start date occurs when the annuitant is at an advanced age, such as over age 85, it is possible that the Contract will not be considered an annuity for federal tax purposes. For more information, see "Federal Tax Considerations" and the SAI. For a Contract purchased in connection with a qualified plan, other than a Roth IRA, distributions must commence not later than April 1st of the calendar year following the calendar year in which you reach age 70 1/2 or, in some cases, retire. Distributions may be made through annuitization or withdrawals. You should consult a tax adviser for tax advice before investing. FREQUENCY OF ANNUITY PAYMENTS You choose the frequency of the annuity payments. They may be monthly, quarterly, semi-annually or annually. If we do not receive written notice from you, we will make the payments monthly. There may be certain restrictions on minimum payments that we will allow. BENEFICIARY RIGHTS A beneficiary's right to elect an annuity option or receive a lump sum may have been restricted by the contract owner. If so, such options will not be available to the beneficiary. THE ANNUITY OPTIONS We offer the 4 annuity options shown below. Payments under Options 1, 2 and 3 are fixed. Payments under Option 4 may be fixed or variable, although only fixed payments are currently available. For a fixed annuity option, the contract value in the subaccounts is transferred to the Company's general account. OPTION 1. INCOME FOR A FIXED PERIOD. Under this option, we make monthly payments in equal installments for a fixed number of years based on the contract value on the annuity start date. We guarantee that each monthly payment will be at least the amount stated in your Contract. If you prefer, you may request that payments be made in annual, semi-annual or quarterly installments. We will provide you with illustrations if you ask for them. If the cash surrender value or contract value is applied under this option, a 10% penalty tax may apply to the taxable portion of each income payment until the contract owner reaches age 59 1/2. OPTION 2. INCOME FOR LIFE WITH A PERIOD CERTAIN. Under this option, we make payments for the life of the annuitant in equal monthly installments and guarantee the income for at least a period certain, such as 10 or 20 years. Other periods certain may be available to you on request. You may choose a refund period instead. Under this arrangement, income is guaranteed until payments equal the amount of your Contract. If the person named lives beyond the guaranteed period, we will continue payments until his or her death. We guarantee that each payment will be at least the amount specified in the Contract corresponding to the person's age on his or her last birthday before the annuity start date. Amounts for ages not shown in the Contract are available if you ask for them. 49 Landmark - 136957 OPTION 3. JOINT LIFE INCOME. This option is available when there are 2 persons named to determine annuity payments. At least one of the persons named must be either the contract owner or beneficiary of the Contract. We guarantee monthly payments will be made as long as at least one of the named persons is living. There is no minimum number of payments. Monthly payment amounts are available if you ask for them. OPTION 4. ANNUITY PLAN. Under this option, your contract value can be applied to any other annuitization plan that we choose to offer on the annuity start date. Annuity payments under Option 4 may be fixed or variable. If variable and subject to the 1940 Act, it will comply with the requirements of such Act. PAYMENT WHEN NAMED PERSON DIES When the person named to receive payment dies, we will pay any amounts still due as provided in the annuity agreement between you and ING USA. The amounts we will pay are determined as follows: 1) For Option 1, or any remaining guaranteed payments under Option 2, we will continue payments. Under Options 1 and 2, the discounted values of the remaining guaranteed payments may be paid in a single sum. This means we deduct the amount of the interest each remaining guaranteed payment would have earned had it not been paid out early. We will base the discount interest rate on the interest rate used to calculate the payments for Options 1 and 2. 2) For Option 3, no amounts are payable after both named persons have died. 3) For Option 4, the annuity option agreement will state the amount we will pay, if any. - -------------------------------------------------------------------------------- OTHER CONTRACT PROVISIONS - -------------------------------------------------------------------------------- REPORTS TO CONTRACT OWNERS We will send you a quarterly report within 31 days after the end of each calendar quarter. The report will show the contract value, cash surrender value, and the death benefit as of the end of the calendar quarter. The report will also show the allocation of your contract value and reflects the amounts deducted from or added to the contract value since the last report. You have 30 days to notify our Customer Service Center of any errors or discrepancies contained in the report and in any confirmation notice. We will also send you copies of any shareholder reports of the investment portfolios in which Separate Account B invests, as well as any other reports, notices or documents we are required by law to furnish to you. SUSPENSION OF PAYMENTS The Company reserves the right to suspend or postpone the date of any payment or determination of values on any business day (i) when the New York Stock Exchange is closed; (ii) when trading on the New York Stock Exchange is restricted; (iii) when an emergency exists as determined by the SEC so that the sale of securities held in Separate Account B may not reasonably occur or so that the Company may not reasonably determine the value of Separate Account B's net assets; or (iv) during any other period when the SEC so permits for the protection of security holders. We have the right to delay payment of amounts from a Fixed Interest Allocation for up to 6 months. 50 Landmark - 136957 IN CASE OF ERRORS IN YOUR APPLICATION If an age or gender given in the application or enrollment form is misstated, the amounts payable or benefits provided by the Contract shall be those that the premium payment would have bought had the age or gender not been misstated. ASSIGNING THE CONTRACT AS COLLATERAL You may assign a non-qualified Contract as collateral security for a loan but you should understand that your rights and any beneficiary's rights may be subject to the terms of the assignment. An assignment likely has federal tax consequences. You should consult a tax adviser for tax advice. You must give us satisfactory written notice at our Customer Service Center in order to make or release an assignment. We are not responsible for the validity of any assignment. CONTRACT CHANGES -- APPLICABLE TAX LAW We have the right to make changes in the Contract to continue to qualify the Contract as an annuity under applicable federal tax law. We will give you advance notice of such changes. FREE LOOK You may cancel your Contract within your 10-day free look period. We deem the free look period to expire 15 days after we mail the Contract to you. Some states may require a longer free look period. To cancel, you need to send your Contract to our Customer Service Center or to the agent from whom you purchased it. We will refund the contract value (which may be more or less than the premium payments you paid) or, if required by your state, the original amount of your premium payment. For purposes of the refund during the free look period, (i) we adjust your contract value for any market value adjustment (if you have invested in the Fixed Account), and (ii) then we include a refund of any charges deducted from your contract value. Because of the market risks associated with investing in the portfolios and the potential positive or negative effect of the market value adjustment, the contract value returned may be greater or less than the premium payment you paid. Some states require us to return to you the amount of the paid premium (rather than the contract value) in which case you will not be subject to investment risk during the free look period. In these states, your premiums designated for investment in the subaccounts may be allocated during the free look period to a subaccount specially designated by the Company for this purpose (currently, the Liquid Assets subaccount). We may, in our discretion, require that premiums designated for investment in the subaccounts from all other states as well as premiums designated for a Fixed Interest Allocation be allocated to the specially designated subaccount during the free look period. Your Contract is void as of the day we receive your Contract and cancellation request in good order. We determine your contract value at the close of business on the day we void your Contract. If you keep your Contract after the free look period and the investment is allocated to a subaccount specially designated by the Company, we will put your money in the subaccount(s) chosen by you, based on the accumulation unit value next computed for each subaccount, and/or in the Fixed Interest Allocation chosen by you. SPECIAL ARRANGEMENTS We may reduce or waive any Contract, rider, or benefit fees or charges for certain group or sponsored arrangements, under special programs, and for certain employees, agents, and related persons of our parent corporation and its affiliates. We reduce or waive these items based on expected economies, and the variations are based on differences in costs or services. SELLING THE CONTRACT Our affiliate, Directed Services, Inc. ("DSI"), 1475 Dunwoody Drive, West Chester, PA 19380 is the principal underwriter and distributor of the Contract as well as for other ING USA contracts. DSI, a New York corporation, is registered with the SEC as a broker/dealer under the Securities Exchange Act of 1934, and is a member of the National Association of Securities Dealers, Inc. ("NASD"). 51 Landmark - 136957 DSI does not retain any commissions or compensation paid to it by ING USA for Contract sales. DSI enters into selling agreements with affiliated and unaffiliated broker/dealers to sell the Contracts through their registered representatives who are licensed to sell securities and variable insurance products ("selling firms"). Selling firms are also registered with the SEC and are NASD member firms. DSI pays selling firms compensation for the promotion and sale of the Contracts. Registered representatives of the selling firms who solicit sales of the Contracts typically receive a portion of the compensation paid by DSI to the selling firm in the form of commissions or other compensation, depending on the agreement between the selling firm and the registered representative. This compensation, as well as other incentives or payments, is not paid directly by contract owners or the Separate Account. We intend to recoup this compensation and other sales expenses paid to selling firms through fees and charges imposed under the Contracts. DSI pays selling firms for Contract sales according to one or more schedules. This compensation is generally based on a percentage of premium payments. Selling firms may receive commissions of up to 7.0% of premium payments. In addition, selling firms may receive ongoing annual compensation of up to 1.25% of all, or a portion, of values of Contracts sold through the firm. Individual representatives may receive all or a portion of compensation paid to their selling firm, depending on the firm's practices. Commissions and annual compensation, when combined, could exceed 7.0% of total premium payments. To the extent permitted by SEC and NASD rules and other applicable laws and regulations, DSI may pay or allow other promotional incentives or payments in the form of cash or other compensation to selling firms. DSI may also enter into special compensation arrangements with certain selling firms based on those firms' aggregate or anticipated sales of the Contracts or other criteria. These special compensation arrangements will not be offered to all selling firms, and the terms of such arrangements may differ among selling firms based on various factors. Any such compensation payable to a selling firm will not result in any additional direct charge to you by us. In addition to the direct cash compensation for sales of contracts described above, DSI may also pay selling firms additional compensation or reimbursement for their efforts in selling Contracts to you and other customers, including for, among other things, training of sales personnel, marketing or other sales-related services they provide to us or our affiliates. This compensation or reimbursement is not reflected in the fees and expenses listed in the Fund Expense Table in this prospectus and may take the form of: o Marketing allowances; o Education and training allowances to facilitate our attendance at certain educational and training meetings to provide information and training about our products, including holding training programs at our expense; o Sponsorship payments to support attendance at meetings by registered representatives who sell our products; o Reimbursement for the cost of attendance by registered representatives at conventions that we sponsor. 52 Landmark - 136957 The following is a list of the top 25 selling firms that, during 2004, received the largest dollar amounts, in the aggregate, from DSI in connection with the sale of annuity contracts, ranked by total dollars received: 1. UBS Financial Services Inc 2. Morgan Stanley Dean Witter 3. Linsco Private Ledger 4. Merrill Lynch 5. Citigroup Global Markets 6. Wachovia Securities 7. ING Financial Partners 8. Planning Corporation of America 9. National Planning Corporation 10. PrimeVest 11. A.G. Edwards 12. ING Financial Advisers, LLC 13. Multi-Financial Securities Corp 14. Financial Network Investment Corp 15. McDonald & Company 16. RBC Dain Rauscher 17. Mutual Service Corporation 18. First Financial Planners, Inc 19. Securities America 20. Investors Capital 21. Wells Fargo Investments, LLC 22. Waterstone Financial 23. Commonwealth Financial Network 24. Quick & Reilly, Inc. 25. NFP Securities Inc DSI may also compensate wholesalers/distributors, and their sales management personnel, for Contract sales within the wholesale/distribution channel. This compensation may be based on a percentage of premium payments and/or a percentage of Contract values. Affiliated selling firms may include Bancnorth Investment Group, Inc. Baring Investment Services, Inc., Financial Network Investment Corporation, Guaranty Brokerage Services, Inc., ING America Equities, Inc., ING DIRECT Securities, Inc., ING Financial Advisers LLC, ING Financial Markets, LLC., ING Financial Partners, Inc., ING Funds Distributor, LLC, ING Investment Management Services, LLC, Multi-Financial Securities Corporation, PrimeVest Financial Services, Inc. and Systematized Benefits Administrators, Inc. We do not pay any additional compensation on the sale or exercise of any of the Contract's optional benefit riders offered in this prospectus. This is a general discussion of the types and levels of compensation paid by us for sales of annuity contracts. It is important for you to know that the payment of volume-based compensation to a selling firm or registered representative may provide that registered representative a financial incentive to promote our contracts over those of another company. - -------------------------------------------------------------------------------- OTHER INFORMATION - -------------------------------------------------------------------------------- VOTING RIGHTS We will vote the shares of a Trust owned by Separate Account B according to your instructions. However, if the 1940 Act or any related regulations should change, or if interpretations of it or related regulations should change, and we decide that we are permitted to vote the shares of a Trust in our own right, we may decide to do so. 53 Landmark - 136957 We determine the number of shares that you have in a subaccount by dividing the Contract's contract value in that subaccount by the net asset value of one share of the portfolio in which a subaccount invests. We count fractional votes. We will determine the number of shares you can instruct us to vote 180 days or less before a Trust shareholder meeting. We will ask you for voting instructions by mail at least 10 days before the meeting. If we do not receive your instructions in time, we will vote the shares in the same proportion as the instructions received from all Contracts in that subaccount. We will also vote shares we hold in Separate Account B which are not attributable to contract owners in the same proportion. STATE REGULATION We are regulated by the Insurance Department of the State of Iowa. We are also subject to the insurance laws and regulations of all jurisdictions where we do business. The Contract offered by this prospectus has been approved where required by those jurisdictions. We are required to submit annual statements of our operations, including financial statements, to the Insurance Departments of the various jurisdictions in which we do business to determine solvency and compliance with state insurance laws and regulations. LEGAL PROCEEDINGS We are not aware of any pending legal proceedings which involve Separate Account B as a party. We are, or may be in the future, a defendant in various legal proceedings in connection with the normal conduct of our insurance operations. Some of these cases may seek class action status and may include a demand for punitive damages as well as for compensatory damages. In the opinion of management, the ultimate resolution of any existing legal proceeding is not likely to have a material adverse effect on our ability to meet our obligations under the contract. Directed Services, Inc., the principal underwriter and distributor of the contract, is not involved in any legal proceeding which, in the opinion of management, is likely to have a material adverse effect on its ability to distribute the contract. INDUSTRY DEVELOPMENTS - TRADING As with many financial services companies, the Company and affiliates of the Company have received requests for information from various governmental and self-regulatory agencies in connection with investigations related to trading in investment company shares. In each case, full cooperation and responses are being provided. The Company is also reviewing its policies and procedures in this area. EXPERTS The audited consolidated financial statements and schedules of the Company as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004, along with the statement of assets and liabilities of Separate Account B as of December 31, 2004 and the related statement of operations for the year then ended, and the statements of changes in net assets for each of the two years in the period then ended, included in the SAI and Registration Statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon included in the SAI and in the Registration Statement, and are included in reliance on such reports given on the authority of such firm as experts in accounting and auditing. - -------------------------------------------------------------------------------- FEDERAL TAX CONSIDERATIONS - -------------------------------------------------------------------------------- INTRODUCTION This section discusses our understanding of current federal income tax laws affecting the contract. You should keep the following in mind when reading it: 54 Landmark - 136957 o Your tax position (or the tax position of the designated beneficiary, as applicable) determines federal taxation of amounts held or paid out under the contract; o Tax laws change. It is possible that a change in the future could affect contracts issued in the past; o This section addresses federal income tax rules and does not discuss federal estate and gift tax implications, state and local taxes, foreign taxes or any other tax provisions; and o We do not make any guarantee about the tax treatment of the contract or transactions involving the contract. We do not intend this information to be tax advice. For advice about the effect of federal income taxes or any other taxes on amounts held or paid out under the contract, consult a tax adviser. For more comprehensive information, contact the Internal Revenue Service (IRS). TYPES OF CONTRACTS: NON-QUALIFIED OR QUALIFIED The Contract may be purchased on a non-tax-qualified basis or purchased on a tax-qualified basis. Non-qualified contracts are purchased with after tax contributions and are not related to retirement plans that receive special income tax treatment under the Code. Qualified Contracts are designed for use by individuals whose premium payments are comprised solely of proceeds from and/or contributions under retirement plans that are intended to qualify as plans entitled to special income tax treatment under Sections 401(a), 403(a), 403(b), 408, 408A or 457 of the Code. The ultimate effect of federal income taxes on the amounts held under a Contract, or annuity payments, depends on the type of retirement plan, on the tax and employment status of the individual concerned, and on your tax status. In addition, certain requirements must be satisfied in purchasing a qualified Contract with proceeds from a tax-qualified plan in order to continue receiving favorable tax treatment. Some retirement plans are subject to additional distribution and other requirements that are not incorporated into our Contract. Because the Plan is not part of the Contract, we are not bound by any Plan's terms or conditions. Contract owners, participants and beneficiaries are responsible for determining that contributions, distributions and other transactions with respect to the Contract comply with applicable law. Therefore, you should seek competent legal and tax advice regarding the suitability of a Contract for your particular situation. The following discussion assumes that qualified Contracts are purchased with proceeds from and/or contributions under retirement plans that qualify for the intended special federal income tax treatment. TAXATION OF NON-QUALIFIED CONTRACTS TAXATION PRIOR TO DISTRIBUTION We believe that if you are a natural person you will generally not be taxed on increases in the value of a non-qualified Contract until a distribution occurs or until annuity payments begin. This assumes that the Contract will qualify as an annuity contract for federal income tax purposes. For these purposes, the agreement to assign or pledge any portion of the contract value generally will be treated as a distribution. In order to receive deferral of taxation, the following requirements must be satisfied: DIVERSIFICATION. Internal Revenue Code Section 817(h) requires investments of a variable account be adequately diversified in order for a contract to be treated as an annuity contract for federal income tax purposes. The Treasury has issued regulations which set the standards for measuring the adequacy of any diversification. To be adequately diversified, each variable investment option must meet certain tests. Each sub-account's corresponding fund has represented that it will meet the diversification standards that apply to your policy. We therefore believe that Separate Account B, through the subaccounts, will satisfy these diversification requirements. 55 Landmark - 136957 INVESTOR CONTROL. Although earnings under non-qualified contracts are generally not taxed until withdrawn, the Internal Revenue Service (IRS) has stated in published rulings that a variable contract owner will be considered the owner of separate account assets if the contract owner possesses incidents of investment control over the assets. In these circumstances, income and gains from the separate account assets would be currently includible in the variable contract owner's gross income. Future guidance regarding the extent to which owners could direct their investments among subaccounts without being treated as owners of the underlying assets of the separate account may adversely affect the tax treatment of existing contracts. The Company therefore reserves the right to modify the contract as necessary to attempt to prevent the contract holder from being considered the federal tax owner of a pro rata share of the assets of the separate account. REQUIRED DISTRIBUTIONS. In order to be treated as an annuity contract for federal income tax purposes, the Code requires any non-qualified Contract to contain certain provisions specifying how your interest in the Contract will be distributed in the event of your death. The non-qualified Contracts contain provisions that are intended to comply with these Code requirements, although no regulations interpreting these requirements have yet been issued. We intend to review such distribution provisions and modify them if necessary to assure that they comply with the applicable requirements when such requirements are clarified by regulation or otherwise. See "Death Benefit Choices" for additional information on required distributions from non-qualified contracts. NON-NATURAL PERSONS. The owner of any annuity contract who is not a natural person generally must include in income any increase in the excess of the contract value over the "investment in the contract" (generally, the premiums or other consideration you paid for the contract less any nontaxable withdrawals) during the taxable year. There are some exceptions to this rule and a prospective contract owner that is not a natural person may wish to discuss these with a tax adviser. DELAYED ANNUITY STARTING DATE. If the Contract's annuity starting date occurs (or is scheduled to occur) at a time when the annuitant has reached an advanced age (e.g., age 85), it is possible that the Contract would not be treated as an annuity for federal income tax purposes. In that event, the income and gains under the Contract could be currently includible in your income. TAXATION OF DISTRIBUTIONS GENERAL. When a withdrawal from a non-qualified Contract occurs (including amounts paid to you under the ING LifePay rider), the amount received will be treated as ordinary income subject to tax up to an amount equal to the excess (if any) of the contract value (unreduced by the amount of any surrender charge) immediately before the distribution over the contract owner's investment in the contract at that time. Investment in the contract is generally equal to the amount of all contributions to the contract, plus amounts previously included in your gross income as the result of certain loans, assignments or gifts, less the aggregate amount of non-taxable distributions previously made. The contract value that applies for this purpose is unclear in some respects. For example, the living benefits provided under riders to the Contract, i.e., the ING LifePay and MGIB riders, as well as the market value adjustment could increase the contract value that applies. Thus, the income on the Contracts could be higher than the amount of income that would be determined without regard to such benefits. As a result, you could have higher amounts of income than will be reported to you. In the case of a surrender under a non-qualified Contract, the amount received generally will be taxable only to the extent it exceeds the contract owner's cost basis in the contract. 56 Landmark - 136957 10% PENALTY TAX. A distribution from a non-qualified Contract may be subject to a federal tax penalty equal to 10% of the amount treated as income. In general, however, there is no penalty on distributions: o made on or after the taxpayer reaches age 59 1/2; o made on or after the death of a contract owner; o attributable to the taxpayer's becoming disabled; or o made as part of a series of substantially equal periodic payments for the life (or life expectancy) of the taxpayer. Other exceptions may be applicable under certain circumstances and special rules may be applicable in connection with the exceptions enumerated above. A tax adviser should be consulted with regard to exceptions from the penalty tax. TAX-FREE EXCHANGES. Section 1035 of the Tax Code permits the exchange of a life insurance, endowment or annuity contract for an annuity contract on a tax-free basis. In such instance, the "investment in the contract" in the old contract will carry over to the new contract. You should consult with your tax advisor regarding procedures for making Section 1035 exchanges. If your Contract is purchased through a tax-free exchange of a life insurance, endowment or annuity contract that was purchased prior to August 14, 1982, then any distributions other than annuity payments will be treated, for tax purposes, as coming: o First, from any remaining "investment in the contract" made prior to August 14, 1982 and exchanged into the Contract; o Next, from any "income on the contract" attributable to the investment made prior to August 14, 1982; o Then, from any remaining "income on the contract"; and o Lastly, from any remaining "investment in the contract". The IRS has concluded that in certain instances, the partial exchange of a portion of one annuity contract for another contract will be tax-free. However, the IRS has reserved the right to treat transactions it considers abusive as ineligible for favorable partial 1035 tax-free exchange treatment. It is not certain whether the IRS would treat an immediate withdrawal or annuitization after a partial exchange as abusive. In addition, it is unclear how the IRS will treat a partial exchange from a life insurance, endowment, or annuity contract directly into an immediate annuity. Currently, we will accept a partial 1035 exchange from a non-qualified annuity into a deferred annuity or an immediate annuity as a tax-free transaction unless we believe that we would be expected to treat the transaction as abusive. We are not responsible for the manner in which any other insurance company, for tax reporting purposes, or the IRS, with respect to the ultimate tax treatment, recognizes or reports a partial exchange. We strongly advise you to discuss any proposed 1035 exchange with your tax advisor prior to proceeding with the transaction. 57 Landmark - 136957 TAXATION OF ANNUITY PAYMENTS. Although tax consequences may vary depending on the payment option elected under an annuity contract, a portion of each annuity payment is generally not taxed and the remainder is taxed as ordinary income. The non-taxable portion of an annuity payment is generally determined in a manner that is designed to allow you to recover your investment in the contract ratably on a tax-free basis over the expected stream of annuity payments, as determined when annuity payments start. Once your investment in the contract has been fully recovered, however, the full amount of each annuity payment is subject to tax as ordinary income. The tax treatment of partial annuitizations is unclear. We currently treat any partial annuitizations, such as those associated with the MGIB benefit, as withdrawals rather than as annuity payments. Please consult your tax adviser before electing a partial annuitization. DEATH BENEFITS. Amounts may be distributed from a Contract because of your death or the death of the annuitant. Generally, such amounts are includible in the income of the recipient as follows: (i) if distributed in a lump sum, they are taxed in the same manner as a surrender of the Contract, or (ii) if distributed under a payment option, they are taxed in the same way as annuity payments. Special rules may apply to amounts distributed after a Beneficiary has elected to maintain Contract value and receive payments. The Contract offers a death benefit (including the benefit provided by the earnings multiplier benefit rider) that may exceed the greater of the premium payments and the contract value. Certain charges are imposed with respect to the death benefit. It is possible that these charges (or some portion thereof) could be treated for federal tax purposes as a distribution from the Contract. ASSIGNMENTS AND OTHER TRANSFERS. A transfer, pledge or assignment of ownership of a Contract, or the designation of an annuitant or payee other than an owner, may result in certain tax consequences to you that are not discussed herein. A contract owner contemplating any such transfer, pledge, assignment, or designation or exchange, should consult a tax adviser as to the tax consequences. IMMEDIATE ANNUITIES. Under section 72 of the Tax Code, an immediate annuity means an annuity (1) which is purchased with a single premium, (2) with annuity payments starting within one year from the date of purchase, and (3) which provides a series of substantially equal periodic payments made annually or more frequently. Treatment as an immediate annuity will have significance with respect to exceptions from the 10% early withdrawal penalty, to contracts owned by non-natural persons, and for certain policy exchanges. MULTIPLE CONTRACTS. The tax law requires that all non-qualified deferred annuity contracts that are issued by a company or its affiliates to the same contract owner during any calendar year be treated as one non-qualified deferred annuity contract for purposes of determining the amount includible in such contract owner's income when a taxable distribution occurs. WITHHOLDING. We will withhold and remit to the U.S. government a part of the taxable portion of each distribution made under a Contract unless the distributee notifies us at or before the time of the distribution that he or she elects not to have any amounts withheld. Withholding will be mandatory, however, if the distribute fails to provide a valid taxpayer identification number or if we are notified by the IRS that the taxpayer identification number we have on file is incorrect. The withholding rates applicable to the taxable portion of periodic annuity payments are the same as the withholding rates generally applicable to payments of wages. In addition, a 10% withholding rate applies to the taxable portion of non-periodic payments. Regardless of whether you elect not to have federal income tax withheld, you are still liable for payment of federal income tax on the taxable portion of the payment. TAXATION OF QUALIFIED CONTRACTS GENERAL The Contracts are designed for use with several types of qualified plans. The tax rules applicable to participants in these qualified plans vary according to the type of plan and the terms and conditions of the plan itself. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from: contributions in excess of specified limits; distributions before age 59 1/2 (subject to certain exceptions); distributions that do not conform to specified commencement and minimum distribution rules; and in other specified circumstances. Therefore, no attempt is made to provide more than general information about the use of the Contracts with the various types of qualified retirement plans. Contract owners, annuitants, and beneficiaries are cautioned that the rights of any person to any benefits under these qualified retirement plans may be subject to the terms and conditions of the plans themselves, regardless of the terms and conditions of the Contract, but we shall not be bound by the terms and conditions of such plans to the extent such terms contradict the Contract, unless the Company consents. 58 Landmark - 136957 You will not generally pay taxes on earnings from the annuity contract described in this prospectus until they are withdrawn. When an annuity contract is used to fund one of these tax qualified retirement arrangements, you should know that the annuity contract does not provide any additional tax deferral of earnings beyond the tax deferral provided by the tax-qualified retirement arrangement. Tax-qualified retirement arrangements under Tax Code sections 401(a), 401(k), 403(a), 403(b) or governmental 457 plans also generally defer payment of taxes on earnings until they are withdrawn (or in the case of a non-governmental 457 plan, paid or made available to you or a designated beneficiary). However, annuities do provide other features and benefits which may be valuable to you. You should discuss your alternatives with your local representative. DISTRIBUTIONS - GENERAL For qualified plans under Section 401(a) and 403(b), the Code requires that distributions generally must commence no later than the later of April 1 of the calendar year following the calendar year in which the plan participant for whose benefit the contract is purchased (i) reaches age 70 1/2 or (ii) retires, and must be made in a specified form or manner. If the plan participant is a "5 percent owner" (as defined in the Code), distributions generally must begin no later than April 1 of the calendar year following the calendar year in which the plan participant reaches age 70 1/2. For IRAs described in Section 408, distributions generally must commence no later than by April 1 of the calendar year following the calendar year in which the individual contract owner reaches age 70 1/2. Roth IRAs under Section 408A do not require distributions at any time before the contract owner's death. Please note that required minimum distributions under qualified Contracts may be subject to surrender charges and/or market value adjustment, in accordance with the terms of the Contract. This could affect the amount that must be taken from the Contract in order to satisfy required minimum distributions. DIRECT ROLLOVERS If the Contract is used in connection with a pension, profit-sharing, or annuity plan qualified under sections 401(a) or 403(a) of the Code, or is a tax-sheltered annuity under section 403(b) of the Code, or is used with an eligible deferred compensation plan that has a government sponsor and that is qualified under section 457(b), any "eligible rollover distribution" from the Contract will be subject to the direct rollover and mandatory withholding requirements. An eligible rollover distribution generally is any taxable distribution from a qualified pension plan under section 401(a) of the Code, qualified annuity plan under section 403(a) of the Code, section 403(b) annuity or custodial account, or an eligible section 457(b) deferred compensation plan that has a government sponsor, excluding certain amounts (such as minimum distributions required under section 401(a)(9) of the Code, distributions which are part of a "series of substantially equal periodic payments" made for life or a specified period of 10 years or more, or hardship distributions as defined in the tax law). Under these requirements, federal income tax equal to 20% of the eligible rollover distribution will be withheld from the amount of the distribution. Unlike withholding on certain other amounts distributed from the Contract, discussed below, you cannot elect out of withholding with respect to an eligible rollover distribution. However, this 20% withholding will not apply if, instead of receiving the eligible rollover distribution, you elect to have it directly transferred to certain qualified plans. Prior to receiving an eligible rollover distribution, you will receive a notice (from the plan administrator or us) explaining generally the direct rollover and mandatory withholding requirements and how to avoid the 20% withholding by electing a direct rollover. 59 Landmark - 136957 CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS Section 401(a) of the Code permits corporate employers to establish various types of retirement plans for employees, and permits self-employed individuals to establish these plans for themselves and their employees. These retirement plans may permit the purchase of the Contracts to accumulate retirement savings under the plans. Adverse tax or other legal consequences to the plan, to the participant, or to both may result if this Contract is assigned or transferred to any individual as a means to provide benefit payments, unless the plan complies with all legal requirements applicable to such benefits before transfer of the Contract. Employers intending to use the Contract with such plans should seek competent advice. INDIVIDUAL RETIREMENT ANNUITIES - GENERAL Section 408 of the Code permits eligible individuals to contribute to an individual retirement program known as an "Individual Retirement Annuity" or "IRA." These IRAs are subject to limits on the amount that can be contributed, the deductible amount of the contribution, the persons who may be eligible, and the time when distributions commence. Also, distributions from certain other types of qualified retirement plans may be "rolled over" on a tax-deferred basis into an IRA. Also, amounts in another IRA or individual retirement account can be rolled over or transferred tax-free to an IRA. There are significant restrictions on rollover or transfer contributions from Savings Incentive Match Plans for Employees (SIMPLE), under which certain employers may provide contributions to IRAs on behalf of their employees, subject to special restrictions. Employers may establish Simplified Employee Pension (SEP) Plans to provide IRA contributions on behalf of their employees. If you make a tax-free rollover of a distribution from any of these IRAs, you may not make another tax-free rollover from the IRA within a 1-year period. Sales of the Contract for use with IRAs may be subject to special requirements of the IRS. INDIVIDUAL RETIREMENT ANNUITIES - DISTRIBUTIONS All distributions from a traditional IRA are taxed as received unless either one of the following is true: o The distribution is rolled over to a plan eligible to receive rollovers or to another traditional IRA or certain qualified plans in accordance with the Tax Code; or o You made after-tax contributions to the IRA. In this case, the distribution will be taxed according to rules detailed in the Tax Code. To avoid certain tax penalties, you and any designated beneficiary must also meet the minimum distribution requirements imposed by the Tax Code. The requirements do not apply to Roth IRA contracts while the owner is living. These rules may dictate the following: o Start date for distributions; o The time period in which all amounts in your account(s) must be distributed; and o Distribution amounts. Generally, you must begin receiving distributions from a traditional IRA by April 1 of the calendar year following the calendar year in which you attain age 70 1/2. We must pay out distributions from the contract over one of the following time periods: o Over your life or the joint lives of you and your designated beneficiary; or o Over a period not greater than your life expectancy or the joint life expectancies of you and your designated beneficiary. 60 Landmark - 136957 The amount of each periodic distribution must be calculated in accordance with IRS regulations. If you fail to receive the minimum required distribution for any tax year, a 50% excise tax may be imposed on the required amount that was not distributed. The following applies to the distribution of death proceeds under 408(b) and 408A (Roth IRA - See below) plans. Different distribution requirements apply after your death. If your death occurs on or after you begin receiving minimum distributions under the contract, distributions must be made at least as rapidly as under the method in effect at the time of your death. Code section 401(a)(9) provides specific rules for calculating the required minimum distributions at your death. The death benefit under the contract and also certain other contract benefits, such as living benefits, may affect the amount of the required minimum distribution that must be taken. If your death occurs before you begin receiving minimum distributions under the contract, your entire balance must be distributed by December 31 of the calendar year containing the fifth anniversary of the date of your death. For example, if you die on September 1, 2005, your entire balance must be distributed to the designated beneficiary by December 31, 2010. However, if distributions begin by December 31 of the calendar year following the calendar year of your death, and you have named a designated beneficiary, then payments may be made over either of the following time frames: o Over the life of the designated beneficiary; or o Over a period not extending beyond the life expectancy of the designated beneficiary. If the designated beneficiary is your spouse, distributions must begin on or before the later of the following: o December 31 of the calendar year following the calendar year of your death; or o December 31 of the calendar year in which you would have attained age 70 1/2. ROTH IRAS - GENERAL Section 408A of the Code permits certain eligible individuals to contribute to a Roth IRA. Contributions to a Roth IRA, which are subject to limits on the amount of the contributions and the persons who may be eligible to contribute, are not deductible, and must be made in cash or as a rollover or transfer from another Roth IRA or other IRA. Certain qualifying individuals may convert an IRA, SEP, or SIMPLE IRA, to a Roth IRA. Such rollovers and conversions are subject to tax, and other special rules may apply. If you make a tax-free rollover of a distribution from a Roth IRA to another Roth IRA, you may not make another tax-free rollover from the Roth IRA from which the rollover was made within a 1-year period. A 10% penalty may apply to amounts attributable to a conversion to a Roth IRA if the amounts are distributed during the five taxable years beginning with the year in which the conversion was made. ROTH IRAS - DISTRIBUTIONS A qualified distribution from a Roth IRA is not taxed when it is received. A qualified distribution is a distribution: o Made after the five-taxable year period beginning with the first taxable year for which a contribution was made to a Roth IRA of the owner; and o Made after you attain age 59 1/2, die, become disabled as defined in the Tax Code, or for a qualified first-time home purchase. 61 Landmark - 136957 If a distribution is not qualified, it will be taxable to the extent of the accumulated earnings. Under special ordering rules, a partial distribution will first be treated generally as a return of contributions which is not taxable and then as taxable accumulated earnings. TAX SHELTERED ANNUITIES - GENERAL The Contracts may be used by individuals whose premium payments are comprised solely of proceeds from and/or contributions under retirement plans that are intended to qualify as plans entitled to special income tax treatment under Code section 403(b) plans. Section 403(b) of the Code allows employees of certain Section 501(c)(3) organizations and public schools to exclude from their gross income the premium payments made, within certain limits, to a Contract that will provide an annuity for the employee's retirement. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from: contributions in excess of specified limits; distributions before age 59 1/2 (subject to certain exceptions); distributions that do not conform to specified commencement and minimum distribution rules; and other specified circumstances. 403(b) plans may be subject to additional distribution and other requirements that are not incorporated into our Contract. In addition, the Treasury proposed 403(b) regulations in November, 2004 which, if finalized, do not take effect until after 2005. These proposed regulations may not be relied upon until they become final. The proposed regulations include rules governing the ability of a 403(b) plan to be terminated which would entitle a participant to a distribution, a revocation of IRS Revenue Ruling 90-204 which would increase restrictions on a participant's right to transfer his or her 403(b) account, the imposition of withdrawal restrictions on non-salary reduction amounts, as well as other changes. As a result, no attempt is made to provide more than general information about the use of the Contracts with 403(b) plans. Contract owners, annuitants, and beneficiaries are cautioned that the rights of any person to any benefits under these 403(b) plans may be subject to the terms and conditions of the plans themselves, regardless of the terms and conditions of the Contract, but we are not bound by the terms and conditions of such plans to the extent such terms contradict the Contract. Contract owners, participants and beneficiaries are responsible for determining that contributions, distributions and other transactions with respect to the Contract comply with applicable law. You should seek competent legal and tax advice regarding the suitability of a Contract for your particular situation. The following discussion assumes that Contracts are purchased with proceeds from and/or contributions under 403(b) plans that qualify for the intended special federal income tax treatment. TAX SHELTERED ANNUITIES - LOANS Loans may be available if you purchased your contract in connection with a non-ERISA plan qualified under Section 403(b) of the Code ("TSA"). We do not currently permit loans under Section 403(b) Contracts that are subject to ERISA. If your Contract was issued in connection with a TSA and the terms of your plan permit, you may take a loan from us, using your surrender value as collateral for the loan. Loans are subject to the terms of the Contract, your 403(b) plan, the Code and other federal and state regulations. The amount and number of loans outstanding at any one time under your TSA are limited, whether under our contracts or those of other carriers. We may modify the terms of a loan to comply with changes in applicable law. Various mandatory repayment requirements apply to loans, and failure to repay generally would result in income to you and the potential application of tax penalties. We urge you to consult with a qualified tax advisor prior to effecting a loan transaction under your Contract. We may apply additional restrictions or limitations on loans, and you must make loan requests in accordance with our administrative practices and loan request procedures in effect at the time you submit your request. Read the terms of the loan agreement before submitting any request. Any outstanding loan balance impacts the following: o Withdrawals and Charges: We determine amounts available for maximum withdrawal amounts, free partial withdrawals, systematic withdrawals and waiver of administrative charges by reducing the otherwise applicable amounts by the amount of any outstanding loan balance. 62 Landmark - 136957 o Death Benefits, Annuitization and Surrenders: We deduct the outstanding loan balance from any amounts otherwise payable and in determining the amount available for annuitization. o Riders: -- Minimum Guaranteed Income Benefit ("MGIB") Rider. If you exercise the MGIB rider, we reduce the MGIB Base by an amount equal to the ratio of the outstanding loan balance to the contract value multiplied by the MGIB Base. -- ING LifePay Minimum Guaranteed Withdrawal Benefit ("ING LifePay") Rider. The portion of the contract value used to pay off the outstanding loan balance will reduce the ING LifePay Base or MAW as applicable. We do not recommend the ING LifePay rider if loans are contemplated. TAX SHELTERED ANNUITIES - DISTRIBUTIONS All distributions from Section 403(b) plans are taxed as received unless either of the following is true: o The distribution is rolled over to another plan eligible to receive rollovers or to a traditional individual retirement annuity/account (IRA) in accordance with the Tax Code; or o You made after-tax contributions to the plan. In this case, the amount will be taxed according to rules detailed in the Tax Code. Generally, you must begin receiving distributions by April 1 of the calendar year following the calendar year in which you attain age 70 1/2 or retire, whichever occurs later, unless you had amounts under the contract as of December 31, 1986. In this case, distribution of these amounts generally must begin by the end of the calendar year in which you attain age 75 or retire, if later. The death benefit under the contract and also certain other contract benefits, such as the living benefits, may affect the amount of the required minimum distribution that must be taken. If you take any distributions in excess of the required minimum amount, then special rules require that some or all of the December 31, 1986 balance be distributed earlier. TAX CONSEQUENCES OF ENHANCED DEATH BENEFIT The Contract offers a death benefit (including the benefit provided by the earnings multiplier benefit rider) that may exceed the greater of the premium payments and the contract value. It is possible that the IRS could characterize such a death benefit as an incidental death benefit. There are limitations on the amount of incidental benefits that may be provided under pension and profit sharing plans. In addition, the provision of such benefits may result in currently taxable income to participants. Also, as stated above, the presence of the death benefit, as well as certain other contract benefits, could affect the amount of required minimum distributions. OTHER TAX CONSEQUENCES As noted above, the foregoing comments about the federal tax consequences under the Contracts are not exhaustive, and special rules are provided with respect to other tax situations not discussed in this prospectus. Further, the federal income tax consequences discussed herein reflect our understanding of current law, and the law may change. Federal estate and state and local estate, inheritance and other tax consequences of ownership or receipt of distributions under a Contract depend on the individual circumstances of each contract owner or recipient of the distribution. A competent tax adviser should be consulted for further information. POSSIBLE CHANGES IN TAXATION Although the likelihood of legislative change is uncertain, there is always the possibility that the tax treatment of the Contracts could change by legislation or other means. It is also possible that any change could be retroactive (that is, effective before the date of the change). You should consult a tax adviser with respect to legislative developments and their effect on the Contract. 63 Landmark - 136957 FEDERAL INCOME TAX WITHHOLDING We will withhold and remit to the U.S. government a part of the taxable portion of each distribution made under a Contract unless the distributee notifies us at or before the time of the distribution that he or she elects not to have any amounts withheld. In certain circumstances, we may be required to withhold tax, as explained above. The withholding rates applicable to the taxable portion of periodic annuity payments (other than eligible rollover distributions) are the same as the withholding rates generally applicable to payments of wages. In addition, a 10% withholding rate applies to the taxable portion of non-periodic payments (including withdrawals prior to the annuity starting date) and conversions of, and rollovers from, non-Roth IRAs to Roth IRAs. Regardless of whether you elect not to have federal income tax withheld, you are still liable for payment of federal income tax on the taxable portion of the payment. As discussed above, the withholding rate applicable to eligible rollover distributions is 20%. ASSIGNMENTS Adverse tax consequences to the plan and/or to you may result if your beneficial interest in the contract is assigned or transferred to persons other than: a plan participant as a means to provide benefit payments; an alternate payee under a qualified domestic relations order in accordance with code section 414(p); or to the Company as collateral for a loan. TAXATION OF COMPANY We are taxed as a life insurance company under the Tax Code. The Separate Account is not a separate entity from us. Therefore, it is not taxed separately as a "regulated investment company," but is taxed as part of the Company. We automatically apply investment income and capital gains attributable to the separate account to increase reserves under the contracts. Because of this, under existing federal tax law we believe that any such income and gains will not be taxed to the extent that such income and gains are applied to increase reserves under the contracts. In addition, any foreign tax credits attributable to the separate account will be first used to reduce any income taxes imposed on the separate account before being used by the Company. In summary, we do not expect that we will incur any federal income tax liability attributable to the separate account and we do not intend to make any provision for such taxes. However, changes in federal tax laws and/or their interpretation may result in our being taxed on income or gains attributable to the separate account. In this case, we may impose a charge against the separate account (with respect to some or all of the contracts) to set aside provisions to pay such taxes. We may deduct this amount from the separate account, including from your account value invested in the subaccounts. 64 Landmark - 136957 - -------------------------------------------------------------------------------- STATEMENT OF ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- TABLE OF CONTENTS Item Introduction Description of ING USA Annuity and Life Insurance Company Safekeeping of Assets The Administrator Independent Registered Public Accounting Firm Distribution of Contracts Performance Information IRA Partial Withdrawal Option Other Information Financial Statements of ING USA Annuity and Life Insurance Company Financial Statements of Separate Account B of ING USA Annuity and Life Insurance Company - -------------------------------------------------------------------------------- PLEASE TEAR OFF, COMPLETE AND RETURN THE FORM BELOW TO ORDER A FREE STATEMENT OF ADDITIONAL INFORMATION FOR THE CONTRACTS OFFERED UNDER THE PROSPECTUS. SEND THE FORM TO OUR CUSTOMER SERVICE CENTER AT THE ADDRESS SHOWN ON THE PROSPECTUS COVER. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - PLEASE SEND ME A FREE COPY OF THE STATEMENT OF ADDITIONAL INFORMATION FOR SEPARATE ACCOUNT B. Please Print or Type: __________________________________________________ NAME __________________________________________________ SOCIAL SECURITY NUMBER __________________________________________________ STREET ADDRESS __________________________________________________ CITY, STATE, ZIP Landmark -136957 11/01/2005 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - SAI-1 Landmark - 136957 This page left intentionally blank. Landmark - 136957 - -------------------------------------------------------------------------------- APPENDIX A - -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION Except for subaccounts which did not commence operations as of December 31, 2004, the following tables give (1) the accumulation unit value ("AUV") at the beginning of the period, (2) the AUV at the end of the period and (3) the total number of accumulation units outstanding at the end of the period for each subaccount of ING USA Separate Account B available under the Contract for the indicated periods.
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 1.65% AIM V.I. DENT DEMOGRAPHIC TRENDS (Fund first available during November 2001) AUV at beginning of period $9.89 $7.32 $10.99 $10.00 AUV at end of period $10.49 $9.89 $7.32 $10.99 Number of accumulation units outstanding at end of period 490,391 343,647 95,005 9,170 AIM V.I. FINANCIAL SERVICES (Fund first available during November 2001) AUV at beginning of period $9.98 $7.83 $9.35 $10.00 AUV at end of period $10.66 $9.98 $7.83 $9.35 Number of accumulation units outstanding at end of period 348,574 368,146 200,146 5,433 AIM V.I. HEALTH SCIENCES (Fund first available during November 2001) AUV at beginning of period $9.58 $7.62 $10.26 $10.00 AUV at end of period $10.14 $9.58 $7.62 $10.26 Number of accumulation units outstanding at end of period 573,077 507,003 183,978 7,400 AIM V.I. LEISURE (Fund first available during May 2002) AUV at beginning of period $10.66 $8.43 $10.00 AUV at end of period $11.89 $10.66 $8.43 Number of accumulation units outstanding at end of period 542,920 224,254 65,382 AIM V.I. UTILITIES (Fund first available during November 2001) AUV at beginning of period $7.33 $6.35 $8.10 $10.00 AUV at end of period $8.91 $7.33 $6.35 $8.10 Number of accumulation units outstanding at end of period 650,887 212,386 51,660 1,002 COLONIAL SMALL CAP VALUE (Fund first available during November 2003) AUV at beginning of period $13.83 $10.00 AUV at end of period $16.67 $13.83 Number of accumulation units outstanding at end of period 1,745,035 202,533 FIDELITY VIP EQUITY - INCOME (Fund first available during May 2002) AUV at beginning of period $9.98 $7.80 $9.58 $10.00 AUV at end of period $10.92 $9.98 $7.80 $9.58 Number of accumulation units outstanding at end of period 1,820,927 947,458 177,883 -- FIDELITY VIP GROWTH (Fund first available during May 2002) AUV at beginning of period $8.28 $6.35 $9.26 $10.00 AUV at end of period $8.39 $8.28 $6.35 $9.26 Number of accumulation units outstanding at end of period 2,221,606 1,641,662 202,569 -- ING AIM MID CAP GROWTH (Fund first available during February 2000) AUV at beginning of period $13.77 $9.71 $14.46 $18.65 $21.51 AUV at end of period $14.57 $13.77 $9.71 $14.46 $18.65 Number of accumulation units outstanding at end of period 646,998 477,375 335,993 414,298 185,121 ING ALLIANCE MID CAP GROWTH (Fund first available during February 2000) AUV at beginning of period $16.31 $9.92 $14.42 $17.00 $19.97 AUV at end of period $19.17 $16.31 $9.92 $14.42 $17.00 Number of accumulation units outstanding at end of period 1,007,648 845,094 481,010 388,823 181,294
A1 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING AMERICAN FUNDS GROWTH (Fund first available during September 2003) AUV at beginning of period $10.76 $10.00 AUV at end of period $11.85 $10.76 Number of accumulation units outstanding at end of period 7,574,705 1,003,541 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available during September 2003) AUV at beginning of period $10.98 $10.00 AUV at end of period $11.86 $10.98 Number of accumulation units outstanding at end of period 5,275,914 536,261 ING AMERICAN FUNDS INTERNATIONAL (Fund first available during September 2003) AUV at beginning of period $11.61 $10.00 AUV at end of period $13.54 $11.61 Number of accumulation units outstanding at end of period 2,513,020 241,840 ING CAPITAL GUARDIAN LARGE CAP VALUE (Fund first available during February 2000) AUV at beginning of period $10.05 $7.47 $9.97 $10.52 $10.00 AUV at end of period $10.80 $10.05 $7.47 $9.97 $10.52 Number of accumulation units outstanding at end of period 4,782,802 3,956,879 2,660,135 1,400,044 181,541 ING CAPITAL GUARDIAN MANAGED GLOBAL (Fund first available during February 2000) AUV at beginning of period $18.01 $13.43 $17.11 $19.75 $21.96 AUV at end of period $19.65 $18.01 $13.43 $17.11 $19.75 Number of accumulation units outstanding at end of period 1,520,291 1,411,896 1,121,603 791,259 406,790 ING CAPITAL GUARDIAN SMALL CAP (Fund first available during February 2000) AUV at beginning of period $17.82 $12.91 $17.60 $18.17 $23.49 AUV at end of period $18.84 $17.82 $12.91 $17.60 $18.17 Number of accumulation units outstanding at end of period 1,628,458 1,326,176 874,016 534,470 184,093 ING DEVELOPING WORLD (Fund first available during February 2000) AUV at beginning of period $8.88 $6.16 $7.01 $7.52 $11.62 AUV at end of period $10.28 $8.88 $6.16 $7.01 $7.52 Number of accumulation units outstanding at end of period 1,024,922 472,273 249,736 203,417 52,533 ING EAGLE ASSET CAPITAL APPRECIATION (Fund first available during February 2000) AUV at beginning of period $18.08 $14.68 $17.99 $19.14 $17.30 AUV at end of period $20.43 $18.08 $14.68 $17.99 $19.14 Number of accumulation units outstanding at end of period 394,924 364,191 318,880 183,496 41,973 ING EVERGREEN HEALTH SCIENCES (Fund first available during May 2004) AUV at beginning of period $9.95 AUV at end of period $9.89 Number of accumulation units outstanding at end of period 346,643 ING EVERGREEN OMEGA (Fund first available during May 2004) AUV at beginning of period $9.92 AUV at end of period $10.47 Number of accumulation units outstanding at end of period 45,865 ING FMR(SM) DIVERSIFIED MID-CAP (Fund first available during October 2000) AUV at beginning of period $9.44 $7.19 $9.06 $9.87 $10.00 AUV at end of period $11.52 $9.44 $7.19 $9.06 $9.87 Number of accumulation units outstanding at end of period 2,007,253 1,236,349 877,092 390,858 9,164 ING GET FUND - SERIES T (Fund first available during September 2002) AUV at beginning of period $10.43 $10.07 $10.00 AUV at end of period $10.48 $10.43 $10.07 Number of accumulation units outstanding at end of period 9,426 19,502 19,504 ING GET FUND - SERIES U (Fund first available during December 2002) AUV at beginning of period $10.52 $10.00 $10.00 AUV at end of period $10.65 $10.52 Number of accumulation units outstanding at end of period 6,337 6,370 --
A2 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING GET FUND - SERIES V (Fund first available during June 2003) AUV at beginning of period $9.71 $10.00 AUV at end of period $9.73 $9.71 Number of accumulation units outstanding at end of period 46,500 57,052 ING GET U.S. CORE PORTFOLIO - SERIES 1 (Fund first available during June 2003) AUV at beginning of period $10.24 $10.00 AUV at end of period $10.37 $10.24 Number of accumulation units outstanding at end of period 47,948 56,854 ING GET U.S. CORE PORTFOLIO - SERIES 2 (Fund first available during December 2003) AUV at beginning of period $10.03 $10.00 AUV at end of period $10.17 $10.03 Number of accumulation units outstanding at end of period 19,339 25,109 ING GET U.S. CORE PORTFOLIO - SERIES 3 (Fund first available during March 2004) AUV at beginning of period $9.97 AUV at end of period $9.91 Number of accumulation units outstanding at end of period 54,672 ING GET U.S. CORE PORTFOLIO - SERIES 4 (Fund first available during June 2004) AUV at beginning of period $9.97 AUV at end of period $10.35 Number of accumulation units outstanding at end of period 122,780 ING GET U.S. CORE PORTFOLIO - SERIES 5 (Fund first available during September 2004) AUV at beginning of period $9.98 AUV at end of period $10.46 Number of accumulation units outstanding at end of period 181,888 ING GET U.S. CORE PORTFOLIO - SERIES 6 (Fund first available during December 2004) AUV at beginning of period $10.00 AUV at end of period $10.07 Number of accumulation units outstanding at end of period 121,031 ING GOLDMAN SACHS TOLLKEEPER (Fund first available during May 2001) AUV at beginning of period $6.42 $4.63 $7.60 $10.00 AUV at end of period $7.04 $6.42 $4.63 $7.60 Number of accumulation units outstanding at end of period 915,327 555,046 240,376 35,022 ING HARD ASSETS (Fund first available during February 2000) AUV at beginning of period $20.28 $13.55 $13.67 $15.81 $15.76 AUV at end of period $21.23 $20.28 $13.55 $13.67 $15.81 Number of accumulation units outstanding at end of period 643,253 349,772 108,460 18,910 5,200 ING INTERNATIONAL (Fund first available during December 2001) AUV at beginning of period $9.01 $7.09 $8.60 $11.32 $14.90 AUV at end of period $10.34 $9.01 $7.09 $8.60 $11.32 Number of accumulation units outstanding at end of period 677,330 460,646 244,423 66,133 ING JANUS SPECIAL EQUITY (Fund first available during October 2000) AUV at beginning of period $8.94 $6.04 $8.30 $8.88 $10.00 AUV at end of period $10.30 $8.94 $6.04 $8.30 $8.88 Number of accumulation units outstanding at end of period 395,916 344,837 246,924 151,551 9,174 ING JENNISON EQUITY OPPORTUNITIES (Fund first available during February 2000) AUV at beginning of period $18.88 $14.64 $21.05 $24.59 $28.98 AUV at end of period $20.91 $18.88 $14.64 $21.05 $24.59 Number of accumulation units outstanding at end of period 411,913 463,551 479,670 337,955 124,676 ING JPMORGAN INTERNATIONAL (Fund first available during September 2003) AUV at beginning of period $11.86 $10.00 AUV at end of period $13.85 $11.86 Number of accumulation units outstanding at end of period 566,780 56,919
A3 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING JPMORGAN SMALL CAP EQUITY (Fund first available during May 2002) AUV at beginning of period $10.34 $7.83 $10.00 AUV at end of period $13.63 $10.34 $7.83 Number of accumulation units outstanding at end of period 1,021,256 506,711 114,380 ING JULIUS BAER FOREIGN PORTFOLIO (Fund first available during May 2002) AUV at beginning of period $10.59 $8.21 $10.00 AUV at end of period $12.29 $10.59 $8.21 Number of accumulation units outstanding at end of period 1,879,994 296,301 81,977 ING LEGG MASON VALUE (Fund first available during October 2000) AUV at beginning of period $8.45 $7.01 $8.84 $9.94 $10.00 AUV at end of period $9.46 $8.45 $7.01 $8.84 $9.94 Number of accumulation units outstanding at end of period 2,715,141 2,048,406 1,160,152 480,294 19,469 ING LIFESTYLE AGGRESSIVE GROWTH (Fund first available during May 2004) AUV at beginning of period $10.13 AUV at end of period $11.24 Number of accumulation units outstanding at end of period 2,210,106 ING LIFESTYLE GROWTH (Fund first available during May 2004) AUV at beginning of period $10.04 AUV at end of period $11.12 Number of accumulation units outstanding at end of period 5,655,755 ING LIFESTYLE MODERATE GROWTH (Fund first available during May 2004) AUV at beginning of period $10.02 AUV at end of period $10.95 Number of accumulation units outstanding at end of period 4,847,018 ING LIFESTYLE MODERATE (Fund first available during May 2004) AUV at beginning of period $10.04 AUV at end of period $10.81 Number of accumulation units outstanding at end of period 1,873,298 ING LIMITED MATURITY BOND (Fund first available during February 2000) AUV at beginning of period $19.62 $19.40 $18.39 $17.18 $16.19 AUV at end of period $19.56 $19.62 $19.40 $18.39 $17.18 Number of accumulation units outstanding at end of period 809,812 1,154,037 917,937 389,087 49,754 ING LIQUID ASSETS (Fund first available during February 2000) AUV at beginning of period $15.09 $15.23 $15.26 $14.94 $14.37 AUV at end of period $14.97 $15.09 $15.23 $15.26 $14.94 Number of accumulation units outstanding at end of period 1,780,415 1,848,567 1,599,933 953,602 302,892 ING MARSICO GROWTH (Fund first available during February 2000) AUV at beginning of period $13.49 $10.34 $14.92 $21.75 $28.89 AUV at end of period $14.93 $13.49 $10.34 $14.92 $21.75 Number of accumulation units outstanding at end of period 2,512,016 1,979,404 1,434,608 1,236,743 693,052 ING MERCURY FOCUS VALUE (Fund first available during May 2002) AUV at beginning of period $10.79 $8.36 $10.00 AUV at end of period $11.83 $10.79 $8.36 Number of accumulation units outstanding at end of period 265,975 128,265 36,244 ING MERCURY LARGE CAP GROWTH (Fund first available during May 2002) AUV at beginning of period $9.94 $7.96 $10.00 AUV at end of period $10.86 $9.94 $7.96 Number of accumulation units outstanding at end of period 188,506 161,256 60,487 ING MFS MID CAP GROWTH (Fund first available during February 2000) AUV at beginning of period $21.54 $15.74 $31.27 $41.63 $38.15 AUV at end of period $24.37 $21.54 $15.74 $31.27 $41.63 Number of accumulation units outstanding at end of period 1,290,210 1,153,663 844,740 569,707 186,073
A4 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING MFS TOTAL RETURN (Fund first available during February 2000) AUV at beginning of period $21.62 $18.83 $20.18 $20.42 $17.27 AUV at end of period $23.63 $21.62 $18.83 $20.18 $20.42 Number of accumulation units outstanding at end of period 2,977,831 2,396,435 1,672,477 915,770 205,502 ING OPPENHEIMER MAIN STREET (Fund first available during February 2000) AUV at beginning of period $18.16 $14.82 $20.06 $25.97 $26.65 AUV at end of period $20.16 $18.16 $14.82 $20.06 $25.97 Number of accumulation units outstanding at end of period 887,678 933,001 921,349 792,240 378,215 ING PIMCO CORE BOND (Fund first available during February 2000) AUV at beginning of period $12.82 $12.44 $11.64 $11.55 $11.32 AUV at end of period $13.22 $12.82 $12.44 $11.64 $11.55 Number of accumulation units outstanding at end of period 3,434,155 2,698,621 1,936,106 244,538 14,652 ING PIMCO HIGH YIELD (Fund first available during May 2004) AUV at beginning of period $10.00 AUV at end of period $10.80 Number of accumulation units outstanding at end of period 4,403,121 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available during September 2003) AUV at beginning of period $10.81 $10.00 AUV at end of period $11.63 $10.81 Number of accumulation units outstanding at end of period 1,121,331 94,036 ING SALOMON BROTHERS ALL CAP (Fund first available during February 2000) AUV at beginning of period $11.59 $8.49 $11.59 $11.57 $10.00 AUV at end of period $12.29 $11.59 $8.49 $11.59 $11.57 Number of accumulation units outstanding at end of period 2,410,480 2,190,115 1,505,988 807,563 70,600 ING SALOMON BROTHERS INVESTORS (Fund first available during February 2000) AUV at beginning of period $10.34 $8.01 $10.58 $11.24 $10.00 AUV at end of period $11.18 $10.34 $8.01 $10.58 $11.24 Number of accumulation units outstanding at end of period 1,173,059 1,081,824 1,030,211 401,684 21,065 ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available during February 2000) AUV at beginning of period $33.19 $26.95 $27.27 $25.23 $20.42 AUV at end of period $38.07 $33.19 $26.95 $27.27 $25.23 Number of accumulation units outstanding at end of period 3,119,934 1,938,760 1,232,631 477,872 61,545 ING T. ROWE PRICE EQUITY INCOME (Fund first available during February 2000) AUV at beginning of period $24.27 $19.72 $23.10 $23.17 $19.74 AUV at end of period $27.43 $24.27 $19.72 $23.10 $23.17 Number of accumulation units outstanding at end of period 2,602,040 1,543,749 814,592 410,546 79,161 ING UBS U.S. BALANCED (Fund first available during November 2003) AUV at beginning of period $8.38 $7.22 AUV at end of period $9.14 $8.38 Number of accumulation units outstanding at end of period 837,292 434,716 ING VAN KAMPEN EQUITY GROWTH (Fund first available during May 2002) AUV at beginning of period $9.50 $7.81 $10.00 AUV at end of period $10.02 $9.50 $7.81 Number of accumulation units outstanding at end of period 299,252 186,268 28,455 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available during May 2002) AUV at beginning of period $10.97 $8.83 $10.00 AUV at end of period $12.15 $10.97 $8.83 Number of accumulation units outstanding at end of period 1,143,284 441,247 136,897 ING VAN KAMPEN GROWTH & INCOME (Fund first available during February 2000) AUV at beginning of period $22.32 $17.75 $21.17 $24.45 $25.20 AUV at end of period $25.05 $22.32 $17.75 $21.17 $24.45 Number of accumulation units outstanding at end of period 1,423,862 1,070,653 835,107 752,796 428,500
A5 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING VAN KAMPEN REAL ESTATE (Fund first available during February 2000) AUV at beginning of period $36.64 $27.05 $27.45 $25.81 $20.18 AUV at end of period $49.64 $36.64 $27.05 $27.45 $25.81 Number of accumulation units outstanding at end of period 672,058 395,687 242,782 77,777 12,612 ING VP FINANCIAL SERVICES (Fund first available during May 2004) AUV at beginning of period $10.03 AUV at end of period $11.08 Number of accumulation units outstanding at end of period 120,279 ING VP INDEX PLUS LARGECAP (Fund first available during August 2003) AUV at beginning of period $8.92 $10.00 AUV at end of period $9.67 $8.92 Number of accumulation units outstanding at end of period 1,211,622 392,888 ING VP INDEX PLUS MIDCAP (Fund first available during May 2004) AUV at beginning of period $9.49 AUV at end of period $10.92 Number of accumulation units outstanding at end of period 505,878 ING VP INDEX PLUS SMALLCAP (Fund first available during May 2004) AUV at beginning of period $9.39 AUV at end of period $11.33 Number of accumulation units outstanding at end of period 456,418 ING VP INTERMEDIATE BOND (Fund first available during May 2002) AUV at beginning of period $11.08 $10.63 $10.00 AUV at end of period $11.40 $11.08 $10.63 Number of accumulation units outstanding at end of period 1,881,640 337,031 88,275 ING VP MAGNACAP (Fund first available during May 2001) AUV at beginning of period $9.09 $7.07 $9.34 $10.00 AUV at end of period $9.74 $9.09 $7.07 $9.34 Number of accumulation units outstanding at end of period 247,085 219,722 153,013 28,170 ING VP MIDCAP OPPORTUNITIES (Fund first available during April 2004) AUV at beginning of period $7.09 AUV at end of period $7.45 Number of accumulation units outstanding at end of period 316,589 ING VP SMALLCAP OPPORTUNITIES (Fund first available during May 2001) AUV at beginning of period $6.26 $4.60 $8.32 $10.00 AUV at end of period $6.77 $6.26 $4.60 $8.32 Number of accumulation units outstanding at end of period 1,295,970 951,109 563,709 111,946 ING VP WORLDWIDE GROWTH (Fund first available during May 2000) AUV at beginning of period $6.57 $5.17 $6.99 $8.74 $10.00 AUV at end of period $7.07 $6.57 $5.17 $6.99 $8.74 Number of accumulation units outstanding at end of period 521,142 424,273 322,466 158,546 39,547 JENNISON PORTFOLIO (Fund first available during May 2000) AUV at beginning of period $5.41 $4.24 $6.27 $7.83 $10.00 AUV at end of period $5.81 $5.41 $4.24 $6.27 $7.83 Number of accumulation units outstanding at end of period 823,183 650,697 522,740 201,082 15,840 PIMCO STOCKSPLUS GROWTH & INCOME (Fund first available during February 2000) AUV at beginning of period $10.20 $7.95 $10.14 $11.64 $12.48 AUV at end of period $11.12 $10.20 $7.95 $10.14 $11.64 Number of accumulation units outstanding at end of period 582,535 676,563 745,490 468,628 187,618 PIONEER FUND VCT (Fund first available during November 2001) AUV at beginning of period $9.04 $7.44 $9.37 $10.00 AUV at end of period $9.86 $9.04 $7.44 $9.37 Number of accumulation units outstanding at end of period 867,657 600,838 184,119 9,738
A6 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- PIONEER MID CAP VALUE (Fund first available during November 2001) AUV at beginning of period $12.59 $9.34 $10.71 $10.00 AUV at end of period $15.07 $12.59 $9.34 $10.71 Number of accumulation units outstanding at end of period 3,544,567 1,315,892 338,219 6,577 PROFUND VP BULL (Fund first available during May 2001) AUV at beginning of period $8.20 $6.64 $8.88 $10.00 AUV at end of period $8.78 $8.20 $6.64 $8.88 Number of accumulation units outstanding at end of period 391,752 212,538 127,499 92,175 PROFUND VP EUROPE 30 (Fund first available during May 2001) AUV at beginning of period $8.22 $6.03 $8.25 $10.00 AUV at end of period $9.24 $8.22 $6.03 $8.25 Number of accumulation units outstanding at end of period 236,069 118,462 64,317 14,668 PROFUND VP RISING RATES OPPORTUNITY (Fund first available during October 2003) AUV at beginning of period $9.36 $10.00 AUV at end of period $8.20 $9.36 Number of accumulation units outstanding at end of period 737,507 29,131 PROFUND VP SMALL CAP (Fund first available during May 2001) AUV at beginning of period $10.08 $7.18 $9.41 $10.00 AUV at end of period $11.58 $10.08 $7.18 $9.41 Number of accumulation units outstanding at end of period 702,471 550,359 236,885 18,943 SP WILLIAM BLAIR INTERNATIONAL GROWTH (Fund first available during October 2000) AUV at beginning of period $5.60 $4.09 $5.39 $8.56 $10.00 AUV at end of period $6.40 $5.60 $4.09 $5.39 $8.56 Number of accumulation units outstanding at end of period 1,316,700 940,235 243,444 109,344 3,557
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 1.80% AIM V.I. DENT DEMOGRAPHIC TRENDS (Fund first available during November 2001) AUV at beginning of period $9.85 $7.31 $10.98 $10.00 AUV at end of period $10.44 $9.85 $7.31 $10.98 Number of accumulation units outstanding at end of period 612,123 574,799 144,579 7,111 AIM V.I. FINANCIAL SERVICES (Fund first available during November 2001) AUV at beginning of period $9.94 $7.81 $9.35 $10.00 AUV at end of period $10.61 $9.94 $7.81 $9.35 Number of accumulation units outstanding at end of period 520,434 612,566 284,060 18,560 AIM V.I. HEALTH SCIENCES (Fund first available during November 2001) AUV at beginning of period $9.54 $7.61 $10.25 $10.00 AUV at end of period $10.08 $9.54 $7.61 $10.25 Number of accumulation units outstanding at end of period 759,944 833,580 375,102 25,836 AIM V.I. LEISURE (Fund first available during May 2002) AUV at beginning of period $10.63 $8.42 $10.00 AUV at end of period $11.84 $10.63 $8.42 Number of accumulation units outstanding at end of period 395,526 301,537 54,250 AIM V.I. UTILITIES (Fund first available during November 2001) AUV at beginning of period $7.30 $6.33 $8.09 $10.00 AUV at end of period $8.86 $7.30 $6.33 $8.09 Number of accumulation units outstanding at end of period 643,949 360,781 167,758 16,134
A7 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- COLONIAL SMALL CAP VALUE (Fund first available during November 2003) AUV at beginning of period $13.81 $10.00 AUV at end of period $16.63 $13.81 Number of accumulation units outstanding at end of period 852,061 243,070 FIDELITY VIP EQUITY - INCOME (Fund first available during May 2002) AUV at beginning of period $9.94 $7.79 $9.57 $10.00 AUV at end of period $10.86 $9.94 $7.79 $9.57 Number of accumulation units outstanding at end of period 1,417,019 1,180,858 178,752 -- FIDELITY VIP GROWTH (Fund first available during May 2002) AUV at beginning of period $8.25 $6.33 $9.25 $10.00 AUV at end of period $8.35 $8.25 $6.33 $9.25 Number of accumulation units outstanding at end of period 1,896,433 2,329,442 244,586 652 ING AIM MID CAP GROWTH (Fund first available during February 2000) AUV at beginning of period $13.60 $9.61 $14.32 $18.50 $21.37 AUV at end of period $14.37 $13.60 $9.61 $14.32 $18.50 Number of accumulation units outstanding at end of period 1,327,212 1,533,657 1,196,567 1,447,650 1,203,898 ING ALLIANCE MID CAP GROWTH (Fund first available during February 2000) AUV at beginning of period $16.11 $9.82 $14.30 $16.88 $19.86 AUV at end of period $18.91 $16.11 $9.82 $14.30 $16.88 Number of accumulation units outstanding at end of period 2,040,024 2,304,112 1,761,535 1,586,391 1,171,869 ING AMERICAN FUNDS GROWTH (Fund first available during September 2003) AUV at beginning of period $10.76 $10.00 AUV at end of period $11.82 $10.76 Number of accumulation units outstanding at end of period 3,253,026 913,862 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available during September 2003) AUV at beginning of period $10.98 $10.00 AUV at end of period $11.83 $10.98 Number of accumulation units outstanding at end of period 2,706,900 724,335 ING AMERICAN FUNDS INTERNATIONAL (Fund first available during September 2003) AUV at beginning of period $11.60 $10.00 AUV at end of period $13.52 $11.60 Number of accumulation units outstanding at end of period 1,413,483 261,151 ING CAPITAL GUARDIAN LARGE CAP VALUE (Fund first available during February 2000) AUV at beginning of period $9.99 $7.44 $9.94 $10.51 $10.00 AUV at end of period $10.72 $9.99 $7.44 $9.94 $10.51 Number of accumulation units outstanding at end of period 6,986,111 6,791,260 5,103,821 3,603,942 1,403,629 ING CAPITAL GUARDIAN MANAGED GLOBAL (Fund first available during February 2000) AUV at beginning of period $17.70 $13.23 $16.87 $19.51 $21.72 AUV at end of period $19.29 $17.70 $13.23 $16.87 $19.51 Number of accumulation units outstanding at end of period 1,790,400 1,938,963 1,564,388 1,137,846 621,115 ING CAPITAL GUARDIAN SMALL CAP (Fund first available during February 2000) AUV at beginning of period $17.61 $12.77 $17.44 $18.03 $23.35 AUV at end of period $18.58 $17.61 $12.77 $17.44 $18.03 Number of accumulation units outstanding at end of period 2,430,551 2,774,027 2,319,410 1,876,959 1,163,996 ING DEVELOPING WORLD (Fund first available during February 2000) AUV at beginning of period $8.80 $6.11 $6.97 $7.49 $11.58 AUV at end of period $10.18 $8.80 $6.11 $6.97 $7.49 Number of accumulation units outstanding at end of period 1,042,282 847,929 690,414 640,405 549,427 ING EAGLE ASSET CAPITAL APPRECIATION (Fund first available during February 2000) AUV at beginning of period $17.84 $14.50 $17.80 $18.97 $17.17 AUV at end of period $20.12 $17.84 $14.50 $17.80 $18.97 Number of accumulation units outstanding at end of period 904,507 983,871 923,702 706,803 298,983
A8 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING EVERGREEN HEALTH SCIENCES (Fund first available during May 2004) AUV at beginning of period $9.95 AUV at end of period $9.88 Number of accumulation units outstanding at end of period 137,601 ING EVERGREEN OMEGA (Fund first available during May 2004) AUV at beginning of period $9.73 AUV at end of period $10.46 Number of accumulation units outstanding at end of period 736 ING FMR(SM) DIVERSIFIED MID-CAP (Fund first available during October 2000) AUV at beginning of period $9.39 $7.17 $9.05 $9.87 $10.00 AUV at end of period $11.45 $9.39 $7.17 $9.05 $9.87 Number of accumulation units outstanding at end of period 2,325,815 2,031,360 1,611,467 815,848 55,360 ING GET FUND - SERIES T (Fund first available during September 2002) AUV at beginning of period $10.41 $10.06 $10.00 AUV at end of period $10.44 $10.41 $10.06 Number of accumulation units outstanding at end of period 342,798 416,352 508,431 ING GET FUND - SERIES U (Fund first available during December 2002) AUV at beginning of period $10.50 $10.00 $10.00 AUV at end of period $10.61 $10.50 $10.00 Number of accumulation units outstanding at end of period 404,842 434,915 1,187 ING GET FUND - SERIES V (Fund first available during June 2003) AUV at beginning of period $9.70 $10.00 AUV at end of period $9.70 $9.70 Number of accumulation units outstanding at end of period 521,300 653,999 ING GET U.S. CORE PORTFOLIO - SERIES 1 (Fund first available during June 2003) AUV at beginning of period $10.23 $10.00 AUV at end of period $10.34 $10.23 Number of accumulation units outstanding at end of period 490,833 588,194 ING GET U.S. CORE PORTFOLIO - SERIES 2 (Fund first available during October 2003) AUV at beginning of period $10.02 $10.00 AUV at end of period $10.15 $10.02 Number of accumulation units outstanding at end of period 466,936 495,513 ING GET U.S. CORE PORTFOLIO - SERIES 3 (Fund first available during December 2003) AUV at beginning of period $10.00 $10.00 AUV at end of period $9.90 $10.00 Number of accumulation units outstanding at end of period 509,721 35,584 ING GET U.S. CORE PORTFOLIO - SERIES 4 (Fund first available during April 2004) AUV at beginning of period $9.99 AUV at end of period $10.34 Number of accumulation units outstanding at end of period 175,257 ING GET U.S. CORE PORTFOLIO - SERIES 5 (Fund first available during September 2004) AUV at beginning of period $9.97 AUV at end of period $10.45 Number of accumulation units outstanding at end of period 1,982 ING GET U.S. CORE PORTFOLIO - SERIES 6 (Fund first available during December 2004) AUV at beginning of period $9.98 AUV at end of period $10.06 Number of accumulation units outstanding at end of period 24,808 ING GOLDMAN SACHS TOLLKEEPER (Fund first available during May 2001) AUV at beginning of period $6.39 $4.62 $7.60 $10.00 AUV at end of period $7.00 $6.39 $4.62 $7.60 Number of accumulation units outstanding at end of period 879,167 932,881 220,935 46,906
A9 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING HARD ASSETS (Fund first available during February 2000) AUV at beginning of period $19.83 $13.26 $13.40 $15.53 $15.50 AUV at end of period $20.72 $19.83 $13.26 $13.40 $15.53 Number of accumulation units outstanding at end of period 588,098 496,935 302,602 94,214 42,632 ING INTERNATIONAL (Fund first available during December 2001) AUV at beginning of period $8.90 $7.02 $8.52 $11.23 $14.81 AUV at end of period $10.20 $8.90 $7.02 $8.52 $11.23 Number of accumulation units outstanding at end of period 1,399,198 1,458,594 1,565,175 1,182,590 1,033,869 ING JANUS SPECIAL EQUITY (Fund first available during October 2000) AUV at beginning of period $8.89 $6.02 $8.28 $8.88 $10.00 AUV at end of period $10.23 $8.89 $6.02 $8.28 $8.88 Number of accumulation units outstanding at end of period 573,273 629,201 401,444 319,420 62,575 ING JENNISON EQUITY OPPORTUNITIES (Fund first available during February 2000) AUV at beginning of period $18.55 $14.41 $20.74 $24.27 $28.64 AUV at end of period $20.51 $18.55 $14.41 $20.74 $24.27 Number of accumulation units outstanding at end of period 1,286,081 1,511,002 1,643,362 1,587,677 981,676 ING JPMORGAN INTERNATIONAL (Fund first available during September 2003) AUV at beginning of period $11.86 $10.00 AUV at end of period $13.82 $11.86 Number of accumulation units outstanding at end of period 176,344 80,497 ING JPMORGAN SMALL CAP EQUITY (Fund first available during May 2002) AUV at beginning of period $10.31 $7.82 $10.00 AUV at end of period $13.63 $10.31 $7.82 Number of accumulation units outstanding at end of period 873,013 681,441 95,249 ING JULIUS BAER FOREIGN (Fund first available during May 2002) AUV at beginning of period $10.57 $8.20 $10.00 AUV at end of period $12.24 $10.57 $8.20 Number of accumulation units outstanding at end of period 630,752 268,993 51,442 ING LEGG MASON VALUE (Fund first available during October 2000) AUV at beginning of period $8.41 $6.99 $8.83 $9.93 $10.00 AUV at end of period $9.40 $8.41 $6.99 $8.83 $9.93 Number of accumulation units outstanding at end of period 3,269,858 3,698,410 2,513,592 1,282,147 148,807 ING LIFESTYLE AGGRESSIVE GROWTH (Fund first available during May 2004) AUV at beginning of period $9.69 AUV at end of period $11.23 Number of accumulation units outstanding at end of period 770,621 ING LIFESTYLE GROWTH (Fund first available during May 2004) AUV at beginning of period $9.86 AUV at end of period $11.11 Number of accumulation units outstanding at end of period 961,249 ING LIFESTYLE MODERATE GROWTH (Fund first available during May 2004) AUV at beginning of period $10.09 AUV at end of period $10.94 Number of accumulation units outstanding at end of period 1,346,989 ING LIFESTYLE MODERATE (Fund first available during May 2004) AUV at beginning of period $10.08 AUV at end of period $10.80 Number of accumulation units outstanding at end of period 863,041 ING LIMITED MATURITY BOND (Fund first available during February 2000) AUV at beginning of period $19.18 $18.99 $18.03 $16.87 $15.92 AUV at end of period $19.09 $19.18 $18.99 $18.03 $16.87 Number of accumulation units outstanding at end of period 1,972,193 2,934,073 2,793,640 1,730,153 507,893
A10 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING LIQUID ASSETS (Fund first available during February 2000) AUV at beginning of period $14.75 $14.91 $14.96 $14.67 $14.13 AUV at end of period $14.62 $14.75 $14.91 $14.96 $14.67 Number of accumulation units outstanding at end of period 5,378,659 5,614,607 10,613,768 9,752,616 2,657,053 ING MARSICO GROWTH (Fund first available during February 2000) AUV at beginning of period $13.34 $10.23 $14.79 $21.59 $28.72 AUV at end of period $14.73 $13.34 $10.23 $14.79 $21.59 Number of accumulation units outstanding at end of period 4,872,617 5,319,925 4,731,610 5,132,970 3,791,737 ING MERCURY FOCUS VALUE (Fund first available during May 2002) AUV at beginning of period $10.76 $8.35 $10.00 AUV at end of period $11.78 $10.76 $8.35 Number of accumulation units outstanding at end of period 285,244 206,043 53,879 ING MERCURY LARGE CAP GROWTH (Fund first available during May 2002) AUV at beginning of period $9.92 $7.95 $10.00 AUV at end of period $10.82 $9.92 $7.95 Number of accumulation units outstanding at end of period 138,104 111,582 27,465 ING MFS MID CAP GROWTH (Fund first available during February 2000) AUV at beginning of period $21.24 $15.55 $30.92 $41.24 $37.84 AUV at end of period $24.00 $21.24 $15.55 $30.92 $41.24 Number of accumulation units outstanding at end of period 2,244,738 2,586,393 2,356,960 2,066,676 1,240,675 ING MFS TOTAL RETURN (Fund first available during February 2000) AUV at beginning of period $21.32 $18.60 $19.96 $20.22 $17.13 AUV at end of period $23.27 $21.32 $18.60 $19.96 $20.22 Number of accumulation units outstanding at end of period 4,747,334 4,841,190 3,921,173 2,673,135 836,664 ING OPPENHEIMER MAIN STREET (Fund first available during February 2000) AUV at beginning of period $17.91 $14.64 $19.84 $25.72 $26.43 AUV at end of period $19.85 $17.91 $14.64 $19.84 $25.72 Number of accumulation units outstanding at end of period 1,916,552 2,135,321 2,132,959 1,666,295 1,007,294 ING PIMCO CORE BOND (Fund first available during February 2000) AUV at beginning of period $12.64 $12.29 $11.51 $11.44 $11.23 AUV at end of period $13.02 $12.64 $12.29 $11.51 $11.44 Number of accumulation units outstanding at end of period 4,229,657 4,187,288 3,457,462 958,057 183,531 ING PIMCO HIGH YIELD (Fund first available during May 2004) AUV at beginning of period $10.00 AUV at end of period $10.79 Number of accumulation units outstanding at end of period 5,910,000 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available during September 2003) AUV at beginning of period $10.80 $10.00 AUV at end of period $11.61 $10.80 Number of accumulation units outstanding at end of period 414,445 147,757 ING SALOMON BROTHERS ALL CAP (Fund first available during February 2000) AUV at beginning of period $11.52 $8.45 $11.56 $11.55 $10.00 AUV at end of period $12.20 $11.52 $8.45 $11.56 $11.55 Number of accumulation units outstanding at end of period 3,539,089 4,017,738 3,308,447 2,722,089 780,053 ING SALOMON BROTHERS INVESTORS (Fund first available during February 2000) AUV at beginning of period $10.28 $7.98 $10.55 $11.22 $10.00 AUV at end of period $11.10 $10.28 $7.98 $10.55 $11.22 Number of accumulation units outstanding at end of period 1,181,536 1,251,944 1,333,387 820,331 145,735 ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available during February 2000) AUV at beginning of period $32.45 $26.38 $26.74 $24.77 $20.08 AUV at end of period $37.15 $32.45 $26.38 $26.74 $24.77 Number of accumulation units outstanding at end of period 5,095,640 4,498,234 3,716,910 1,927,531 400,243
A11 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING T. ROWE PRICE EQUITY INCOME (Fund first available during February 2000) AUV at beginning of period $23.73 $19.30 $22.64 $22.75 $19.41 AUV at end of period $26.77 $23.73 $19.30 $22.64 $22.75 Number of accumulation units outstanding at end of period 2,660,206 2,387,635 1,769,554 1,103,377 311,484 ING UBS U.S. BALANCED (Fund first available during November 2003) AUV at beginning of period $8.34 $7.20 AUV at end of period $9.09 $8.34 Number of accumulation units outstanding at end of period 1,156,727 1,112,008 ING VAN KAMPEN EQUITY GROWTH (Fund first available during May 2002) AUV at beginning of period $9.47 $7.80 $10.00 AUV at end of period $9.98 $9.47 $7.80 Number of accumulation units outstanding at end of period 474,240 423,091 37,952 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available during May 2002) AUV at beginning of period $10.94 $8.82 $10.00 AUV at end of period $12.10 $10.94 $8.82 Number of accumulation units outstanding at end of period 793,145 565,302 133,794 ING VAN KAMPEN GROWTH & INCOME (Fund first available during February 2000) AUV at beginning of period $21.98 $17.50 $20.91 $24.18 $24.96 AUV at end of period $24.63 $21.98 $17.50 $20.91 $24.18 Number of accumulation units outstanding at end of period 1,987,888 2,020,012 1,678,851 1,489,476 803,307 ING VAN KAMPEN REAL ESTATE (Fund first available during February 2000) AUV at beginning of period $35.82 $26.48 $26.91 $25.34 $19.85 AUV at end of period $48.45 $35.82 $26.48 $26.91 $25.34 Number of accumulation units outstanding at end of period 1,026,075 933,790 639,504 310,014 77,442 ING VP FINANCIAL SERVICES (Fund first available during May 2004) AUV at beginning of period $10.05 AUV at end of period $11.07 Number of accumulation units outstanding at end of period 30,346 ING VP INDEX PLUS LARGECAP (Fund first available during August 2003) AUV at beginning of period $8.89 $7.19 AUV at end of period $9.62 $8.89 Number of accumulation units outstanding at end of period 578,842 335,685 ING VP INDEX PLUS MIDCAP (Fund first available during November 2003) AUV at beginning of period $11.03 $8.51 AUV at end of period $12.60 $11.03 Number of accumulation units outstanding at end of period 175,614 25,111 ING VP INDEX PLUS SMALLCAP (Fund first available during November 2003) AUV at beginning of period $11.43 $8.57 AUV at end of period $13.66 $11.43 Number of accumulation units outstanding at end of period 166,880 56,252 ING VP INTERMEDIATE BOND (Fund first available during May 2002) AUV at beginning of period $11.05 $10.62 $10.00 AUV at end of period $11.35 $11.05 $10.62 Number of accumulation units outstanding at end of period 1,363,166 785,879 616,917 ING VP MAGNACAP (Fund first available during May 2001) AUV at beginning of period $9.05 $7.05 $9.33 $10.00 AUV at end of period $9.69 $9.05 $7.05 $9.33 Number of accumulation units outstanding at end of period 285,036 304,573 190,988 102,246 ING VP MIDCAP OPPORTUNITIES (Fund first available during April 2004) AUV at beginning of period $7.06 AUV at end of period $7.41 Number of accumulation units outstanding at end of period 348,463
A12 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING VP SMALLCAP OPPORTUNITIES (Fund first available during May 2001) AUV at beginning of period $6.24 $4.59 $8.31 $10.00 AUV at end of period $6.73 $6.24 $4.59 $8.31 Number of accumulation units outstanding at end of period 1,460,032 1,478,756 696,664 222,328 ING VP WORLDWIDE GROWTH (Fund first available during May 2000) AUV at beginning of period $6.53 $5.15 $6.98 $8.73 $10.00 AUV at end of period $7.02 $6.53 $5.15 $6.98 $8.73 Number of accumulation units outstanding at end of period 872,735 910,436 598,428 468,772 84,578 JENNISON PORTFOLIO (Fund first available during May 2000) AUV at beginning of period $5.38 $4.23 $6.25 $7.82 $10.00 AUV at end of period $5.77 $5.38 $4.23 $6.25 $7.82 Number of accumulation units outstanding at end of period 1,009,998 981,934 934,116 1,102,268 89,929 PIMCO STOCKSPLUS GROWTH & INCOME (Fund first available during February 2000) AUV at beginning of period $10.11 $7.90 $10.08 $11.59 $12.45 AUV at end of period $11.00 $10.11 $7.90 $10.08 $11.59 Number of accumulation units outstanding at end of period 1,247,179 1,519,191 1,932,333 1,789,954 1,176,897 PIONEER FUND VCT (Fund first available during November 2001) AUV at beginning of period $9.00 $7.43 $9.37 $10.00 AUV at end of period $9.81 $9.00 $7.43 $9.37 Number of accumulation units outstanding at end of period 657,577 648,278 229,508 22,142 PIONEER MID CAP VALUE (Fund first available during November 2001) AUV at beginning of period $12.55 $9.32 $10.71 $10.00 AUV at end of period $15.00 $12.55 $9.32 $10.71 Number of accumulation units outstanding at end of period 2,059,509 1,373,009 503,892 23,811 PROFUND VP BULL (Fund first available during May 2001) AUV at beginning of period $8.17 $6.62 $8.87 $10.00 AUV at end of period $8.73 $8.17 $6.62 $8.87 Number of accumulation units outstanding at end of period 883,577 990,737 475,785 244,571 PROFUND VP EUROPE 30 (Fund first available during May 2001) AUV at beginning of period $8.19 $6.01 $8.24 $10.00 AUV at end of period $9.19 $8.19 $6.01 $8.24 Number of accumulation units outstanding at end of period 321,503 516,713 103,963 39,270 PROFUND VP RISING RATES OPPORTUNITY (Fund first available during October 2003) AUV at beginning of period $9.35 $10.00 AUV at end of period $8.18 $9.35 Number of accumulation units outstanding at end of period 451,133 108,486 PROFUND VP SMALL CAP (Fund first available during May 2001) AUV at beginning of period $10.04 $7.16 $9.40 $10.00 AUV at end of period $11.51 $10.04 $7.16 $9.40 Number of accumulation units outstanding at end of period 972,699 1,323,338 420,431 132,361 SP WILLIAM BLAIR INTERNATIONAL GROWTH (Fund first available during October 2000) AUV at beginning of period $5.57 $4.08 $5.38 $8.55 $10.00 AUV at end of period $6.35 $5.57 $4.08 $5.38 $8.55 Number of accumulation units outstanding at end of period 1,363,830 1,299,827 360,089 212,147 12,698
A13 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 1.90% AIM V.I. DENT DEMOGRAPHIC TRENDS (Fund first available during November 2001) AUV at beginning of period $9.83 $7.30 $10.98 $10.00 AUV at end of period $10.40 $9.83 $7.30 $10.98 Number of accumulation units outstanding at end of period 1,250,785 1,025,962 237,698 119,539 AIM V.I. FINANCIAL SERVICES (Fund first available during November 2001) AUV at beginning of period $9.92 $7.80 $9.34 $10.00 AUV at end of period $10.57 $9.92 $7.80 $9.34 Number of accumulation units outstanding at end of period 828,642 1,036,218 407,036 18,432 AIM V.I. HEALTH SCIENCES (Fund first available during November 2001) AUV at beginning of period $9.52 $7.59 $10.25 $10.00 AUV at end of period $10.05 $9.52 $7.59 $10.25 Number of accumulation units outstanding at end of period 1,521,283 1,604,306 736,096 289,358 AIM V.I. LEISURE (Fund first available during May 2002) AUV at beginning of period $10.62 $8.41 $10.00 AUV at end of period $11.81 $10.62 $8.41 Number of accumulation units outstanding at end of period 668,459 510,398 100,699 AIM V.I. UTILITIES (Fund first available during November 2001) AUV at beginning of period $7.29 $6.32 $8.09 $10.00 AUV at end of period $8.83 $7.29 $6.32 $8.09 Number of accumulation units outstanding at end of period 1,554,208 617,033 173,346 23,627 COLONIAL SMALL CAP VALUE (Fund first available during November 2003) AUV at beginning of period $13.80 $10.00 AUV at end of period $16.60 $13.80 Number of accumulation units outstanding at end of period 2,732,107 510,581 FIDELITY VIP EQUITY - INCOME (Fund first available during May 2002) AUV at beginning of period $9.92 $7.78 $9.57 $10.00 AUV at end of period $10.82 $9.92 $7.78 $9.57 Number of accumulation units outstanding at end of period 3,034,707 1,794,730 250,947 FIDELITY VIP GROWTH (Fund first available during May 2002) AUV at beginning of period $8.22 $6.33 $9.25 $10.00 AUV at end of period $8.32 $8.22 $6.33 $9.25 Number of accumulation units outstanding at end of period 4,872,159 3,360,732 473,547 ING AIM MID CAP GROWTH (Fund first available during February 2000) AUV at beginning of period $13.49 $9.54 $14.23 $18.40 $21.27 AUV at end of period $14.23 $13.49 $9.54 $14.23 $18.40 Number of accumulation units outstanding at end of period 2,226,475 2,013,485 1,357,778 1,475,163 1,103,423 ING ALLIANCE MID CAP GROWTH (Fund first available during February 2000) AUV at beginning of period $15.99 $9.76 $14.21 $16.80 $19.78 AUV at end of period $18.75 $15.99 $9.76 $14.21 $16.80 Number of accumulation units outstanding at end of period 3,046,960 2,753,698 1,863,527 1,557,259 874,247 ING AMERICAN FUNDS GROWTH (Fund first available during September 2003) AUV at beginning of period $10.75 $10.00 AUV at end of period $11.81 $10.75 Number of accumulation units outstanding at end of period 12,085,363 1,785,979 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available during September 2003) AUV at beginning of period $10.97 $10.00 AUV at end of period $11.82 $10.97 Number of accumulation units outstanding at end of period 9,395,072 1,387,064 ING AMERICAN FUNDS INTERNATIONAL (Fund first available during September 2003) AUV at beginning of period $11.60 $10.00 AUV at end of period $13.50 $11.60 Number of accumulation units outstanding at end of period 3,432,847 564,361
A14 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING CAPITAL GUARDIAN LARGE CAP VALUE (Fund first available during February 2000) AUV at beginning of period $9.95 $7.42 $9.92 $10.50 $10.00 AUV at end of period $10.67 $9.95 $7.42 $9.92 $10.50 Number of accumulation units outstanding at end of period 9,824,888 8,602,293 6,279,536 4,320,851 993,651 ING CAPITAL GUARDIAN MANAGED GLOBAL (Fund first available during February 2000) AUV at beginning of period $17.50 $13.09 $16.72 $19.34 $21.56 AUV at end of period $19.05 $17.50 $13.09 $16.72 $19.34 Number of accumulation units outstanding at end of period 2,325,689 2,098,781 1,515,003 1,118,604 522,271 ING CAPITAL GUARDIAN SMALL CAP (Fund first available during February 2000) AUV at beginning of period $17.46 $12.68 $17.34 $17.94 $23.25 AUV at end of period $18.41 $17.46 $12.68 $17.34 $17.94 Number of accumulation units outstanding at end of period 3,360,369 3,243,334 2,389,036 1,918,122 825,516 ING DEVELOPING WORLD (Fund first available during February 2000) AUV at beginning of period $8.75 $6.08 $6.94 $7.47 $11.56 AUV at end of period $10.11 $8.75 $6.08 $6.94 $7.47 Number of accumulation units outstanding at end of period 1,999,161 1,334,968 847,173 509,513 259,187 ING EAGLE ASSET CAPITAL APPRECIATION (Fund first available during February 2000) AUV at beginning of period $17.67 $14.38 $17.68 $18.85 $17.08 AUV at end of period $19.92 $17.67 $14.38 $17.68 $18.85 Number of accumulation units outstanding at end of period 1,083,314 1,029,028 983,703 665,936 162,505 ING EVERGREEN HEALTH SCIENCES (Fund first available during May 2004) AUV at beginning of period $10.00 AUV at end of period $9.87 Number of accumulation units outstanding at end of period 592,804 ING EVERGREEN OMEGA (Fund first available during May 2004) AUV at beginning of period $9.78 AUV at end of period $10.45 Number of accumulation units outstanding at end of period 45,863 ING FMR(SM) DIVERSIFIED MID-CAP (Fund first available during October 2000) AUV at beginning of period $9.36 $7.15 $9.04 $9.87 $10.00 AUV at end of period $11.40 $9.36 $7.15 $9.04 $9.87 Number of accumulation units outstanding at end of period 3,937,987 3,090,180 2,302,131 1,385,134 89,462 ING GET FUND - SERIES V (Fund first available during June 2003) AUV at beginning of period $9.69 $10.00 AUV at end of period $9.68 $9.69 Number of accumulation units outstanding at end of period 1,882,163 2,639,551 ING GET U.S. CORE PORTFOLIO - SERIES 1 (Fund first available during June 2003) AUV at beginning of period $10.23 $10.00 AUV at end of period $10.32 $10.23 Number of accumulation units outstanding at end of period 1,605,331 2,278,146 ING GET U.S. CORE PORTFOLIO - SERIES 2 (Fund first available during December 2003) AUV at beginning of period $10.02 $10.00 AUV at end of period $10.14 $10.02 Number of accumulation units outstanding at end of period 927,441 1,473,980 ING GET U.S. CORE PORTFOLIO - SERIES 3 (Fund first available during December 2003) AUV at beginning of period $9.99 $10.00 AUV at end of period $9.89 $9.99 Number of accumulation units outstanding at end of period 18,395 113,971 ING GOLDMAN SACHS TOLLKEEPER (Fund first available during May 2001) AUV at beginning of period $6.37 $4.61 $7.59 $10.00 AUV at end of period $6.97 $6.37 $4.61 $7.59 Number of accumulation units outstanding at end of period 1,693,238 1,631,740 447,885 162,626
A15 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING HARD ASSETS (Fund first available during February 2000) AUV at beginning of period $19.53 $13.08 $13.22 $15.34 $15.33 AUV at end of period $20.39 $19.53 $13.08 $13.22 $15.34 Number of accumulation units outstanding at end of period 1,970,232 1,330,707 932,327 315,574 227,856 ING INTERNATIONAL (Fund first available during December 2001) AUV at beginning of period $8.83 $6.97 $8.47 $11.18 $14.76 AUV at end of period $10.11 $8.83 $6.97 $8.47 $11.18 Number of accumulation units outstanding at end of period 2,062,906 2,080,261 1,470,429 1,055,368 685,944 ING JANUS SPECIAL EQUITY (Fund first available during October 2000) AUV at beginning of period $8.86 $6.01 $8.27 $8.88 $10.00 AUV at end of period $10.19 $8.86 $6.01 $8.27 $8.88 Number of accumulation units outstanding at end of period 1,251,267 1,098,078 520,898 420,371 83,761 ING JENNISON EQUITY OPPORTUNITIES (Fund first available during February 2000) AUV at beginning of period $18.33 $14.25 $20.53 $24.06 $28.41 AUV at end of period $20.24 $18.33 $14.25 $20.53 $24.06 Number of accumulation units outstanding at end of period 1,841,165 1,998,516 2,091,213 1,748,122 969,120 ING JPMORGAN INTERNATIONAL (Fund first available during September 2003) AUV at beginning of period $11.85 $10.00 AUV at end of period $13.80 $11.85 Number of accumulation units outstanding at end of period 725,812 104,296 ING JPMORGAN SMALL CAP EQUITY (Fund first available during May 2002) AUV at beginning of period $10.30 $7.82 $10.00 AUV at end of period $13.63 $10.30 $7.82 Number of accumulation units outstanding at end of period 2,099,655 1,006,794 155,620 ING JULIUS BAER FOREIGN (Fund first available during May 2002) AUV at beginning of period $10.55 $8.20 $10.00 AUV at end of period $12.20 $10.55 $8.20 Number of accumulation units outstanding at end of period 3,062,604 582,823 138,594 ING LEGG MASON VALUE (Fund first available during October 2000) AUV at beginning of period $8.38 $6.97 $8.82 $9.93 $10.00 AUV at end of period $9.36 $8.38 $6.97 $8.82 $9.93 Number of accumulation units outstanding at end of period 4,964,766 4,168,723 3,186,621 2,016,515 113,353 ING LIFESTYLE AGGRESSIVE GROWTH (Fund first available during May 2004) AUV at beginning of period $10.04 AUV at end of period $11.22 Number of accumulation units outstanding at end of period 4,747,062 ING LIFESTYLE GROWTH (Fund first available during May 2004) AUV at beginning of period $10.17 AUV at end of period $11.11 Number of accumulation units outstanding at end of period 8,321,452 ING LIFESTYLE MODERATE GROWTH (Fund first available during May 2004) AUV at beginning of period $10.02 AUV at end of period $10.93 Number of accumulation units outstanding at end of period 7,820,447 ING LIFESTYLE MODERATE (Fund first available during May 2004) AUV at beginning of period $10.08 AUV at end of period $10.79 Number of accumulation units outstanding at end of period 3,664,368 ING LIMITED MATURITY BOND (Fund first available during February 2000) AUV at beginning of period $18.89 $18.72 $17.80 $16.67 $15.74 AUV at end of period $18.78 $18.89 $18.72 $17.80 $16.67 Number of accumulation units outstanding at end of period 1,718,054 2,747,067 2,647,005 1,441,971 273,264
A16 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING LIQUID ASSETS (Fund first available during February 2000) AUV at beginning of period $14.52 $14.70 $14.77 $14.50 $13.97 AUV at end of period $14.38 $14.52 $14.70 $14.77 $14.50 Number of accumulation units outstanding at end of period 5,864,378 5,938,918 7,015,870 6,235,817 2,132,811 ING MARSICO GROWTH (Fund first available during February 2000) AUV at beginning of period $13.23 $10.16 $14.71 $21.49 $28.61 AUV at end of period $14.60 $13.23 $10.16 $14.71 $21.49 Number of accumulation units outstanding at end of period 5,851,107 5,372,714 4,149,074 4,093,894 2,741,325 ING MERCURY FOCUS VALUE (Fund first available during May 2002) AUV at beginning of period $10.74 $8.34 $10.00 AUV at end of period $11.75 $10.74 $8.34 Number of accumulation units outstanding at end of period 615,881 419,552 94,083 ING MERCURY LARGE CAP GROWTH (Fund first available during May 2002) AUV at beginning of period $9.90 $7.95 $10.00 AUV at end of period $10.79 $9.90 $7.95 Number of accumulation units outstanding at end of period 242,746 199,717 62,915 ING MFS MID CAP GROWTH (Fund first available during February 2000) AUV at beginning of period $21.04 $15.42 $30.70 $40.98 $37.63 AUV at end of period $23.75 $21.04 $15.42 $30.70 $40.98 Number of accumulation units outstanding at end of period 3,541,706 3,633,581 2,751,560 2,275,455 1,099,617 ING MFS TOTAL RETURN (Fund first available during February 2000) AUV at beginning of period $21.12 $18.44 $19.81 $20.10 $17.04 AUV at end of period $23.03 $21.12 $18.44 $19.81 $20.10 Number of accumulation units outstanding at end of period 6,519,914 5,686,198 4,012,552 2,637,734 506,976 ING OPPENHEIMER MAIN STREET (Fund first available during February 2000) AUV at beginning of period $17.74 $14.51 $19.69 $25.56 $26.29 AUV at end of period $19.64 $17.74 $14.51 $19.69 $25.56 Number of accumulation units outstanding at end of period 2,260,629 2,358,725 2,110,645 1,829,741 807,166 ING PIMCO CORE BOND (Fund first available during February 2000) AUV at beginning of period $12.52 $12.19 $11.43 $11.37 $11.17 AUV at end of period $12.88 $12.52 $12.19 $11.43 $11.37 Number of accumulation units outstanding at end of period 6,098,052 5,824,732 5,600,337 1,352,337 101,577 ING PIMCO HIGH YIELD (Fund first available during February 2000) AUV at beginning of period $10.00 AUV at end of period $10.78 Number of accumulation units outstanding at end of period 8,122,576 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available during September 2003) AUV at beginning of period $10.80 $10.00 AUV at end of period $11.59 $10.80 Number of accumulation units outstanding at end of period 1,947,332 291,189 ING SALOMON BROTHERS ALL CAP (Fund first available during February 2000) AUV at beginning of period $11.47 $8.42 $11.54 $11.54 $10.00 AUV at end of period $12.14 $11.47 $8.42 $11.54 $11.54 Number of accumulation units outstanding at end of period 6,906,094 6,946,527 5,615,264 4,291,401 986,100 ING SALOMON BROTHERS INVESTORS (Fund first available during February 2000) AUV at beginning of period $10.24 $7.95 $10.53 $11.21 $10.00 AUV at end of period $11.04 $10.24 $7.95 $10.53 $11.21 Number of accumulation units outstanding at end of period 2,375,113 2,433,238 2,079,377 1,766,107 191,223 ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available during February 2000) AUV at beginning of period $31.96 $26.01 $26.39 $24.47 $19.86 AUV at end of period $36.56 $31.96 $26.01 $26.39 $24.47 Number of accumulation units outstanding at end of period 6,613,564 5,130,780 3,927,375 1,940,881 183,884
A17 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING T. ROWE PRICE EQUITY INCOME (Fund first available during February 2000) AUV at beginning of period $23.37 $19.03 $22.35 $22.48 $19.19 AUV at end of period $26.34 $23.37 $19.03 $22.35 $22.48 Number of accumulation units outstanding at end of period 5,039,682 3,453,724 2,273,204 1,364,874 238,986 ING UBS U.S. BALANCED (Fund first available during February 2000) AUV at beginning of period $8.31 $7.18 AUV at end of period $9.05 $8.31 Number of accumulation units outstanding at end of period 2,049,551 1,599,133 ING VAN KAMPEN EQUITY GROWTH (Fund first available during May 2002) AUV at beginning of period $9.46 $7.79 $10.00 AUV at end of period $9.96 $9.46 $7.79 Number of accumulation units outstanding at end of period 670,046 455,787 67,606 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available during May 2002) AUV at beginning of period $10.92 $8.82 $10.00 AUV at end of period $12.07 $10.92 $8.82 Number of accumulation units outstanding at end of period 1,699,597 898,110 201,786 ING VAN KAMPEN GROWTH & INCOME (Fund first available during February 2000) AUV at beginning of period $21.75 $17.34 $20.73 $24.00 $24.80 AUV at end of period $24.35 $21.75 $17.34 $20.73 $24.00 Number of accumulation units outstanding at end of period 2,982,066 2,428,852 1,920,555 1,546,448 713,282 ING VAN KAMPEN REAL ESTATE (Fund first available during February 2000) AUV at beginning of period $35.28 $26.11 $26.56 $25.04 $19.63 AUV at end of period $47.67 $35.28 $26.11 $26.56 $25.04 Number of accumulation units outstanding at end of period 1,760,569 1,166,070 768,503 474,135 192,508 ING VP FINANCIAL SERVICES (Fund first available during May 2004) AUV at beginning of period $10.03 AUV at end of period $11.06 Number of accumulation units outstanding at end of period 212,751 ING VP INDEX PLUS LARGECAP (Fund first available during August 2003) AUV at beginning of period $8.87 $10.00 AUV at end of period $9.59 $8.87 Number of accumulation units outstanding at end of period 1,954,792 957,662 ING VP INDEX PLUS MIDCAP (Fund first available during May 2004) AUV at beginning of period $9.66 AUV at end of period $11.23 Number of accumulation units outstanding at end of period 770,708 ING VP INDEX PLUS SMALLCAP (Fund first available during May 2004) AUV at beginning of period $9.52 AUV at end of period $11.68 Number of accumulation units outstanding at end of period 711,336 ING VP INTERMEDIATE BOND (Fund first available during May 2002) AUV at beginning of period $11.04 $10.61 $10.00 AUV at end of period $11.32 $11.04 $10.61 Number of accumulation units outstanding at end of period 2,895,223 889,844 456,891 ING VP MAGNACAP (Fund first available during May 2001) AUV at beginning of period $9.03 $7.04 $9.32 $10.00 AUV at end of period $9.65 $9.03 $7.04 $9.32 Number of accumulation units outstanding at end of period 375,601 424,572 295,511 117,705 ING VP MIDCAP OPPORTUNITIES (Fund first available during April 2004) AUV at beginning of period $7.04 AUV at end of period $7.38 Number of accumulation units outstanding at end of period 814,033
A18 Landmark - 136957
2004 2003 2002 2001 2000 ---- ---- ---- ---- ---- ING VP SMALLCAP OPPORTUNITIES (Fund first available during May 2001) AUV at beginning of period $6.22 $4.58 $8.30 $10.00 AUV at end of period $6.71 $6.22 $4.58 $8.30 Number of accumulation units outstanding at end of period 2,585,684 2,876,835 1,196,787 253,382 ING VP WORLDWIDE GROWTH (Fund first available during May 2000) AUV at beginning of period $6.51 $5.14 $6.96 $8.72 $10.00 AUV at end of period $6.99 $6.51 $5.14 $6.96 $8.72 Number of accumulation units outstanding at end of period 1,550,262 1,506,719 1,083,707 477,958 68,648 JENNISON PORTFOLIO (Fund first available during May 2000) AUV at beginning of period $5.36 $4.22 $6.24 $7.82 $10.00 AUV at end of period $5.74 $5.36 $4.22 $6.24 $7.82 Number of accumulation units outstanding at end of period 2,308,768 2,247,327 1,916,839 1,029,815 152,003 Number of accumulation units outstanding at end of period 6,589,740 3,093,339 1,858,684 386,288 PIMCO STOCKSPLUS GROWTH & INCOME (Fund first available during February 2000) AUV at beginning of period $10.05 $7.86 $10.04 $11.56 $12.42 AUV at end of period $10.93 $10.05 $7.86 $10.04 $11.56 Number of accumulation units outstanding at end of period 1,461,992 1,744,752 1,702,075 1,325,932 829,397 PIONEER FUND VCT (Fund first available during November 2001) AUV at beginning of period $8.98 $7.42 $9.36 $10.00 AUV at end of period $9.77 $8.98 $7.42 $9.36 Number of accumulation units outstanding at end of period 1,448,434 1,239,130 562,117 47,468 PIONEER MID CAP VALUE (Fund first available during November 2001) AUV at beginning of period $12.52 $9.31 $10.71 $10.00 AUV at end of period $14.95 $12.52 $9.31 $10.71 Number of accumulation units outstanding at end of period 5,608,449 2,287,184 740,867 72,420 PROFUND VP BULL (Fund first available during May 2001) AUV at beginning of period $8.15 $6.61 $8.87 $10.00 AUV at end of period $8.70 $8.15 $6.61 $8.87 Number of accumulation units outstanding at end of period 1,940,698 1,278,503 491,042 103,369 PROFUND VP EUROPE 30 (Fund first available during May 2001) AUV at beginning of period $8.17 $6.00 $8.24 $10.00 AUV at end of period $9.16 $8.17 $6.00 $8.24 Number of accumulation units outstanding at end of period 557,626 445,959 218,083 19,682 PROFUND VP RISING RATES OPPORTUNITY (Fund first available during October 2003) AUV at beginning of period $9.35 $10.00 AUV at end of period $8.17 $9.35 Number of accumulation units outstanding at end of period 1,007,799 812,145 PROFUND VP SMALL CAP (Fund first available during May 2001) AUV at beginning of period $10.01 $7.15 $9.40 $10.00 AUV at end of period $11.47 $10.01 $7.15 $9.40 Number of accumulation units outstanding at end of period 1,815,670 1,694,421 374,258 47,995 SP WILLIAM BLAIR INTERNATIONAL GROWTH (Fund first available during October 2000) AUV at beginning of period $5.55 $4.07 $5.37 $8.55 $10.00 AUV at end of period $6.33 $5.55 $4.07 $5.37 $8.55 Number of accumulation units outstanding at end of period 2,653,603 2,042,525 636,058 320,126 28,074
A19 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 1.95% AIM V.I. DENT DEMOGRAPHIC TRENDS (Fund first available during May 2001) AUV at beginning of period $9.82 $7.29 $10.98 $10.00 AUV at end of period $10.39 $9.82 $7.29 $10.98 Number of accumulation units outstanding at end of period 19,830 19,072 2,381 -- AIM V.I. FINANCIAL SERVICES (Fund first available during November 2001) AUV at beginning of period $9.90 $7.79 $9.34 $10.00 AUV at end of period $10.55 $9.90 $7.79 $9.34 Number of accumulation units outstanding at end of period 11,508 7,391 667 -- AIM V.I. HEALTH SCIENCES (Fund first available during November 2001) AUV at beginning of period $9.51 $7.59 $10.25 $10.00 AUV at end of period $10.03 $9.51 $7.59 $10.25 Number of accumulation units outstanding at end of period 16,308 9,822 2,088 -- AIM V.I. LEISURE (Fund first available during May 2002) AUV at beginning of period $10.61 $8.41 $10.00 AUV at end of period $11.79 $10.61 $8.41 Number of accumulation units outstanding at end of period 5,645 6,530 758 AIM V.I. UTILITIES (Fund first available during November 2001) AUV at beginning of period $7.28 $6.32 $8.09 $10.00 AUV at end of period $8.82 $7.28 $6.32 $8.09 Number of accumulation units outstanding at end of period 30,615 10,109 2,188 -- COLONIAL SMALL CAP VALUE (Fund first available during November 2003) AUV at beginning of period $13.80 $10.00 AUV at end of period $16.58 $13.80 Number of accumulation units outstanding at end of period 23,095 703 FIDELITY VIP EQUITY - INCOME (Fund first available during May 2002) AUV at beginning of period $9.91 $7.77 $9.57 AUV at end of period $10.80 $9.91 $7.77 Number of accumulation units outstanding at end of period 125,507 58,993 9,459 FIDELITY VIP GROWTH (Fund first available during May 2002) AUV at beginning of period $8.21 $6.32 $9.25 AUV at end of period $8.31 $8.21 $6.32 Number of accumulation units outstanding at end of period 97,366 63,607 7,613 ING AIM MID CAP GROWTH (Fund first available during May 2001) AUV at beginning of period $13.43 $9.50 $14.19 $16.41 AUV at end of period $14.16 $13.43 $9.50 $14.19 Number of accumulation units outstanding at end of period 3,740 2,798 431 32 ING ALLIANCE MID CAP GROWTH (Fund first available during May 2001) AUV at beginning of period $15.92 $9.72 $14.17 $16.21 AUV at end of period $18.66 $15.92 $9.72 $14.17 Number of accumulation units outstanding at end of period 3,599 220 -- -- ING AMERICAN FUNDS GROWTH (Fund first available during September 2003) AUV at beginning of period $10.75 $10.00 AUV at end of period $11.80 $10.75 Number of accumulation units outstanding at end of period 362,211 72,592 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available during September 2003) AUV at beginning of period $10.97 $10.00 AUV at end of period $11.81 $10.97 Number of accumulation units outstanding at end of period 348,070 63,213 ING AMERICAN FUNDS INTERNATIONAL (Fund first available during September 2003) AUV at beginning of period $11.60 $10.00 AUV at end of period $13.49 $11.60 Number of accumulation units outstanding at end of period 161,298 17,513
A20 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- ING CAPITAL GUARDIAN LARGE CAP VALUE (Fund first available during May 2001) AUV at beginning of period $9.93 $7.41 $9.91 $10.53 AUV at end of period $10.64 $9.93 $7.41 $9.91 Number of accumulation units outstanding at end of period 25,889 6,646 686 -- ING CAPITAL GUARDIAN MANAGED GLOBAL (Fund first available during May 2001) AUV at beginning of period $17.40 $13.02 $16.64 $19.44 AUV at end of period $18.93 $17.40 $13.02 $16.64 Number of accumulation units outstanding at end of period 4,502 822 -- -- ING CAPITAL GUARDIAN SMALL CAP (Fund first available during May 2001) AUV at beginning of period $17.39 $12.64 $17.28 $17.66 AUV at end of period $18.33 $17.39 $12.64 $17.28 Number of accumulation units outstanding at end of period 11,811 4,336 1,453 -- ING DEVELOPING WORLD (Fund first available during May 2001) AUV at beginning of period $8.72 $6.07 $6.93 $7.35 AUV at end of period $10.07 $8.72 $6.07 $6.93 Number of accumulation units outstanding at end of period 2,102 928 -- -- ING EAGLE ASSET CAPITAL APPRECIATION (Fund first available during May 2001) AUV at beginning of period $17.59 $14.32 $17.61 $19.31 AUV at end of period $19.82 $17.59 $14.32 $17.61 Number of accumulation units outstanding at end of period 20,783 15,780 5,517 -- ING EVERGREEN HEALTH SCIENCES (Fund first available during May 2004) AUV at beginning of period $9.71 AUV at end of period $9.87 Number of accumulation units outstanding at end of period 14,865 ING FMR(SM) DIVERSIFIED MID-CAP (Fund first available during May 2001) AUV at beginning of period $10.20 $7.14 $9.03 $9.47 AUV at end of period $11.37 $10.20 $7.14 $9.03 Number of accumulation units outstanding at end of period 451 635 1,419 -- ING GET FUND - SERIES T (Fund first available during September 2002) AUV at beginning of period $10.39 $10.06 $10.00 AUV at end of period $10.40 $10.39 $10.06 Number of accumulation units outstanding at end of period 232,206 269,373 402,294 ING GET FUND - SERIES U (Fund first available during December 2002) AUV at beginning of period $10.49 $9.99 $10.00 AUV at end of period $10.58 $10.49 $9.99 Number of accumulation units outstanding at end of period 370,206 415,852 -- ING GET FUND - SERIES V (Fund first available during June 2003) AUV at beginning of period $9.69 $10.00 AUV at end of period $9.67 $9.69 Number of accumulation units outstanding at end of period 683,682 917,111 ING GET U.S. CORE PORTFOLIO - SERIES 1 (Fund first available during June 2003) AUV at beginning of period $10.22 $10.00 AUV at end of period $10.32 $10.22 Number of accumulation units outstanding at end of period 511,544 569,199 ING GET U.S. CORE PORTFOLIO - SERIES 2 (Fund first available during December 2003) AUV at beginning of period $10.02 $10.00 AUV at end of period $10.13 $10.02 Number of accumulation units outstanding at end of period 235,476 267,014 ING GET U.S. CORE PORTFOLIO - SERIES 3 (Fund first available during December 2003) AUV at beginning of period $9.99 $10.00 AUV at end of period $9.88 $9.99 Number of accumulation units outstanding at end of period 161,875 2,302
A21 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- ING GET U.S. CORE PORTFOLIO - SERIES 4 (Fund first available during June 2004) AUV at beginning of period $9.96 AUV at end of period $10.33 Number of accumulation units outstanding at end of period 143,323 ING GET U.S. CORE PORTFOLIO - SERIES 5 (Fund first available during September 2004) AUV at beginning of period $9.98 AUV at end of period $10.44 Number of accumulation units outstanding at end of period 12,478 ING GET U.S. CORE PORTFOLIO - SERIES 6 (Fund first available during December 2004) AUV at beginning of period $9.98 AUV at end of period $10.06 Number of accumulation units outstanding at end of period 38,290 ING GOLDMAN SACHS TOLLKEEPER (Fund first available during May 2001) AUV at beginning of period $6.37 $4.61 $7.59 $10.00 AUV at end of period $6.96 $6.37 $4.61 $7.59 Number of accumulation units outstanding at end of period 5,774 6,815 -- -- ING HARD ASSETS (Fund first available during May 2001) AUV at beginning of period $19.38 $12.98 $13.14 $15.45 AUV at end of period $20.22 $19.38 $12.98 $13.14 Number of accumulation units outstanding at end of period 4,832 2,426 -- -- ING INTERNATIONAL (Fund first available during December 2001) AUV at beginning of period $8.80 $6.95 $8.45 $9.82 AUV at end of period $10.07 $8.80 $6.95 $8.45 Number of accumulation units outstanding at end of period 11,027 2,824 -- -- ING JANUS SPECIAL EQUITY (Fund first available during May 2001) AUV at beginning of period $8.85 $6.00 $8.27 $8.98 AUV at end of period $10.16 $8.85 $6.00 $8.27 Number of accumulation units outstanding at end of period 3,447 2,108 -- -- ING JENNISON EQUITY OPPORTUNITIES (Fund first available during May 2001) AUV at beginning of period $18.22 $14.17 $20.43 $23.18 AUV at end of period $20.11 $18.22 $14.17 $20.43 Number of accumulation units outstanding at end of period 2,019 98 -- -- ING JPMORGAN INTERNATIONAL (Fund first available during September 2003) AUV at beginning of period $11.85 $10.00 AUV at end of period $13.79 $11.85 Number of accumulation units outstanding at end of period 24,195 8,655 ING JPMORGAN SMALL CAP EQUITY (Fund first available during May 2002) AUV at beginning of period $10.29 $7.82 $10.00 AUV at end of period $13.63 $10.29 $7.82 Number of accumulation units outstanding at end of period 68,789 26,587 2,108 ING JULIUS BAER FOREIGN (Fund first available during May 2002) AUV at beginning of period $10.54 $8.19 $10.00 AUV at end of period $12.19 $10.54 $8.19 Number of accumulation units outstanding at end of period 72,649 20,511 467 ING LEGG MASON VALUE (Fund first available during May 2001) AUV at beginning of period $8.37 $6.96 $8.81 $9.65 AUV at end of period $9.34 $8.37 $6.96 $8.81 Number of accumulation units outstanding at end of period 68,437 26,957 5,288 -- ING LIFESTYLE AGGRESSIVE GROWTH (Fund first available during May 2004) AUV at beginning of period $9.83 AUV at end of period $11.22 Number of accumulation units outstanding at end of period 11,075
A22 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- ING LIFESTYLE GROWTH (Fund first available during May 2004) AUV at beginning of period $10.10 AUV at end of period $11.10 Number of accumulation units outstanding at end of period 116,438 ING LIFESTYLE MODERATE GROWTH (Fund first available during May 2004) AUV at beginning of period $10.01 AUV at end of period $10.92 Number of accumulation units outstanding at end of period 75,027 ING LIFESTYLE MODERATE (Fund first available during May 2004) AUV at beginning of period $10.01 AUV at end of period $10.79 Number of accumulation units outstanding at end of period 77,856 ING LIMITED MATURITY BOND (Fund first available during May 2001) AUV at beginning of period $18.78 $18.62 $17.71 $17.02 AUV at end of period $18.67 $18.78 $18.62 $17.71 Number of accumulation units outstanding at end of period 1,129 1,045 6,405 994 ING LIQUID ASSETS (Fund first available during May 2001) AUV at beginning of period $14.46 $14.64 $14.72 $14.61 AUV at end of period $14.31 $14.46 $14.64 $14.72 Number of accumulation units outstanding at end of period 138,686 66,946 19,321 92 ING MARSICO GROWTH (Fund first available during May 2001) AUV at beginning of period $13.18 $10.13 $14.66 $19.14 AUV at end of period $14.53 $13.18 $10.13 $14.66 Number of accumulation units outstanding at end of period 27,999 7,966 1,800 30 ING MERCURY FOCUS VALUE (Fund first available during May 2002) AUV at beginning of period $10.73 $8.34 $10.00 AUV at end of period $11.73 $10.73 $8.34 Number of accumulation units outstanding at end of period 654 328 -- ING MFS MID CAP GROWTH (Fund first available during May 2001) AUV at beginning of period $20.94 $15.35 $30.58 $39.64 AUV at end of period $23.63 $20.94 $15.35 $30.58 Number of accumulation units outstanding at end of period 3,927 2,196 1,308 15 ING MFS TOTAL RETURN (Fund first available during May 2001) AUV at beginning of period $21.02 $18.37 $19.74 $20.20 AUV at end of period $22.91 $21.02 $18.37 $19.74 Number of accumulation units outstanding at end of period 127,261 50,717 19,958 470 ING OPPENHEIMER MAIN STREET (Fund first available during May 2001) AUV at beginning of period $17.65 $14.45 $19.62 $23.34 AUV at end of period $19.54 $17.65 $14.45 $19.62 Number of accumulation units outstanding at end of period 9,183 12,028 1,027 23 ING PIMCO CORE BOND (Fund first available during May 2001) AUV at beginning of period $12.46 $12.13 $11.39 $10.99 AUV at end of period $12.82 $12.46 $12.13 $11.39 Number of accumulation units outstanding at end of period 279,024 105,747 32,108 -- ING PIMCO HIGH YIELD (Fund first available during May 2004) AUV at beginning of period $10.00 AUV at end of period $10.78 Number of accumulation units outstanding at end of period 134,849 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available during September 2003) AUV at beginning of period $10.79 $10.00 AUV at end of period $11.58 $10.79 Number of accumulation units outstanding at end of period 59,803 5,105
A23 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- ING SALOMON BROTHERS ALL CAP (Fund first available during May 2001) AUV at beginning of period $11.45 $8.41 $11.53 $12.25 AUV at end of period $12.11 $11.45 $8.41 $11.53 Number of accumulation units outstanding at end of period 44,955 16,669 3,105 778 ING SALOMON BROTHERS INVESTORS (Fund first available during May 2001) AUV at beginning of period $10.22 $7.94 $10.52 $11.49 AUV at end of period $11.01 $10.22 $7.94 $10.52 Number of accumulation units outstanding at end of period 20,350 6,274 2,596 847 ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available during May 2001) AUV at beginning of period $31.72 $25.83 $26.21 $26.07 AUV at end of period $36.26 $31.72 $25.83 $26.21 Number of accumulation units outstanding at end of period 30,850 16,339 12,095 -- ING T. ROWE PRICE EQUITY INCOME (Fund first available during May 2001) AUV at beginning of period $23.19 $18.90 $22.20 $22.61 AUV at end of period $26.13 $23.19 $18.90 $22.20 Number of accumulation units outstanding at end of period 55,676 3,253 193 -- ING UBS U.S. BALANCED (Fund first available during February 2004) AUV at beginning of period $8.45 AUV at end of period $9.03 Number of accumulation units outstanding at end of period 8,961 ING VAN KAMPEN EQUITY GROWTH (Fund first available during May 2002) AUV at beginning of period $9.45 $7.79 $10.00 AUV at end of period $9.94 $9.45 $7.79 Number of accumulation units outstanding at end of period 4,439 1,570 -- ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available during May 2002) AUV at beginning of period $10.91 $8.81 $10.00 AUV at end of period $12.05 $10.91 $8.81 Number of accumulation units outstanding at end of period 14,300 4,280 -- ING VAN KAMPEN GROWTH & INCOME (Fund first available during May 2001) AUV at beginning of period $21.63 $17.26 $20.64 $21.93 AUV at end of period $24.21 $21.63 $17.26 $20.64 Number of accumulation units outstanding at end of period 3,750 2,913 835 23 ING VAN KAMPEN REAL ESTATE (Fund first available during May 2001) AUV at beginning of period $35.01 $25.92 $26.39 $24.63 AUV at end of period $47.29 $35.01 $25.92 $26.39 Number of accumulation units outstanding at end of period 18,394 1,917 696 -- ING VP FINANCIAL SERVICES (Fund first available during May 2004) AUV at beginning of period $10.08 AUV at end of period $11.06 Number of accumulation units outstanding at end of period 9,493 ING VP INDEX PLUS LARGECAP (Fund first available during August 2003) AUV at beginning of period $8.86 $7.18 AUV at end of period $9.57 $8.86 Number of accumulation units outstanding at end of period 156,482 74,850 ING VP INDEX PLUS MIDCAP (Fund first available during November 2003) AUV at beginning of period $10.99 $8.49 AUV at end of period $12.54 $10.99 Number of accumulation units outstanding at end of period 128,177 52,557 ING VP INDEX PLUS SMALLCAP (Fund first available during November 2003) AUV at beginning of period $11.38 $8.55 AUV at end of period $13.59 $11.38 Number of accumulation units outstanding at end of period 105,870 37,589
A24 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- ING VP INTERMEDIATE BOND (Fund first available during February 2004) AUV at beginning of period $11.15 AUV at end of period $11.31 Number of accumulation units outstanding at end of period 9,453 ING VP MAGNACAP (Fund first available during May 2001) AUV at beginning of period $9.02 $7.04 $9.32 $10.11 AUV at end of period $9.63 $9.02 $7.04 $9.32 Number of accumulation units outstanding at end of period 37,654 16,409 -- -- ING VP MIDCAP OPPORTUNITIES (Fund first available during April 2004) AUV at beginning of period $7.03 AUV at end of period $7.36 Number of accumulation units outstanding at end of period 12,026 ING VP SMALLCAP OPPORTUNITIES (Fund first available during May 2001) AUV at beginning of period $6.21 $4.58 $8.30 $10.01 AUV at end of period $6.70 $6.21 $4.58 $8.30 Number of accumulation units outstanding at end of period 15,222 5,697 345 -- ING VP WORLDWIDE GROWTH (Fund first available during May 2001) AUV at beginning of period $6.50 $5.13 $6.96 $8.35 AUV at end of period $6.97 $6.50 $5.13 $6.96 Number of accumulation units outstanding at end of period 8,288 3,247 1,003 -- JENNISON PORTFOLIO (Fund first available during May 2001) AUV at beginning of period $5.35 $4.21 $6.24 $7.20 AUV at end of period $5.73 $5.35 $4.21 $6.24 Number of accumulation units outstanding at end of period 14,269 3,603 5,385 -- PIONEER FUND VCT (Fund first available during November 2001) AUV at beginning of period $8.97 $7.41 $9.36 $10.00 AUV at end of period $9.76 $8.97 $7.41 $9.36 Number of accumulation units outstanding at end of period 24,566 37,110 6,687 -- PIONEER MID CAP VALUE (Fund first available during November 2001) AUV at beginning of period $12.50 $9.30 $10.71 $10.00 AUV at end of period $14.93 $12.50 $9.30 $10.71 Number of accumulation units outstanding at end of period 44,996 9,137 -- -- PROFUND VP BULL (Fund first available during May 2001) AUV at beginning of period $8.13 $6.61 $8.86 $10.00 AUV at end of period $8.68 $8.13 $6.61 $8.86 Number of accumulation units outstanding at end of period 3,195 705 305 -- PROFUND VP EUROPE 30 (Fund first available during May 2001) AUV at beginning of period $8.15 $5.99 $8.24 $10.05 AUV at end of period $9.14 $8.15 $8.24 Number of accumulation units outstanding at end of period 25,549 2,410 -- -- PROFUND VP RISING RATES OPPORTUNITY (Fund first available during October 2003) AUV at beginning of period $9.35 $10.00 AUV at end of period $8.17 $9.35 Number of accumulation units outstanding at end of period 28,211 2,001 PROFUND VP SMALL CAP (Fund first available during May 2001) AUV at beginning of period $10.00 $7.14 $9.39 $10.00 AUV at end of period $11.45 $10.00 $9.39 Number of accumulation units outstanding at end of period 45,553 15,408 -- -- SP WILLIAM BLAIR INTERNATIONAL GROWTH (Fund first available during May 2001) AUV at beginning of period $5.54 $4.06 $5.37 $7.30 AUV at end of period $6.31 $5.54 $4.06 $5.37 Number of accumulation units outstanding at end of period 18,926 8,883 3,559 --
A25 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 2.00% AIM V.I. DENT DEMOGRAPHIC TRENDS (Fund first available during November 2001) AUV at beginning of period $9.81 $7.29 $10.98 $10.00 AUV at end of period $10.37 $9.81 $7.29 $10.98 Number of accumulation units outstanding at end of period 66,976 84,411 20,619 1,155 AIM V.I. FINANCIAL SERVICES (Fund first available during November 2001) AUV at beginning of period $9.89 $7.79 $9.34 $10.00 AUV at end of period $10.53 $9.89 $7.79 $9.34 Number of accumulation units outstanding at end of period 81,873 86,690 47,921 1,384 AIM V.I. HEALTH SCIENCES (Fund first available during November 2001) AUV at beginning of period $9.50 $7.58 $10.24 $10.00 AUV at end of period $10.01 $9.50 $7.58 $10.24 Number of accumulation units outstanding at end of period 151,205 159,877 94,313 1,482 AIM V.I. LEISURE (Fund first available during May 2002) AUV at beginning of period $10.60 $8.41 $10.00 AUV at end of period $11.78 $10.60 $8.41 Number of accumulation units outstanding at end of period 100,657 79,557 24,347 AIM V.I. UTILITIES (Fund first available during November 2001) AUV at beginning of period $7.27 $6.31 $8.08 $10.00 AUV at end of period $8.80 $7.27 $6.31 $8.08 Number of accumulation units outstanding at end of period 115,161 80,761 30,198 -- COLONIAL SMALL CAP VALUE (Fund first available during November 2003) AUV at beginning of period $13.79 $10.00 AUV at end of period $16.57 $13.79 Number of accumulation units outstanding at end of period 132,789 70,760 FIDELITY VIP EQUITY - INCOME (Fund first available during May 2002) AUV at beginning of period $9.89 $7.76 $9.56 AUV at end of period $10.79 $9.89 $7.76 Number of accumulation units outstanding at end of period 308,446 221,381 19,712 FIDELITY VIP GROWTH (Fund first available during May 2002) AUV at beginning of period $8.20 $6.32 $9.25 AUV at end of period $8.29 $8.20 $6.32 Number of accumulation units outstanding at end of period 515,708 376,538 72,837 ING AIM MID CAP GROWTH (Fund first available during May 2001) AUV at beginning of period $13.37 $9.47 $14.14 $16.37 AUV at end of period $14.10 $13.37 $9.47 $14.14 Number of accumulation units outstanding at end of period 105,949 90,471 24,834 16,923 ING ALLIANCE MID CAP GROWTH (Fund first available during May 2001) AUV at beginning of period $15.86 $9.69 $14.13 $16.17 AUV at end of period $18.58 $15.86 $9.69 $14.13 Number of accumulation units outstanding at end of period 143,731 144,731 56,387 28,214 ING AMERICAN FUNDS GROWTH (Fund first available during September 2003) AUV at beginning of period $10.75 $10.00 AUV at end of period $11.79 $10.75 Number of accumulation units outstanding at end of period 829,532 290,167 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available during September 2003) AUV at beginning of period $10.97 $10.00 AUV at end of period $11.80 $10.97 Number of accumulation units outstanding at end of period 665,072 234,073 ING AMERICAN FUNDS INTERNATIONAL (Fund first available during September 2003) AUV at beginning of period $11.59 $10.00 AUV at end of period $13.48 $11.59 Number of accumulation units outstanding at end of period 269,604 71,827
A26 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- ING CAPITAL GUARDIAN LARGE CAP VALUE (Fund first available during May 2001) AUV at beginning of period $9.91 $7.40 $9.90 $10.52 AUV at end of period $10.61 $9.91 $7.40 $9.90 Number of accumulation units outstanding at end of period 951,208 897,773 483,293 111,131 ING CAPITAL GUARDIAN MANAGED GLOBAL (Fund first available during May 2001) AUV at beginning of period $17.30 $12.95 $16.56 $19.36 AUV at end of period $18.82 $17.30 $12.95 $16.56 Number of accumulation units outstanding at end of period 218,939 204,340 127,169 24,836 ING CAPITAL GUARDIAN SMALL CAP (Fund first available during May 2001) AUV at beginning of period $17.32 $12.59 $17.23 $17.61 AUV at end of period $18.24 $17.32 $12.59 $17.23 Number of accumulation units outstanding at end of period 209,959 210,070 123,958 28,511 ING DEVELOPING WORLD (Fund first available during May 2001) AUV at beginning of period $8.70 $6.05 $6.92 $7.34 AUV at end of period $10.03 $8.70 $6.05 $6.92 Number of accumulation units outstanding at end of period 111,442 80,874 40,885 10,204 ING EAGLE ASSET CAPITAL APPRECIATION (Fund first available during May 2001) AUV at beginning of period $17.51 $14.27 $17.55 $19.25 AUV at end of period $19.72 $17.51 $14.27 $17.55 Number of accumulation units outstanding at end of period 85,355 78,240 56,538 18,689 ING EVERGREEN HEALTH SCIENCES (Fund first available during May 2004) AUV at beginning of period $10.03 AUV at end of period $9.86 Number of accumulation units outstanding at end of period 22,301 ING EVERGREEN OMEGA (Fund first available during May 2004) AUV at beginning of period $9.73 AUV at end of period $10.44 Number of accumulation units outstanding at end of period 806 ING FMR(SM) DIVERSIFIED MID-CAP (Fund first available during May 2001) AUV at beginning of period $9.33 $7.13 $9.02 $9.47 AUV at end of period $11.35 $9.33 $7.13 $9.02 Number of accumulation units outstanding at end of period 247,897 207,580 163,816 19,800 ING GOLDMAN SACHS TOLLKEEPER (Fund first available during May 2001) AUV at beginning of period $6.36 $4.60 $7.59 $10.00 AUV at end of period $6.94 $6.36 $4.60 $7.59 Number of accumulation units outstanding at end of period 82,353 77,660 22,077 6,461 ING HARD ASSETS (Fund first available during May 2001) AUV at beginning of period $19.23 $12.89 $13.05 $15.35 AUV at end of period $20.06 $19.23 $12.89 $13.05 Number of accumulation units outstanding at end of period 79,323 46,296 14,039 3,689 ING INTERNATIONAL (Fund first available during December 2001) AUV at beginning of period $8.76 $6.92 $8.42 $9.79 AUV at end of period $10.02 $8.76 $6.92 $8.42 Number of accumulation units outstanding at end of period 181,676 191,230 55,118 2 ING JANUS SPECIAL EQUITY (Fund first available during May 2001) AUV at beginning of period $8.84 $5.99 $8.26 $8.97 AUV at end of period $10.14 $8.84 $5.99 $8.26 Number of accumulation units outstanding at end of period 44,257 78,180 70,820 16,846 ING JENNISON EQUITY OPPORTUNITIES (Fund first available during May 2001) AUV at beginning of period $18.11 $14.10 $20.33 $23.07 AUV at end of period $19.98 $18.11 $14.10 $20.33 Number of accumulation units outstanding at end of period 67,038 68,657 44,959 10,329
A27 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- ING JPMORGAN INTERNATIONAL (Fund first available during September 2003) AUV at beginning of period $11.85 $10.00 AUV at end of period $13.78 $11.85 Number of accumulation units outstanding at end of period 29,416 13,821 ING JPMORGAN SMALL CAP EQUITY (Fund first available during May 2002) AUV at beginning of period $10.28 $7.81 $10.00 AUV at end of period $13.63 $10.28 $7.81 Number of accumulation units outstanding at end of period 145,849 121,614 18,982 ING JULIUS BAER FOREIGN (Fund first available during May 2002) AUV at beginning of period $10.53 $8.19 $10.00 AUV at end of period $12.17 $10.53 $8.19 Number of accumulation units outstanding at end of period 138,775 45,763 8,531 ING LEGG MASON VALUE (Fund first available during May 2001) AUV at beginning of period $8.35 $6.95 $8.80 $9.64 AUV at end of period $9.32 $8.35 $6.95 $8.80 Number of accumulation units outstanding at end of period 401,515 307,687 184,661 56,788 ING LIFESTYLE AGGRESSIVE GROWTH (Fund first available during June 2004) AUV at beginning of period $10.09 AUV at end of period $11.22 Number of accumulation units outstanding at end of period 163,522 ING LIFESTYLE GROWTH (Fund first available during May 2004) AUV at beginning of period $9.68 AUV at end of period $11.10 Number of accumulation units outstanding at end of period 434,386 ING LIFESTYLE MODERATE GROWTH (Fund first available during May 2004) AUV at beginning of period $9.75 AUV at end of period $10.92 Number of accumulation units outstanding at end of period 292,656 ING LIFESTYLE MODERATE (Fund first available during May 2004) AUV at beginning of period $9.84 AUV at end of period $10.78 Number of accumulation units outstanding at end of period 220,958 ING LIMITED MATURITY BOND (Fund first available during May 2001) AUV at beginning of period $18.64 $18.49 $17.59 $16.91 AUV at end of period $18.51 $18.64 $18.49 $17.59 Number of accumulation units outstanding at end of period 143,020 187,232 148,373 32,154 ING LIQUID ASSETS (Fund first available during May 2001) AUV at beginning of period $14.35 $14.54 $14.62 $14.52 AUV at end of period $14.19 $14.35 $14.54 $14.62 Number of accumulation units outstanding at end of period 227,939 247,662 246,748 202,030 ING MARSICO GROWTH (Fund first available during May 2001) AUV at beginning of period $13.13 $10.09 $14.62 $19.09 AUV at end of period $14.47 $13.13 $10.09 $14.62 Number of accumulation units outstanding at end of period 349,744 339,229 149,093 42,687 ING MERCURY FOCUS VALUE (Fund first available during May 2002) AUV at beginning of period $10.72 $8.34 $10.00 AUV at end of period $11.72 $10.72 $8.34 Number of accumulation units outstanding at end of period 42,465 18,966 1,399 ING MERCURY LARGE CAP GROWTH (Fund first available during May 2002) AUV at beginning of period $9.88 $7.94 $10.00 AUV at end of period $10.76 $9.88 $7.94 Number of accumulation units outstanding at end of period 26,550 23,791 1,012
A28 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- ING MFS MID CAP GROWTH (Fund first available during May 2001) AUV at beginning of period $20.85 $15.29 $30.47 $39.51 AUV at end of period $23.50 $20.85 $15.29 $30.47 Number of accumulation units outstanding at end of period 167,581 164,912 130,301 29,848 ING MFS TOTAL RETURN (Fund first available during May 2001) AUV at beginning of period $20.93 $18.29 $19.66 $20.14 AUV at end of period $22.79 $20.93 $18.29 $19.66 Number of accumulation units outstanding at end of period 569,629 512,064 311,824 91,026 ING OPPENHEIMER MAIN STREET (Fund first available during May 2001) AUV at beginning of period $17.57 $14.39 $19.55 $23.26 AUV at end of period $19.44 $17.57 $14.39 $19.55 Number of accumulation units outstanding at end of period 150,163 159,402 131,251 33,529 ING PIMCO CORE BOND (Fund first available during May 2001) AUV at beginning of period $12.40 $12.08 $11.35 $10.95 AUV at end of period $12.75 $12.40 $12.08 $11.35 Number of accumulation units outstanding at end of period 788,210 685,841 529,440 160,007 ING PIMCO HIGH YIELD (Fund first available during May 2004) AUV at beginning of period $10.00 AUV at end of period $10.77 Number of accumulation units outstanding at end of period 671,366 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available during September 2003) AUV at beginning of period $10.79 $10.00 AUV at end of period $11.58 $10.79 Number of accumulation units outstanding at end of period 44,213 7,733 ING SALOMON BROTHERS ALL CAP (Fund first available during May 2001) AUV at beginning of period $11.43 $8.40 $11.51 $12.24 AUV at end of period $12.08 $11.43 $8.40 $11.51 Number of accumulation units outstanding at end of period 404,311 403,321 294,228 77,843 ING SALOMON BROTHERS INVESTORS (Fund first available during May 2001) AUV at beginning of period $10.20 $7.93 $10.51 $11.49 AUV at end of period $10.99 $10.20 $7.93 $10.51 Number of accumulation units outstanding at end of period 202,420 200,601 160,814 36,288 ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available during May 2001) AUV at beginning of period $31.47 $25.65 $26.04 $25.91 AUV at end of period $35.97 $31.47 $25.65 $26.04 Number of accumulation units outstanding at end of period 529,273 415,984 232,111 43,865 ING T. ROWE PRICE EQUITY INCOME (Fund first available during May 2001) AUV at beginning of period $23.02 $18.76 $22.06 $22.47 AUV at end of period $25.91 $23.02 $18.76 $22.06 Number of accumulation units outstanding at end of period 429,673 336,483 151,476 29,036 ING UBS U.S. BALANCED (Fund first available during November 2003) AUV at beginning of period $8.29 AUV at end of period $9.01 Number of accumulation units outstanding at end of period 124,629 ING VAN KAMPEN EQUITY GROWTH (Fund first available during May 2002) AUV at beginning of period $9.44 $7.79 $10.00 AUV at end of period $9.93 $9.44 $7.79 Number of accumulation units outstanding at end of period 85,202 69,963 8,349 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available during May 2002) AUV at beginning of period $10.90 $8.81 $10.00 AUV at end of period $12.04 $10.90 $8.81 Number of accumulation units outstanding at end of period 133,602 92,038 14,613
A29 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- ING VAN KAMPEN GROWTH & INCOME (Fund first available during May 2001) AUV at beginning of period $21.52 $17.17 $20.56 $21.85 AUV at end of period $24.07 $21.52 $17.17 $20.56 Number of accumulation units outstanding at end of period 238,814 233,334 134,276 43,851 ING VAN KAMPEN REAL ESTATE (Fund first available during May 2001) AUV at beginning of period $34.74 $25.74 $26.21 $24.47 AUV at end of period $46.91 $34.74 $25.74 $26.21 Number of accumulation units outstanding at end of period 87,409 58,412 33,005 2,487 ING VP FINANCIAL SERVICES (Fund first available during May 2004) AUV at beginning of period $9.79 AUV at end of period $11.05 Number of accumulation units outstanding at end of period 10,098 ING VP INDEX PLUS LARGECAP (Fund first available during August 2003) AUV at beginning of period $8.84 $10.00 AUV at end of period $9.56 $8.84 Number of accumulation units outstanding at end of period 139,303 73,289 ING VP INDEX PLUS MIDCAP (Fund first available during May 2004) AUV at beginning of period $9.49 AUV at end of period $10.90 Number of accumulation units outstanding at end of period 103,058 ING VP INDEX PLUS SMALLCAP (Fund first available during May 2004) AUV at beginning of period $9.39 AUV at end of period $11.30 Number of accumulation units outstanding at end of period 86,380 ING VP INTERMEDIATE BOND (Fund first available during May 2002) AUV at beginning of period $11.02 $10.60 $10.00 AUV at end of period $11.29 $11.02 $10.60 Number of accumulation units outstanding at end of period 147,886 49,551 16,611 ING VP MAGNACAP (Fund first available during May 2001) AUV at beginning of period $9.00 $7.03 $9.32 $10.11 AUV at end of period $9.61 $9.00 $7.03 $9.32 Number of accumulation units outstanding at end of period 27,916 34,266 31,709 6,879 ING VP MIDCAP OPPORTUNITIES (Fund first available during April 2004) AUV at beginning of period $7.02 AUV at end of period $7.35 Number of accumulation units outstanding at end of period 45,752 ING VP SMALLCAP OPPORTUNITIES (Fund first available during May 2001) AUV at beginning of period $6.20 $4.57 $8.30 $10.01 AUV at end of period $6.68 $6.20 $4.57 $8.30 Number of accumulation units outstanding at end of period 250,032 249,210 117,676 25,433 ING VP WORLDWIDE GROWTH (Fund first available during May 2001) AUV at beginning of period $6.48 $5.12 $6.95 $8.34 AUV at end of period $6.95 $6.48 $5.12 $6.95 Number of accumulation units outstanding at end of period 133,300 113,212 100,549 15,369 JENNISON PORTFOLIO (Fund first available during May 2001) AUV at beginning of period $5.34 $4.20 $6.23 $7.19 AUV at end of period $5.72 $5.34 $4.20 $6.23 Number of accumulation units outstanding at end of period 118,854 144,335 69,927 28,394 PIMCO STOCKSPLUS GROWTH & INCOME (Fund first available during May 2001) AUV at beginning of period $10.00 $7.82 $10.01 $10.99 AUV at end of period $10.86 $10.00 $7.82 $10.01 Number of accumulation units outstanding at end of period 118,118 134,619 76,765 28,122
A30 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- PIONEER FUND VCT (Fund first available during November 2001) AUV at beginning of period $8.96 $7.41 $9.36 $10.00 AUV at end of period $9.74 $8.96 $7.41 $9.36 Number of accumulation units outstanding at end of period 138,924 126,992 91,408 -- PIONEER MID CAP VALUE (Fund first available during November 2001) AUV at beginning of period $12.49 $9.30 $10.70 $10.00 AUV at end of period $14.91 $12.49 $9.30 $10.70 Number of accumulation units outstanding at end of period 365,163 269,824 127,116 1,969 PROFUND VP BULL (Fund first available during May 2001) AUV at beginning of period $8.12 $6.60 $8.86 $10.00 AUV at end of period $8.66 $8.12 $6.60 $8.86 Number of accumulation units outstanding at end of period 83,416 79,556 16,669 1,491 PROFUND VP EUROPE 30 (Fund first available during May 2001) AUV at beginning of period $8.14 $5.99 $8.23 $10.05 AUV at end of period $9.12 $8.14 $5.99 $8.23 Number of accumulation units outstanding at end of period 62,417 30,483 5,164 901 PROFUND VP RISING RATES OPPORTUNITY (Fund first available during October 2003) AUV at beginning of period $9.35 $10.00 AUV at end of period $8.16 $9.35 Number of accumulation units outstanding at end of period 101,669 92,406 PROFUND VP SMALL CAP (Fund first available during May 2001) AUV at beginning of period $9.99 $7.14 $9.39 $10.00 AUV at end of period $11.43 $9.99 $7.14 $9.39 Number of accumulation units outstanding at end of period 95,672 93,987 59,953 6,233 SP WILLIAM BLAIR INTERNATIONAL GROWTH (Fund first available during May 2001) AUV at beginning of period $5.54 $4.06 $5.37 $7.29 AUV at end of period $6.30 $5.54 $4.06 $5.37 Number of accumulation units outstanding at end of period 377,055 285,493 89,982 14,879
2004 2003 2002 2001 ---- ---- ---- ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 2.10% AIM V.I. DENT DEMOGRAPHIC TRENDS (Fund first available during November 2001) AUV at beginning of period $9.79 $7.28 $10.98 $10.00 AUV at end of period $10.34 $9.79 $7.28 $10.98 Number of accumulation units outstanding at end of period 306,802 194,283 11,618 -- AIM V.I. FINANCIAL SERVICES (Fund first available during November 2001) AUV at beginning of period $9.87 $7.78 $9.33 $10.00 AUV at end of period $10.50 $9.87 $7.78 $9.33 Number of accumulation units outstanding at end of period 166,716 144,891 84,291 3,260 AIM V.I. HEALTH SCIENCES (Fund first available during November 2001) AUV at beginning of period $9.47 $7.57 $10.24 $10.00 AUV at end of period $9.98 $9.47 $7.57 $10.24 Number of accumulation units outstanding at end of period 366,144 324,507 151,077 466 AIM V.I. LEISURE (Fund first available during May 2002) AUV at beginning of period $10.58 $8.40 $10.00 AUV at end of period $11.74 $10.58 $8.40 Number of accumulation units outstanding at end of period 277,954 125,871 40,592
A31 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- AIM V.I. UTILITIES (Fund first available during November 2001) AUV at beginning of period $7.25 $6.30 $8.08 $10.00 AUV at end of period $8.77 $7.25 $6.30 $8.08 Number of accumulation units outstanding at end of period 457,831 131,724 52,671 -- COLONIAL SMALL CAP VALUE (Fund first available during November 2003) AUV at beginning of period $13.79 $10.00 AUV at end of period $16.54 $13.79 Number of accumulation units outstanding at end of period 1,261,075 219,203 FIDELITY VIP EQUITY - INCOME (Fund first available during May 2002) AUV at beginning of period $9.87 $7.75 $9.56 AUV at end of period $10.75 $9.87 $7.75 Number of accumulation units outstanding at end of period 1,195,423 448,420 54,904 FIDELITY VIP GROWTH (Fund first available during May 2002) AUV at beginning of period $8.18 $6.31 $9.24 AUV at end of period $8.26 $8.18 $6.31 Number of accumulation units outstanding at end of period 1,683,849 875,428 107,165 ING AIM MID CAP GROWTH (Fund first available during May 2001) AUV at beginning of period $13.26 $9.40 $14.05 $16.27 AUV at end of period $13.97 $13.26 $9.40 $14.05 Number of accumulation units outstanding at end of period 441,646 224,903 63,802 21,990 ING ALLIANCE MID CAP GROWTH (Fund first available during May 2001) AUV at beginning of period $15.74 $9.62 $14.05 $16.08 AUV at end of period $18.42 $15.74 $9.62 $14.05 Number of accumulation units outstanding at end of period 672,084 439,259 184,179 63,924 ING AMERICAN FUNDS GROWTH (Fund first available during September 2003) AUV at beginning of period $10.75 $10.00 AUV at end of period $11.77 $10.75 Number of accumulation units outstanding at end of period 6,721,770 882,976 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available during September 2003) AUV at beginning of period $10.96 $10.00 AUV at end of period $11.78 $10.96 Number of accumulation units outstanding at end of period 5,253,841 709,118 ING AMERICAN FUNDS INTERNATIONAL (Fund first available during September 2003) AUV at beginning of period $11.59 $10.00 AUV at end of period $13.46 $11.59 Number of accumulation units outstanding at end of period 2,085,943 296,661 ING CAPITAL GUARDIAN LARGE CAP VALUE (Fund first available during May 2001) AUV at beginning of period $9.87 $7.37 $9.88 $10.51 AUV at end of period $10.56 $9.87 $7.37 $9.88 Number of accumulation units outstanding at end of period 2,891,985 2,105,769 916,295 261,939 ING CAPITAL GUARDIAN MANAGED GLOBAL (Fund first available during May 2001) AUV at beginning of period $17.11 $12.82 $16.41 $19.19 AUV at end of period $18.58 $17.11 $12.82 $16.41 Number of accumulation units outstanding at end of period 680,585 451,642 210,411 72,320 ING CAPITAL GUARDIAN SMALL CAP (Fund first available during May 2001) AUV at beginning of period $17.18 $12.50 $17.12 $17.51 AUV at end of period $18.08 $17.18 $12.50 $17.12 Number of accumulation units outstanding at end of period 1,056,898 734,792 350,649 77,139 ING DEVELOPING WORLD (Fund first available during May 2001) AUV at beginning of period $8.64 $6.02 $6.89 $7.32 AUV at end of period $9.96 $8.64 $6.02 $6.89 Number of accumulation units outstanding at end of period 614,996 251,031 87,622 52,358
A32 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- ING EAGLE ASSET CAPITAL APPRECIATION (Fund first available during May 2001) AUV at beginning of period $17.35 $14.15 $17.43 $19.13 AUV at end of period $19.52 $17.35 $14.15 $17.43 Number of accumulation units outstanding at end of period 261,179 228,990 131,099 34,231 ING EVERGREEN HEALTH SCIENCES (Fund first available during May 2004) AUV at beginning of period $10.00 AUV at end of period $9.86 Number of accumulation units outstanding at end of period 334,842 ING EVERGREEN OMEGA (Fund first available during May 2004) AUV at beginning of period $9.64 AUV at end of period $10.44 Number of accumulation units outstanding at end of period 23,328 ING FMR(SM) DIVERSIFIED MID-CAP (Fund first available during May 2001) AUV at beginning of period $9.30 $7.12 $9.01 $9.46 AUV at end of period $11.30 $9.30 $7.12 $9.01 Number of accumulation units outstanding at end of period 1,202,124 724,929 492,026 76,525 ING GET FUND - SERIES V (Fund first available during June 2003) AUV at beginning of period $9.68 $10.00 AUV at end of period $9.65 $9.68 Number of accumulation units outstanding at end of period 58,801 108,973 ING GET U.S. CORE PORTFOLIO - SERIES 1 (Fund first available during June 2003) AUV at beginning of period $10.21 $10.00 AUV at end of period $10.29 $10.21 Number of accumulation units outstanding at end of period 17,023 17,037 ING GOLDMAN SACHS TOLLKEEPER (Fund first available during May 2001) AUV at beginning of period $6.34 $4.59 $7.58 $10.00 AUV at end of period $6.92 $6.34 $4.59 $7.58 Number of accumulation units outstanding at end of period 548,034 305,817 141,023 23,594 ING HARD ASSETS (Fund first available during May 2001) AUV at beginning of period $18.94 $12.71 $12.88 $15.16 AUV at end of period $19.73 $18.94 $12.71 $12.88 Number of accumulation units outstanding at end of period 367,334 147,526 43,248 2,531 ING INTERNATIONAL (Fund first available during December 2001) AUV at beginning of period $8.69 $6.87 $8.37 $9.74 AUV at end of period $9.93 $8.69 $6.87 $8.37 Number of accumulation units outstanding at end of period 452,329 291,624 132,383 2,399 ING JANUS SPECIAL EQUITY (Fund first available during May 2001) AUV at beginning of period $8.81 $5.98 $8.25 $8.97 AUV at end of period $10.10 $8.81 $5.98 $8.25 Number of accumulation units outstanding at end of period 160,339 149,245 96,355 38,065 ING JENNISON EQUITY OPPORTUNITIES (Fund first available during May 2001) AUV at beginning of period $17.90 $13.94 $20.13 $22.86 AUV at end of period $19.73 $17.90 $13.94 $20.13 Number of accumulation units outstanding at end of period 228,038 185,364 132,556 41,070 ING JPMORGAN INTERNATIONAL (Fund first available during September 2003) AUV at beginning of period $11.85 $10.00 AUV at end of period $13.76 $11.85 Number of accumulation units outstanding at end of period 333,308 22,489 ING JPMORGAN SMALL CAP EQUITY (Fund first available during May 2002) AUV at beginning of period $10.26 $7.81 $10.00 AUV at end of period $13.63 $10.26 $7.81 Number of accumulation units outstanding at end of period 643,342 260,352 37,674
A33 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- ING JULIUS BAER FOREIGN (Fund first available during May 2002) AUV at beginning of period $10.51 $8.19 $10.00 AUV at end of period $12.14 $10.51 $8.19 Number of accumulation units outstanding at end of period 1,232,792 128,362 6,369 ING LEGG MASON VALUE (Fund first available during May 2001) AUV at beginning of period $8.32 $6.94 $8.79 $9.64 AUV at end of period $9.28 $8.32 $6.94 $8.79 Number of accumulation units outstanding at end of period 1,677,706 854,803 584,691 164,770 ING LIFESTYLE AGGRESSIVE GROWTH (Fund first available during May 2004) AUV at beginning of period $10.04 AUV at end of period $11.21 Number of accumulation units outstanding at end of period 2,096,871 ING LIFESTYLE GROWTH (Fund first available during May 2004) AUV at beginning of period $10.17 AUV at end of period $11.09 Number of accumulation units outstanding at end of period 4,510,533 ING LIFESTYLE MODERATE GROWTH (Fund first available during May 2004) AUV at beginning of period $9.99 AUV at end of period $10.91 Number of accumulation units outstanding at end of period 3,892,013 ING LIFESTYLE MODERATE (Fund first available during May 2004) AUV at beginning of period $9.81 AUV at end of period $10.78 Number of accumulation units outstanding at end of period 1,671,674 ING LIMITED MATURITY BOND (Fund first available during May 2001) AUV at beginning of period $18.35 $18.23 $17.36 $16.70 AUV at end of period $18.22 $18.35 $18.23 $17.36 Number of accumulation units outstanding at end of period 281,028 390,766 187,662 63,527 ING LIQUID ASSETS (Fund first available during May 2001) AUV at beginning of period $14.13 $14.33 $14.43 $14.34 AUV at end of period $13.97 $14.13 $14.33 $14.43 Number of accumulation units outstanding at end of period 971,131 735,857 514,409 261,606 ING MARSICO GROWTH (Fund first available during May 2001) AUV at beginning of period $13.02 $10.02 $14.53 $18.99 AUV at end of period $14.34 $13.02 $10.02 $14.53 Number of accumulation units outstanding at end of period 1,389,051 845,399 311,442 126,140 ING MERCURY FOCUS VALUE (Fund first available during May 2002) AUV at beginning of period $10.70 $8.33 $10.00 AUV at end of period $11.69 $10.70 $8.33 Number of accumulation units outstanding at end of period 257,304 99,430 15,878 ING MERCURY LARGE CAP GROWTH (Fund first available during May 2002) AUV at beginning of period $9.86 $7.94 $10.00 AUV at end of period $10.73 $9.86 $7.94 Number of accumulation units outstanding at end of period 72,893 38,135 8,896 ING MFS MID CAP GROWTH (Fund first available during May 2001) AUV at beginning of period $20.65 $15.16 $30.25 $39.25 AUV at end of period $23.26 $20.65 $15.16 $30.25 Number of accumulation units outstanding at end of period 704,318 527,276 309,801 93,233 ING MFS TOTAL RETURN (Fund first available during May 2001) AUV at beginning of period $20.73 $18.14 $19.52 $20.00 AUV at end of period $22.55 $20.73 $18.14 $19.52 Number of accumulation units outstanding at end of period 1,640,545 1,114,951 687,305 203,036
A34 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- ING OPPENHEIMER MAIN STREET (Fund first available during May 2001) AUV at beginning of period $17.41 $14.27 $19.40 $23.11 AUV at end of period $19.24 $17.41 $14.27 $19.40 Number of accumulation units outstanding at end of period 379,152 360,253 215,283 85,348 ING PIMCO CORE BOND (Fund first available during May 2001) AUV at beginning of period $12.29 $11.98 $11.26 $10.88 AUV at end of period $12.62 $12.29 $11.98 $11.26 Number of accumulation units outstanding at end of period 1,738,298 1,262,012 836,451 221,684 ING PIMCO HIGH YIELD (Fund first available during May 2004) AUV at beginning of period $10.00 AUV at end of period $10.77 Number of accumulation units outstanding at end of period 2,439,916 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available during September 2003) AUV at beginning of period $10.79 $10.00 AUV at end of period $11.56 $10.79 Number of accumulation units outstanding at end of period 974,672 109,745 ING SALOMON BROTHERS ALL CAP (Fund first available during May 2001) AUV at beginning of period $11.38 $8.37 $11.49 $12.23 AUV at end of period $12.02 $11.38 $8.37 $11.49 Number of accumulation units outstanding at end of period 1,693,260 1,445,599 892,250 225,937 ING SALOMON BROTHERS INVESTORS (Fund first available during May 2001) AUV at beginning of period $10.16 $7.91 $10.48 $11.47 AUV at end of period $10.93 $10.16 $7.91 $10.48 Number of accumulation units outstanding at end of period 619,270 474,812 294,204 136,482 ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available during May 2001) AUV at beginning of period $31.00 $25.28 $25.70 $25.59 AUV at end of period $35.39 $31.00 $25.28 $25.70 Number of accumulation units outstanding at end of period 2,380,506 998,381 442,657 92,605 ING T. ROWE PRICE EQUITY INCOME (Fund first available during May 2001) AUV at beginning of period $22.67 $18.50 $21.77 $22.19 AUV at end of period $25.50 $22.67 $18.50 $21.77 Number of accumulation units outstanding at end of period 1,619,276 860,125 425,112 107,272 ING UBS U.S. BALANCED (Fund first available during November 2003) AUV at beginning of period $8.26 $7.15 AUV at end of period $8.97 $8.26 Number of accumulation units outstanding at end of period 577,971 294,927 ING VAN KAMPEN EQUITY GROWTH (Fund first available during May 2002) AUV at beginning of period $9.42 $7.78 $10.00 AUV at end of period $9.90 $9.42 $7.78 Number of accumulation units outstanding at end of period 261,717 138,420 10,422 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available during May 2002) AUV at beginning of period $10.88 $8.80 $10.00 AUV at end of period $12.00 $10.88 $8.80 Number of accumulation units outstanding at end of period 789,277 200,135 40,258 ING VAN KAMPEN GROWTH & INCOME (Fund first available during May 2001) AUV at beginning of period $21.30 $17.01 $20.39 $21.68 AUV at end of period $23.79 $21.30 $17.01 $20.39 Number of accumulation units outstanding at end of period 677,755 424,242 180,352 51,722 ING VAN KAMPEN REAL ESTATE (Fund first available during May 2001) AUV at beginning of period $34.22 $25.38 $25.87 $24.17 AUV at end of period $46.15 $34.22 $25.38 $25.87 Number of accumulation units outstanding at end of period 518,437 182,707 77,757 7,350
A35 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- ING VP FINANCIAL SERVICES (Fund first available during May 2004) AUV at beginning of period $10.03 AUV at end of period $11.04 Number of accumulation units outstanding at end of period 172,681 ING VP INDEX PLUS LARGECAP (Fund first available during August 2003) AUV at beginning of period $8.82 $10.00 AUV at end of period $9.52 $8.82 Number of accumulation units outstanding at end of period 689,799 247,476 ING VP INDEX PLUS MIDCAP (Fund first available during May 2004) AUV at beginning of period $9.66 AUV at end of period $11.21 Number of accumulation units outstanding at end of period 340,018 ING VP INDEX PLUS SMALLCAP (Fund first available during May 2004) AUV at beginning of period $9.61 AUV at end of period $11.66 Number of accumulation units outstanding at end of period 333,675 ING VP INTERMEDIATE BOND (Fund first available during May 2002) AUV at beginning of period $11.00 $10.59 $10.00 AUV at end of period $11.26 $11.00 $10.59 Number of accumulation units outstanding at end of period 1,029,703 182,945 20,543 ING VP MAGNACAP (Fund first available during May 2001) AUV at beginning of period $8.98 $7.02 $9.31 $10.11 AUV at end of period $9.58 $8.98 $7.02 $9.31 Number of accumulation units outstanding at end of period 100,899 60,421 41,229 10,474 ING VP MIDCAP OPPORTUNITIES (Fund first available during April 2004) AUV at beginning of period $7.00 AUV at end of period $7.32 Number of accumulation units outstanding at end of period 215,454 ING VP SMALLCAP OPPORTUNITIES (Fund first available during May 2001) AUV at beginning of period $6.19 $4.57 $8.29 $10.01 AUV at end of period $6.66 $6.19 $4.57 $8.29 Number of accumulation units outstanding at end of period 823,490 521,035 249,714 45,115 ING VP WORLDWIDE GROWTH (Fund first available during May 2001) AUV at beginning of period $6.46 $5.11 $6.94 $8.34 AUV at end of period $6.92 $6.46 $5.11 $6.94 Number of accumulation units outstanding at end of period 312,656 252,106 138,853 46,282 JENNISON PORTFOLIO (Fund first available during May 2001) AUV at beginning of period $5.32 $4.19 $6.22 $7.19 AUV at end of period $5.69 $5.32 $4.19 $6.22 Number of accumulation units outstanding at end of period 509,298 449,625 265,344 70,772 PIMCO STOCKSPLUS GROWTH & INCOME (Fund first available during May 2001) AUV at beginning of period $9.94 $7.79 $9.97 $10.95 AUV at end of period $10.78 $9.94 $7.79 $9.97 Number of accumulation units outstanding at end of period 221,710 255,345 218,962 61,575 PIONEER FUND VCT (Fund first available during November 2001) AUV at beginning of period $8.94 $7.39 $9.35 $10.00 AUV at end of period $9.70 $8.94 $7.39 $9.35 Number of accumulation units outstanding at end of period 501,864 342,392 57,294 -- PIONEER MID CAP VALUE (Fund first available during November 2001) AUV at beginning of period $12.46 $9.29 $10.70 $10.00 AUV at end of period $14.86 $12.46 $9.29 $10.70 Number of accumulation units outstanding at end of period 2,314,602 732,031 145,463 --
A36 Landmark - 136957
2004 2003 2002 2001 ---- ---- ---- ---- PROFUND VP BULL (Fund first available during May 2001) AUV at beginning of period $8.10 $6.59 $8.85 $10.00 AUV at end of period $8.63 $8.10 $6.59 $8.85 Number of accumulation units outstanding at end of period 278,604 83,177 23,783 1,814 PROFUND VP EUROPE 30 (Fund first available during May 2001) AUV at beginning of period $8.12 $5.98 $8.23 $10.05 AUV at end of period $9.09 $8.12 $5.98 $8.23 Number of accumulation units outstanding at end of period 160,013 67,213 17,650 -- PROFUND VP RISING RATES OPPORTUNITY (Fund first available during October 2003) AUV at beginning of period $9.34 $10.00 AUV at end of period $8.15 $9.34 Number of accumulation units outstanding at end of period 307,589 26,719 PROFUND VP SMALL CAP (Fund first available during May 2001) AUV at beginning of period $9.96 $7.13 $9.39 $10.00 AUV at end of period $11.38 $9.96 $7.13 $9.39 Number of accumulation units outstanding at end of period 453,800 255,439 68,579 12,110 SP WILLIAM BLAIR INTERNATIONAL GROWTH (Fund first available during May 2001) AUV at beginning of period $5.52 $4.05 $5.36 $7.29 AUV at end of period $6.27 $5.52 $4.05 $5.36 Number of accumulation units outstanding at end of period 1,021,161 640,197 156,994 86,394
A37 Landmark - 136957 - -------------------------------------------------------------------------------- APPENDIX B - -------------------------------------------------------------------------------- THE INVESTMENT PORTFOLIOS During the accumulation phase, you may allocate your premium payments and contract value to any of the investment portfolios available under this Contract. They are listed in this appendix. You bear the entire investment risk for amounts you allocate to any investment portfolio, and you may lose your principal. The investment results of the mutual funds (funds) are likely to differ significantly and there is no assurance that any of the funds will achieve their respective investment objectives. You should consider the investment objectives, risks and charges and expenses of the funds carefully before investing. Please refer to the fund prospectuses for this and additional information. Shares of the funds will rise and fall in value and you could lose money by investing in the funds. Shares of the funds are not bank deposits and are not guaranteed, endorsed or insured by any financial institution, the Federal Deposit Insurance Corporation or any other government agency. Except as noted, all funds are diversified, as defined under the Investment Company Act of 1940. Fund prospectuses may be obtained free of charge, from our Customer Service Center at the address and telephone number listed in the prospectus, by accessing the SEC's web site or by contacting the SEC Public Reference Room. Certain funds offered under the contracts have investment objectives and policies similar to other funds managed by the fund's investment adviser. The investment results of a fund may be higher or lower than those of other funds managed by the same adviser. There is no assurance and no representation is made that the investment results of any fund will be comparable to those of another fund managed by the same investment adviser. Certain funds are designated as "Master-Feeder", "LifeStyle Funds" or "MarketPro Funds". Funds offered in a Master-Feeder structure (such as the American Funds) or fund of funds structure (such as the LifeStyle or MarketPro Funds) may have higher fees and expenses than a fund that invests directly in debt and equity securities.
- ------------------------------------------------------------------------------------------------------------------------------- LIST OF FUND NAME CHANGES - ------------------------------------------------------------------------------------------------------------------------------- FORMER FUND NAME CURRENT FUND NAME - ------------------------------------------------------------------------------------------------------------------------------- ING Alliance Mid Cap Growth Portfolio ING AllianceBernstein Mid Cap Growth Portfolio ING Capital Guardian Large Cap Value Portfolio ING Capital Guardian U.S. Equities Portfolio - ------------------------------------------------------------------------------------------------------------------------------- ING Capital Guardian Managed Global Portfolio ING Templeton Global Growth Portfolio ING Capital Guardian Small Cap Portfolio ING Capital Guardian Small/Mid Cap Portfolio - ------------------------------------------------------------------------------------------------------------------------------- ING Developing World Portfolio ING JPMorgan Emerging Markets Equity Portfolio - ------------------------------------------------------------------------------------------------------------------------------- ING Goldman Sachs Internet Tollkeeper Portfolio ING Goldman Sachs Tollkeeper Portfolio - ------------------------------------------------------------------------------------------------------------------------------- ING Hard Assets Portfolio ING Global Resources Portfolio - ------------------------------------------------------------------------------------------------------------------------------- ING Janus Special Equity Portfolio ING Janus Contrarian Portfolio ING Jennison Equity Opportunities Portfolio ING Wells Fargo Mid Cap Disciplined Portfolio ING Mercury Focus Value Portfolio ING Mercury Large Cap Value Portfolio - ------------------------------------------------------------------------------------------------------------------------------- ING Mercury Fundamental Growth Portfolio ING Mercury LargeCap Growth Portfolio - ------------------------------------------------------------------------------------------------------------------------------- ING MFS Research Portfolio ING Oppenheimer Main Street Portfolio - ------------------------------------------------------------------------------------------------------------------------------- ING Salomon Brothers Investors Portfolio ING Lord Abbett Affiliated Portfolio ING UBS U.S. Balanced Portfolio ING UBS U.S. Allocation Portfolio - ------------------------------------------------------------------------------------------------------------------------------- ING VP Bond Portfolio ING VP Intermediate Bond Portfolio - ------------------------------------------------------------------------------------------------------------------------------- ING VP Worldwide Growth Portfolio ING VP Global Equity Dividend Portfolio - ------------------------------------------------------------------------------------------------------------------------------- INVESCO VIF - Leisure Fund AIM V.I. Leisure Fund - -------------------------------------------------------------------------------------------------------------------------------
B1 Landmark - 136957
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING INVESTORS TRUST 7337 E. Doubletree Ranch Road, Scottsdale, AZ 85258 - ------------------------------------------------------------------------------------------------------------------------------- ING ALLIANCEBERNSTEIN MID CAP GROWTH PORTFOLIO Seeks long-term total return. Invests in common stocks of (Class S)* middle capitalization companies. Normally invests (formerly ING Alliance Mid Cap Growth Portfolio) substantially all of its assets in high-quality common INVESTMENT ADVISER: Directed Services, Inc. stocks that the subadviser expects to increase in value. INVESTMENT SUBADVISER: Alliance Capital Management, L.P. *NAME CHANGE EFFECTIVE 12/05/05 - ------------------------------------------------------------------------------------------------------------------------------- ING AMERICAN FUNDS GROWTH PORTFOLIO Seeks to make your investment grow. The Portfolio operates INVESTMENT ADVISER: ING Investments, LLC as a "feeder fund" which invests all of its assets in the INVESTMENT SUBADVISER: Capital Research Management Company "master fund" which is Class 2 shares of the Growth Fund, a series of American Funds Insurance Series(R), a registered open-end investment company. The master fund invests primarily in common stocks of companies that appear to offer superior opportunities for growth of capital. The Growth Fund is designed for investors seeking long-term capital appreciation through stocks. - ------------------------------------------------------------------------------------------------------------------------------- ING AMERICAN FUNDS GROWTH-INCOME PORTFOLIO Seeks to make your investment grow and provide you with INVESTMENT ADVISER: ING Investments, LLC income over time. The Portfolio operates as a "feeder INVESTMENT SUBADVISER: Capital Research Management Company fund" which invests all of its assets in the "master fund" which is Class 2 shares of the Growth-Income Fund, a series of American Funds Insurance Series(R), a registered open-end investment company. The master fund invests primarily in common stocks or other securities which demonstrate the potential for appreciation and/or dividends. The Growth-Income Fund is designed for investors seeking both capital appreciation and income. - ------------------------------------------------------------------------------------------------------------------------------- ING AMERICAN FUNDS INTERNATIONAL PORTFOLIO Seeks to make your investment grow over time. The Portfolio INVESTMENT ADVISER: ING Investments, LLC operates as a "feeder fund" which invests all of its assets INVESTMENT SUBADVISER: Capital Research Management Company in the "master fund" which is Class 2 shares of the International Fund, a series of American Funds Insurance Series(R), a registered open-end investment company. The master fund invests primarily in common stocks of companies located outside the United States. The International Fund is designed for investors seeking capital appreciation through stocks. - -------------------------------------------------------------------------------------------------------------------------------
B2 Landmark - 136957
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING CAPITAL GUARDIAN SMALL/MID CAP PORTFOLIO Seeks long-term capital appreciation. Invests at least 80% (Class S) of its assets in equity securities of small/mid (formerly ING Capital Guardian Small Cap Portfolio) capitalization ("small/mid-cap") companies. INVESTMENT ADVISER: Directed Services, Inc. INVESTMENT SUBADVISER: Capital Guardian Trust Company - ------------------------------------------------------------------------------------------------------------------------------- ING CAPITAL GUARDIAN U.S. EQUITIES PORTFOLIO Seeks long-term growth of capital and income. Invests, (Class S) under normal market conditions, at least 80% of its assets (formerly ING Capital Guardian Large Cap Value Portfolio) in equity and equity-related securities of issuers located INVESTMENT ADVISER: Directed Services, Inc. in the United States. INVESTMENT SUBADVISER: Capital Guardian Trust Company - ------------------------------------------------------------------------------------------------------------------------------- ING EAGLE ASSET CAPITAL APPRECIATION PORTFOLIO Seeks capital appreciation. Dividend income is a secondary (Class S) objective. Normally invests at least 80% of its assets in INVESTMENT ADVISER: Directed Services, Inc. equity securities of domestic and foreign issuers that INVESTMENT SUBADVISER: Eagle Asset Management, Inc. meet quantitative standards relating to financial soundness and high intrinsic value relative to price. - ------------------------------------------------------------------------------------------------------------------------------- ING EVERGREEN HEALTH SCIENCES PORTFOLIO A non-diversified Portfolio that seeks long-term capital (Class S) growth. Normally invests at 80% of its assets in the INVESTMENT ADVISER: Directed Services, Inc. equity securities of healthcare companies. May invest in INVESTMENT SUBADVISER: Evergreen Investment Management securities of relatively well-known and large companies as Company, LLC well as small- and medium-sized companies. - ------------------------------------------------------------------------------------------------------------------------------- ING EVERGREEN OMEGA PORTFOLIO (Class S) Seeks long-term capital growth. Invests primarily in INVESTMENT ADVISER: Directed Services, Inc. common stocks and securities convertible into common stocks INVESTMENT SUBADVISER: Evergreen Investment Management of U.S. companies across all market capitalizations. May Company, LLC invest up to 25% of its assets in foreign securities. - ------------------------------------------------------------------------------------------------------------------------------- ING FMR(SM) DIVERSIFIED MID CAP PORTFOLIO Seeks long-term growth of capital. Normally invests (Class S) primarily in common stocks and normally invests at least INVESTMENT ADVISER: Directed Services, Inc. 80% of assets in securities of companies with medium market INVESTMENT SUBADVISER: Fidelity Management & Research Co. capitalizations. - ------------------------------------------------------------------------------------------------------------------------------- ING FMR(SM) EARNINGS GROWTH PORTFOLIO Seeks growth of capital over the long term. Normally (Class S) invests primarily in common stocks. Invests the assets in INVESTMENT ADVISER: Directed Services, Inc. companies it believes have above-average growth potential. INVESTMENT SUBADVISER: Fidelity Management & Research Co. Growth may be measured by factors such as earnings or revenue. Companies with high growth potential tend to be companies with higher than average price/earnings (P/E) or price/book (P/B) ratios. - ------------------------------------------------------------------------------------------------------------------------------- ING GLOBAL RESOURCES PORTFOLIO (Class S) A non-diversified Portfolio that seeks long-term capital (formerly ING Hard Assets Portfolio) appreciation. Normally invests at least 80% of its assets INVESTMENT ADVISER: Directed Services, Inc. in the equities of producers of commodities. INVESTMENT SUBADVISER: Baring International Investment Limited - -------------------------------------------------------------------------------------------------------------------------------
B3 Landmark - 136957
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING GOLDMAN SACHS TOLLKEEPER(SM) PORTFOLIO* (Class S) Seeks long-term growth of capital. Invests, under normal (formerly ING Goldman Sachs Internet Tollkeeper Portfolio) circumstances, at least 80% of its net assets plus any INVESTMENT ADVISER: Directed Services, Inc. borrowings for investment purposes (measured at time of INVESTMENT SUBADVISER: Goldman Sachs Asset Management, L.P. purchase) in equity investments in "Tollkeeper" companies, * Goldman Sachs Tollkeeper(SM) is a service mark of which are high-quality technology, media, or service Goldman Sachs & Co. companies that adopt or use technology to improve cost structure, revenue opportunities, and/or competitive advantage. - ------------------------------------------------------------------------------------------------------------------------------- ING JANUS CONTRARIAN PORTFOLIO (Class S) A non-diversified Portfolio that seeks capital (formerly ING Janus Special Equity Portfolio) appreciation. Invests, under normal circumstances, at least INVESTMENT ADVISER: Directed Services, Inc. 80% of its net assets (plus borrowings for investment INVESTMENT SUBADVISER: Janus Capital Management, LLC purposes) in equity securities with the potential for long-term growth of capital. - ------------------------------------------------------------------------------------------------------------------------------- ING JPMORGAN EMERGING MARKETS EQUITY PORTFOLIO (Class S) Seeks capital appreciation. Normally invests at least 80% (formerly ING Developing World Portfolio) of its assets in securities of issuers located in at least INVESTMENT ADVISER: Directed Services, Inc. three countries with emerging securities markets. May also INVESTMENT SUBADVISER: JPMorgan Investment Management Inc. invest to a lesser extent in debt securities of issuers in countries with emerging markets. May also invest in high-quality, short-term money market instruments and repurchase agreements. - ------------------------------------------------------------------------------------------------------------------------------- ING JPMORGAN SMALL CAP EQUITY PORTFOLIO Seeks capital growth over the long term. Under normal (Class S) market conditions, invests at least 80% of its total assets INVESTMENT ADVISER: Directed Services, Inc. in equity securities of small-cap companies. May invest up INVESTMENT SUBADVISER: J.P. Morgan Investment Management to 20% of its assets in foreign securities, convertible Inc. securities and high quality money market instruments and repurchase agreements. May invest in REITs and derivatives. - ------------------------------------------------------------------------------------------------------------------------------- ING JPMORGAN VALUE OPPORTUNITIES PORTFOLIO Seeks to provide long-term capital appreciation. Under (Class S) normal market conditions, the Portfolio invests at least INVESTMENT ADVISER: Directed Services, Inc. 80% of its assets in equity securities of mid and INVESTMENT SUBADVISER: J.P. Morgan Investment Management large-capitalization companies at the time of purchase. Inc. - ------------------------------------------------------------------------------------------------------------------------------- ING JULIUS BAER FOREIGN PORTFOLIO (Class S) Seeks long-term growth of capital. Under normal INVESTMENT ADVISER: Directed Services, Inc. conditions, invests in a wide variety of international INVESTMENT SUBADVISER: Julius Baer Investment Management LLC equity securities issued through the world, normally excluding the United States. Normally invests at least 80% of its assets in equity securities tied economically to countries outside the United States. - ------------------------------------------------------------------------------------------------------------------------------- ING LEGG MASON VALUE PORTFOLIO (Class S) A non-diversified portfolio that seeks long-term growth of (formerly ING Janus Growth and Income Portfolio) capital. Normally invests in equity securities, including INVESTMENT ADVISER: Directed Services, Inc. foreign securities, that offer the potential for capital INVESTMENT SUBADVISER: Legg Mason Funds Management, Inc. growth. May also invest in companies with market capitalizations greater than $5 billion, but may invest in companies of any size. May also invest up to 25% of its total assets in long-term debt securities. - -------------------------------------------------------------------------------------------------------------------------------
B4 Landmark - 136957
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING LIFESTYLE AGGRESSIVE GROWTH PORTFOLIO (Class S1) Seeks growth of capital. Invests in a combination of INVESTMENT ADVISER: ING Investments, LLC underlying funds according to a fixed formula that over time should reflect an allocation of approximately 100% in equity securities. - ------------------------------------------------------------------------------------------------------------------------------- ING LIFESTYLE GROWTH PORTFOLIO (Class S1) Seeks growth of capital and some current income. Invests INVESTMENT ADVISER: ING Investments, LLC in a combination of underlying funds according to a fixed formula that over time should reflect an allocation of approximately 80% in equity securities and 20% in fixed income securities. - ------------------------------------------------------------------------------------------------------------------------------- ING LIFESTYLE MODERATE GROWTH PORTFOLIO (Class S1) Seeks growth of capital and current income. Invests in a INVESTMENT ADVISER: ING Investments, LLC combination of underlying funds according to a fixed formula that over time should reflect an allocation of approximately 50% in equity securities and 50% in fixed income securities. - ------------------------------------------------------------------------------------------------------------------------------- ING LIFESTYLE MODERATE PORTFOLIO (Class S1) Seeks growth of capital and a low to moderate level of INVESTMENT ADVISER: ING Investments, LLC current income. Invests in a combination of underlying funds according to a fixed formula that over time should reflect an allocation of approximately 65% in equity securities and 35% in fixed income securities. - ------------------------------------------------------------------------------------------------------------------------------- ING LIQUID ASSETS PORTFOLIO (Class S) Seeks high level of current income consistent with the INVESTMENT ADVISER: Directed Services, Inc. preservation of capital and liquidity. Strives to maintain INVESTMENT SUBADVISER: ING Investment Management Co. a stable $1 per share net asset value and its investment strategy focuses on safety of principal, liquidity and yield, in order of importance, to achieve this goal. - ------------------------------------------------------------------------------------------------------------------------------- ING LORD ABBETT AFFILIATED PORTFOLIO (Class S)* Seeks long-term growth of capital. Secondarily seeks (formerly ING Salomon Brothers Investors Portfolio) current income. Invests primarily in equity securities of INVESTMENT ADVISER: Directed Services, Inc. U.S. companies. May also invest in other securities. To a INVESTMENT SUBADVISER: Lord Abbett & Co., LLC* lesser degree, invests in income producing securities such as debt securities, and may also invest in securities of *NAME CHANGE AND SUBADVISER CHANGE EFFECTIVE 12/05/05 foreign issuers. - ------------------------------------------------------------------------------------------------------------------------------- ING MARKETPRO PORTFOLIO (Class S)* Seeks capital appreciation. Income is a secondary INVESTMENT ADVISER: ING Investments, LLC consideration. Seeks to obtain its investment objective by investing in a combination of underlying funds according to *PORTFOLIO AVAILABLE 12/05/05 fixed percentages that reflect an allocation of approximately 70% in equity securities and 30% in fixed income securities. - ------------------------------------------------------------------------------------------------------------------------------- ING MARSICO GROWTH PORTFOLIO (Class S) Seeks capital appreciation. Invests primarily in equity INVESTMENT ADVISER: Directed Services, Inc. securities selected for their growth potential. May invest INVESTMENT SUBADVISER: Marsico Capital Management, LLC in companies of any size, from larger, well-established companies to smaller, emerging growth companies. - -------------------------------------------------------------------------------------------------------------------------------
B5 Landmark - 136957
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING MARSICO INTERNATIONAL OPPORTUNITIES PORTFOLIO (Class S) Seeks long-term growth of capital. Invests primarily (no INVESTMENT ADVISER: Directed Services, Inc. less than 65% of its total assets) in common stocks of INVESTMENT SUBADVISER: Marsico Capital Management, LLC foreign companies that are selected for their long-term growth potential. May invest in companies of any size throughout the world. Normally invests in issuers from at least three different countries not including the United States and generally maintains a core position of between 35 and 50 common stocks. May invest in common stocks of companies operating in emerging markets. - ------------------------------------------------------------------------------------------------------------------------------- ING MERCURY LARGECAP GROWTH PORTFOLIO Seeks long-term growth of capital. Invests at least 80% of (Class S) its assets in equity securities of large capitalization (formerly ING Mercury Fundamental Growth Portfolio) companies located in the United States believed to have INVESTMENT ADVISER: Directed Services, Inc. good prospects for earnings growth. These securities will INVESTMENT SUBADVISER: Mercury Advisors be selected from companies that are included in the Russell 1000(R) Growth Index. May invest up to 10% of its total assets in securities issued by foreign companies. Normally will invest a portion of its assets in short-term debt securities. - ------------------------------------------------------------------------------------------------------------------------------- ING MERCURY LARGE CAP VALUE PORTFOLIO (Class S) Seeks long-term growth of capital. Invests at least 80% of (formerly ING Mercury Focus Value Portfolio) its assets in a diversified portfolio of equity securities INVESTMENT ADVISER: Directed Services, Inc. of large capitalization companies that the Portfolio INVESTMENT SUBADVISER: Mercury Advisors Manager believes are undervalued. - ------------------------------------------------------------------------------------------------------------------------------- ING MFS MID CAP GROWTH PORTFOLIO (Class S) Seeks long-term growth of capital. Normally invests at INVESTMENT ADVISER: Directed Services, Inc. least 80% of its net assets in common stocks and related INVESTMENT SUBADVISER: Massachusetts Financial Services securities (such as preferred stocks, convertible Company securities and depositary receipts) of companies with medium market capitalizations (or "mid-cap companies") which it believes have above-average growth potential. - ------------------------------------------------------------------------------------------------------------------------------- ING MFS TOTAL RETURN PORTFOLIO (Class S) Seeks above-average income (compared to a portfolio INVESTMENT ADVISER: Directed Services, Inc. entirely invested in equity securities) consistent with the INVESTMENT SUBADVISER: Massachusetts Financial Services prudent employment of capital. Secondarily seeks reasonable Company opportunity for growth of capital and income. Invests in a combination of equity and fixed income securities. - ------------------------------------------------------------------------------------------------------------------------------- ING MFS UTILITIES PORTFOLIO (Class S) A non-diversified portfolio that seeks capital growth and INVESTMENT ADVISER: Directed Services, Inc. current income. Normally invests at least 80% of its net INVESTMENT SUBADVISER: Massachusetts Financial Services assets in equity and debt securities of domestic and Company foreign (including emerging markets) companies in the utilities industry. - ------------------------------------------------------------------------------------------------------------------------------- ING OPPENHEIMER MAIN STREET PORTFOLIO (Class S) Seeks long-term growth of capital and future income. (formerly ING MFS Research Portfolio) Normally invests mainly in common stocks of U.S. companies INVESTMENT ADVISER: Directed Services, Inc. of different capitalization ranges, presently focusing on INVESTMENT SUBADVISER: OppenheimerFunds, Inc. large-capitalization issuers. May also invest in debt securities, such as bonds and debentures, but does not currently emphasize these investments. - -------------------------------------------------------------------------------------------------------------------------------
B6 Landmark - 136957
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING PIMCO CORE BOND PORTFOLIO (Class S) Seeks maximum total return, consistent with preservation of INVESTMENT ADVISER: Directed Services, Inc. capital and prudent investment management. Invests, under INVESTMENT SUBADVISER: Pacific Investment Management normal circumstances, at least 80% of its net assets (plus Company LLC borrowings for investment purposes) in a diversified portfolio of fixed income instruments of varying maturities. - ------------------------------------------------------------------------------------------------------------------------------- ING PIMCO HIGH YIELD PORTFOLIO (Class S) Seeks maximum total return, consistent with preservation of INVESTMENT ADVISER: Directed Services, Inc. capital and prudent investment management. Normally INVESTMENT SUBADVISER: Pacific Investment Management invests at least 80% of its net assets (plus borrowings for Company LLC investment purposes) in a diversified portfolio of high yield securities ("junk bonds") rated below investment grade but rated at least CCC/Caa by Moody's Investors Service, Inc., Standard and Poor's Rating Service, or Fitch, or if unrated, determined by PIMCO to be of comparable quality, subject to a maximum of 5% of total assets in CCC/Caa securities, determined at the time of investment. - ------------------------------------------------------------------------------------------------------------------------------- ING PIONEER FUND PORTFOLIO (Class S) Seeks reasonable income and capital growth. Invests in a INVESTMENT ADVISER: Directed Services, Inc. broad list of carefully selected securities believed to be INVESTMENT SUBADVISER: Pioneer Investment Management, Inc. reasonably priced, rather than in securities whose prices reflect a premium resulting from their current market popularity. Invests the major portion of its assets in equity securities, primarily of U.S. issuers. - ------------------------------------------------------------------------------------------------------------------------------- ING PIONEER MID CAP VALUE PORTFOLIO (Class S) Seeks capital appreciation. Normally invests at least 80% INVESTMENT ADVISER: Directed Services, Inc. of its total assets in equity securities of mid-size INVESTMENT SUBADVISER: Pioneer Investment Management, Inc. companies, that is companies with market values within the range of market values of companies included in the Russell Midcap Value Index. - ------------------------------------------------------------------------------------------------------------------------------- ING SALOMON BROTHERS ALL CAP PORTFOLIO (Class S) A non-diversified Portfolio that seeks capital appreciation INVESTMENT ADVISER: Directed Services, Inc. through investment in securities which it believes have INVESTMENT SUBADVISER: Salomon Brothers Asset Management, above-average capital appreciation potential. Invests Inc. primarily in common stocks and common stock equivalents, such as preferred stocks and securities convertible into common stocks, of companies it believes are undervalued in the marketplace. - ------------------------------------------------------------------------------------------------------------------------------- ING T. ROWE PRICE CAPITAL APPRECIATION PORTFOLIO Seeks, over the long-term, a high total investment return, (Class S) consistent with the preservation of capital and prudent INVESTMENT ADVISER: Directed Services, Inc. investment risk. Pursues an active asset allocation INVESTMENT SUBADVISER: T. Rowe Price Associates, Inc. strategy whereby investments are allocated among three asset classes - equity securities, debt securities and money market instruments. May invest up to 25% of its net assets in foreign equity securities. - -------------------------------------------------------------------------------------------------------------------------------
1 B7 Landmark - 136957
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING T. ROWE PRICE EQUITY INCOME PORTFOLIO Seeks substantial dividend income as well as long-term (Class S) growth of capital. Normally invests at least 80% of its INVESTMENT ADVISER: Directed Services, Inc. assets in common stocks, with 65% in the common stocks of INVESTMENT SUBADVISER: T. Rowe Price Associates, Inc. well-established companies paying above-average dividends. May also invest in convertible securities, warrants and preferred stocks, foreign securities, debt securities including high-yield debt securities and future and options. - ------------------------------------------------------------------------------------------------------------------------------- ING TEMPLETON GLOBAL GROWTH PORTFOLIO (Class S)* Seeks capital appreciation. Current income is only an (formerly ING Capital Guardian Managed Global Portfolio) incidental consideration. Invests primarily in common INVESTMENT ADVISER: Directed Services, Inc. stocks traded in securities markets throughout the world. INVESTMENT SUBADVISER: Templeton Global Advisors Limited* May invest up to 100% of its total assets in securities *NAME CHANGE AND SUBADVISER CHANGE EFFECTIVE 12/05/05 traded in securities markets outside the United States. Generally invests at least 65% of its total assets in at least three different countries, one of which may be the United States. - ------------------------------------------------------------------------------------------------------------------------------- ING UBS U.S. ALLOCATION PORTFOLIO (Class S) Seeks to maximize total return over the long term by (formerly ING UBS U.S. Balanced Portfolio) allocating its assets among stocks, bonds, short-term INVESTMENT ADVISER: Directed Services, Inc. instruments and other investments. Allocates its assets INVESTMENT SUBADVISER: UBS Global Asset Management among the following classes, or types, of investments: (Americas) Inc. stocks, bonds, and short-term money market debt obligations. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN EQUITY GROWTH PORTFOLIO Seeks long-term capital appreciation. Under normal (Class S) circumstances, at least 80% of the net assets of the INVESTMENT ADVISER: Directed Services, Inc. Portfolio will be invested in equity securities (plus INVESTMENT SUBADVISER: Van Kampen borrowings for investment purposes). Invests primarily in growth-oriented companies. May invest, to a limited extent, in foreign companies that are listed on U.S. exchanges or traded in U.S. markets. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN GLOBAL FRANCHISE PORTFOLIO A non-diversified Portfolio that seeks long-term capital (Class S) appreciation. Invests primarily in equity securities of INVESTMENT ADVISER: Directed Services, Inc. issuers located throughout the world that it believes have, INVESTMENT SUBADVISER: Van Kampen among other things, resilient business franchises and growth potential. Under normal market conditions, invests at least 65% of its total assets in securities of issuers from at least three different countries, which may include the United States. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN GROWTH AND INCOME PORTFOLIO Seeks long-term growth of capital and income. Under normal (Class S) market conditions, investing primarily in what it believes INVESTMENT ADVISER: Directed Services, Inc. to be income-producing equity securities, including common INVESTMENT SUBADVISER: Van Kampen stocks and convertible securities; although investments are also made in non-convertible preferred stocks and debt securities rated "investment grade," which are securities rated within the four highest grades assigned by Standard & Poor's or by Moody's Investors Service, Inc. - -------------------------------------------------------------------------------------------------------------------------------
B8 Landmark - 136957
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN REAL ESTATE PORTFOLIO (Class S) A non-diversified Portfolio that seeks capital appreciation INVESTMENT ADVISER: Directed Services, Inc. and secondarily seeks current income. Invests at least 80% INVESTMENT SUBADVISER: Van Kampen of its assets in equity securities of companies in the U.S. real estate industry that are listed on national exchanges or the National Association of Securities Dealers Automated Quotation System ("NASDAQ"). - ------------------------------------------------------------------------------------------------------------------------------- ING VP INDEX PLUS INTERNATIONAL EQUITY PORTFOLIO (Class S)* Seeks to out perform the total return performance of the INVESTMENT ADVISER: ING Investments, LLC Standard & Poor's 500 Composite Stock Price Index (S&P 500 INVESTMENT SUBADVISER: ING Investment Management Advisors, Index), while maintaining a market level of risk. B.V. *PORTFOLIO AVAILABLE 12/05/05 - ------------------------------------------------------------------------------------------------------------------------------- ING WELLS FARGO MID CAP DISCIPLINED PORTFOLIO (Class S) Seeks long-term capital growth. Normally invests at least (formerly ING Jennison Equity Opportunities Portfolio) 80% of its net assets (plus any borrowings for investment INVESTMENT ADVISER: Directed Services, Inc. purposes) in securities of mid-capitalization companies. INVESTMENT SUBADVISER: Wells Capital Management, Inc. The Portfolio manager defines mid-capitalization companies as those with market capitalizations within the range of companies comprising the Russell Midcap (R) Value Index at the time of purchase. - ------------------------------------------------------------------------------------------------------------------------------- ING WELLS FARGO SMALL CAP DISCIPLINED PORTFOLIO (Class S)* A non-diversified Portfolio that seeks capital appreciation INVESTMENT ADVISER: Directed Services, Inc. and secondarily seeks current income. Invests at least 80% INVESTMENT SUBADVISER: Wells Fargo Funds Management, LLC of its assets in equity securities of companies in the U.S. *PORTFOLIO AVAILABLE 12/05/05 real estate industry that are listed on national exchanges or the National Association of Securities Dealers Automated Quotation System ("NASDAQ"). - ------------------------------------------------------------------------------------------------------------------------------- ING PARTNERS, INC. 151 Farmington Avenue, Hartford, CT 06156-8962 - ------------------------------------------------------------------------------------------------------------------------------- ING BARON SMALL CAP GROWTH PORTFOLIO (Service Class) Seeks capital appreciation. Invests primarily (at least 80% INVESTMENT ADVISER: ING Life Insurance and Annuity Company of total assets under normal circumstances) in securities INVESTMENT SUBADVISER: Bamco, Inc. of smaller companies with market values under $2.5 billion as measured at the time of purchase. - ------------------------------------------------------------------------------------------------------------------------------- ING DAVIS VENTURE VALUE PORTFOLIO (Service Class S)* Seeks long-term growth of capital. Under normal INVESTMENT ADVISER: Directed Services, Inc. circumstances, invests majority of assets in equity INVESTMENT SUBADVISER: Davis Selected Advisers L.P securities issued by large companies with market *PORTFOLIO AVAILABLE 12/05/05 capitalizations of at least 10 billion. May invest a limited portion of its assets in companies of any size in foreign securities and may invest in non-equity securities. - -------------------------------------------------------------------------------------------------------------------------------
B9 Landmark - 136957
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING FUNDAMENTAL RESEARCH PORTFOLIO (Service Class) Seeks to maximize total return through investments in a INVESTMENT ADVISER: ING Life Insurance and Annuity Company diversified portfolio of common stocks and securities INVESTMENT SUBADVISER: ING Investment Management Co. convertible into common stock. Prior to July 5, 2005, invests at least 80% of assets in stocks included in the S&P 500 Index. Effective July 5, 2005, will invest at least 65% of total assets in common stocks and securities convertible into common stocks. May invest principally in common stocks having significant potential for capital appreciation emphasizing stocks of larger companies. May also invest a portion of assets in stocks of mid-sized companies, and up to 25% of assets in stocks of foreign issuers, depending upon market conditions. May also invest in derivative instruments. - ------------------------------------------------------------------------------------------------------------------------------- ING JPMORGAN FLEMING INTERNATIONAL PORTFOLIO Seeks long-term growth of capital. Invests primarily (at (Service Class) least 65% of total assets) in the equity securities of INVESTMENT ADVISER: ING Life Insurance and Annuity Company foreign companies that the subadviser believes have high INVESTMENT SUBADVISER: J.P. Morgan Fleming Asset Management growth potential. Will normally invest in securities of at (London) Ltd. least three different countries other than the U.S. and will invest in both developed and developing markets. - ------------------------------------------------------------------------------------------------------------------------------- ING OPPENHEIMER GLOBAL PORTFOLIO (Service Class) Seeks capital appreciation. Invests mainly in common stocks INVESTMENT ADVISER: ING Life Insurance and Annuity Company of companies in the U.S. and foreign countries. Can invest INVESTMENT SUBADVISER: OppenheimerFund, Inc. without limit in foreign securities in any country, including countries with emerging markets. Currently emphasizes investments in developed markets such as the United States, Western European countries and Japan. May invest in companies of any size, but currently focuses its investments in mid- and large-cap companies. Normally will invest in at least three countries (one of which may be the United States). - ------------------------------------------------------------------------------------------------------------------------------- ING SALOMON BROTHERS AGGRESSIVE GROWTH PORTFOLIO Seeks long-term growth of capital. Invests primarily (at (Service Class) least 80% of net assets under normal circumstances) in INVESTMENT ADVISER: ING Life Insurance and Annuity Company common stocks and related securities, such as preferred INVESTMENT SUBADVISER: Salomon Brothers Asset Management stock, convertible securities and depositary receipts, of Inc. emerging growth companies. May invest in foreign securities (including emerging market securities). - ------------------------------------------------------------------------------------------------------------------------------- ING UBS U.S. LARGE CAP EQUITY PORTFOLIO Seeks long-term growth of capital and future income. Under (Service Class) normal circumstances, invests at least 80% of net assets INVESTMENT ADVISER: ING Life Insurance and Annuity Company (plus borrowings for investment purposes, if any) in equity INVESTMENT SUBADVISER: UBS Global Asset Management securities of U.S. large capitalization companies. (Americas) Inc. Investments in equity securities may include dividend-paying securities, common stock and preferred stock. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN COMSTOCK PORTFOLIO (Service Class) Seeks capital growth and income. Invests in a portfolio of INVESTMENT ADVISER: ING Life Insurance and Annuity Company equity securities, including common stocks, preferred INVESTMENT SUBADVISER: Van Kampen stocks and securities convertible into common and preferred stocks. May invest up to 25% of total assets in securities of foreign issuers and may purchase and sell certain derivative instruments, such as options, futures and options on futures, for various portfolio management purposes. - -------------------------------------------------------------------------------------------------------------------------------
B10 Landmark - 136957
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN EQUITY AND INCOME PORTFOLIO (Service Class) Seeks total return, consisting of long-term capital INVESTMENT ADVISER: ING Life Insurance and Annuity Company appreciation and current income. Normally invests at least INVESTMENT SUBADVISER: Van Kampen 80% of net assets (plus any borrowings for investment purposes) in equity and income securities at the time of investment. Normally invests at least 65% of assets in income producing equity instruments (including common stocks, preferred stocks and convertible securities) and investment grade quality debt securities. May invest up to 25% of total assets in securities of foreign issuers. May purchase and sell certain derivative instruments, such as options, futures contracts, and options on futures contracts, for various portfolio management purposes, including to earn income, to facilitate portfolio management and to mitigate risks. - ------------------------------------------------------------------------------------------------------------------------------- ING VARIABLE INSURANCE TRUST 7337 E. Doubletree Ranch Road, Scottsdale, AZ 85258 - ------------------------------------------------------------------------------------------------------------------------------- ING VP GLOBAL EQUITY DIVIDEND PORTFOLIO Seeks growth of capital with dividend income as a secondary (formerly ING VP Worldwide Growth Portfolio) consideration. Normally invests at least 80% of assets in INVESTMENT ADVISER: ING Investments, LLC equity securities of dividend paying companies. At least INVESTMENT SUBADVISER: ING Investment Management Co. 65% of assets will be invested in equity securities of issuers in at least three countries, one of which may be the U.S., with at least 75% of total assets in common and preferred stocks, warrants and convertible securities. May invest in companies located in countries with emerging securities markets when the fund's subadviser believes they present attractive investment opportunities. - ------------------------------------------------------------------------------------------------------------------------------- ING VARIABLE PORTFOLIOS, INC. 7337 E. Doubletree Ranch Road, Scottsdale, AZ 85258 - ------------------------------------------------------------------------------------------------------------------------------- ING VP INDEX PLUS LARGECAP PORTFOLIO (Class S) Seeks to outperform the total return performance of the INVESTMENT ADVISER: ING Investments, LLC Standard & Poor's 500 Composite Stock Price Index (S&P 500 INVESTMENT SUBADVISER: ING Investment Index), while maintaining a market level of risk. Invests Management Co., at least 80% of assets in stocks included in the S&P 500 Index. The subadviser's objective is to overweight those stocks in the S&P 500 Index that it believes will outperform the index and underweight (or avoid altogether) those stocks it believes will underperform the index. May invest in derivatives. - ------------------------------------------------------------------------------------------------------------------------------- ING VP INDEX PLUS MIDCAP PORTFOLIO (Class S) Seeks to outperform the total return performance of the INVESTMENT ADVISOR: ING Investments, LLC Standard & Poor's MidCap 400 Index (S&P MidCap 400 Index), INVESTMENT SUBADVISER: ING Investment Management Co. while maintaining a market level of risk. Invests at least 80% of assets in stocks included in the S&P MidCap 400 Index. The subadviser's objective is to overweight those stocks in the S&P MidCap 400 Index that it believes will outperform the index and underweight (or avoid altogether) those stocks that it believes will underperform the index. May invest in derivatives. - -------------------------------------------------------------------------------------------------------------------------------
B11 Landmark - 136957
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING VP INDEX PLUS SMALLCAP PORTFOLIO (Class S) Seeks to outperform the total return performance of the INVESTMENT ADVISOR: ING Investments, LLC Standard & Poor's SmallCap 600 Index (S&P 600 Index), while INVESTMENT SUBADVISER: ING Investment Management Co. maintaining a market level of risk. Invests at least 80% of assets in stocks included in the S&P 600 Index. The subadviser's objective is to overweight those stocks in the S&P 600 Index that it believes will outperform the index and underweight (or avoid altogether) those stocks that it believes will underperform the index. May invest in derivatives. - ------------------------------------------------------------------------------------------------------------------------------- ING VARIABLE PRODUCTS TRUST 7337 E. Doubletree Ranch Road, Scottsdale, AZ 85258 - ------------------------------------------------------------------------------------------------------------------------------- ING VP FINANCIAL SERVICES PORTFOLIO (Class S) Seeks long-term capital appreciation. Under normal INVESTMENT ADVISER: ING Investments, LLC conditions, invests at least 80% of assets in equity INVESTMENT SUBADVISER: ING Investment Management Co. securities and equity equivalent securities of companies principally engaged in the financial services industry. Equity securities in which the Portfolio invests are normally common stocks, but may also include preferred stocks, warrants and convertible securities. May invest in initial public offerings. - ------------------------------------------------------------------------------------------------------------------------------- ING VP SMALLCAP OPPORTUNITIES PORTFOLIO (Class S) Seeks long-term capital appreciation. Normally invests at INVESTMENT ADVISER: ING Investments, LLC least 80% of assets in the common stock of smaller, INVESTMENT SUBADVISER: ING Investment Management Co. lesser-known U.S. companies that the sub-adviser believes have above average prospects for growth. For this Portfolio, smaller companies are those with market capitalizations that fall within the range of companies in the Russell 2000 Growth Index. - -------------------------------------------------------------------------------------------------------------------------------
B12 Landmark - 136957
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING VP INTERMEDIATE BOND PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------------- ING VP INTERMEDIATE BOND PORTFOLIO (Class S) Seeks to maximize total return consistent with reasonable (formerly ING VP Bond Portfolio) risk, through investment in a diversified portfolio INVESTMENT ADVISER: ING Investments, LLC consisting primarily of debt securities. It is anticipated INVESTMENT SUBADVISER: ING Investment Management Co., that capital appreciation and investment income will both be major factors in achieving total return. Under normal market conditions, the Portfolio invests at least 80% of its assets in a portfolio of bonds, including but not limited to corporate, government and mortgage bonds, which, at the time of investment, are rated investment grade or have an equivalent rating by a nationally recognized statistical rating organization, or of comparable quality if unrated. May also invest in: preferred stocks; high quality money market instruments; municipal bonds; debt securities of foreign issuers; mortgage- and asset-backed securities; and options and futures contracts involving securities, securities indices and interest rates. Although the portfolio may invest in high yield debt securities rated below investment grade, it seeks to maintain a minimum average portfolio quality of at least investment grade. - ------------------------------------------------------------------------------------------------------------------------------- AIM VARIABLE INSURANCE FUNDS 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173 - ------------------------------------------------------------------------------------------------------------------------------- AIM V.I. LEISURE FUND (Series I) Seeks capital growth. Normally invests at least 80% of net (formerly INVESCO VIF - Leisure Fund) assets in the equity securities and equity-related INVESTMENT ADVISER: A I M Advisors, Inc. instruments of companies engaged in the design, production, and distribution of products related to the leisure activities. - ------------------------------------------------------------------------------------------------------------------------------- FIDELITY(R) VARIABLE INSURANCE PRODUCTS 82 Devonshire Street, Boston, MA 02109 - ------------------------------------------------------------------------------------------------------------------------------- FIDELITY(R) VIP CONTRAFUND PORTFOLIO (Service Class 2) Seeks long-term capital appreciation. Normally invests INVESTMENT ADVISER: Fidelity Management & Research Co. primarily in common stocks of companies whose value the INVESTMENT SUBADVISER: FMR Co., Inc. Portfolio's investment adviser believes is not fully recognized by the public. - ------------------------------------------------------------------------------------------------------------------------------- FIDELITY(R) VIP EQUITY-INCOME PORTFOLIO Seeks reasonable income. Also considers the potential for (Service Class 2) capital appreciation. Seeks to achieve a yield which INVESTMENT ADVISER: Fidelity Management & Research Co. exceeds the composite yield on the securities comprising INVESTMENT SUBADVISER: FMR Co., Inc. the Standard & Poor's 500(SM) Index. Normally invests at least 80% of total assets in income-producing equity securities (which tends to lead to investments in large cap "value" stocks). - ------------------------------------------------------------------------------------------------------------------------------- LIBERTY VARIABLE INSURANCE TRUST 600 Atlantic Avenue, Boston, MA 02210 - ------------------------------------------------------------------------------------------------------------------------------- COLONIAL SMALL CAP VALUE FUND (Class B) The Fund seeks long-term growth by investing primarily in INVESTMENT ADVISER: Columbia Management Advisers, Inc. smaller capitalization (small-cap) equities. - -------------------------------------------------------------------------------------------------------------------------------
B13 Landmark - 136957
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- PROFUNDS VP 3435 Stelzer Road, Suite 1000, P.O. Box 182100, Columbus, OH 43218-2000 - ------------------------------------------------------------------------------------------------------------------------------- PROFUND VP BULL Seeks daily investment results, before fees and expenses, INVESTMENT ADVISER: ProFund Advisors LLC that correspond to the daily performance of the S&P 500 Index. - ------------------------------------------------------------------------------------------------------------------------------- PROFUND VP EUROPE 30 Seeks daily investment results, before fees and expenses, INVESTMENT ADVISER: ProFund Advisors LLC that correspond to the daily performance of the ProFunds Europe 30 Index. - ------------------------------------------------------------------------------------------------------------------------------- PROFUND VP RISING RATES OPPORTUNITY Seeks daily investment results, before fees and expenses, INVESTMENT ADVISER: ProFund Advisors LLC that correspond to one and one-quarter times (125%) the inverse (opposite) of the daily price movement of the most recently issued 30-year U.S. Treasury Bond ("Long Bond"). - ------------------------------------------------------------------------------------------------------------------------------- PROFUND VP SMALL-CAP Seeks daily investment results, before fees and expenses, INVESTMENT ADVISER: ProFund Advisors LLC that correspond to the daily performance of the Russell 2000 Index. - -------------------------------------------------------------------------------------------------------------------------------
B14 Landmark - 136957 THE FOLLOWING PORTFOLIOS ARE WITHIN THE CURRENT GROUP OF ING PORTFOLIOS INCLUDED IN ONE OR MORE OF THE ING LIFESTYLE PORTFOLIOS: ING AllianceBernstein Mid Cap Growth Portfolio ING JPMorgan Emerging Markets Equity Portfolio ING JPMorgan Fleming International Portfolio ING JPMorgan Value Opportunities Portfolio ING Julius Baer Foreign Portfolio ING Legg Mason Value Portfolio ING Liquid Assets Portfolio ING Lord Abbett Affiliated Portfolio ING PIMCO Core Bond Portfolio ING PIMCO High Yield Portfolio ING Pioneer Mid Cap Value Portfolio ING Salomon Brothers Aggressive Growth Portfolio ING Salomon Brothers All Cap Portfolio ING T. Rowe Price Growth Equity Portfolio ING Van Kampen Comstock Portfolio ING Van Kampen Real Estate Portfolio ING VP High Yield Bond Portfolio ING VP Index Plus LargeCap Portfolio ING VP Index Plus MidCap Portfolio ING VP Index Plus SmallCap Portfolio ING VP Intermediate Bond Portfolio ING VP Small Company Portfolio THE FOLLOWING PORTFOLIOS ARE THOSE WITHIN THE GROUP OF ING PORTFOLIOS THAT MAY BE INCLUDED IN ONE OR MORE OF THE ING LIFESTYLE PORTFOLIOS: ING AllianceBernstein Mid Cap Growth Portfolio ING American Century Large Company Value Portfolio ING American Century Select Portfolio ING Capital Guardian Small/Mid Cap Portfolio ING Capital Guardian U.S. Equities Portfolio ING Eagle Asset Capital Appreciation Portfolio ING Evergreen Omega Portfolio ING FMR(SM) Diversified Mid Cap Portfolio ING FMR(SM) Earnings Growth Portfolio ING Fundamental Research Portfolio ING International Portfolio ING Janus Contrarian Portfolio ING JPMorgan Emerging Markets Equity Portfolio ING JPMorgan Fleming International Portfolio ING JPMorgan Mid Cap Value Portfolio ING JPMorgan Small Cap Equity Portfolio ING JPMorgan Value Opportunities Portfolio ING Julius Baer Foreign Portfolio ING Legg Mason Value Portfolio ING Liquid Asset Portfolio ING Lord Abbett Affiliated Portfolio ING Marsico Growth Portfolio ING Marsico International Opportunities Portfolio ING Mercury Large Cap Growth Portfolio ING Mercury Large Cap Value Portfolio ING MFS Capital Opportunities Portfolio ING MFS Mid Cap Growth Portfolio ING MFS Total Return Portfolio ING OpCap Balanced Value Portfolio ING Oppenheimer Global Portfolio ING Oppenheimer Main Street Portfolio(R) ING Oppenheimer Strategic Income Portfolio ING PIMCO Core Bond Portfolio ING PIMCO High Yield Portfolio ING Pioneer Fund Portfolio ING Pioneer Mid Cap Value Portfolio ING Salomon Brothers Aggressive Growth Portfolio ING Salomon Brothers All Cap Portfolio ING T. Rowe Price Capital Appreciation Portfolio ING T. Rowe Price Diversified Mid Cap Growth Portfolio ING T. Rowe Price Equity Income Portfolio ING T. Rowe Price Growth Equity Portfolio ING Templeton Global Growth Portfolio ING UBS U.S. Large Cap Equity Portfolio ING Van Kampen Comstock Portfolio ING Van Kampen Equity and Income Portfolio ING Van Kampen Equity Growth Portfolio ING Van Kampen Global Franchise Portfolio ING Van Kampen Growth and Income Portfolio ING Van Kampen Real Estate Portfolio ING VP Balanced Portfolio ING VP Growth and Income Portfolio ING VP Growth Portfolio ING VP High Yield Bond Portfolio ING VP Index Plus LargeCap Portfolio ING VP Index Plus MidCap Portfolio ING VP Index Plus SmallCap Portfolio ING VP Intermediate Bond Portfolio ING VP International Equity Portfolio ING VP MidCap Opportunities Portfolio ING VP Real Estate Portfolio ING VP Small Company Portfolio ING VP SmallCap Opportunities Portfolio ING VP Value Opportunity Portfolio ING Wells Fargo Mid Cap Disciplined Portfolio B15 Landmark - 136957 ALL OF THE ABOVE PORTFOLIOS ARE SERVICE CLASS SHARES. THE PROSPECTUS FOR THE ING LIFESTYLE PORTFOLIOS CONTAINS INFORMATION ABOUT THE UNDERLYING PORTFOLIOS INCLUDED IN THE ING LIFESTYLE PORTFOLIOS. THE FOLLOWING PORTFOLIOS ARE INCLUDED IN ONE OR MORE OF THE MARKETPRO PORTFOLIOS: ING FMR Diversified MidCap Portfolio ING JPMorgan Fleming International Equity Portfolio ING Legg Mason Value Portfolio ING Marsico Growth ING Mercury Large Cap Value Portfolio ING Salomon Brothers Aggressive Growth Portfolio ING T. Rowe Price Capital Appreciation Portfolio ING Van Kampen Equity and Income Portfolio ING VP Intermediate Bond Portfolio The prospectus for the ING MarketPro Portfolio contains additional information about the underlying portfolios included in the ING MarketPro Portfolio. B16 Landmark - 136957 - -------------------------------------------------------------------------------- APPENDIX C - -------------------------------------------------------------------------------- FIXED ACCOUNT II Fixed Account II ("Fixed Account") is an optional fixed interest allocation offered during the accumulation phase of your variable annuity contract between you and ING USA Annuity and Life Insurance Company ("ING USA," the "Company," "we" or "our"). The Fixed Account, which is a segregated asset account of ING USA, provides a means for you to invest on a tax-deferred basis and earn a guaranteed interest for guaranteed interest periods (Fixed Interest Allocation(s)). We will credit your Fixed Interest Allocation(s) with a fixed rate of interest. We currently offer Fixed Interest Allocations with guaranteed interest periods that may vary by maturity, state of issue and rate. In addition, we may offer DCA Fixed Interest Allocations, which are 6-month and 1-year Fixed Interest Allocations available exclusively in connection with our dollar cost averaging program. We may offer additional guaranteed interest periods in some or all states, may not offer all guaranteed interest periods on all contracts or in all states and the rates for a given guaranteed interest period may vary among contracts. We set the interest rates periodically. We may credit a different interest rate for each interest period. The interest you earn in the Fixed Account as well as your principal is guaranteed by ING USA, as long as you do not take your money out before the maturity date for the applicable interest period. If you take your money out from a Fixed Interest Allocation more than 30 days before the applicable maturity date, we will apply a market value adjustment ("Market Value Adjustment"). A Market Value Adjustment could increase or decrease your contract value and/or the amount you take out. A surrender charge may also apply to withdrawals from your contract. You bear the risk that you may receive less than your principal because of the Market Value Adjustment. For contracts sold in some states, not all Fixed Interest Allocations are available. You have a right to return a contract for a refund as described in the prospectus. THE FIXED ACCOUNT You may allocate premium payments and transfer your Contract value to the guaranteed interest periods of the Fixed Account during the accumulation period as described in the prospectus. Every time you allocate money to the Fixed Account, we set up a Fixed Interest Allocation for the guaranteed interest period you select. We will credit your Fixed Interest Allocation with a guaranteed interest rate for the interest period you select, so long as you do not withdraw money from that Fixed Interest Allocation before the end of the guaranteed interest period. Each guaranteed interest period ends on its maturity date which is the last day of the month in which the interest period is scheduled to expire. Your Contract value in the Fixed Account is the sum of your Fixed Interest Allocations and the interest credited as adjusted for any withdrawals, transfers or other charges we may impose, including any Market Value Adjustment. Your Fixed Interest Allocation will be credited with the guaranteed interest rate in effect for the guaranteed interest period you selected when we receive and accept your premium or reallocation of Contract value. We will credit interest daily at a rate that yields the quoted guaranteed interest rate. If you surrender, withdraw, transfer or annuitize your investment in a Fixed Interest Allocation more than 30 days before the end of the guaranteed interest period, we will apply a Market Value Adjustment to the transaction. A Market Value Adjustment could increase or decrease the amount you surrender, withdraw, transfer or annuitize, depending on current interest rates at the time of the transaction. You bear the risk that you may receive less than your principal because of the Market Value Adjustment. GUARANTEED INTEREST RATES Each Fixed Interest Allocation will have an interest rate that is guaranteed as long as you do not take your money out until its maturity date. We do not have a specific formula for establishing the guaranteed interest rates for the different guaranteed interest periods. We determine guaranteed interest rates at our sole discretion. We cannot predict the level of future interest rates. For more information see the prospectus for Fixed Account II. C1 Landmark - 136957 TRANSFERS FROM A FIXED INTEREST ALLOCATION You may transfer your Contract value in a Fixed Interest Allocation to one or more new Fixed Interest Allocations with new guaranteed interest periods, or to any of the subaccounts of ING USA's Separate Account B as described in the prospectus on the maturity date of a guaranteed interest period. The minimum amount that you can transfer to or from any Fixed Interest Allocation is $100. Transfers from a Fixed Interest Allocation may be subject to a Market Value Adjustment. If you have a special Fixed Interest Allocation that was offered exclusively with our dollar cost averaging program, canceling dollar cost averaging will cause a transfer of the entire Contract value in such Fixed Interest Allocation to the Liquid Assets subaccount, and such a transfer will be subject to a Market Value Adjustment. Please be aware that the benefit we pay under certain optional benefit riders will be adjusted by any transfers you make to and from the Fixed Interest Allocations during specified periods while the rider is in effect. See "Optional Riders" in the prospectus. WITHDRAWALS FROM A FIXED INTEREST ALLOCATION During the accumulation phase, you may withdraw a portion of your Contract value in any Fixed Interest Allocation. You may make systematic withdrawals of only the interest earned during the prior month, quarter or year, depending on the frequency chosen, from a Fixed Interest Allocation under our systematic withdrawal option. A withdrawal from a Fixed Interest Allocation may be subject to a Market Value Adjustment and a contract surrender charge. Be aware that withdrawals may have federal income tax consequences, including a 10% penalty tax, as well as state income tax consequences. Please be aware that the benefit we pay under any of the optional benefit riders will be reduced by any withdrawals you made from the Fixed Interest Allocations during the period while the rider is in effect. See "Optional Riders" in the prospectus. MARKET VALUE ADJUSTMENT A Market Value Adjustment may decrease, increase or have no effect on your Contract value. We will apply a Market Value Adjustment (i) whenever you withdraw or transfer money from a Fixed Interest Allocation (unless made within 30 days before the maturity date of the applicable guaranteed interest period, or under the systematic withdrawal or dollar cost averaging program) and (ii) if on the annuity start date a guaranteed interest period for any Fixed Interest Allocation does not end on or within 30 days of the annuity start date. A Market Value Adjustment may be positive, negative or result in no change. In general, if interest rates are rising, you bear the risk that any Market Value Adjustment will likely be negative and reduce your Contract value. On the other hand, if interest rates are falling, it is more likely that you will receive a positive Market Value Adjustment that increases your Contract value. In the event of a full surrender, transfer or annuitization from a Fixed Interest Allocation, we will add or subtract any Market Value Adjustment from the amount surrendered, transferred or annuitized. In the event of a partial withdrawal, transfer or annuitization, we will add or subtract any Market Value Adjustment from the total amount withdrawn, transferred or annuitized in order to provide the amount requested. If a negative Market Value Adjustment exceeds your Contract value in the Fixed Interest Allocation, we will consider your request to be a full surrender, transfer or annuitization of the Fixed Interest Allocation. CONTRACT VALUE IN THE FIXED INTEREST ALLOCATIONS On the contract date, the Contract value in any Fixed Interest Allocation in which you are invested is equal to the portion of the initial premium paid and designated for allocation to the Fixed Interest Allocation. On each business day after the contract date, we calculate the amount of Contract value in each Fixed Interest Allocation as follows: (1) We take the Contract value in the Fixed Interest Allocation at the end of the preceding business day. (2) We credit a daily rate of interest on (1) at the guaranteed rate since the preceding business day. C2 Landmark - 136957 (3) We add (1) and (2). (4) We subtract from (3) any transfers from that Fixed Interest Allocation. (5) We subtract from (4) any withdrawals, and then subtract any contract fees (including any rider charges) and premium taxes. Additional premium payments and transfers allocated to the Fixed Account will be placed in a new Fixed Interest Allocation. The Contract value on the date of allocation will be the amount allocated. Several examples which illustrate how the Market Value Adjustment works are included in the prospectus for the Fixed Account. CASH SURRENDER VALUE The cash surrender value is the amount you receive when you surrender the Contract. The cash surrender value of amounts allocated to the Fixed Account will fluctuate daily based on the interest credited to Fixed Interest Allocations, any Market Value Adjustment, and any surrender charge. We do not guarantee any minimum cash surrender value. On any date during the accumulation phase, we calculate the cash surrender value as follows: we start with your Contract value, then we adjust for any Market Value Adjustment, and then we deduct any surrender charge, any charge for premium taxes, the annual contract administrative fee (unless waived), and any optional benefit rider charge, and any other charges incurred but not yet deducted. DOLLAR COST AVERAGING FROM FIXED INTEREST ALLOCATIONS You may elect to participate in our dollar cost averaging program if you have at least $1,200 of Contract value in Fixed Account Interest Allocations with a guaranteed interest period of 1 year or less. The Fixed Interest Allocations serve as the source accounts from which we will, on a monthly basis, automatically transfer a set dollar amount of money to other Fixed Interest Allocations or contract investment portfolio subaccounts selected by you. The dollar cost averaging program is designed to lessen the impact of market fluctuation on your investment. Since we transfer the same dollar amount to subaccounts each month, more units of a subaccount are purchased if the value of its unit is low and fewer units are purchased if the value of its unit is high. Therefore, a lower than average value per unit may be achieved over the long term. However, we cannot guarantee this. When you elect the dollar cost averaging program, you are continuously investing in securities regardless of fluctuating price levels. You should consider your tolerance for investing through periods of fluctuating price levels. You elect the dollar amount you want transferred under this program. Each monthly transfer must be at least $100. You may change the transfer amount once each contract year. Transfers from a Fixed Interest Allocation under the dollar cost averaging program are not subject to a Market Value Adjustment. We may in the future offer additional subaccounts or withdraw any subaccount or Fixed Interest Allocation to or from the dollar cost averaging program or otherwise modify, suspend or terminate this program. Of course, such change will not affect any dollar cost averaging programs in operation at the time. SUSPENSION OF PAYMENTS We have the right to delay payment of amounts from a Fixed Interest Allocation for up to 6 months. MORE INFORMATION See the prospectus for Fixed Account II. C3 Landmark - 136957 - -------------------------------------------------------------------------------- APPENDIX D - -------------------------------------------------------------------------------- FIXED INTEREST DIVISION A Fixed Interest Division option is available through the group and individual deferred variable annuity contracts offered by ING USA Annuity and Life Insurance Company. The Fixed Interest Division is part of the ING USA General Account. Interests in the Fixed Interest Division have not been registered under the Securities Act of 1933, and neither the Fixed Interest Division nor the General Account are registered under the Investment Company Act of 1940. Interests in the Fixed Interest Division are offered in certain states through an Offering Brochure, dated April 29, 2005. The Fixed Interest Division is different from the Fixed Account which is described in the prospectus but which is not available in your state. If you are unsure whether the Fixed Account is available in your state, please contact our Customer Service Center at (800) 366-0066. When reading through the Prospectus, the Fixed Interest Division should be counted among the various investment options available for the allocation of your premiums, in lieu of the Fixed Account. The Fixed Interest Division may not be available in some states. Some restrictions may apply. You will find more complete information relating to the Fixed Interest Division in the Offering Brochure. Please read the Offering Brochure carefully before you invest in the Fixed Interest Division. D1 Landmark - 136957 - -------------------------------------------------------------------------------- APPENDIX E - -------------------------------------------------------------------------------- SURRENDER CHARGE FOR EXCESS WITHDRAWALS EXAMPLE The following assumes you made an initial premium payment of $25,000 and additional premium payments of $25,000 in each of the second and third contract years, for total premium payments under the Contract of $75,000. It also assumes a withdrawal at the beginning of the third contract year of 30% of the contract value of $90,000. In this example, $15,000 (the greater of earnings less any previous withdrawals, which is $90,000 - $75,000, which equals $15,000, and 10% of premium payments, which is $7,500) is the maximum free withdrawal amount that you may withdraw without a surrender charge. The total amount withdrawn from the contract would be $27,000 ($90,000 x .30). Therefore, $12,000 ($27,000 - $15,000) is considered an excess withdrawal and would be subject to a 4% surrender charge of $480 ($12,000 x .04). This example does not take into account any Market Value Adjustment or deduction of any premium taxes. E1 Landmark - 136957 - -------------------------------------------------------------------------------- APPENDIX F - -------------------------------------------------------------------------------- SPECIAL FUNDS AND EXCLUDED FUNDS EXAMPLES EXAMPLE #1: The following examples are intended to demonstrate the impact on your 7% Solution Death Benefit Element ("7% MGDB") of allocating your Contract Value to Special Funds.
- ------------------------------------------------------------------------------------------------------------------------------ 7% MGDB IF 50% INVESTED 7% MGDB IF 0% INVESTED 7% MGDB IF 100% INVESTED IN SPECIAL FUNDS IN SPECIAL FUNDS IN SPECIAL FUNDS - ------------------------------------------------------------------------------------------------------------------------------ END OF YR COVERED SPECIAL TOTAL END OF YR COVERED SPECIAL TOTAL END OF YR COVERED SPECIAL TOTAL 0 500 500 1,000 0 1,000 -- 1,000 0 0 1,000 1,000 1 535 500 1,035 1 1,070 -- 1,070 1 0 1,000 1,000 2 572 500 1,072 2 1,145 -- 1,145 2 0 1,000 1,000 3 613 500 1,113 3 1,225 -- 1,225 3 0 1,000 1,000 4 655 500 1,155 4 1,311 -- 1,311 4 0 1,000 1,000 5 701 500 1,201 5 1,403 -- 1,403 5 0 1,000 1,000 6 750 500 1,250 6 1,501 -- 1,501 6 0 1,000 1,000 7 803 500 1,303 7 1,606 -- 1,606 7 0 1,000 1,000 8 859 500 1,359 8 1,718 -- 1,718 8 0 1,000 1,000 9 919 500 1,419 9 1,838 -- 1,838 9 0 1,000 1,000 10 984 500 1,484 10 1,967 -- 1,967 10 0 1,000 1,000 - ------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 7% MGDB IF TRANSFERRED TO 7% MGDB IF TRANSFERRED TO SPECIAL FUNDS COVERED FUNDS AT THE BEGINNING OF YEAR 6 AT THE BEGINNING OF YEAR 6 - -------------------------------------------------------------------------------- END OF YR COVERED SPECIAL TOTAL END OF YR COVERED SPECIAL TOTAL 0 1,000 -- 1,000 0 -- 1,000 1,000 1 1,070 -- 1,070 1 -- 1,000 1,000 2 1,145 -- 1,145 2 -- 1,000 1,000 3 1,225 -- 1,225 3 -- 1,000 1,000 4 1,311 -- 1,311 4 -- 1,000 1,000 5 1,403 -- 1,403 5 -- 1,000 1,000 6 -- 1,403 1,403 6 1,070 -- 1,070 7 -- 1,403 1,403 7 1,145 -- 1,145 8 -- 1,403 1,403 8 1,225 -- 1,225 9 -- 1,403 1,403 9 1,311 -- 1,311 10 -- 1,403 1,403 10 1,403 -- 1,403 - -------------------------------------------------------------------------------- F1 Landmark - 136957 EXAMPLE #2: The following examples are intended to demonstrate the impact on your 7% Solution Death Benefit Element ("7% MGDB") of allocating your Contract Value to Excluded Funds. - -------------------------------------------------------------------------------- 7% MGDB IF 50% INVESTED IN EXCLUDED FUNDS - -------------------------------------------------------------------------------- Covered Excluded Total -------------------------------------------------------- Death End of Yr 7% MGDB AV "7% MGDB" AV 7% MGDB AV Benefit 0 500 500 500 500 1,000 1,000 1,000 1 535 510 535 510 1,045 1,020 1,045 2 572 490 572 490 1,062 980 1,062 3 613 520 613 520 1,133 1,040 1,133 4 655 550 655 550 1,205 1,100 1,205 5 701 450 701 450 1,151 900 1,151 6 750 525 750 525 1,275 1,050 1,275 7 803 600 803 600 1,403 1,200 1,403 8 859 750 859 750 1,609 1,500 1,609 9 919 500 919 500 1,419 1,000 1,419 10 984 300 984 300 1,284 600 1,284 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 7% MGDB IF 0% INVESTED 7% MGDB IF 100% INVESTED IN EXCLUDED FUNDS IN EXCLUDED FUNDS - -------------------------------------------------------------------------------- Covered Excluded -------------------- --------------------- Death Death End of Yr 7% MGDB AV Benefit End of Yr "7% MGDB" AV Benefit 0 1,000 1,000 1,000 0 1,000 1,000 1,000 1 1,070 1,020 1,070 1 1,070 1,020 1,020 2 1,145 980 1,145 2 1,145 980 980 3 1,225 1,040 1,225 3 1,225 1,040 1,040 4 1,311 1,100 1,311 4 1,311 1,100 1,100 5 1,403 900 1,403 5 1,403 900 900 6 1,501 1,050 1,501 6 1,501 1,050 1,050 7 1,606 1,200 1,606 7 1,606 1,200 1,200 8 1,718 1,500 1,718 8 1,718 1,500 1,500 9 1,838 1,000 1,838 9 1,838 1,000 1,000 10 1,967 600 1,967 10 1,967 600 600 - -------------------------------------------------------------------------------- Note: AV are hypothetical illustrative values. Not a projection. "7% MGDB" for Excluded funds is notional. Not payable as a benefit. Death Benefit for Excluded Funds equals Accumulation Value (AV) F2 Landmark - 136957 - ------------------------------------------------------------------------------- TRANSFER FROM COVERED FUNDS TO EXCLUDED FUNDS AT THE BEGINNING OF YEAR 6 - ------------------------------------------------------------------------------- Covered Excluded Total --------------------------------------------------------- Death End of Yr 7% MGDB AV "7% MGDB" AV 7% MGDB AV Benefit -- 1,000 1,000 -- -- 1,000 1,000 1,000 1 1,050 1,020 -- -- 1,050 1,020 1,050 2 1,103 980 -- -- 1,103 980 1,103 3 1,158 1,040 -- -- 1,158 1,040 1,158 4 1,216 1,100 -- -- 1,216 1,100 1,216 5 1,276 900 -- -- 1,276 900 1,276 6 -- -- 1,340 1,050 1,050 1,050 1,050 7 -- -- 1,407 1,200 1,200 1,200 1,200 8 -- -- 1,477 1,500 1,500 1,500 1,500 9 -- -- 1,551 1,000 1,000 1,000 1,000 10 -- -- 1,629 600 600 600 600 - -------------------------------------------------------------------------------- Note: 7% MGDB transferred to Excluded Funds equals the 7% MGDB in Covered Funds (or pro-rata portion thereof for partial transfer). Transfers from Special Funds to Excluded Funds work the same as Covered to Excluded (except 7% MGDB in Special Funds does not accumulate). - ------------------------------------------------------------------------------- TRANSFER FROM EXCLUDED FUNDS TO COVERED FUNDS AT THE BEGINNING OF YEAR 6 - ------------------------------------------------------------------------------- Covered Excluded Total --------------------------------------------------------- Death End of Yr 7% MGDB AV "7% MGDB" AV 7% MGDB AV Benefit -- -- -- 1,000 1,000 1,000 1,000 1,000 1 -- -- 1,050 1,020 1,020 1,020 1,020 2 -- -- 1,103 980 980 980 980 3 -- -- 1,158 1,040 1,040 1,040 1,040 4 -- -- 1,216 1,100 1,100 1,100 1,100 5 -- -- 1,276 900 900 900 900 6 945 1,050 -- -- 945 1,050 1,050 7 992 1,200 -- -- 992 1,200 1,200 8 1,042 1,500 -- -- 1,042 1,500 1,500 9 1,094 1,000 -- -- 1,094 1,000 1,094 10 1,149 600 -- -- 1,149 600 1,149 - ------------------------------------------------------------------------------- Note: 7% MGDB transferred to Covered Funds is the lesser of 7% MGDB in Excluded Funds (or portion thereof for partial transfer) and AV transferred to Covered Funds. Transfers from Excluded Funds to Special Funds work the same as Excluded to Covered (except 7% MGDB in Special Funds does not accumulate). F3 Landmark - 136957 - -------------------------------------------------------------------------------- APPENDIX G - -------------------------------------------------------------------------------- EXAMPLES OF MINIMUM GUARANTEED INCOME BENEFIT CALCULATION EXAMPLE 1 CONTRACT WITHOUT CONTRACT WITH AGE THE MGIB RIDER THE MGIB RIDER - --- -------------- -------------- 55 Initial Value $100,000 $100,000 Accumulation Rate 0.0% 0.00% Rider Charge 0.0% 0.75% 65 Contract Value $100,000 $89,167 Contract Annuity Factor 4.71 4.71 Monthly Income $471.00 $419.98 MGIB Rollup n/a $196,715 MGIB Ratchet n/a $100,000 MGIB Annuity Factor n/a 4.43 MGIB Income N/A $820.30 Income $471.00 $871.44 EXAMPLE 2 CONTRACT WITHOUT CONTRACT WITH AGE THE MGIB RIDER THE MGIB RIDER - --- -------------- -------------- 55 Initial Value $100,000 $100,000 Accumulation Rate 3.0% 3.0% Rider Charge 0.0% 0.75% 65 Contract Value $134,392 $122,019 Contract Annuity Factor 4.71 4.71 Monthly Income $632.98 $574.70 MGIB Rollup n/a $196,715 MGIB Ratchet n/a $122,019 MGIB Annuity Factor n/a 4.43 MGIB Income N/A $871.44 Income $632.98 $871.44 G1 Landmark - 136957 EXAMPLE 3 CONTRACT WITHOUT CONTRACT WITH AGE THE MGIB RIDER THE MGIB RIDER - --- -------------- -------------- 55 Initial Value $100,000 $100,000 Accumulation Rate 8.0% 8.0% Rider Charge 0.0% 0.75% 65 Contract Value $215,892 $200,423 Contract Annuity Factor 4.71 4.71 Monthly Income $1,016.85 $943.99 MGIB Rollup n/a $196,715 MGIB Ratchet n/a $200,423 MGIB Annuity Factor n/a 4.43 MGIB Income N/A $887.87 Income $1,016.85 $887.87 The Accumulation Rates shown under "Contract" are hypothetical and intended to illustrate various market conditions. These rates are assumed to be net of all fees and charges. Fees and charges are not assessed against the MGIB Rollup Rate. G2 Landmark - 136957 - -------------------------------------------------------------------------------- APPENDIX H - -------------------------------------------------------------------------------- ING LIFEPAY PARTIAL WITHDRAWAL AMOUNT EXAMPLES The following are examples of adjustments to the Maximum Annual Withdrawal ("MAW") amount for withdrawals in excess of the MAW: ILLUSTRATION 1: ADJUSTMENT TO THE MAXIMUM ANNUAL WITHDRAWAL ("MAW") AMOUNT FOR A WITHDRAWAL IN EXCESS OF THE MAW, INCLUDING SURRENDER AND/OR MVA CHARGES. Assume the MAW is $5,000. The first withdrawal taken during the contract year is $3,000 net, with $500 of surrender and/or MVA charges. The MAW is not exceeded. The next withdrawal taken during the contract year is $1,500 net, with $300 of surrender and/or MVA charges. The MAW is not exceeded because total net withdrawals, $4,500, do not exceed the MAW, $5,000. The next withdrawal taken during the contract year is $1,500 net, with $200 of surrender and/or MVA charges. Because total net withdrawals taken, $6,000, exceed the MAW, $5,000, then there is an adjustment to the MAW. Total gross withdrawals during the contract year are $7,000 ($3,000 + $500 + $1,500 + $300 + $1,500 + $200). The adjustment is the lesser of the amount by which the total gross withdrawals for the year exceed the MAW, $2,000, and the amount of the current gross withdrawal, $1,700. If the Account Value before this withdrawal is $50,000, then the MAW is reduced by 3.40% ($1,700 / $50,000) to $4,830 ((1 - 3.40%) * $5,000) ILLUSTRATION 2: ADJUSTMENT TO THE MAW AMOUNT FOR A WITHDRAWAL IN EXCESS OF THE MAW. Assume the MAW is $5,000. The first withdrawal taken during the contract year is $3,000 net, with $0 of surrender and/or MVA charges. The MAW is not exceeded. The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. The MAW is not exceeded because total net withdrawals, $4,500, do not exceed the MAW, $5,000. The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. Because total net withdrawals taken, $6,000, exceed the MAW, $5,000, there is an adjustment to the MAW. Total gross withdrawals during the contract year are $6,000 ($3,000 + $1,500 + $1,500). The adjustment is the lesser of the amount by which the total gross withdrawals for the year exceed the MAW, $1,000, and the amount of the current gross withdrawal, $1,500. If the Account Value after the part of the gross withdrawal that was within the MAW, $500, is $49,500, then the MAW is reduced by 2.02% ($1,000 / $49,500) to $4,899 ((1 - 2.02%) * $5,000) H1 Landmark - 136957 ILLUSTRATION 3: A WITHDRAWAL EXCEEDS THE MAW AMOUNT BUT DOES NOT EXCEED THE ADDITIONAL WITHDRAWAL AMOUNT ("AWA"). Assume the MAW is $5,000. On January 31, the RMD for the current calendar year applicable to this contract is determined to be $6,000. The AWA is set equal to the excess of this amount above the MAW, $1,000 ($6,000 - $5,000). The first withdrawal taken during the contract year is $3,000 net, with $0 of surrender and/or MVA charges. The MAW is not exceeded. The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. The MAW is not exceeded because total net withdrawals, $4,500, do not exceed the MAW, $5,000. The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. Total net withdrawals taken, $6,000, exceed the MAW, $5,000, however, the MAW is not adjusted until the AWA is exhausted. The amount by which total net withdrawals taken exceed the MAW, $1,000 ($6,000 - $5,000), is the same as the AWA, so no adjustment to the MAW is made. If total net withdrawals taken had exceeded the sum of the MAW and the AWA, then an adjustment would be made to the MAW. ILLUSTRATION 4: THE RESET OPTION IS UTILIZED. Assume the MAW is $5,000 and the MAW percentage is 5%. One year after the first withdrawal is taken, the contract value has increased to $120,000, and the Reset Option is utilized. The MAW is now $6,000 ($120,000 * 5%). One year after the Reset Option was first utilized, the contract value has increased further to $130,000. The Reset Option is utilized again, and the MAW is now $6,500 ($130,000 * 5%). H2 Landmark - 136957 - -------------------------------------------------------------------------------- APPENDIX I - -------------------------------------------------------------------------------- MINIMUM GUARANTEED WITHDRAWAL BENEFIT (APPLICABLE TO CONTRACTS ISSUED IN STATES WHERE ING LIFEPAY IS NOT AVAILABLE) MINIMUM GUARANTEED WITHDRAWAL BENEFIT RIDER (MGWB). The MGWB rider, marketed under the name, ING PrincipalGuard Withdrawal Benefit, is an optional benefit which guarantees that if your contract value is reduced to zero, you will receive periodic payments. The amount of the periodic payments is based on the amount in the MGWB Withdrawal Account. ONLY PREMIUMS ADDED TO YOUR CONTRACT DURING THE FIRST TWO-YEAR PERIOD AFTER YOUR RIDER DATE ARE INCLUDED IN THE MGWB WITHDRAWAL ACCOUNT. Any additional premium payments added after the second rider anniversary are not included in the MGWB Withdrawal Account. Thus, the MGWB rider may not be appropriate for you if you plan to add substantial premium payments after your second rider anniversary. The guarantee provides that, subject to the conditions described below, the amount you will receive in periodic payments is equal to your Eligible Payment Amount adjusted for any prior withdrawals. Your Eligible Payment Amount depends on when you purchase the MGWB rider and equals: 1) if you purchased the MGWB rider on the contract date: your premium payments received during the first two contract years; 2) if you purchased the MGWB rider after the contract date: your contract value on the Rider Date, including any premiums received that day, and any subsequent premium payments received during the two-year period commencing on the Rider Date. To maintain the guarantee, withdrawals in any contract year may not exceed 7% of your Eligible Payment Amount adjusted, as defined below. If your contract value is reduced to zero, your periodic payments will be 7% of your Eligible Payment Amount every year. Payments continue until your MGWB Withdrawal Account is reduced to zero. Please note that before Automatic Periodic Benefit status is reached, withdrawals in excess of the free withdrawal amount will be subject to surrender charges. Once your contract reaches Automatic Period Benefit Status, the periodic payments paid under the MGWB rider are not subject to surrender charges. The MGWB Withdrawal Account is equal to the Eligible Payment Amount adjusted for any withdrawals and transfers between Covered and Excluded Funds. The MGWB Withdrawal Account is tracked separately for Covered and Excluded Funds. The MGWB Withdrawal Account equals the sum of (a) the MGWB Withdrawal Account allocated to Covered Funds, and (b) the lesser of (i) the MGWB Withdrawal Account allocated to Excluded Funds and (ii) the contract value in Excluded Funds. Thus, investing in the Excluded Funds may limit the MGWB Withdrawal Account. No investment options are currently designated as Excluded Funds for the Minimum Guaranteed Withdrawal Benefit. The Maximum Annual Withdrawal Amount (or "MAW") is equal to 7% of the Eligible Payment Amount. Withdrawals from Covered Funds of up to the MAW will reduce the value of your MGWB Withdrawal Account by the dollar amount of the withdrawal. Any withdrawals from Covered Funds greater than the MAW will cause a reduction in the MGWB Withdrawal Account allocated to Covered Funds by the proportion that the excess withdrawal bears to the remaining contract value in Covered Funds after the withdrawal of the MAW. All withdrawals from Excluded Funds will reduce the value of the MGWB Withdrawal Account allocated to Excluded Funds on a pro-rata basis. If a single withdrawal involves both Covered and Excluded Funds and exceeds 7%, the withdrawal will be treated as taken first from Covered Funds. Any withdrawals greater than the MAW will also cause a reduction in the Eligible Payment Amount by the proportion that the excess portion of the withdrawal bears to the contract value remaining after withdrawal of the MAW at the time of the withdrawal. Please see Appendix J, MGWB Excess Withdrawal Amount Examples. I1 Landmark - 136957 Once your contract value is zero, any periodic payments paid under the MGWB rider also reduce the MGWB Withdrawal Account by the dollar amount of the payments. If a withdrawal reduces the MGWB Withdrawal Account to zero, the MGWB rider terminates and no further benefits are payable under the rider. Net transfers from Covered Funds to Excluded Funds will reduce the MGWB Withdrawal Account allocated to Covered Funds on a pro-rata basis. The resulting increase in the MGWB Withdrawal Account allocated to Excluded Funds equals the reduction in the MGWB Withdrawal Account for Covered Funds. Net transfers from Excluded Funds to Covered Funds will reduce the MGWB Withdrawal Account allocated to Excluded Funds on a pro-rata basis. The resulting increase in the MGWB Withdrawal Account allocated to Covered Funds will equal the lesser of the reduction in the MGWB Withdrawal Account for Excluded Funds and the net contract value transferred. YOU SHOULD NOT MAKE ANY WITHDRAWALS IF YOU WISH TO RETAIN THE OPTION TO ELECT THE STEP-UP BENEFIT (SEE BELOW). The MGWB Withdrawal Account is only a calculation which represents the remaining amount available for periodic payments. It does not represent a contract value, nor does it guarantee performance of the subaccounts in which you are invested. It will not affect your annuitization, surrender and death benefits. GUARANTEED WITHDRAWAL STATUS. You may continue to make withdrawals in any amount permitted under your Contract so long as your contract value is greater than zero. See "Withdrawals." However, making any withdrawals in any year greater than the MAW will reduce the Eligible Payment Amount and payments under the MGWB rider by the proportion that the withdrawal bears to the contract value at the time of the withdrawal. The MGWB rider will remain in force and you may continue to make withdrawals each year so long as: 1) your contract value is greater than zero; 2) your MGWB Withdrawal Account is greater than zero; 3) you have not reached your latest allowable annuity start date; 4) you have not elected to annuitize your Contract; and 5) you have not died (unless your spouse has elected to continue the Contract), changed the ownership of the Contract or surrendered the Contract. The standard Contract provision limiting withdrawals to no more than 90% of the cash surrender value is not applicable under the MGWB rider. AUTOMATIC PERIODIC BENEFIT STATUS. Under the MGWB rider, in the event your contract value is reduced to zero, your Contract is given Automatic Periodic Benefit Status, if: 1) your MGWB Withdrawal Account is greater than zero; 2) you have not reached your latest allowable annuity start date; 3) you have not elected to annuitize your Contract; and 4) you have not died, changed the ownership of the Contract or surrendered the Contract. Once your Contract is given Automatic Periodic Benefit Status, we will pay you the annual MGWB periodic payments, beginning on the next contract anniversary until the earliest of (i) your Contract's latest annuity start date, (ii) the death of the owner; or (iii) your MGWB Withdrawal Account is exhausted. These payments are equal to the lesser of the remaining MGWB Withdrawal Account or the MAW. We will reduce the MGWB Withdrawal Account by the amount of each payment. Once your Contract is given Automatic Periodic Benefit Status, we will not accept any additional premium payments in your Contract, and the Contract will not provide any benefits except those provided by the MGWB rider. Any other rider terminates. Your Contract will remain in Automatic Periodic Benefit Status until the earliest of (i) payment of all MGWB periodic payments, (ii) payment of the Commuted Value (defined below) or (iii) the owner's death. I2 Landmark - 136957 On the Contract's latest annuity start date, in lieu of making the remaining MGWB periodic payments, we will pay you the Commuted Value of your MGWB periodic payments remaining. We may, at our option, extend your annuity start date in order to continue the MGWB periodic payments. The Commuted Value is the present value of any then-remaining MGWB periodic payments at the current interest rate plus 0.50%. The current interest rate will be determined by the average of the Ask Yields for U.S. Treasury STRIPS as quoted by a national quoting service for period(s) applicable to the remaining payments. Once we pay you the last MGWB periodic payment or the Commuted Value, your Contract and the MGWB rider terminate. RESET OPTION. Beginning on the fifth contract anniversary following the Rider Date, if the contract value is greater than the MGWB Withdrawal Account, you may choose to reset the MGWB Rider. The effect will be to terminate the existing MGWB Rider and add a new MGWB Rider ("New Rider"). The MGWB Withdrawal Account under the New Rider will equal the contract value on the date the New Rider is effective. The charge for the MGWB under the New Rider and any right to reset again will be based on the terms of the New Rider when it is issued. We reserve the right to limit the reset election to contract anniversaries only. If you elect the Reset Option, the Step-Up benefit is not available. STEP-UP BENEFIT. If the Rider Date is the same as the Contract Date, beginning on the fifth contract anniversary following the Rider Date, if you have not made any previous withdrawals, you may elect to increase the MGWB Withdrawal Account, the adjusted Eligible Payment Amount and the MAW by a factor of 20%. This option is available whether or not the contract value is greater than the MGWB Withdrawal Account. If you elect the Step-Up Benefit: 1) we reserve the right to increase the charge for the MGWB Rider up to a maximum annual charge of 1.00% of contract value; 2) you must wait at least five years from the Step-Up date to elect the Reset Option. The Step-Up Benefit may be elected only one time under the MGWB Rider. We reserve the right to limit the election of the Step-Up Benefit to contract anniversaries only. Please note that if you have a third party investment advisor who charges a separate advisory fee, and you have chosen to use withdrawals from your contract to pay this fee, these will be treated as any other withdrawals, and the Step-Up Benefit will not be available. DEATH OF OWNER. BEFORE AUTOMATIC PERIODIC BENEFIT STATUS. The MGWB rider terminates on the first owner's date of death (death of annuitant, if there is a non-natural owner), but the death benefit is payable. However, if the beneficiary is the owner's spouse, the spouse elects to continue the Contract, and the contract value steps up to the minimum guaranteed death benefit, the MGWB Withdrawal Account and MAW are also reset. The MGWB charge will continue at the existing rate. Reset upon spousal continuation does not affect any then existing Reset Option. DURING AUTOMATIC PERIODIC BENEFIT STATUS. The death benefit payable during Automatic Periodic Benefit Status is your MGWB Withdrawal Account which equals the sum of the remaining MGWB periodic payments. PURCHASE. To purchase the MGWB rider, you must be age 80 or younger on the Rider Date. The MGWB rider must be purchased on the contract date. If the rider is not yet available in your state, the Company may in its discretion allow purchase of this rider during the 30-day period preceding the first contract anniversary after the date of this prospectus, or the date of state approval, whichever is later. MINIMUM GUARANTEED WITHDRAWAL BENEFIT RIDER(8):
- ----------------------------------------------------------------------------------------------------------- MAXIMUM ANNUAL CHARGE IF STEP-UP AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE BENEFIT ELECTED(8) - -------------------------------- ---------------------------------- --------------------------------------- 0.45% of contract value 0.12% of contract value 1.00% of contract value - -------------------------------- ---------------------------------- ---------------------------------------
(6) We deduct optional rider charges from the subaccounts in which you are invested on each quarterly contract anniversary and pro-rata on termination of the Contract; if the value in the subaccounts is insufficient, the optional rider charges will be deducted from the Fixed Interest Allocation(s) nearest maturity, and the amount deducted may be subject to a Market Value Adjustment. I3 Landmark - 136957 (7) Please see "Charges and Fees - Optional Rider Charges" and "Optional Riders" in the prospectus. (8) If you elect the Step-Up Benefit, we reserve the right to increase the charge for the MGWB to a maximum annual charge of 1.00% of contract value. Please see "Minimum Guarantee Withdrawal Benefit Step-Up Benefit, above." I4 Landmark - 136957 - -------------------------------------------------------------------------------- APPENDIX J - -------------------------------------------------------------------------------- MGWB EXCESS WITHDRAWAL AMOUNT EXAMPLES The following are examples of adjustments to the MGWB Withdrawal Account and the Maximum Annual Withdrawal Amount for Transfers and Withdrawals in Excess of the Maximum Annual Withdrawal Amount ("Excess Withdrawals Amount"): EXAMPLE #1: OWNER HAS INVESTED ONLY IN COVERED FUNDS Assume the Contract Value (CV) before the withdrawal is $100,000 and is invested in Covered Funds only, the Eligible Payment Amount (EPA) is $100,000, the Maximum Annual Withdrawal Amount (MAW) is $7,000, the MGWB Withdrawal Account allocated to Covered Funds ("Covered Withdrawal Account") is $120,000, and a withdrawal of $10,000 is made. The effect of the withdrawal is calculated as follows: The new CV is $90,000 ($100,000 - $10,000). The Excess Withdrawal Amount is $3,000 ($10,000 - $7,000). The Covered Withdrawal Account is first reduced dollar-for-dollar by the portion of the withdrawal up to the MAW to $113,000 ($120,000 - $7,000), and is then reduced pro-rata based on the ratio of the Excess Withdrawal Amount to the CV (after being reduced for the withdrawal up to the MAW) to $109,354.84 ($113,000 * (1 - $3,000 / $93,000)). The EPA is reduced pro-rata based on the ratio of the Excess Withdrawal Amount to the CV (after being reduced for the withdrawal up to the MAW) to $96,774.19 ($100,000 * (1 - $3,000 / $93,000)). The reduction to the EPA for withdrawals of Excess Withdrawal Amount is applied pro-rata regardless of whether CV is allocated to Covered or Excluded Funds. The MAW is then recalculated to be 7% of the new EPA, $6,774.19 ($96,774.19 * 7%). EXAMPLE #2: OWNER HAS INVESTED ONLY IN EXCLUDED FUNDS Assume the Contract Value (CV) before the withdrawal is $100,000 and is invested in Excluded Funds only, the Eligible Payment Amount (EPA) is $100,000, the Maximum Annual Withdrawal Amount (MAW) is $7,000, the MGWB Withdrawal Account allocated to Excluded Funds ("Excluded Withdrawal Account") is $120,000, and a withdrawal of $10,000 is made. The effect of the withdrawal is calculated as follows: The new CV is $90,000 ($100,000 - $10,000). The Excess Withdrawal Amount is $3,000 ($10,000 - $7.000). The Excluded Withdrawal Account is reduced pro-rata based on the ratio of the entire amount withdrawn to the CV (before the withdrawal) to $108,000 ($120,000 * (1 - $10,000 / $100,000)). The EPA is reduced pro-rata based on the ratio of the Excess Withdrawal Amount to the CV (after being reduced for the withdrawal up to the MAW) to $96,774.19 ($100,000 * (1 - $3,000/$93,000)). The reduction to the EPA for withdrawals of Excess Withdrawal Amount is applied pro-rata regardless of whether CV is allocated to Covered or Excluded Funds. The MAW is then recalculated to be 7% of the new EPA, $6,774.19 ($96,774.19 * 7%). J1 Landmark - 136957 EXAMPLE #3: OWNER HAS INVESTED IN BOTH COVERED AND EXCLUDED FUNDS Assume the Contract Value (CV) before the withdrawal is $100,000 and is invested $60,000 in Covered Funds and $40,000 in Excluded Funds. Further assume that the Eligible Payment Amount (EPA) is $100,000, the Maximum Annual Withdrawal Amount (MAW) is $7,000, the MGWB Withdrawal Account allocated to Covered Funds ("Covered Withdrawal Account") is $75,000, the MGWB Withdrawal Account allocated to Excluded Funds ("Excluded Withdrawal Account") is $45,000, and a withdrawal is made of $10,000 ($8,000 from Covered Funds and $2,000 from Excluded Funds). The new CV for Covered Funds is $52,000 ($60,000 - $8,000), and the new CV for Excluded Funds is $38,000 ($40,000 - $2,000). The Covered Withdrawal Account is first reduced dollar-for-dollar by the lesser of the MAW ($7,000) and the amount withdrawn from Covered Funds ($8,000) to $68,000 ($75,000 - $7,000), and is then reduced pro-rata based on the ratio of any Excess Withdrawal Amount from Covered Funds to the CV in Covered Funds (after being reduced for the withdrawal up to the MAW) to $66,716.98 ($68,000 * (1 - $1,000 / $53,000). The Excluded Withdrawal Account is reduced pro-rata based on the ratio of the amount withdrawn from Excluded Funds to the CV in Excluded Funds (prior to the withdrawal) to $42,750 ($45,000 * (1 - $2,000 / $40,000)). The EPA is reduced pro-rata based on the ratio of the Excess Withdrawal Amount to the CV (after being reduced for the withdrawal up to the MAW) to $96,774.19 ($100,000 * (1 - $3,000 / $93,000)). The reduction to the EPA for withdrawals of Excess Withdrawal Amount is applied pro-rata regardless of whether CV is allocated to Covered or Excluded Funds. The MAW is then recalculated to be 7% of the new EPA, $6,774.19 ($96,774.19 * 7%). EXAMPLE #4: OWNER TRANSFERS FUNDS FROM EXCLUDED FUNDS TO COVERED FUNDS Assume the Contract Value (CV) before the transfer is $100,000 and is invested $60,000 in Covered Funds and $40,000 in Excluded Funds. Further assume that the MGWB Withdrawal Account allocated to Covered Funds ("Covered Withdrawal Account") is $75,000, the MGWB Withdrawal Account allocated to Excluded Funds ("Excluded Withdrawal Account") is $45,000, and a transfer is made of $10,000 from Excluded Funds to Covered Funds. The new CV for Covered Funds is $70,000 ($60,000 + $10,000), and the new CV for Excluded Funds is $30,000 ($40,000 - $10,000). The Excluded Withdrawal Account is reduced pro-rata based on the ratio of the amount transferred from Excluded Funds to the CV in Excluded Funds (prior to the transfer) to $33,750 ($45,000 * (1 - $10,000 / $40,000)). The Covered Withdrawal Account is increased by the lesser of the reduction of the Excluded Withdrawal Account of $11,250 ($45,000 - $33,750) and the actual amount transferred of $10,000. Thus, the Covered Withdrawal Account is increased to $85,000 ($75,000 + $10,000). J2 Landmark - 136957 EXAMPLE #5: OWNER TRANSFERS FUNDS FROM COVERED FUNDS TO EXCLUDED FUNDS Assume the Contract Value (CV) before the transfer is $100,000 and is invested $60,000 in Covered Funds and $40,000 in Excluded Funds. Further assume that the MGWB Withdrawal Account allocated to Covered Funds ("Covered Withdrawal Account") is $75,000, the MGWB Withdrawal Account allocated to Excluded Funds ("Excluded Withdrawal Account") is $45,000, and a transfer is made of $10,000 from Covered Funds to Excluded Funds. The new CV for Covered Funds is $50,000 ($60,000 - $10,000), and the new CV for Excluded Funds is $50,000 ($40,000 + $10,000). The Covered Withdrawal Account is reduced pro-rata based on the ratio of the amount transferred from Covered Funds to the CV in Covered Funds (prior to the transfer) to $62,500 ($75,000 * (1 - $10,000 / $60,000)). The Excluded Withdrawal Account is increased by the reduction of the Covered Withdrawal Account of $12,500 ($75,000 - $62,500) to $57,500 ($45,000 + $12,500). J3 Landmark - 136957 ING USA ANNUITY AND LIFE INSURANCE COMPANY ING USA Annuity and Life Insurance Company is a stock company domiciled in Iowa. Landmark - 136957 11/01/2005 - -------------------------------------------------------------------------------- ING USA ANNUITY AND LIFE INSURANCE COMPANY SEPARATE ACCOUNT B OF ING USA ANNUITY AND LIFE INSURANCE COMPANY DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY PROSPECTUS WELLS FARGO ING LANDMARK - -------------------------------------------------------------------------------- NOVEMBER 1, 2005 This prospectus describes Wells Fargo ING Landmark, a group and individual deferred variable annuity contract (the "Contract") offered by ING USA Annuity and Life Insurance Company ("ING USA," the "Company," "we," "us" or "our"). The Contract is available in connection with certain retirement plans that qualify for special federal income tax treatment ("qualified Contracts") as well as those that do not qualify for such treatment ("non-qualified Contracts"). The Contract provides a means for you to invest your premium payments in one or more mutual fund investment portfolios. You may also allocate premium payments to our Fixed Account with guaranteed interest periods. Your contract value will vary daily to reflect the investment performance of the investment portfolio(s) you select and any interest credited to your allocations in the Fixed Account. For Contracts sold in some states, not all Fixed Interest Allocations or subaccounts are available. The investment portfolios available under your Contract are listed on the next page. You have a right to return a Contract within 10 days after you receive it for a refund of the adjusted contract value (which may be more or less than the premium payments you paid), or if required by your state, the original amount of your premium payment. Longer free look periods apply in some states and in certain situations. REPLACING AN EXISTING ANNUITY WITH THE CONTRACT MAY NOT BE BENEFICIAL TO YOU. YOUR EXISTING ANNUITY MAY BE SUBJECT TO FEES OR PENALTIES ON SURRENDER, AND THE CONTRACT MAY HAVE NEW CHARGES. This prospectus provides information that you should know before investing and should be kept for future reference. A Statement of Additional Information ("SAI"), dated April 29, 2005, has been filed with the Securities and Exchange Commission ("SEC"). It is available without charge upon request. To obtain a copy of this document, write to our Customer Service Center at P.O. Box 9271, Des Moines, Iowa 50306-9271 or call (800) 366-0066, or access the SEC's website (http://www.sec.gov). The table of contents of the SAI is on the last page of this prospectus and the SAI is made part of this prospectus by reference. THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN ANY SUBACCOUNT THROUGH A TRUST OR FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED BY ANY BANK OR BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. - -------------------------------------------------------------------------------- THE INVESTMENT PORTFOLIOS ARE LISTED ON THE NEXT PAGE. - -------------------------------------------------------------------------------- WF Landmark - 136960 The investment portfolios available under your Contract are: ING INVESTORS TRUST ING AllianceBernstein Mid Cap Growth Portfolio (Class S) ING American Funds Growth Portfolio ING American Funds Growth-Income Portfolio ING American Funds International Portfolio ING Cap Guardian Small/Midcap Portfolio (Class S) ING Cap Guardian U.S. Equities Portfolio (Class S) ING Eagle Asset Capital Appreciation Portfolio (Class S) ING Evergreen Health Sciences Portfolio (Class S) ING Evergreen Omega Portfolio (Class S) ING FMR(SM) Diversified Mid Cap Portfolio (Class S) ING FMR(SM) Earnings Growth Portfolio (Class S) ING Global Resources Portfolio (Class S) ING Goldman Sachs Tollkeeper(SM) Portfolio (Class S) ING Janus Contrarian Portfolio (Class S) ING JPMorgan Emerging Markets Equity Portfolio (Class S) ING JPMorgan Small Cap Equity Portfolio (Class S) ING JPMorgan Value Opportunities Portfolio (Class S) ING Julius Baer Foreign Portfolio (Class S) ING Legg Mason Value Portfolio (Class S) ING LifeStyle Aggressive Growth Portfolio (Class S1) ING LifeStyle Growth Portfolio (Class S1) ING LifeStyle Moderate Growth Portfolio (Class S1) ING LifeStyle Moderate Portfolio (Class S1) ING Liquid Assets Portfolio (Class S) ING Lord Abbett Affiliated Portfolio (Class S) ING MarketPro Portfolio (Class S) ING Marsico Growth Portfolio (Class S) ING Marsico International Opportunities Portfolio (Class S) ING Mercury Large Cap Growth Portfolio (Class S) ING Mercury Large Cap Value Portfolio (Class S) ING MFS Mid Cap Growth Portfolio (Class S) ING MFS Total Return Portfolio (Class S) ING MFS Utilities Portfolio (Class S) ING Oppenheimer Main Street Portfolio (Class S) ING PIMCO Core Bond Portfolio (Class S) ING PIMCO High Yield Portfolio (Class S) ING Pioneer Fund Portfolio (Class S) ING Pioneer Mid Cap Value Portfolio (Class S) ING Salomon Brothers All Cap Portfolio (Class S) ING T. Rowe Price Capital Appreciation Portfolio (Class S) ING T. Rowe Price Equity Income Portfolio (Class S) ING Templeton Global Growth Portfolio (Class S) ING UBS U.S. Allocation Portfolio (Class S) ING Van Kampen Equity Growth Portfolio (Class S) ING Van Kampen Global Franchise Portfolio (Class S) ING Van Kampen Growth and Income Portfolio (Class S) ING Van Kampen Real Estate Portfolio (Class S) ING VP Index Plus International Equity Portfolio (Class S) ING Wells Fargo Mid Cap Disciplined Portfolio (Class S) ING Wells Fargo Small Cap Disciplined Portfolio (Class S) ING PARTNERS, INC. ING Baron Small Cap Growth Portfolio (Service Class) ING Davis Venture Value Portfolio (Service Class) ING Fundamental Research Portfolio (Service Class) ING JPMorgan Fleming International Portfolio (Service Class) ING Oppenheimer Global Portfolio (Service Class) ING Salomon Brothers Aggressive Growth Portfolio (Service Class) ING UBS U.S. Large Cap Equity Portfolio (Service Class) ING Van Kampen Comstock Portfolio (Service Class) ING Van Kampen Equity and Income Portfolio (Service Class) ING VARIABLE INSURANCE TRUST ING VP Global Equity Dividend Portfolio ING VARIABLE PORTFOLIOS, INC. ING VP Index Plus LargeCap Portfolio (Class S) ING VP Index Plus MidCap Portfolio (Class S) ING VP Index Plus SmallCap Portfolio (Class S) ING VARIABLE PRODUCTS TRUST ING VP Financial Services Portfolio (Class S) ING VP SmallCap Opportunities Portfolio (Class S) ING VP INTERMEDIATE BOND PORTFOLIO (CLASS S) AIM VARIABLE INSURANCE FUNDS AIM V.I. Leisure Fund (Series I) FIDELITY VARIABLE INSURANCE PRODUCTS PORTFOLIO Fidelity VIP Contrafund Portfolio (Service Class 2) Fidelity VIP Equity-Income Portfolio (Service Class 2) LIBERTY VARIABLE INSURANCE TRUST Colonial Small Cap Value Fund (Class B) PROFUNDS VP ProFund VP Bull ProFund VP Europe 30 ProFund VP Rising Rates Opportunity ProFund VP Small-Cap WELLS FARGO VARIABLE TRUST Wells Fargo VT Asset Allocation Fund Wells Fargo VT Equity Income Fund Wells Fargo VT C&B Large Cap Value Fund Wells Fargo VT Large Company Growth Fund Wells Fargo VT Money Market Fund Wells Fargo VT Small Cap Growth Fund Wells Fargo VT Total Return Bond Fund WF Landmark - 136960 - -------------------------------------------------------------------------------- TABLE OF CONTENTS - -------------------------------------------------------------------------------- PAGE Index of Special Terms .................................................... ii Fees and Expenses ......................................................... 1 Condensed Financial Information ........................................... 9 Accumulation Unit ....................................................... 9 The Net Investment Factor ............................................... 9 Performance Information ................................................. 9 Financial Statements .................................................... 10 ING USA Annuity and Life Insurance Company ................................ 10 ING USA Separate Account B ................................................ 11 The Trusts and Funds ...................................................... 11 Covered Funds, Special Funds and Excluded Funds ................................................................... 12 Charges and Fees .......................................................... 13 Charge Deduction Subaccount ............................................. 13 Charges Deducted from the Contract Value ................................ 13 Surrender Charge .................................................... 13 Waiver of Surrender Charge for Extended Medical Care ..................................................... 13 Free Withdrawal Amount .............................................. 14 Surrender Charge for Excess Withdrawals ............................. 14 Premium Taxes ....................................................... 14 Administrative Charge ............................................... 14 Transfer Charge ..................................................... 14 Charges Deducted from the Subaccounts ................................... 15 Mortality and Expense Risk Charge ................................... 15 Asset-Based Administrative Charge ................................... 15 Earnings Multiplier Benefit Charge .................................. 15 Optional Rider Charges .............................................. 15 Trust and Fund Expenses ................................................. 16 The Annuity Contract ...................................................... 17 Contract Date and Contract Year ......................................... 18 Contract Owner .......................................................... 18 Annuity Start Date ...................................................... 18 Annuitant ............................................................... 19 Beneficiary ............................................................. 19 Purchase and Availability of the Contract ............................... 20 Crediting of Premium Payments ........................................... 20 Administrative Procedures ............................................... 22 Contract Value .......................................................... 22 Cash Surrender Value .................................................... 23 Addition, Deletion or Substitution of Subaccounts and Other Changes ....................................... 23 The Fixed Account ....................................................... 23 Optional Riders ......................................................... 24 Other Contracts ........................................................... 32 Withdrawals ............................................................... 32 Transfers Among Your Investments .......................................... 36 Death Benefit Choices ..................................................... 40 Death Benefit During the Accumulation Phase ........................................................... 40 Standard Death Benefit .............................................. 40 Enhanced Death Benefit Options ...................................... 41 Earnings Multiplier Benefit Rider ....................................... 43 Death Benefit During the Income Phase ................................... 43 Continuation After Death -- Spouse ...................................... 43 Continuation After Death -- Not a Spouse ................................ 44 Required Distributions Upon Contract Owner's Death ....................................................... 44 The Annuity Options ....................................................... 46 Other Contract Provisions ................................................. 48 Other Information ......................................................... 51 Federal Tax Considerations ................................................ 52 Statement of Additional Information Table of Contents .......................................................SAI-1 Appendix A Condensed Financial Information ......................................... A1 Appendix B The Investment Portfolios ............................................... B1 Appendix C Fixed Account II ........................................................ C1 Appendix D Fixed Interest Division ................................................. D1 Appendix E Surrender Charge for Excess Withdrawals Example ............................................................. E1 Appendix F Special Funds and Excluded Funds Examples ............................... F1 Appendix G Minimum Guaranteed Income Benefit Calculation Examples ................................................ G1 Appendix H ING LifePay Withdrawal Examples ........................................... H1 Appendix I MGWB For Contracts In States Where ING LifePay Not Available ................................................... I1 Appendix J MGWB Excess Withdrawal Amount Examples For Contracts In States Where ING LifePay Not Available ............................................................... J1 i WF Landmark - 136960 - -------------------------------------------------------------------------------- INDEX OF SPECIAL TERMS - -------------------------------------------------------------------------------- The following special terms are used throughout this prospectus. Refer to the page(s) listed for an explanation of each term: ------------------------------------------------------------ SPECIAL TERM PAGE ------------------------------------------------------------ Accumulation Unit 9 ------------------------------------------------------------ Annuitant 19 ------------------------------------------------------------ Annuity Start Date 18 ------------------------------------------------------------ Cash Surrender Value 23 ------------------------------------------------------------ Contract Date 19 ------------------------------------------------------------ Claim Date 40 ------------------------------------------------------------ Contract Owner 18 ------------------------------------------------------------ Contract Value 22 ------------------------------------------------------------ Contract Year 18 ------------------------------------------------------------ Covered Fund 12 ------------------------------------------------------------ Earnings Multiplier Benefit 43 ------------------------------------------------------------ Excluded Fund 12 ------------------------------------------------------------ Free Withdrawal Amount 14 ------------------------------------------------------------ Market Value Adjustment C1 ------------------------------------------------------------ Max 7 Enhanced Death Benefit 42 ------------------------------------------------------------ Net Investment Factor 9 ------------------------------------------------------------ Net Rate of Return 9 ------------------------------------------------------------ Quarterly Ratchet Enhanced Death Benefit 41 ------------------------------------------------------------ Restricted Funds 12 ------------------------------------------------------------ Rider Date 24 ------------------------------------------------------------ 7% Solution Death Benefit Element 42 ------------------------------------------------------------ Special Fund 12 ------------------------------------------------------------ Standard Death Benefit 40 ------------------------------------------------------------ The following terms as used in this prospectus have the same or substituted meanings as the corresponding terms currently used in the Contract: ------------------------------------------------------------------------ TERM USED IN THIS PROSPECTUS CORRESPONDING TERM USED IN THE CONTRACT ------------------------------------------------------------------------ Accumulation Unit Value Index of Investment Experience ------------------------------------------------------------------------ Annuity Start Date Annuity Commencement Date ------------------------------------------------------------------------ Contract Owner Owner or Certificate Owner ------------------------------------------------------------------------ Contract Value Accumulation Value ------------------------------------------------------------------------ Transfer Charge Excess Allocation Charge ------------------------------------------------------------------------ Fixed Interest Allocation Fixed Allocation ------------------------------------------------------------------------ Free Look Period Right to Examine Period ------------------------------------------------------------------------ Guaranteed Interest Period Guarantee Period ------------------------------------------------------------------------ ING LifePay Base MGWB Base ------------------------------------------------------------------------ Subaccount(s) Division(s) ------------------------------------------------------------------------ Net Investment Factor Experience Factor ------------------------------------------------------------------------ Regular Withdrawals Conventional Partial Withdrawals ------------------------------------------------------------------------ Withdrawals Partial Withdrawals ------------------------------------------------------------------------ ii WF Landmark - 136960 - -------------------------------------------------------------------------------- FEES AND EXPENSES - -------------------------------------------------------------------------------- The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the Contract. The first table describes the fees and expenses that you will pay at the time that you buy the Contract, surrender the Contract, or transfer contract value between investment options. State premium taxes may also be deducted. CONTRACT OWNER TRANSACTION EXPENSES (1) Surrender Charge: COMPLETE YEARS ELAPSED 0 1 2 3 4+ SINCE PREMIUM PAYMENT SURRENDER CHARGE (AS A PERCENTAGE 6% 5% 4% 3% 0% OF PREMIUM PAYMENT) Transfer Charge (2)................ $25 per transfer, if you make more than 12 transfers in a contract year (1) If you invested in a Fixed Interest Allocation, a Market Value Adjustment may apply to certain transactions. This may increase or decrease your contract value and/or your transfer or surrender amount. (2) We currently do not impose this charge, but may do so in the future. The next table describes the fees and expenses that you will pay periodically during the time that you own the Contract, not including Trust or Fund fees and expenses. ANNUAL CONTRACT ADMINISTRATIVE CHARGE (3)................................. $30 (We waive this charge if the total of your premium payments is $100,000 or more or if your contract value at the end of a contract year is $100,000 or more.) (3) We deduct this charge on each contract anniversary and on surrender. SEPARATE ACCOUNT ANNUAL CHARGES (4)
---------------------------------------------------------------------------------------- ENHANCED DEATH BENEFITS STANDARD ----------------------- DEATH QUARTERLY BENEFIT RATCHET MAX 7 ---------------------------------------------------------------------------------------- Mortality & Expense Risk Charge 1.50% 1.75% 2.05% Asset-Based Administrative Charge 0.15% 0.15% 0.15% ---- ---- ---- Total 1.65% 1.90% 2.20% ----------------------------------------------------------------------------------------
(4) As a percentage of average daily assets in each subaccount. The Separate Account Annual Charges are deducted daily. EARNINGS MULTIPLIER BENEFIT RIDER CHARGE (5) --------------------------------------------------------------------- AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE --------------------------------------------------------------------- 0.30% of contract value 0.08% of contract value --------------------------------------------------------------------- (5) We deduct the rider charge from the subaccounts in which you are invested on each quarterly contract anniversary and pro-rata on termination of the Contract; if the value in the subaccounts is insufficient, the rider charge will be deducted from the Fixed Interest Allocation(s) nearest maturity, and the amount deducted may be subject to a Market Value Adjustment. 1 WF Landmark - 136960 OPTIONAL RIDER CHARGES (6) MINIMUM GUARANTEED INCOME BENEFIT RIDER: ------------------------------------------------------------------------- AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE ------------------------------------------------------------------------- 0.75% of the MGIB Benefit Base(7) 0.19% of the MGIBBenefit Base(7) ------------------------------------------------------------------------- ING LIFEPAY MINIMUM GUARANTEED WITHDRAWAL BENEFIT RIDER(8):
------------------------------------------------------------------------------------------------ MAXIMUM ANNUAL CHARGE IF RESET AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE BENEFIT ELECTED(8) ------------------------------------------------------------------------------------------------ 0.50% of contract value 0.125% of contract value 1.20% of contract value ------------------------------------------------------------------------------------------------
(6) We deduct optional rider charges from the subaccounts in which you are invested on each quarterly contract anniversary, in arrears, and pro-rata on termination of the Contract; if the value in the subaccounts is insufficient, the optional rider charges will be deducted from the Fixed Interest Allocation(s) nearest maturity, and the amount deducted may be subject to a Market Value Adjustment. (7) Please see "Charges and Fees - Optional Rider Charges" and "Optional Riders" later in this prospectus. (8) If you elect the Reset Benefit on or after the fifth rider anniversary, we reserve the right to increase the charge for the ING LifePay rider to a maximum annual charge of 1.20% of contract value. Please see "ING LifePay Minimum Guarantee Withdrawal Benefit - ING LifePay Reset Option." TABLE OF SEPARATE ACCOUNT CHARGES This table shows the total charges as a percentage of contract value that you would pay if you elect the earnings multiplier benefit and the ING LifePay Withdrawal Benefit.
---------------------------------------------------------------------------------------- ENHANCED DEATH BENEFITS STANDARD ----------------------- DEATH QUARTERLY BENEFIT RATCHET MAX 7 ---------------------------------------------------------------------------------------- Mortality & Expense Risk Charge 1.40% 1.65% 1.95% Asset-Based Administrative Charge 0.15% 0.15% 0.15% Earning Multiplier Benefit Rider 0.30% 0.30% 0.30% ING LifePay Minimum Guaranteed Withdrawal Benefit Rider 0.50% 0.50% 0.50% ----- ----- ----- Total 2.35% 2.60% 2.90%
If you elect the Minimum Guaranteed Income Benefit instead of the ING LifePay Withdrawal Benefit, your total separate account charges as a percentage of contract value would be as follows, but the Minimum Guaranteed Income Benefit charge of 0.75% of MGIB Benefit Base would be deducted in addition to these charges:
---------------------------------------------------------------------------------------- ENHANCED DEATH BENEFITS STANDARD ----------------------- DEATH QUARTERLY BENEFIT RATCHET MAX 7 ---------------------------------------------------------------------------------------- Mortality & Expense Risk Charge 1.40% 1.65% 1.95% Asset-Based Administrative Charge 0.15% 0.15% 0.15% Earning Multiplier Benefit Rider 0.30% 0.30% 0.30% ----- ----- ----- Total 1.85% 2.10% 2.40%
2 WF Landmark - 136960 As noted in the expense examples below, your charges will be higher if you elect the Minimum Guaranteed Income Benefit than they would if you elect the ING LifePay Withdrawal Benefit. TRUST OR FUND EXPENSES The next item shows the minimum and maximum total operating expenses charged by the Trust or Fund that you may pay periodically during the time that you own the Contract. More detail concerning each Trust or Fund's fees and expenses is contained in the prospectus for each Trust or Fund.
------------------------------------------------------------------------------------------------------- TOTAL ANNUAL TRUST OR FUND OPERATING EXPENSES (8) MINIMUM MAXIMUM ------------------------------------------------------------------------------------------------------- (expenses that are deducted from Trust or Fund assets, including management fees, distribution and/or service (12b-1) fees(9), and other expenses): 0.54% 1.78% -------------------------------------------------------------------------------------------------------
(8) The minimum and maximum total operating expenses charged by a Trust or a Fund including applicable expense reimbursement or fee waiver arrangements would also be 054% to 1.78%. The expense reimbursement or fee arrangement reflected is contractual and expected to continue through May 1, 2006. (9) The Company may receive compensation from each of the funds or the funds' affiliates based on an annual percentage of the average net assets held in that fund by the Company. The percentage paid may vary from one fund company to another. For certain funds, some of this compensation may be paid out of 12b-1 fees or service fees that are deducted from fund assets. Any such fees deducted from fund assets are disclosed in the Fund or Trust prospectuses. The Company may also receive additional compensation from certain funds for administrative, recordkeeping or other services provided by the Company to the funds or the funds' affiliates. These additional payments are made by the funds or the funds' affiliates to the Company and do not increase, directly or indirectly, the fees and expenses shown above. The following table shows the annual operating expenses separately for each Trust or Fund. FUND EXPENSE TABLE (1),(2) The column labeled "Total Fund Annual Expenses Without Waivers or Reductions" shows the total annual operating expenses charged by a Trust or Fund, absent expense reimbursement or fee waiver arrangements. The column labeled "Net Fund Annual Expenses After Waivers or Reductions" shows such total annual operating expenses after applicable expense reimbursement or fee waiver arrangements where such reimbursement or waiver is contractual and is expected to continue through May 1, 2006. Expenses shown are actual expenses for the year ended 12/31/04 unless otherwise noted.
- ------------------------------------------------------------------------------------------------------------------------- TOTAL FUND NET FUND DISTRIBUTION ANNUAL ANNUAL AND/OR EXPENSES TOTAL EXPENSES INVESTMENT SERVICE WITHOUT WAIVERS AFTER ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR FUND NAME FEES FEES EXPENSES REDUCTIONS REDUCTIONS REDUCTIONS - ------------------------------------------------------------------------------------------------------------------------- ING INVESTORS TRUST - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- ING AllianceBernstein Mid Cap Growth Portfolio (Class S) (3) (6) (27) 0.77% 0.25% 0.01% 1.03% 0.00% 1.03% - ------------------------------------------------------------------------------------------------------------------------- ING American Funds Growth Portfolio (4)(5) 0.35% 0.75% 0.04% 1.14% 0.00% 1.14% - ------------------------------------------------------------------------------------------------------------------------- ING American Funds Growth-Income Portfolio (4)(5) 0.29% 0.75% 0.05% 1.09% 0.00% 1.09% - ------------------------------------------------------------------------------------------------------------------------- ING American Funds International Portfolio (4)(5) 0.54% 0.75% 0.08% 1.37% 0.00% 1.37% - ------------------------------------------------------------------------------------------------------------------------- ING Capital Guardian Small/Mid Cap Portfolio (Class S) (3) (6) 0.66% 0.25% 0.01% 0.92% 0.00% 0.92% - ------------------------------------------------------------------------------------------------------------------------- ING Capital Guardian U.S. Equities Portfolio (Class S) (3) (6) (9) 0.74% 0.25% 0.01% 1.00% 0.00% 1.00% - ------------------------------------------------------------------------------------------------------------------------- ING Eagle Asset Capital Appreciation Portfolio (Class S) (3) (6) 0.66% 0.25% 0.01% 0.92% 0.00% 0.92% - ------------------------------------------------------------------------------------------------------------------------- ING Evergreen Health Sciences Portfolio (Class S) (3a) 0.75% 0.25% 0.00% 1.00% 0.00% 1.00% - ------------------------------------------------------------------------------------------------------------------------- ING Evergreen Omega Portfolio (Class S) (3a) 0.60% 0.25% 0.00% 0.85% 0.00% 0.85% - ------------------------------------------------------------------------------------------------------------------------- ING FMR(SM) Diversified Mid Cap Portfolio (Class S) (3) 0.75% 0.25% 0.01% 1.01% 0.00% 1.01% - ------------------------------------------------------------------------------------------------------------------------- ING FMR(SM) Earnings Growth Portfolio (Class S) (7) (8) 0.62% 0.25% 0.15% 1.02% 0.02% 1.00% - ------------------------------------------------------------------------------------------------------------------------- ING Global Resources Portfolio (Class S) (3) 0.66% 0.25% 0.00% 0.91% 0.00% 0.91% - -------------------------------------------------------------------------------------------------------------------------
3 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------- TOTAL FUND NET FUND DISTRIBUTION ANNUAL ANNUAL AND/OR EXPENSES TOTAL EXPENSES INVESTMENT SERVICE WITHOUT WAIVERS AFTER ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR FUND NAME FEES FEES EXPENSES REDUCTIONS REDUCTIONS REDUCTIONS - ------------------------------------------------------------------------------------------------------------------------- ING Goldman Sachs Tollkeeper(SM) Portfolio (Class S) (3) (8) 1.35% 0.25% 0.01% 1.61% 0.21% 1.40% - ------------------------------------------------------------------------------------------------------------------------- ING Janus Contrarian Portfolio (Class S) (3) (6) 0.80% 0.25% 0.01% 1.06% 0.00% 1.06% - ------------------------------------------------------------------------------------------------------------------------- ING JPMorgan Emerging Markets Equity Portfolio (Class S) (3) 1.25% 0.25% 0.02% 1.52% 0.00% 1.52% - ------------------------------------------------------------------------------------------------------------------------- ING JPMorgan Small Cap Equity Portfolio (Class S) (3) (6) (9) 0.90% 0.25% 0.00% 1.15% 0.03% 1.12% - ------------------------------------------------------------------------------------------------------------------------- ING JPMorgan Value Opportunities Portfolio (Class S) (7) (8) 0.40% 0.25% 0.15% 0.80% 0.02% 0.78% - ------------------------------------------------------------------------------------------------------------------------- ING Julius Baer Foreign Portfolio (Class S) (3) 0.96% 0.25% 0.00% 1.21% 0.00% 1.21% - ------------------------------------------------------------------------------------------------------------------------- ING Legg Mason Value Portfolio (Class S) (3) (6) 0.80% 0.25% 0.01% 1.06% 0.00% 1.06% - ------------------------------------------------------------------------------------------------------------------------- ING Lifestyles Aggressive Growth Portfolio (Class S1) (10) (11) 1.19% 0.00% 0.05% 1.24% 0.05% 1.19% - ------------------------------------------------------------------------------------------------------------------------- ING Lifestyles Growth Portfolio (Class S1) (10) (11) 1.15% 0.00% 0.05% 1.20% 0.06% 1.14% - ------------------------------------------------------------------------------------------------------------------------- ING Lifestyles Moderate Growth Portfolio (Class S1) (10) (11) 1.11% 0.00% 0.05% 1.16% 0.06% 1.10% - ------------------------------------------------------------------------------------------------------------------------- ING Lifestyles Moderate Portfolio (Class S1) (10) (11) 1.05% 0.00% 0.05% 1.10% 0.06% 1.04% - ------------------------------------------------------------------------------------------------------------------------- ING Liquid Assets Portfolio (Class S) (3) 0.27% 0.25% 0.02% 0.54% 0.00% 0.54% - ------------------------------------------------------------------------------------------------------------------------- ING Lord Abbett Affiliated Portfolio (Class S) (3) (31) 0.74% 0.25% 0.01% 1.00% 0.00% 1.00% - ------------------------------------------------------------------------------------------------------------------------- ING MarketPro Portfolio (Class S) (29) (30) 0.70% 0.25% 0.10% 1.05% 0.00% 1.05% - ------------------------------------------------------------------------------------------------------------------------- ING Marsico Growth Portfolio (Class S) (3) (6) 0.77% 0.25% 0.01% 1.03% 0.00% 1.03% - ------------------------------------------------------------------------------------------------------------------------- ING Marsico International Opportunities Portfolio (Class S) (7) (8) 0.54% 0.25% 0.17% 0.96% 0.03% 0.93% - ------------------------------------------------------------------------------------------------------------------------- ING Mercury Large Cap Growth Portfolio (Class S) (3) (9) 0.80% 0.25% 0.00% 1.05% 0.05% 1.00% - ------------------------------------------------------------------------------------------------------------------------- ING Mercury Large Cap Value Portfolio (Class S) (3) (9) 0.80% 0.25% 0.00% 1.05% 0.05% 1.00% - ------------------------------------------------------------------------------------------------------------------------- ING MFS Mid Cap Growth Portfolio (Class S) (3) (6) (12) 0.64% 0.25% 0.00% 0.89% 0.00% 0.89% - ------------------------------------------------------------------------------------------------------------------------- ING MFS Total Return Portfolio (Class S) (3) (6) 0.64% 0.25% 0.00% 0.89% 0.00% 0.89% - ------------------------------------------------------------------------------------------------------------------------- ING MFS Utilities Portfolio (Class S) (7) (8) 0.60% 0.25% 0.15% 1.00% 0.00% 1.00% - ------------------------------------------------------------------------------------------------------------------------- ING Oppenheimer Main Street Portfolio (Class S) (3) (6) 0.64% 0.25% 0.00% 0.89% 0.00% 0.89% - ------------------------------------------------------------------------------------------------------------------------- ING PIMCO Core Bond Portfolio (Class S) (3) 0.60% 0.25% 0.01% 0.86% 0.00% 0.86% - ------------------------------------------------------------------------------------------------------------------------- ING PIMCO High Yield Portfolio (Class S) (3a) 0.49% 0.25% 0.00% 0.74% 0.00% 0.74% - ------------------------------------------------------------------------------------------------------------------------- ING Pioneer Fund Portfolio (Class S) (8) 0.75% 0.25% 0.01% 1.01% 0.05% 0.96% - ------------------------------------------------------------------------------------------------------------------------- ING Pioneer Mid Cap Value Portfolio (Class S) (8) 0.64% 0.25% 0.01% 0.90% 0.00% 0.90% - ------------------------------------------------------------------------------------------------------------------------- ING Salomon Brothers All Cap Portfolio (Class S) (3) (6) 0.74% 0.25% 0.01% 1.00% 0.00% 1.00% - ------------------------------------------------------------------------------------------------------------------------- ING T. Rowe Price Capital Appreciation Portfolio (Class S) (3) (6) 0.66% 0.25% 0.01% 0.92% 0.00% 0.92% - ------------------------------------------------------------------------------------------------------------------------- ING T. Rowe Price Equity Income Portfolio (Class S) (3) (6) 0.66% 0.25% 0.01% 0.92% 0.00% 0.92% - ------------------------------------------------------------------------------------------------------------------------- ING Templeton Global Growth Portfolio (Class S) (6) (28) 0.97% 0.25% 0.01% 1.23% 0.00% 1.23% - ------------------------------------------------------------------------------------------------------------------------- ING UBS U.S. Allocation Portfolio (Class S) (3) (9) 0.75% 0.25% 0.01% 1.01% 0.02% 0.99% - ------------------------------------------------------------------------------------------------------------------------- ING Van Kampen Equity Growth Portfolio (Class S) (3)(9) 0.65% 0.25% 0.00% 0.90% 0.05% 0.85% - ------------------------------------------------------------------------------------------------------------------------- ING Van Kampen Global Franchise Portfolio (Class S) (3) 1.00% 0.25% 0.00% 1.25% 0.00% 1.25% - ------------------------------------------------------------------------------------------------------------------------- ING Van Kampen Growth and Income Portfolio (Class S) (3) (6) 0.66% 0.25% 0.01% 0.92% 0.00% 0.92% - ------------------------------------------------------------------------------------------------------------------------- ING Van Kampen Real Estate Portfolio (Class S) (3) 0.66% 0.25% 0.00% 0.91% 0.00% 0.91% - ------------------------------------------------------------------------------------------------------------------------- ING VP Index Plus International Equity Portfolio (Class S) (32) 0.45% 0.25% 0.22% 0.92% 0.12% 0.80% - ------------------------------------------------------------------------------------------------------------------------- ING Wells Fargo Mid Cap Disciplined Portfolio (Class S) (3) (6) 0.66% 0.25% 0.01% 0.92% 0.00% 0.92% - ------------------------------------------------------------------------------------------------------------------------- ING Wells Fargo Small Cap Disciplined Portfolio (Class S) (32) 0.77% 0.25% 0.21% 1.23% 0.11% 1.12% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- ING PARTNERS, INC. - ------------------------------------------------------------------------------------------------------------------------- ING Baron Small Cap Growth Portfolio (Service Class) (14) 0.85% 0.25% 0.40% 1.50% 0.05% 1.45% - ------------------------------------------------------------------------------------------------------------------------- ING Davis Venture Value Portfolio (Service Class)(32) 0.80% 0.25% 0.00% 0.10% 0.00% 1.15% - ------------------------------------------------------------------------------------------------------------------------- ING Fundamental Research Portfolio (Service Class) 0.60% 0.25% 0.20% 1.05% 0.00% 1.05% - ------------------------------------------------------------------------------------------------------------------------- ING JPMorgan Fleming International Portfolio (Service Class) 0.80% 0.25% 0.20% 1.25% 0.00% 1.25% - ------------------------------------------------------------------------------------------------------------------------- ING Oppenheimer Global Portfolio (Service Class) (15) 0.60% 0.25% 0.06% 0.91% 0.00% 0.91% - ------------------------------------------------------------------------------------------------------------------------- ING Salomon Brothers Aggressive Growth Portfolio (Service Class) 0.69% 0.25% 0.13% 1.07% 0.00% 1.07% - ------------------------------------------------------------------------------------------------------------------------- ING UBS U.S. Large Cap Equity Portfolio (Service Class) 0.70% 0.25% 0.15% 1.10% 0.00% 1.10% - ------------------------------------------------------------------------------------------------------------------------- ING Van Kampen Comstock Portfolio (Service Class) (14) 0.60% 0.25% 0.35% 1.20% 0.07% 1.13% - ------------------------------------------------------------------------------------------------------------------------- ING Van Kampen Equity and Income Portfolio (Service Class) (15) 0.55% 0.25% 0.02% 0.82% 0.00% 0.82% - ------------------------------------------------------------------------------------------------------------------------- ING VARIABLE INSURANCE TRUST - ------------------------------------------------------------------------------------------------------------------------- ING VP Global Equity Dividend Portfolio (16) (17) 1.00% 0.00% 0.20% 1.20% (0.03%) 1.23% - -------------------------------------------------------------------------------------------------------------------------
4 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------- TOTAL FUND NET FUND DISTRIBUTION ANNUAL ANNUAL AND/OR EXPENSES TOTAL EXPENSES INVESTMENT SERVICE WITHOUT WAIVERS AFTER ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR FUND NAME FEES FEES EXPENSES REDUCTIONS REDUCTIONS REDUCTIONS - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- ING VARIABLE PORTFOLIOS, INC. - ------------------------------------------------------------------------------------------------------------------------- ING VP Index Plus LargeCap Portfolio (Class S) (18) (19) 0.35% 0.25% 0.09% 0.69% 0.00% 0.69% - ------------------------------------------------------------------------------------------------------------------------- ING VP Index Plus MidCap Portfolio (Class S) (18) (19) 0.40% 0.25% 0.09% 0.74% 0.00% 0.74% - ------------------------------------------------------------------------------------------------------------------------- ING VP Index Plus SmallCap Portfolio (Class S) (18) (19) 0.40% 0.25% 0.09% 0.74% 0.00% 0.74% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- ING VARIABLE PRODUCTS TRUST - ------------------------------------------------------------------------------------------------------------------------- ING VP Financial Services Portfolio (Service Class S) (20) (21) 0.75% 0.25% 0.25% 1.25% 0.20% 1.05% - ------------------------------------------------------------------------------------------------------------------------- ING VP SmallCap Opportunities Portfolio (Service Class S) (20) (21) 0.75% 0.25% 0.19% 1.19% 0.09% 1.10% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- ING VP INTERMEDIATE BOND PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------- ING VP Intermediate Bond Portfolio (Class S) (20) 0.40% 0.25% 0.08% 0.73% 0.00% 0.73% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- AIM VARIABLE INSURANCE FUNDS - ------------------------------------------------------------------------------------------------------------------------- AIM V.I. Leisure Fund (Series I) (22) 0.75% 0.00% 0.59% 1.34% 0.04% 1.30% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- FIDELITY VARIABLE INSURANCE PRODUCTS PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------- Fidelity(R) VIP Contrafund Portfolio (Service Class 2) 0.57% 0.25% 0.11% 0.93% 0.00% 0.93% - ------------------------------------------------------------------------------------------------------------------------- Fidelity(R) VIP Equity-Income Portfolio (Service Class 2) 0.47% 0.25% 0.11% 0.83% 0.00% 0.83% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- LIBERTY VARIABLE INSURANCE TRUST - ------------------------------------------------------------------------------------------------------------------------- Colonial Small Cap Value Fund (Class B) 0.80% 0.25% 0.17% 1.22% 0.00% 1.22% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- PROFUNDS VP - ------------------------------------------------------------------------------------------------------------------------- ProFund VP Bull 0.75% 0.25% 0.78% 1.78% 0.00% 1.78% - ------------------------------------------------------------------------------------------------------------------------- ProFund VP Europe 30 0.75% 0.25% 0.61% 1.61% 0.00% 1.61% - ------------------------------------------------------------------------------------------------------------------------- ProFund Rising Rates Opportunity 0.75% 0.25% 0.78% 1.78% 0.00% 1.78% - ------------------------------------------------------------------------------------------------------------------------- ProFund VP Small-Cap 0.75% 0.25% 0.75% 1.75% 0.00% 1.75% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- WELLS FARGO VARIABLE TRUST - ------------------------------------------------------------------------------------------------------------------------- Wells Fargo Advantage VT Asset Allocation Fund (24) (25) (26) 0.55% 0.25% 0.22% 1.02% 0.02% 1.00% - ------------------------------------------------------------------------------------------------------------------------- Wells Fargo Advantage VT Equity Income Fund (24) (25) (26) 0.55% 0.25% 0.23% 1.03% 0.03% 1.00% - ------------------------------------------------------------------------------------------------------------------------- Wells Fargo Advantage VT C&B Large Cap Value Fund (23) (24) (25) (26) 0.55% 0.25% 0.39% 1.19% 0.19% 1.00% - ------------------------------------------------------------------------------------------------------------------------- Wells Fargo Advantage VT Large Company Growth Fund (24) (25) (26) 0.55% 0.25% 0.25% 1.05% 0.05% 1.00% - ------------------------------------------------------------------------------------------------------------------------- Wells Fargo Advantage VT Money Market Fund (24) (25) (26) 0.30% 0.25% 0.32% 0.87% 0.12% 0.75% - ------------------------------------------------------------------------------------------------------------------------- Wells Fargo Advantage VT Small Cap Growth Fund (24) (25) (26) 0.75% 0.25% 0.24% 1.24% 0.04% 1.20% - ------------------------------------------------------------------------------------------------------------------------- Wells Fargo Advantage VT Total Return Bond Fund (24) (25) (26) 0.45% 0.25% 0.26% 0.96% 0.06% 0.90% - -------------------------------------------------------------------------------------------------------------------------
Footnotes to the "Fund Expense Table" (1) The Company may receive compensation from each of the funds or the funds' affiliates based on an annual percentage of the average net assets held in that fund by the Company. The percentage paid may vary from one fund company to another. For certain funds, some of this compensation may be paid out of 12b-1 fees or service fees that are deducted from fund assets. Any such fees deducted from fund assets are disclosed in this Fund Expense Table and the fund prospectuses. The Company may also receive additional compensation from certain funds for administrative, recordkeeping or other services provided by the Company to the funds or the funds' affiliates. These additional payments are made by the funds or the funds' affiliates to the Company and do not increase, directly or indirectly, the fees and expenses shown above. See "Fees - Fund Expenses" for additional information. 5 WF Landmark - 136960 (2) In the case of fund companies affiliated with the Company, where the Company or an affiliated investment adviser employs subadvisers to manage the funds, no payments are made to the Company or the affiliated investment adviser by the subadvisers. However, the investment management fee shown in the table is apportioned between the Company or other affiliated investment adviser and subadviser. This apportionment varies by subadviser, resulting in varying amounts of revenue retained by the investment adviser, including the Company. This apportionment of the investment advisory fee does not increase, directly or indirectly, the fees and expenses shown above. See "Fees - Fund Expenses" for additional information. (3) The amounts shown are estimated operating expenses for Class S shares of each Portfolio as a ratio of expenses to average daily net assets based on each Portfolio's actual operating expenses for Class S shares for its most recently completed fiscal year, as adjusted for contractual changes, if any, and fee waivers to which Directed Services, Inc. (DSI) as adviser to each Portfolio, has agreed for each Portfolio for the current fiscal year. Effective March 1, 2004, the management fee structure for ING JPMorgan Emerging Markets Equity Portfolio was revised. Effective January 1, 2005, the management fee structure for ING Capital Guardian Managed Global Portfolio was revised. Through a "bundled fee" arrangement, DSI, the Trust's manager, is paid a single fee for advisory, administrative, custodial, transfer agency, auditing and legal services necessary for the ordinary operation of the Portfolios. The Portfolios would also bear any extraordinary expenses. (3a) The amounts shown are estimated operating expenses for Class S shares of each Portfolio as a ratio of expenses to average daily net assets. Operating expenses for each Portfolio are based on estimated amounts for the current fiscal year as they had not had a full year of operations as of December 31, 2004. Through a "bundled fee" arrangement, DSI, the Trust's manager, is paid a single fee for advisory, administrative, custodial, transfer agency, auditing and legal services necessary for the ordinary operation of the Portfolios. The Portfolios would also bear any extraordinary expenses. (4) This table shows the estimated operating expenses for the Portfolios as a ratio of expenses to average daily net assets. These estimates are based on each Portfolio's actual operating expenses for its most recently completed fiscal year. This table reflects the aggregate annual operating expenses of each Portfolio and its corresponding Master Fund (Class 2 shares of American Funds Insurance Series(R) - Growth Fund, Growth-Income Fund, and International Fund.) Each Master Fund pays Capital Research Management Company (CRMC), the investment adviser to the Master Funds, a management fee for advisory expenses at current asset levels of the Master Funds of 0.35%, 0.53% and 0.28%, respectively. Pursuant to its investment management agreement with the Trust, ING Investments, LLC may charge an annual advisory fee at asset levels that are the same as the current asset levels of the Master Funds equal to 0.35%, 0.29% and 0.54% of average daily net assets for the ING American Funds Growth Portfolio, the ING American Funds Growth-Income Portfolio, and the ING American Funds International Portfolio, respectively, if the respective Portfolio does not invest substantially all of its assets in another investment company. If a Portfolio invests substantially all of its assets in another investment company, ING Investments, LLC does not charge an advisory fee. Each Portfolio anticipates investing substantially all of its assets in another investment company. CRMC has voluntarily agreed to waive a portion of its management fee. Including this waiver, the Total Fund Annual Operating Expenses for the ING American Funds Growth Portfolio, the ING American Funds Growth-Income Portfolio, and the ING American Funds International Portfolio would have been 1.13%, 1.08%, and 1.36%, respectively. This arrangement may be discontinued by CRMC at any time. (5) Shares of each Portfolio are subject to a Rule 12b-1 fee at an annual rate of 0.50% of average daily net assets payable to Directed Services, Inc. In addition, Class 2 shares of each of the Master Funds pay 0.25% of average net assets annually pursuant to a Plan of Distribution or 12b-1 plan. Shareholders of the Class 2 shares of the Master Funds pay only their proportionate share of 12b-1 plan expenses. Pursuant to its administration agreement with the Trust, ING Funds Services, LLC may receive an annual administration fee equal to 0.10% of average daily net assets for ING American Funds Growth Portfolio, ING American Funds Growth-Income Portfolio, and ING American Funds International Portfolio, respectively, if the respective Portfolio does not invest substantially all of its assets in another investment company. If a Portfolio invests substantially all of its assets in another investment company, ING Funds Services, LLC does not charge an administration fee. Each Portfolio anticipates investing substantially all of its assets in another investment company. (6) A portion of the brokerage commissions that the ING AIM Mid Cap Growth, ING Alliance Mid Cap Growth, ING Capital Guardian Managed Global, ING Capital Guardian Small/Mid Cap, ING Capital Guardian U.S. Equities, ING Eagle Asset Capital Appreciation, ING Janus Contrarian, ING Wells Fargo Mid Cap Disciplined Portfolio, ING JPMorgan Small Cap Equity, ING Legg Mason Value, ING Marsico Growth, ING MFS Mid Cap Growth, ING MFS Total Return, ING Oppenheimer Main Street, ING Salomon Brothers All Cap, ING T. Rowe Price Capital Appreciation, ING T. Rowe Price Equity Income and ING Van Kampen Growth and Income Portfolios pay is used to reduce each Portfolio's expenses. Including these reductions and the MFS Voluntary Management fee waiver the Total Annual Fund Operating Expenses for each Portfolio for the year ended December 31, 2004 would have been 0.87%, 0.97%, 1.26%, 0.91%, 0.99%, 0.91%, 1.05%, 0.88%, 1.12%, 1.06%, 1.00%, 0.87%, 0.88%, 0.86%, 0.97%, 0.90%, 0.91%, and 0.90%, respectively. This arrangement may be discontinued at any time. (7) The amounts shown are estimated operating expenses for Class S shares of each Portfolio as a ratio of expenses to average daily net assets. Operating expenses for each Portfolio are estimated as they had not commenced operations as of December 31, 2004. Pursuant to its administration agreement with the Trust, ING Funds Services, LLC may receive an annual administration fee equal to 0.10% of average daily net assets for this Portfolio. Other Expenses for each Portfolio are estimated because the Portfolio did not have a full calendar year of operations as of December 31, 2004 (the Portfolio's fiscal year end). (8) DirectedServices, Inc. ("DSI"), the Adviser, has entered into a written expense limitation agreement with respect to ING JPMorgan Value Opportunities Portfolio, ING Marsico International Opportunities Portfolio, ING MFS Utilities Portfolio, and ING Pioneer Mid Cap Value Portfolio under which it will limit expenses of these Portfolios, excluding taxes, brokerage and extraordinary expenses, subject to possible recoupment by DSI within three years. The amount of these Portfolios' expenses that are proposed to be waived or reimbursed in the ensuing fiscal year is shown under the heading "Waivers, Reimbursements, and Recoupments." For ING MFS Utilities Portfolio, the expense limitation agreement will continue through at least May 1, 2006. For ING JPMorgan Value Opportunities Portfolio, ING Marsico International Opportunities Portfolio, and ING Pioneer Mid Cap Value Portfolio, the expense limitation agreement will continue through at least September 23, 2007. The expense limitation agreements are contractual and shall renew automatically for one-year terms unless DSI provides written notice of the termination of the expense limitation agreement at least 90 days prior to the end of the then current terms or upon termination of the management agreement. Pursuant to a side agreement effective September 23, 2005, DSI has effected an expense limit for ING Pioneer Fund Portfolio through September 23, 2007. There is no guarantee that this side agreement will continue after that date. This side agreement will only renew if DSI elects to renew it. 6 WF Landmark - 136960 (9) Directed Services, Inc. (DSI), the adviser, has contractually agreed to waive a portion of the management fee for the Portfolio. Based upon net assets as of December 31, 2004, the management fee waiver for each Portfolio would equal 0.00% for ING Capital Guardian U.S. Equities Portfolio; 0.03% for ING JPMorgan Small Cap Equity Portfolio; 0.05% for ING Mercury Large Cap Value Portfolio; 0.05% for ING Mercury Large Cap Growth Portfolio; 0.02% for ING UBS U.S. Allocation Portfolio; and 0.05% for ING Van Kampen Equity Growth Portfolio. This expense waiver will continue through at least May 1, 2006. There is no guarantee that this waiver will continue after this date. This agreement will only renew if DSI elects to renew it. (10) The table reflects the net operating expenses paid directly and indirectly by each Portfolio. Shareholders in each Portfolio indirectly bear the proportionate expenses of the Service Class shares of the Underlying Funds. Because a weighted average is used in calculating expenses attributable to a Portfolio, the amount of the expenses of Underlying Funds indirectly borne by a Portfolio will vary based on the Portfolio's allocation of assets to, and the annualized net operating expenses of, the particular Underlying Funds during the Portfolio's fiscal year. For information regarding expenses of the Underlying Funds, see the Fund's prospectus. Other Expenses are estimated for each Portfolio's current fiscal year. (11) ING Investments, LLC, the investment adviser to each Portfolio, has entered into a written expense limitation agreement with respect to each Portfolio under which it will limit expenses of the LifeStyle Portfolios, excluding interest, taxes, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments, LLC within three years. The amount of each Portfolio's expenses that are proposed to be waived or reimbursed in the ensuing fiscal year is shown under the heading Fees and Expenses Waived or Reimbursed. The expense limitation agreement will continue through at least May 1, 2006. For further information regarding the expense limitation agreements, see the Fund's prospectus. (12) Directed Services, Inc. (DSI) has voluntarily agreed to waive a portion of its management fee for ING MFS Mid Cap Growth Portfolio. Including this waiver, the Net Annual Fund Operating Expenses for the Portfolio for the year ended December 31, 2004, would have been 0.87%. This arrangement may be discontinued by DSI at any time. (13) The amounts shown are estimated operating expenses for Class S shares of each Portfolio as a ratio of expenses to average daily net assets. Operating expenses for each Portfolio are estimated as they had not commenced operations as of December 31, 2004. Through a "bundled fee" arrangement, DSI, the Trust's manager, is paid a single fee for advisory, administrative, custodial, transfer agency, auditing and legal services necessary for the ordinary operation of the Portfolios. The Portfolios would also bear any extraordinary expenses. Other Expenses for each Portfolio are estimated because the Portfolio did not have a full calendar year of operations as of December 31, 2004 (the Portfolio's fiscal year end). (14) The Administrator of the Fund has contractually agreed to waive all or a portion of its administrative services fees and/or reimburse administrative expenses for ING American Century Small Cap Value, ING Baron Small Cap Growth, and ING Van Kampen Comstock Portfolios so that the Net Annual Fund Operating Expenses for these Portfolios shall not exceed 1.55%, 1.45%, and 1.13%, respectively, through May 1, 2006. Without this waiver, the Net Annual Fund Operating Expenses would be 1.65% for ING American Century Small Cap Value, 1.50% for ING Baron Small Cap Growth and 1.20% for ING Van Kampen Comstock Portfolios. (15) Effective December 1, 2004, Management (Advisory) Fees were restated to reflect a decrease from 0.85% to 0.55% for ING Van Kampen Equity and Income Portfolio. Effective December 1, 2004, the administrative fees (included in Other Expenses) were restated to reflect an increase/decrease as follows: from 0.20% to 0.02% for ING Van Kampen Equity and Income Portfolio and from 0.60% to 0.06% for ING Oppenheimer Global Portfolio. (16) The amounts shown are the estimated operating expenses for shares of the Portfolio as a ratio of expenses to average daily net assets. These estimates are based on the Portfolio's actual operating expenses for its most recently completed fiscal year, as adjusted for contractual changes, if any, and a fee waiver to which ING Investments, LLC, the investment adviser to the Portfolio, has agreed for the Portfolio. 7 WF Landmark - 136960 (17) ING Investments, LLC has entered into a written expense limitation agreement with the Portfolio under which it will limit expenses of the Portfolio, excluding interest, taxes, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments, LLC within three years. The amount of the Portfolio's expenses waived, reimbursed or recouped during the last fiscal year by ING Investments, LLC is shown under the heading Fees and Expenses Waived or Reimbursed. Recoupments are shown as negative numbers. The expense limit for the Portfolio is shown as Net Annual Fund Operating Expenses. The expense limit will continue through at least May 1, 2006. In addition, effective January 1, 2005, pursuant to a side agreement which is not reflected in the fund expense table, ING Investments, LLC has lowered the expense limit for the Portfolio to 1.15% through at least December 31, 2005. There is no guarantee that this side agreement will continue after that date. Any fees waived pursuant to the side agreement shall not be eligible for recoupment. For further information regarding the expense limitation agreements, see the Fund's prospectus. (18) The amounts shown are estimated operating expenses for Class S shares of each Portfolio as a ratio of expenses to average daily net assets. These estimates, unless otherwise noted, are based on each Portfolio's actual operating expenses for its most recently completed fiscal year, adjusted for contractual changes, if any, and fee waivers to which ING Investments, LLC, the investment adviser to each Portfolio, has agreed for each Portfolio. ING Funds Services, LLC receives an annual administrative fee (included in Other Expenses) equal to 0.055% on the first $5 billion of daily net assets and 0.03% thereafter. (19) ING Investments, LLC, the investment adviser to each Portfolio, has entered into written expense limitation agreements with each Portfolio under which it will limit expenses of the Portfolios, excluding interest, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments, LLC within three years. The amount of each Portfolio's expenses waived, reimbursed or recouped during the last fiscal year is shown under the heading Fees and Expenses Waived or Reimbursed. Recoupments are shown as negative numbers under Fees and Expenses Waived or Reimbursed. The expense limits will continue through at least May 1, 2006. For further information regarding the expense limitation agreements, see the Fund's prospectus. (20) For the ING VP Financial Services Portfolio, which has not had a full year of operations, expenses are based on estimated amounts for the current fiscal year. In each case, the estimated operating expenses for the Class S shares are based on a ratio of expenses to average daily net assets. For all other Portfolios, estimated operating expenses are based on each Portfolio's actual operating expenses for Class S shares for its most recently completed fiscal year, as adjusted for contractual changes, if any, and fee waivers to which ING Investments, LLC, the investment adviser, has agreed for each Portfolio for the current fiscal year. (21) ING Funds Services, LLC receives an annual administration fee (included in Other Expenses) equal to 0.10% of each Portfolio's average daily net assets. ING Investments, LLC has entered into a written expense limitation agreement with ING Variable Products Trust under which it will limit expenses of the Portfolios, excluding interest, taxes, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments, LLC within three years. The amount of each Portfolio's expenses waived, reimbursed or recouped during the last fiscal year by ING Investments, LLC is shown under the heading Fees and Expenses Waived or Reimbursed. The amount of expenses proposed to be waived during the current fiscal year by ING Investments, LLC for ING VP Financial Services Portfolio is shown under the heading Fees and Expenses Waived or Reimbursed. For the Portfolio, the expense limits will continue through at least May 1, 2006. For further information regarding the expense limitation agreements, see the Fund's prospectus. (22) The Fund's advisor and/or distributor has contractually agreed to waive advisory fees and/or reimburse expenses of Series II shares to the extent necessary to limit Total Annual Fund Operating Expenses (excluding certain items as discussed in the fund's prospectus) of Series II shares to 1.45% of average daily net assets for each series portfolio of AIM Variable Insurance Funds. The expense limitation agreements are in effect through April 30, 2006. Please refer to the fund's prospectus for more detailed information. (23) Formerly, the Wells Fargo VT Equity Value Fund. As of 4/11/05 the Wells Fargo VT Equity Value Fund will be called the Wells Fargo Advantage VT C&B Large Cap Value Fund (24) The Funds' investment adviser has implemented a breakpoint schedule for the Funds' management fees. The management fees charged to the Funds will decline as a Fund's assets grow and will continue to be based on a percentage of the Fund's average daily net assets. The breakpoint schedule for the Asset Allocation, Equity Income, C&B Large Cap Value and Large Company Growth Funds is as follows: 0.55% from $0 to $499 million; 0.50% for assets from $500 million to $999 million; 0.45% for assets from $1 billion to $2.99 billion; 0.425% for assets from $3 billion to $4.99 billion; and 0.40% for assets $5 billion and higher. The breakpoint schedule for the Small Cap Growth Fund is as follows: 0.75% for assets from $0 to $499 million; 0.70% for assets from $500 million to $999 million; 0.65% for assets from $1 billion to $2.99 billion; 0.625% for assets from $3 billion to $4.99 billion; and 0.60% for assets $5 billion and higher. The breakpoint schedule for the Money Market Fund is as follows: 0.30% for assets from $0 to $499 million; 0.30% for assets from $500 million to $999 million; 0.275% for assets from $1 billion to $2.99 billion; 0.275% for assets from $3 billion to $4.99 billion; and 0.25% for assets $5 billion and higher. The breakpoint schedule for the Total Return Bond Fund is as follows: 0.45% for assets from $0 to $499 million; 0.40% for assets from $500 million to $999 million; 0.35% for assets from $1 billion to $2.99 billion; 0.325% for assets from $3 billion to $4.99 billion; and 0.30% for assets $5 billion and higher. 8 WF Landmark - 136960 (25) Other expenses may include expenses payable to affiliates of Wells Fargo & Company. (26) The adviser has committed through April 30, 2006 to waive fees and/or reimburse expenses to the extent necessary to maintain the net operating expense ratio shown. (27) Effective December 5, 2005, the portfolio name "ING Alliance Mid Cap Growth Portfolio" is changed to "ING AllianceBernstein Mid Cap Growth Portfolio". (28) Effective December 5, 2005, the portfolio name "ING Capital Guardian Managed Global Portfolio" is changed to "ING Templeton Global Growth Portfolio". (29) In addition to the expenses of each Portfolio, each Portfolio will indirectly bear the proportionate expenses of the Institutional Class shares of the Underlying Funds. Because the Fund uses a weighted average in calculating expenses attributable to a Portfolio, the amount of the expenses of Underlying Funds indirectly borne by a Portfolio will vary based on the Portfolio's allocation of assets to, and the annualized net operating expenses of, the particular Underlying Funds during the Portfolio's fiscal year. The fees reflected in the Fund Expense Table, above, are the aggregate annual net expense ratios (as an annual percentage of average daily net assets) for each Portfolio and its Underlying Funds as of December 31, 2004. (30) ING Investments, the investment advisor to each Portfolio, has entered into a written expense limitation agreement with respect to each Portfolio under which it will limit expenses of the Portfolios, excluding interest, taxes, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments within three years. The amount of each Portfolio's expenses that are proposed to be waived or reimbursed in the ensuing fiscal year is shown under the heading, "Total Waivers or Reductions." The expense limitation agreement will continue through at least May 1, 2007. The expense limitation agreements are contractual and shall renew automatically for one-year terms unless ING Investments provides written notice of the termination of an expense limitation agreement at least 90 days prior to the end of the then current term or upon termination of the investment management agreement. (31) Effective December 5, 2005, the portfolio name "ING Salomon Brothers Investors Portfolio" is changed to "ING Lord Abbett Affiliated Portfolio". (32) Effective December 5, 2005, this portfolio is available as an investment option under the contract. Premium taxes (which currently range from 0% to 3.5% of premium payments) may apply, but are not reflected in the above table or in the example below. EXAMPLE: This Example is intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity contracts. These costs include contract owner transaction expenses, contract fees, separate account annual expenses, and Trust or Fund fees and expenses. The Example assumes that you invest $10,000 in the Contract for the time periods indicated. The Example also assumes that your investment has a 5% return each year and assumes the maximum fees and expenses of any of the Trusts or Funds. Specifically, the Example assumes election of the Max 7 Enhanced Death Benefit and election of the earnings multiplier benefit rider with a charge of 0.30% of the contract value annually. The Example reflects the deduction of a mortality and expense risk charge, an asset-based administrative charge, and the annual contract administrative charge as an annual charge of 0.01% of assets. The Example also assumes you elected the Minimum Guaranteed Income Benefit Rider. Note that surrender charges may apply if you choose to annuitize your Contract within the first 4 contract years. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: ---------------------------------------------------------------------------- 1) If you surrender your contract at the end of the applicable time period: ---------------------------------------------------------------------------- 1 year 3 years 5 years 10 years $1,142 $2,019 $2,686 $5,315 ---------------------------------------------------------------------------- 2) If you annuitize at the end of the applicable time period: ---------------------------------------------------------------------------- 1 year 3 years 5 years 10 years $1,142 $2,019 $2,686 $5,315 ---------------------------------------------------------------------------- 3) If you do not surrender your contract: ---------------------------------------------------------------------------- 1 year 3 years 5 years 10 years $542 $1,619 $2,686 $5,315 ---------------------------------------------------------------------------- 9 WF Landmark - 136960 Compensation is paid for the sale of the Contracts. For information about this compensation, see "Selling the Contract." - -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION - -------------------------------------------------------------------------------- ACCUMULATION UNIT We use accumulation units to calculate the value of a Contract. Each subaccount of Separate Account B has its own accumulation unit value. The accumulation units are valued each business day that the New York Stock Exchange is open for trading. Their values may increase or decrease from day to day according to a Net Investment Factor, which is primarily based on the investment performance of the applicable investment portfolio. Shares in the investment portfolios are valued at their net asset value. Tables containing (i) the accumulation unit value history of each subaccount of ING USA Separate Account B offered in this prospectus and (ii) the total investment value history of each such subaccount are presented in Appendix A -- Condensed Financial Information. The numbers show the year-end unit values of each subaccount from the time purchase payments were first received in the subaccounts under the Contract. THE NET INVESTMENT FACTOR The Net Investment Factor is an index number which reflects certain charges under the Contract and the investment performance of the subaccount. The Net Investment Factor is calculated for each subaccount as follows: 1) We take the net asset value of the subaccount at the end of each business day. 2) We add to (1) the amount of any dividend or capital gains distribution declared for the subaccount and reinvested in such subaccount. We subtract from that amount a charge for our taxes, if any. 3) We divide (2) by the net asset value of the subaccount at the end of the preceding business day. 4) We then subtract the applicable daily mortality and expense risk charge and the daily asset-based administrative charge from the subaccount. Calculations for the subaccounts are made on a per share basis. The Net Rate of Return equals the Net Investment Factor minus one. PERFORMANCE INFORMATION From time to time, we may advertise or include in reports to contract owners performance information for the subaccounts of Separate Account B, including the average annual total return performance, yields and other nonstandard measures of performance. Such performance data will be computed, or accompanied by performance data computed, in accordance with standards defined by the SEC. Except for the Liquid Assets subaccount and the Wells Fargo VT Money Market subaccount, quotations of yield for the subaccounts will be based on all investment income per unit (contract value divided by the accumulation unit) earned during a given 30-day period, less expenses accrued during such period. Information on standard total average annual return performance will include average annual rates of total return for 1, 5 and 10 year periods, or lesser periods depending on how long Separate Account B has been investing in the portfolio. We may show other total returns for periods of less than one year. We will base total return figures on the actual historic performance of the subaccounts of Separate Account B, assuming an investment at the beginning of the period when the separate account first invested in the portfolios, and withdrawal of the investment at the end of the period, adjusted to reflect the deduction of all applicable portfolio and current contract charges. We may also show rates of total return on amounts invested at the beginning of the period with no withdrawal at the end of the period. Total return figures which assume no withdrawals at the end of the period will reflect all recurring charges, but will not reflect the surrender charge. In addition, we may present historic performance data for the investment portfolios since their inception reduced by some or all of the fees and charges under the Contract. Such adjusted historic performance includes data that precedes the inception dates of the subaccounts of Separate Account B. This data is designed to show the performance that would have resulted if the Contract had been in existence before the separate account began investing in the portfolios. 10 WF Landmark - 136960 Current yield for the Liquid Assets subaccount and the Wells Fargo VT Money Market subaccount are based on income received by a hypothetical investment over a given 7-day period, less expenses accrued, and then "annualized" (i.e., assuming that the 7-day yield would be received for 52 weeks). We calculate "effective yield" for the Liquid Assets subaccount and the Wells Fargo VT Money Market subaccount in a manner similar to that used to calculate yield, but when annualized, the income earned by the investment is assumed to be reinvested. The "effective yield" will thus be slightly higher than the "yield" because of the compounding effect of earnings. We calculate quotations of yield for the remaining subaccounts on all investment income per accumulation unit earned during a given 30-day period, after subtracting fees and expenses accrued during the period, assuming no surrender. YOU SHOULD BE AWARE THAT THERE IS NO GUARANTEE THAT EITHER THE LIQUID ASSETS SUBACCOUNT OR THE WELLS FARGO VT MONEY MARKET SUBACCOUNT WILL HAVE A POSITIVE OR LEVEL RETURN. We may compare performance information for a subaccount to: (i) the Standard & Poor's 500 Stock Index, Dow Jones Industrial Average, Donoghue Money Market Institutional Averages, or any other applicable market indices, (ii) other variable annuity separate accounts or other investment products tracked by Lipper Analytical Services (a widely used independent research firm which ranks mutual funds and other investment companies), or any other rating service, and (iii) the Consumer Price Index (measure for inflation) to determine the real rate of return of an investment in the Contract. Our reports and promotional literature may also contain other information including the ranking of any subaccount based on rankings of variable annuity separate accounts or other investment products tracked by Lipper Analytical Services or by similar rating services. Performance information reflects only the performance of a hypothetical contract and should be considered in light of other factors, including the investment objective of the investment portfolio and market conditions. Please keep in mind that past performance is not a guarantee of future results. FINANCIAL STATEMENTS The statement of assets and liabilities of Separate Account B as of December 31, 2004, and the related statement of operations for the year then ended, and the statements of changes in net assets for each of the two years in the period then ended are included in the Statement of Additional Information. The consolidated financial statements and schedules of ING USA Annuity and Life Insurance Company as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004 are included in the Statement of Additional Information. - -------------------------------------------------------------------------------- ING USA ANNUITY AND LIFE INSURANCE COMPANY - -------------------------------------------------------------------------------- ING USA Annuity and Life Insurance Company ("ING USA") is an Iowa stock life insurance company, which was originally incorporated in Minnesota on January 2, 1973. ING USA is a wholly owned subsidiary of Lion Connecticut Holdings Inc. ("Lion Connecticut"), which in turn is a wholly owned subsidiary of ING Groep N.V. ("ING"), a global financial services holding company based in The Netherlands. ING USA is authorized to sell insurance and annuities in all states, except New York, and the District of Columbia. ING USA's consolidated financial statements appear in the Statement of Additional Information. 11 WF Landmark - 136960 Lion Connecticut is the holding company for Directed Services, Inc., the investment manager of the ING Investors Trust and the distributor of the Contracts, and other interests. ING also owns ING Investments, LLC and ING Investment Management Co., portfolio managers of the ING Investors Trust, and the investment managers of the ING Variable Insurance Trust and ING Variable Products Trust and ING Variable Product Portfolios, respectively. ING also owns Baring International Investment Limited, another portfolio manager of the ING Investors Trust. Our principal office is located at 1475 Dunwoody Drive, West Chester, Pennsylvania 19380. - -------------------------------------------------------------------------------- ING USA SEPARATE ACCOUNT B - -------------------------------------------------------------------------------- ING USA Separate Account B ("Separate Account B") was established as a separate account of the Company on July 14, 1988. It is registered with the SEC as a unit investment trust under the Investment Company Act of 1940, as amended (the "1940 Act"). Separate Account B is a separate investment account used for our variable annuity contracts. We own all the assets in Separate Account B but such assets are kept separate from our other accounts. Separate Account B is divided into subaccounts. Each subaccount invests exclusively in shares of one investment portfolio of a Trust or Fund. Each investment portfolio has its own distinct investment objectives and policies. Income, gains and losses, realized or unrealized, of a portfolio are credited to or charged against the corresponding subaccount of Separate Account B without regard to any other income, gains or losses of the Company. Assets equal to the reserves and other contract liabilities with respect to each are not chargeable with liabilities arising out of any other business of the Company. They may, however, be subject to liabilities arising from subaccounts whose assets we attribute to other variable annuity contracts supported by Separate Account B. If the assets in Separate Account B exceed the required reserves and other liabilities, we may transfer the excess to our general account. We are obligated to pay all benefits and make all payments provided under the Contracts. Note: We currently offer other variable annuity contracts that invest in Separate Account B, but are not discussed in this prospectus. Separate Account B may also invest in other investment portfolios which are not available under your Contract. Under certain circumstances, we may make certain changes to the subaccounts. For more information, see "The Annuity Contract -- Addition, Deletion, or Substitution of Subaccounts and Other Changes." - -------------------------------------------------------------------------------- THE TRUSTS AND FUNDS - -------------------------------------------------------------------------------- YOU WILL FIND INFORMATION ABOUT THE TRUSTS AND FUNDS CURRENTLY AVAILABLE UNDER YOUR CONTRACT IN APPENDIX B -- THE INVESTMENT PORTFOLIOS. A PROSPECTUS CONTAINING MORE COMPLETE INFORMATION ON EACH TRUST OR FUND MAY BE OBTAINED BY CALLING OUR CUSTOMER SERVICE CENTER AT 800-366-0066. YOU SHOULD READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. Certain funds are designated as "Master-Feeder", "LifeStyle Funds" or "MarketPro Funds". Funds offered in a Master-Feeder structure (such as the American Funds) or fund of funds structure (such as the LifeStyle or MarketPro Funds) may have higher fees and expenses than a fund that invests directly in debt and equity securities. See "Trust and Fund Expenses". Also, you should discuss with your registered representative whether the LifeStyle or MarketPro Funds are appropriate for you, particularly if you are a conservative investor. 12 WF Landmark - 136960 If, due to differences in tax treatment or other considerations, the interests of contract owners of various contracts participating in the Trusts or Funds conflict, we, the Boards of Trustees or Directors of the Trusts or Funds, and any other insurance companies participating in the Trusts or Funds will monitor events to identify and resolve any material conflicts that may arise. - -------------------------------------------------------------------------------- RESTRICTED FUNDS - -------------------------------------------------------------------------------- We may, with 30 days notice to you, designate any investment option as a Restricted Fund and limit the amount you may allocate or transfer to a Restricted Fund. We may also change the limitations on existing contracts with respect to new premiums added to investment portfolios and with respect to new transfers to investment portfolios. We may establish any limitations, at our discretion, as a percentage of premium or contract value, or as a specified dollar amount, and change the limitation at any time. Currently, we have not designated any investment option as a Restricted Fund. If we designate an investment option as a Restricted Fund or set applicable limitations, such change will apply only to transactions made after the designation. We limit your investment in the Restricted Funds on an aggregate basis for all Restricted Funds and for each individual Restricted Fund. Currently, we limit an investment in Restricted Funds to the following limitations: no more than $999,999,999, and no more than 30 percent of contract value. We may change these limits, in our discretion, for new contracts, premiums, transfers or withdrawals. We monitor the aggregate and individual limits on investments in Restricted Funds for each transaction (e.g. premium payments, reallocations, withdrawals, dollar cost averaging). If the contract value in the Restricted Funds has increased beyond the applicable limit due to market growth, we will not require the reallocation or withdrawal of contract value from the Restricted Funds. However, if the contract value in the Restricted Funds exceed the aggregate limit, if you take a withdrawal, it must come from either the Restricted Funds or pro-rata from all investment options in which contract value is allocated, so that the percentage of contract value in the Restricted Funds following the withdrawal is less than or equal to the percentage of contract value in the Restricted Funds prior to the withdrawal. We will not permit a transfer to the Restricted Funds if it would increase the contract value in the Restricted Fund or in all Restricted Funds to more than the applicable limits set forth above. We will not limit transfers from Restricted Funds. If the multiple reallocations lower the percentage of total contract value in Restricted Funds, we will permit the reallocation even if the percentage of contract value in a Restricted Fund is greater than its limit. Please see "Withdrawals" and "Transfers Among Your Investments" in this prospectus for more information on the effect of Restricted Funds. - -------------------------------------------------------------------------------- COVERED FUNDS, SPECIAL FUNDS AND EXCLUDED FUNDS - -------------------------------------------------------------------------------- For purposes of determining death benefits and benefits under the optional benefit riders (but not the earnings multiplier benefit rider), we assign the investment options to one of three categories of funds. The categories are: 1) Covered Funds; 2) Special Funds; and 3) Excluded Funds. Allocations to Covered Funds participate fully in all guaranteed benefits. Allocations to Special Funds could affect the death benefit and/or optional benefit rider guarantee that may otherwise be provided. Allocations to Excluded Funds do not participate in any guaranteed benefits, due to their potential for volatility. No investment options are currently designated as Excluded Funds. 13 WF Landmark - 136960 Designation of investment options under these categories may vary by benefit. For example, we may designate an investment option a Special Fund for purposes of calculating a benefit under an optional benefit rider, but not a death benefit, or for calculating one death benefit and not another. We may, with 30 days notice to you, designate any investment option as a Special or Excluded Fund with respect to new premiums added to such investment option and also with respect to new transfers to such investment option. Please see Appendix F for examples. - -------------------------------------------------------------------------------- CHARGES AND FEES - -------------------------------------------------------------------------------- We deduct the contract charges described below to compensate us for our costs and expenses, services provided and risks assumed under the Contracts. We incur certain costs and expenses for distributing and administering the Contracts, including compensation and expenses paid in connection with sales of the Contracts, for paying the benefits payable under the Contracts and for bearing various risks associated with the Contracts. The amount of a contract charge will not always correspond to the actual costs associated with the charge. For example, the surrender charge collected may not fully cover all of the distribution expenses incurred by us with the service or benefits provided. If there are any profits from fees and charges deducted under the Contract, including the mortality and expense risk charge and rider and benefit charges, we may use such profits to finance the distribution of Contracts. CHARGE DEDUCTION SUBACCOUNT You may elect to have all charges against your contract value deducted directly from a single subaccount designated by the Company. Currently we use the Wells Fargo VT Money Market subaccount for this purpose. If you do not elect this option, or if the amount of the charges is greater than the amount in the designated subaccount, we will deduct the charges as discussed below. You may cancel this option at any time by sending satisfactory notice to our Customer Service Center. CHARGES DEDUCTED FROM THE CONTRACT VALUE We deduct the following charges from your contract value: SURRENDER CHARGE. We will deduct a contingent deferred sales charge (a "surrender charge") if you surrender your Contract or if you take a withdrawal in excess of the Free Withdrawal Amount during the 4-year period from the date we receive and accept a premium payment. We base the surrender charge on a percentage of each premium payment withdrawn. The surrender charge is based on the amount requested for withdrawal. The surrender charge is deducted from the contract value remaining after you have received the amount requested for withdrawal. This charge is intended to cover sales expenses that we have incurred. We may reduce or waive the surrender charge in certain situations. We will never charge more than the maximum surrender charges. The percentage of premium payments deducted at the time of surrender or excess withdrawal depends on the number of complete years that have elapsed since that premium payment was made. We determine the surrender charge as a percentage of each premium payment as follows: COMPLETE YEARS ELAPSED 0 1 2 3 4+ SINCE PREMIUM PAYMENT SURRENDER CHARGE (AS A 6% 5% 4% 3% 0% PERCENTAGE OF PREMIUM PAYMENT) 14 WF Landmark - 136960 WAIVER OF SURRENDER CHARGE FOR EXTENDED MEDICAL CARE. We will waive the surrender charge in most states in the following events: (i) you begin receiving qualified extended medical care on or after the first contract anniversary for at least 45 days during a 60-day period and we receive your request for the surrender or withdrawal, together with all required documentation at our Customer Service Center during the term of your care or within 90 days after the last day of your care; or (ii) you are first diagnosed by a qualified medical professional, on or after the first contract anniversary, as having a qualifying terminal illness. We have the right to require an examination by a physician of our choice. If we require such an examination, we will pay for it. You are required to send us satisfactory written proof of illness. See your Contract for more information. The waiver of surrender charge may not be available in all states. FREE WITHDRAWAL AMOUNT. The Free Withdrawal Amount is the greater of (i) any earnings less previous withdrawals, and (ii) 10% of premium payments paid within 4 years prior to the date of withdrawal and not previously withdrawn, less any previous withdrawals taken in the same contract year. SURRENDER CHARGE FOR EXCESS WITHDRAWALS. We will deduct a surrender charge for excess withdrawals, which may include a withdrawal you make to satisfy required minimum distribution requirements under the Internal Revenue Code (the "Code"). We consider a withdrawal to be an excess withdrawal when the amount you withdraw in any contract year exceeds the Free Withdrawal Amount. When you are receiving systematic withdrawals, any combination of regular withdrawals taken and any systematic withdrawals expected to be received in a contract year will be included in determining the amount of the excess withdrawal. Such a withdrawal will be considered a partial surrender of the Contract and we will impose a surrender charge and any associated premium tax. We will deduct such charges from the contract value in proportion to the contract value in each subaccount or Fixed Interest Allocation from which the excess withdrawal was taken. In instances where the excess withdrawal equals the entire contract value in such subaccounts or Fixed Interest Allocations, we will deduct charges proportionately from all other subaccounts and Fixed Interest Allocations in which you are invested. ANY WITHDRAWAL FROM A FIXED INTEREST ALLOCATION MORE THAN 30 DAYS BEFORE ITS MATURITY DATE WILL TRIGGER A MARKET VALUE ADJUSTMENT. See Appendix C and the Fixed Account II prospectus for more information. For the purpose of calculating the surrender charge for an excess withdrawal: (i) we treat premiums as being withdrawn on a first-in, first-out basis; and (ii) amounts withdrawn which are not considered an excess withdrawal are not considered a withdrawal of any premium payments. We have included an example of how this works in Appendix E. Although we treat premium payments as being withdrawn before earnings for purpose of calculating the surrender charge for excess withdrawals, the federal tax law treats earnings as withdrawn first. PREMIUM TAXES. We may charge for state and local premium taxes depending on your state of residence. These taxes can range from 0% to 3.5% of the premium payment. We have the right to change this amount to conform with changes in the law or if you change your state of residence. We deduct the premium tax from your contract value (or from the MGIB Benefit Base, if exercised) on the annuity start date. However, some jurisdictions impose a premium tax at the time initial and additional premiums are paid, regardless of when the annuity payments begin. In those states we may defer collection of the premium taxes from your contract value and deduct it when you surrender the Contract, when you take an excess withdrawal or on the annuity start date. ADMINISTRATIVE CHARGE. We deduct an annual administrative charge on each contract anniversary. If you surrender your Contract prior to a contract anniversary, we deduct an administrative charge when we determine the cash surrender value payable to you. The charge is $30 per Contract. We waive this charge if your contract value is $100,000 or more at the end of a contract year or the total of your premium payments is $100,000 or more or under other under conditions established by ING USA. We deduct the charge proportionately from all subaccounts in which you are invested. If there is no contract value in those subaccounts, we will deduct the charge from your Fixed Interest Allocations starting with the guaranteed interest periods nearest their maturity dates until the charge has been paid. 15 WF Landmark - 136960 TRANSFER CHARGE. We currently do not deduct any charges for transfers made during a contract year. We have the right, however, to assess up to $25 for each transfer after the twelfth transfer in a contract year. The charge will not apply to any transfers due to the election of dollar cost averaging or automatic rebalancing. REDEMPTION FEES. If applicable, we may deduct the amount of any redemption fees imposed by the underlying portfolios as a result of withdrawals, transfers or other fund transactions you initiate. Redemption fees, if any, are separate and distinct from any transaction charges or other charges deducted from your contract value. CHARGES DEDUCTED FROM THE SUBACCOUNTS MORTALITY AND EXPENSE RISK CHARGE. The amount of the mortality and expense risk charge depends on the death benefit you have elected. The charge is deducted on each business day and is a percentage of average daily assets based on the assets you have in each subaccount. The mortality and expense risk charge compensates the Company for death benefit and annuitization risks and the risk that expense charges will not cover actual expenses. If there are any profits from the mortality and expense risk charge, we may use such profits to finance the distribution of Contracts.
----------------------------------------------------------------------------------------- QUARTERLY RATCHET MAX 7 STANDARD ENHANCED ENHANCED DEATH BENEFIT DEATH BENEFIT DEATH BENEFIT ----------------------------------------------------------------------------------------- Annual Annual Annual Charge Charge Charge Expressed as Expressed as Expressed as Annual Charge Daily Rate Annual Charge Daily Rate Annual Charge Daily Rate 1.50% 0.004141% 1.75% 0.004837% 2.05% 0.005675% -----------------------------------------------------------------------------------------
ASSET-BASED ADMINISTRATIVE CHARGE. The amount of the asset-based administrative charge, on an annual basis, is equal to 0.15% of the assets you have in each subaccount. We deduct the charge from your assets in each subaccount on each business day at the rate of 0.000411% for each day since the previous business day. EARNINGS MULTIPLIER BENEFIT CHARGE. Subject to state availability, you may purchase the earnings multiplier benefit rider for a non-qualified Contract either at issue or on the next contract anniversary following the introduction of the benefit in your state, if later. So long as the rider is in effect, we will deduct a separate quarterly charge for the rider through a pro-rata reduction of the contract value of the subaccounts in which you are invested. If there is insufficient contract value in the subaccounts, we will deduct the charges from your Fixed Interest Allocations starting with the allocation nearest its maturity date. If that is insufficient, we will deduct the charge from the allocation next nearest its maturity date, and so on. We deduct the rider charge on each quarterly contract anniversary in arrears, meaning we deduct the first charge on the first quarterly anniversary following the rider date. If you surrender or annuitize your Contract, we will deduct a pro-rata portion of the charge for the current quarter based on the current contract value immediately prior to the surrender or annuitization. The quarterly charge for the earnings multiplier benefit rider is 0.08% (0.30% annually). For a description of the rider, see "Earnings Multiplier Benefit Rider." OPTIONAL RIDER CHARGES. Subject to state availability, you may purchase one of two optional benefit riders that you may elect at issue. So long as the rider is in effect, we will deduct a separate quarterly charge for each optional benefit rider through a pro-rata reduction of the contract value of the subaccounts in which you are invested. If there is insufficient contract value in the subaccount, we will deduct the charges from your Fixed Interest Allocations nearest their maturity date. We deduct each rider charge on each quarterly contract anniversary in arrears, meaning we deduct the first charge on the first quarterly anniversary following the rider date. For a description of the riders and the defined terms used in connection with the riders, see "The Annuity Contract -- Optional Riders." 16 WF Landmark - 136960 MINIMUM GUARANTEED INCOME BENEFIT (MGIB). The charge for the MGIB rider is as follows: -------------------------------------------------------------------------- AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE -------------------------------------------------------------------------- 0.75% of the MGIB Benefit Base 0.19% of the MGIB Benefit Base -------------------------------------------------------------------------- Please see "Optional Riders-Minimum Guaranteed Income Benefit" for a description of the MGIB Benefit Base and the MGIB Rate. ING LIFEPAY MINIMUM GUARANTEED WITHDRAWAL BENEFIT (ING LIFEPAY). The annual charge for the ING LifePay rider is 0.50% (0.125% quarterly) of the contract value. The charge is deducted from the contract value in the subaccounts on each quarterly contract anniversary date, in arrears. We will deduct charges during the period starting on the rider date and up to your rider's Lifetime Automatic Periodic Benefit ("LAPB") Status. LAPB Status will occur if your contract value is reduced to zero and other conditions are met. Please see "ING LifePay Minimum Guaranteed Withdrawal Benefit Rider - Lifetime Automatic Periodic Benefit Status" later in this prospectus. If you surrender or annuitize your Contract, we will deduct a pro-rata portion of the charge for the current quarter based on the current quarterly charge rate immediately prior to the surrender or annuitization. TRUST AND FUND EXPENSES As shown in the Fund Expense Table, each fund deducts management fees from the amounts allocated to the funds. In addition, each fund deducts other expenses which may include service fees which are used to compensate service providers, including the Company and its affiliates, for administrative and contract owner services provided on behalf of the fund. Furthermore, certain funds deduct a distribution or 12b-1 fee, which is used to finance any activity that is primarily intended to result in the sale of fund shares. FOR A MORE COMPLETE DESCRIPTION OF THE FUNDS' FEES AND EXPENSES, REVIEW EACH FUND'S PROSPECTUS. The Company, or its U.S. affiliates, receives from each of the funds or the funds' affiliates varying levels and types of revenue with respect to each of the funds available through the Contract. In terms of total dollar amounts received, the greatest amount of revenue comes from assets allocated to funds managed by ING Investments, LLC or other Company affiliates, which funds may or may not also be sub-advised by another Company affiliate. Assets allocated to funds managed by a Company affiliate, Directed Services, Inc., for example, but which are sub-advised by unaffiliated third parties generate the next greatest amount of revenue. Finally, assets allocated to unaffiliated funds generate the least amount of revenue. TYPES OF REVENUE RECEIVED FROM AFFILIATED FUNDS Affiliated funds are (a) funds managed by ING Investments, LLC or other Company affiliates, which may or may not also be sub-advised by a Company affiliate; and (b) funds managed by a Company affiliate but which are sub-advised by unaffiliated third parties. Revenues received by the Company from affiliated funds include: o Service fees that are deducted from fund assets and included within the "Other Expenses" column of the Fund Expense Table contained in this prospectus. o For certain share classes, the Company may also receive compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "Distribution and/or Service (12b-1) Fees" column of the Fund Expense Table. o Additionally, the Company receives other revenues from affiliated funds and/or their affiliates which may be based either on an annual percentage of average net assets held in the fund by the Company or a percentage of the management fees shown in the Fund Expense Table. These revenues may be received as cash payments or according to a variety of financial accounting techniques which are used to allocate revenue and profits across ING businesses. For funds sub-advised by unaffiliated third parties, once the sub-adviser has been paid, the adviser may share a portion of the remaining management fee with the Company. Because sub-advisory fees vary by sub-adviser, varying amounts of revenue are retained by the affiliated investment adviser and ultimately shared with the Company. 17 WF Landmark - 136960 TYPES OF REVENUE RECEIVED FROM UNAFFILIATED FUNDS Revenues received from each of the unaffiliated funds or their affiliates is based on an annual percentage of the average net assets held in that fund by the Company. Some unaffiliated funds or their affiliates pay us more than others and some of the amounts we receive may be significant. Revenues received by the Company from unaffiliated funds include: o For certain funds, compensation paid from 12b-1 fees or service fees that are deducted from fund assets. Any such fees deducted from fund assets are disclosed in the Fund Expense Table. o We may also receive additional payments for administrative, recordkeeping or other services which we provide to the funds or their affiliates or as an incentive for us to make the funds available through the Contract. These additional payments are not disclosed in the Fund Expense Table. These additional payments may be used by us to finance distribution of the Contract. The following table shows the unaffiliated fund families which have funds currently offered through the Contract, ranked according to total dollar amounts they paid to the Company or its affiliates in 2004: Fidelity Variable Insurance Products Portfolio ProFunds VP AIM Variable Insurance Funds Liberty Variable Insurance Trust Wells Fargo Variable Trust If the revenues received from affiliated funds were included in the table above, payments to the Company or its affiliates by ING Investments, LLC and other Company affiliates would be at the top of the list. Management personnel of the Company, and of its affiliated broker-dealers, may receive additional compensation if the overall amount of investments in funds advised by the Company or its affiliates meets certain target levels or increases over time. Compensation for certain management personnel, including sales management personnel, may be enhanced if the overall amount of investments in the contracts and other products issued or advised by the Company or its affiliates increases over time. Certain sales management personnel may also receive compensation that is a specific percentage of the commissions paid to distributors or of purchase payments received under the contracts. Certain funds are designated as "Master-Feeder" or "LifeStyle Funds." Funds offered in a Master Feeder structure (such as the American Funds) or fund of funds structure (such as LifeStyle Funds) may have higher fees and expenses than a fund that invests directly in debt and equity securities. The Fund Expense Table included in "Fees and Expenses" reflects the aggregate annual operating expenses of each portfolio and its corresponding underlying fund or funds. These funds are identified in the Fund Expense Table. See "Fees and Expenses -- Trust or Fund Expenses." - -------------------------------------------------------------------------------- THE ANNUITY CONTRACT - -------------------------------------------------------------------------------- The Contract described in this prospectus is a deferred combination variable and fixed annuity contract. The Contract provides a means for you to invest in one or more of the available mutual fund portfolios of the Trusts and Funds through Separate Account B. It also provides a means for you to invest in a Fixed Interest Allocation through the Fixed Account. See Appendix C and the Fixed Account II prospectus for more information on the Fixed Interest Allocation and Fixed Account. 18 WF Landmark - 136960 CONTRACT DATE AND CONTRACT YEAR The date the Contract became effective is the contract date. Each 12-month period following the contract date is a contract year. CONTRACT OWNER You are the contract owner. You have the rights and options described in the Contract. One or more persons may own the Contract. If there are multiple owners named, the age of the oldest owner will determine the applicable death benefit if such death benefit is available for multiple owners. In the event a selected death benefit is not available, the Standard Death Benefit will apply. The death benefit becomes payable when you die. In the case of a sole contract owner who dies before the annuity start date, we will pay the beneficiary the death benefit then due. The sole contract owner's estate will be the beneficiary if no beneficiary has been designated or the beneficiary has predeceased the contract owner. In the case of a joint owner of the Contract dying before the annuity start date, we will designate the surviving contract owner as the beneficiary. This will override any previous beneficiary designation. See "Joint Owner" below. If the contract owner is a trust and a beneficial owner of the trust has been designated, the beneficial owner will be treated as the contract owner for determining the death benefit. If a beneficial owner is changed or added after the contract date, we will treat this as a change of contract owner for determining the death benefit (likely a taxable event). If no beneficial owner of the trust has been designated, the availability of Enhanced Death Benefits will be based on the age of the annuitant at the time you purchase the Contract. JOINT OWNER. For non-qualified Contracts only, joint owners may be named in a written request before the Contract is in effect. Joint owners may independently exercise transfers and other transactions allowed under the Contract. All other rights of ownership must be exercised by both owners. Joint owners own equal shares of any benefits accruing or payments made to them. All rights of a joint owner end at death of that owner if the other joint owner survives. The entire interest of the deceased joint owner in the Contract will pass to the surviving joint owner and the death benefit will be payable. Joint owners may only select the Standard Death Benefit option. The earnings multiplier benefit rider is not available when there are joint owners. Any addition or deletion of a joint owner is treated as a change of owner which may affect the amount of the death benefit. See "Change of Contract Owner or Beneficiary" below. If you have elected an Enhanced Death Benefit, and you add a joint owner after issue, the Enhanced Death Benefit from the date of change will end. If the older joint owner is attained age 85 or under, the Standard Death Benefit will apply. If the older joint owner is attained age 86 or over on the date of the ownership change, the death benefit will be the cash surrender value. The mortality and expense risk charge going forward will reflect the change in death benefit. If you elected the earnings multiplier benefit rider, it will terminate if you add a joint owner after issue. Note that returning a Contract to single owner status will not restore any Enhanced Death Benefit or the earnings multiplier benefit. Unless otherwise specified, the term "age" when used for joint owners shall mean the age of the oldest owner. ANNUITY START DATE The annuity start date is the date you start receiving annuity payments under your Contract. The Contract, like all deferred variable annuity contracts, has two phases: the accumulation phase and the income phase. The accumulation phase is the period between the contract date and the annuity start date. The income phase begins when you start receiving regular annuity payments from your Contract on the annuity start date. 19 WF Landmark - 136960 ANNUITANT The annuitant is the person designated by you to be the measuring life in determining annuity payments. You are the annuitant unless you name another annuitant in the application. The annuitant's age determines when the income phase must begin and the amount of the annuity payments to be paid. The contract owner will receive the annuity benefits of the Contract if the annuitant is living on the annuity start date. You may not change the annuitant after the Contract is in effect. If the contract owner is an individual, and the annuitant dies before the annuity start date and you have named a contingent annuitant, the contingent annuitant becomes the annuitant. If the annuitant dies before the annuity start date and there is no contingent annuitant, the contract owner will become the annuitant. The contract owner may designate a new annuitant within 60 days of the death of the annuitant. If the annuitant was the sole contract owner and there is no beneficiary designation, the annuitant's estate will be the beneficiary. If the contract owner is not an individual, and the annuitant dies before the annuity start date, we will pay the designated beneficiary the death benefit then due. If a beneficiary has not been designated, or if there is no designated beneficiary living, the contract owner will be the beneficiary. Regardless of whether a death benefit is payable, if the annuitant dies and any contract owner is not an individual, distribution rules under federal tax law will apply. You should consult your tax adviser for more information if the contract owner is not an individual. BENEFICIARY The beneficiary is named by you in a written request. The beneficiary is the person who receives any death benefit proceeds. We pay death benefits to the primary beneficiary (unless there are joint owners, in which case death proceeds are payable to the surviving owner(s)). If the beneficiary dies before the annuitant or the contract owner, we pay the death benefit proceeds to the contingent beneficiary, if any. If there is no surviving beneficiary, we pay the death benefit proceeds to the contract owner's estate. One or more persons may be a beneficiary or contingent beneficiary. In the case of more than one beneficiary, we will assume any death benefit proceeds are to be paid in equal shares to the surviving beneficiaries, unless you indicate otherwise in writing. CHANGE OF CONTRACT OWNER OR BENEFICIARY. During the annuitant's lifetime, you may transfer ownership of a non-qualified Contract. A change in ownership may affect the amount of the death benefit, the guaranteed minimum death benefit and/or the death benefit option applied to the Contract, the amount of the earnings multiplier benefit, if applicable, and the continuation of any other optional rider that you have elected. The new owner's age, as of the date of the change, will be used as the basis for determining the applicable benefits and charges. The new owner's death will determine when a death benefit is payable. If you have elected the Standard Death Benefit option, the minimum guaranteed death benefit will continue if the new owner is age 85 or under on the date of the ownership change. For the Enhanced Death Benefit options, if the new owner is age 79 or under on the date that ownership changes, the minimum guaranteed death benefit will continue. If the new owner is age 80 to 85, the Enhanced Death Benefit will end, and the death benefit will become the Standard Death Benefit. For all death benefit options, 1) if the new owner's attained age is 86 or over on the date of the ownership change, or 2) if the new owner is not an individual (other than a trust for the benefit of the owner or annuitant), the death benefit will be the cash surrender value. The mortality and expense risk charge going forward will reflect the change in death benefit. Please note that once a death benefit has been changed due to a change in owner, a subsequent change to a younger owner will not restore any Enhanced Death Benefits. 20 WF Landmark - 136960 If you have elected the earnings multiplier benefit rider, and the new owner is under age 76, the rider will continue. The benefit will be adjusted to reflect the attained age of the new owner as the issue age. We will use the Maximum Base and Benefit Base percentages in effect on the original rider date to calculate the benefit. If the new owner is age 76 or over, the rider will terminate. If you have not elected the earnings multiplier benefit rider, the new owner may not add the rider upon the change of ownership. If you have elected another optional rider, the rider will terminate upon a change of ownership. A change of owner likely has tax consequences. See "Federal Tax Considerations" in this prospectus. You have the right to change beneficiaries during the annuitant's lifetime unless you have designated an irrevocable beneficiary. If you have designated an irrevocable beneficiary, you and the irrevocable beneficiary may have to act together to exercise some of the rights and options under the Contract. You may also restrict a beneficiary's right to elect an annuity option or receive a lump sum payment. If so, such rights or options will not be available to the beneficiary. All requests for changes must be in writing and submitted to our Customer Service Center. Please date your requests. The change will be effective as of the day we receive the request. The change will not affect any payment made or action taken by us before recording the change. PURCHASE AND AVAILABILITY OF THE CONTRACT We will issue a Contract only if both the annuitant and the contract owner are age 80 or younger. The initial premium payment must be $10,000 or more ($1,500 for qualified Contracts). You may make additional payments of $500 or more ($50 for qualified Contracts) at any time after the free look period and up to the contract anniversary after your 85th birthday. Under certain circumstances, we may waive the minimum premium payment requirement. We may also change the minimum initial or additional premium requirements for certain group or sponsored arrangements. An initial or additional premium payment that would cause the contract value of all annuities that you maintain with us to exceed $1,000,000 requires our prior approval. The Contract may not be available to all ages through all broker dealers. The Contract is designed for people seeking long-term tax-deferred accumulation of assets, generally for retirement or other long-term purposes. The tax-deferred feature is more attractive to people in high federal and state tax brackets. YOU SHOULD NOT BUY THIS CONTRACT: (I) IF YOU ARE LOOKING FOR A SHORT-TERM INVESTMENT; (II) IF YOU CANNOT RISK GETTING BACK LESS MONEY THAN YOU PUT IN; OR (III) IF YOUR ASSETS ARE IN A PLAN WHICH PROVIDES FOR TAX-DEFERRAL AND YOU SEE NO OTHER REASON TO PURCHASE THIS CONTRACT. IRAs and other qualified plans already have the tax-deferral feature found in this Contract. For an additional cost, the Contract provides other features and benefits including death benefits and the ability to receive a lifetime income. You should not purchase a qualified Contract unless you want these other features and benefits, taking into account their cost. See "Fees and Expenses" in this prospectus. IF YOU ARE CONSIDERING AN ENHANCED DEATH BENEFIT OPTION AND/OR THE EARNINGS MULTIPLIER BENEFIT RIDER AND YOUR CONTRACT WILL BE AN IRA, SEE "TAXATION OF QUALIFIED CONTRACTS -- INDIVIDUAL RETIREMENT ANNUITIES" AND "TAX CONSEQUENCES OF ENHANCED DEATH BENEFIT" IN THIS PROSPECTUS. CREDITING OF PREMIUM PAYMENTS We will process your initial premium within 2 business days after receipt, if the application and all information necessary for processing the Contract are complete. We will process subsequent premium payments within 1 business day if we receive all information necessary. In certain states we also accept initial and additional premium payments by wire order. Wire transmittals must be accompanied by sufficient electronically transmitted data. We may retain your initial premium payment for up to 5 business days while attempting to complete an incomplete application. If the application cannot be completed within this period, we will inform you of the reasons for the delay. We will also return the premium payment immediately unless you direct us to hold the premium payment until the application is completed. If you choose to have us hold the premium payment, it will be held in a non-interest bearing account. 21 WF Landmark - 136960 We will allocate your initial payment according to the instructions you specified. If a subaccount is not available or requested in error, we will make inquiry about a replacement subaccount. If we are unable to reach you or your representative, we will consider the application incomplete. For initial premium payments designated for a subaccount of Separate Account B, we will credit the payment at the accumulation unit value next determined after we receive your premium payment and the completed application. Once the completed application is received, we will allocate the payment to the subaccounts and/or Fixed Interest Allocation of Separate Account B specified by you within 2 business days. If your premium payment was transmitted by wire order from your broker/dealer, we will follow one of the following two procedures after we receive and accept the wire order and investment instructions. The procedure we follow depends on state availability and the procedures of your broker/dealer. 1) If either your state or broker/dealer do not permit us to issue a Contract without an application, we reserve the right to rescind the Contract if we do not receive and accept a properly completed application or enrollment form within 5 days of the premium payment. If we do not receive the application or form within 5 days of the premium payment, we will refund the contract value plus any charges we deducted, and the Contract will be voided. Some states require that we return the premium paid. 2) If your state and broker/dealer allow us to issue a Contract without an application, we will issue and mail the Contract to you or your representative, together with a Contract Acknowledgement and Delivery Statement for your execution. Until our Customer Service Center receives the executed Contract Acknowledgement and Delivery Statement, neither you nor the broker/dealer may execute any financial transactions on your Contract unless they are requested in writing by you. We may require additional information before complying with your request (e.g., signature guarantee). We will ask about any missing information related to subsequent payments. We will allocate the subsequent payment(s) pro-rata according to the current variable subaccount allocation unless you specify otherwise. Any fixed allocation(s) will not be considered in the pro-rata calculations. If a subaccount is no longer available or requested in error, we will allocate the subsequent payment(s) proportionally among the other subaccount(s) in your current allocation or your allocation instructions. For any subsequent premium payments, we will credit the payment designated for a subaccount of Separate Account B at the accumulation unit value next determined after receipt of your premium payment and instructions. Once we allocate your premium payment to the subaccounts selected by you, we convert the premium payment into accumulation units. We divide the amount of the premium payment allocated to a particular subaccount by the value of an accumulation unit for the subaccount to determine the number of accumulation units of the subaccount to be held in Separate Account B with respect to your Contract. The net investment results of each subaccount vary with its investment performance. In some states, we may require that an initial premium designated for a subaccount of Separate Account B or the Fixed Account be allocated to a subaccount specially designated by the Company (currently, the Wells Fargo VT Money Market subaccount) during the free look period. After the free look period, we will convert your contract value (your initial premium plus any earnings less any expenses) into accumulation units of the subaccounts you previously selected. The accumulation units will be allocated based on the accumulation unit value next computed for each subaccount. Initial premiums designated for Fixed Interest Allocations will be allocated to a Fixed Interest Allocation with the guaranteed interest period you have chosen; however, in the future we may allocate the premiums to the specially designated subaccount during the free look period. 22 WF Landmark - 136960 We may also refuse to accept certain forms of premium payments or loan repayments, if applicable, (traveler's checks, for example) or restrict the amount of certain forms of premium payments or loan repayments (money orders totaling more than $500, for example). In addition, we may require information as to why a particular form of payment was used (third party checks, for example) and the source of the funds of such payment in order to determine whether or not we will accept it. Use of an unacceptable form of payment may result in us returning your premium payment and not issuing the contract. ADMINISTRATIVE PROCEDURES We may accept a request for Contract service in writing, by telephone, or other approved electronic means, subject to our administrative procedures, which vary depending on the type of service requested and may include proper completion of certain forms, providing appropriate identifying information, and/or other administrative requirements. We will process your request at the contract value next determined only after you have met all administrative requirements. Please be advised that with regard to withdrawal requests, the risk of a fraudulent transaction is increased by the use of a facsimile withdrawal request form, even if appropriate identifying information is provided. CONTRACT VALUE We determine your contract value on a daily basis beginning on the contract date. Your contract value is the sum of (i) the contract value in the Fixed Interest Allocations, and (ii) the contract value in each subaccount in which you are invested. CONTRACT VALUE IN FIXED INTEREST ALLOCATIONS. The contract value in your Fixed Interest Allocation is the sum of premium payments allocated to the Fixed Interest Allocation under the Contract, plus contract value transferred to the Fixed Interest Allocation, plus credited interest, minus any transfers and withdrawals from the Fixed Interest Allocation (including any Market Value Adjustment applied to such withdrawal), contract fees (including, in some cases, fees for optional benefit riders) and premium taxes. CONTRACT VALUE IN THE SUBACCOUNTS. On the contract date, the contract value in the subaccount in which you are invested is equal to the initial premium paid and designated to be allocated to the subaccount. On the contract date, we allocate your contract value to each subaccount and/or a Fixed Interest Allocation specified by you, unless the Contract is issued in a state that requires the return of premium payments during the free look period, in which case, the portion of your initial premium not allocated to a Fixed Interest Allocation may be allocated to a subaccount specially designated by the Company during the free look period for this purpose (currently, the Wells Fargo VT Money Market subaccount). On each business day after the contract date, we calculate the amount of contract value in each subaccount as follows: 1) We take the contract value in the subaccount at the end of the preceding business day. 2) We multiply (1) by the subaccount's Net Rate of Return since the preceding business day. 3) We add (1) and (2). 4) We add to (3) any additional premium payments, and then add or subtract any transfers to or from that subaccount. 5) We subtract from (4) any withdrawals and any related charges, and then subtract any contract fees and premium taxes. 23 WF Landmark - 136960 CASH SURRENDER VALUE The cash surrender value is the amount you receive when you surrender the Contract. The cash surrender value will fluctuate daily based on the investment results of the subaccounts in which you are invested and interest credited to Fixed Interest Allocations and any Market Value Adjustment. See Appendix C and the Fixed Account II prospectus for a description of the calculation of cash surrender value under any Fixed Interest Allocation. We do not guarantee any minimum cash surrender value. On any date during the accumulation phase, we calculate the cash surrender value as follows: we start with your contract value, adjust for any Market Value Adjustment, and then we deduct any surrender charge, any charge for premium taxes, the annual contract administrative fee (unless waived), any optional benefit rider charge, and any other charges incurred but not yet deducted. SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE. You may surrender the Contract at any time while the annuitant is living and before the annuity start date. A surrender is effective on the date we receive your written request and the Contract at our Customer Service Center. After we receive all paperwork required for us to process your surrender, we will determine and pay the cash surrender value at the price next determined. Once paid, all benefits under the Contract will terminate. For administrative purposes, we will transfer your money to a specially designated subaccount (currently the Wells Fargo VT Money Market subaccount) prior to processing the surrender. This transfer will have no effect on your cash surrender value. You may receive the cash surrender value in a single sum payment or apply it under one or more annuity options. We will usually pay the cash surrender value within 7 days. Consult your tax adviser regarding the tax consequences associated with surrendering your Contract. A surrender made before you reach age 59 1/2 may result in a 10% tax penalty. See "Federal Tax Considerations" for more details. ADDITION, DELETION OR SUBSTITUTION OF SUBACCOUNTS AND OTHER CHARGES We may make additional subaccounts available to you under the Contract. These subaccounts will invest in investment portfolios we find suitable for your Contract. We may also withdraw or substitute investment portfolios, subject to the conditions in your Contract and compliance with regulatory requirements. We may amend the Contract to conform to applicable laws or governmental regulations. If we feel that investment in any of the investment portfolios has become inappropriate to the purposes of the Contract, we may, with approval of the SEC (and any other regulatory agency, if required) substitute another portfolio for existing and future investments. If you elected the dollar cost averaging, systematic withdrawals or automatic rebalancing programs, or if you have other outstanding instructions and we substitute or otherwise eliminate a portfolio subject to those instructions, we will execute your instructions using the substituted or proposed replacement portfolio, unless you request otherwise. The substitute or proposed replacement portfolio may have higher fees and charges than any portfolio it replaces. We will provide you with written notice before we make these changes. We reserve the right to: (i) deregister Separate Account B under the 1940 Act; (ii) operate Separate Account B as a management company under the 1940 Act if it is operating as a unit investment trust; (iii) operate Separate Account B as a unit investment trust under the 1940 Act if it is operating as a managed separate account; (iv) restrict or eliminate any voting rights as to Separate Account B; and (v) combine Separate Account B with other accounts. We will provide you with written notice before we make any of these changes. THE FIXED ACCOUNT The Fixed Account is a segregated asset account which contains the assets that support a contract owner's Fixed Interest Allocations. See Appendix C and the Fixed Account II prospectus for more information. OPTIONAL RIDERS 24 WF Landmark - 136960 Subject to state availability, you may elect one of the two optional benefit riders discussed below. YOU MAY ADD ONLY ONE OF THESE TWO RIDERS TO YOUR CONTRACT. EACH RIDER HAS A SEPARATE CHARGE. Once elected, the riders generally may not be cancelled. You may not remove the rider and charges will be assessed regardless of the performance of your Contract. Please see "Charges and Fees -- Optional Rider Charges" for information on rider charges. THE OPTIONAL RIDERS MAY NOT BE AVAILABLE FOR ALL INVESTORS. YOU SHOULD ANALYZE EACH RIDER THOROUGHLY AND UNDERSTAND IT COMPLETELY BEFORE YOU SELECT ONE. THE OPTIONAL RIDERS DO NOT GUARANTEE ANY RETURN OF PRINCIPAL OR PREMIUM PAYMENTS AND DO NOT GUARANTEE PERFORMANCE OF ANY SPECIFIC INVESTMENT PORTFOLIO UNDER THE CONTRACT. YOU SHOULD CONSULT A QUALIFIED FINANCIAL ADVISER IN EVALUATING THE RIDERS. THE OPTIONAL RIDERS MAY NOT BE APPROVED IN ALL STATES. CHECK WITH OUR CUSTOMER SERVICE CENTER FOR AVAILABILITY IN YOUR STATE. THE TELEPHONE NUMBER IS (800) 366-0066. RIDER DATE. The rider date is the date the optional benefit rider becomes effective. The rider date is also the contract date if you purchase the rider when the Contract is issued. NO CANCELLATION. Once you purchase a rider, you may not cancel it unless you cancel the Contract during the Contract's free look period, surrender, annuitize or otherwise terminate the Contract. These events automatically cancel any rider. Once the Contract continues beyond the free look period, you may not cancel the rider. The Company may, at its discretion, cancel and/or replace a rider at your request in order to renew or reset a rider. TERMINATION. The optional riders are "living benefits," which means the guaranteed benefits offered by the riders are intended to be available to you while you are living and while your Contract is in the accumulation phase. The optional riders automatically terminate if you: o annuitize, surrender or otherwise terminate your Contract during the accumulation phase; or o die during the accumulation phase (first owner to die if there are multiple contract owners, or at death of annuitant if contract owner is not a natural person), unless your spouse beneficiary elects to continue the Contract. The optional riders will also terminate if there is a change in contract ownership (other than a spousal beneficiary continuation on your death). Other circumstances which may cause a particular optional rider to terminate automatically are discussed below with each rider. MINIMUM GUARANTEED INCOME BENEFIT RIDER (MGIB). The MGIB rider is an optional benefit which guarantees a minimum amount of annuity income will be available to you if you annuitize on the MGIB Date, regardless of fluctuating market conditions. The amount of the Minimum Guaranteed Income Benefit will depend on the amount of premiums you pay during the five contract years after you purchase the rider, the amount of contract value you allocate or transfer to Special Funds or Excluded Funds, the MGIB Rate, the adjustment for Special Fund or Excluded Fund transfers, and any withdrawals you take while the rider is in effect. Thus, investing in Special Funds or Excluded Funds may limit the MGIB benefit. The charge we deduct under the MGIB Rider is 0.75% of the MGIB Benefit Base. The calculation of the MGIB Benefit Base is described in "Determining the MGIB Annuity Income", below. 25 WF Landmark - 136960 Ordinarily, the amount of income that will be available to you on the annuity start date is based on your contract value, the annuity option you selected and the guaranteed or the income factors in effect on the date you annuitize. If you purchase the MGIB rider, the amount of income that will be available to you upon annuitization on the MGIB Date is the greatest of: 1) your annuity income based on your contract value on the MGIB Date adjusted for any Market Value Adjustment (see Appendix C and the Fixed Account II prospectus) applied to the guaranteed income factors specified in your Contract for the annuity option you selected; 2) your annuity income based on your contract value on the MGIB Date adjusted for any Market Value Adjustment (see Appendix C and the Fixed Account II prospectus) applied to the then-current income factors in effect for the annuity option you selected; or 3) the MGIB annuity income based on your MGIB Benefit Base on the MGIB Date applied to the MGIB income factors specified in your rider for the MGIB annuity option you selected. Prior to applying the MGIB income factors, we will adjust the MGIB Benefit Base for any premium tax recovery and Market Value Adjustment (see Appendix C and the Fixed Account II prospectus) that would otherwise apply at annuitization. The guaranteed factors contained in the MGIB rider generally provide lower payout per $1,000 of value applied than the guaranteed factors found in your Contract. Although the minimum income provided under the rider can be determined in advance, the contract value in the future is unknown, so the income provided under a contract with the MGIB rider attached may be greater or less than the income that would be provided under the Contract without the rider. Generally, the income calculated under the rider will be greater than the income provided under the Contract whenever the MGIB Benefit Base (greater of the Rollup and Ratchet Bases) is sufficiently in excess of the contract value to offset the additional conservatism reflected in the rider's income factors compared to those in the Contract. The income factors in the MGIB rider generally reflect a lower interest rate and more conservative mortality than the income factors in the Contract. The degree of relative excess that the income factors require to produce more income will vary for each individual circumstance. If the contract value exceeds the MGIB Benefit Base at time of annuitization, the Contract will always produce greater income than the rider. Please see Appendix G -- Examples of Minimum Guaranteed Income Benefit Calculation. The MGIB Benefit Base is only a calculation used to determine the MGIB annuity income. The MGIB Benefit Base does not represent a contract value, nor does it guarantee performance of the subaccounts in which you are invested. It is also not used in determining the amount of your cash surrender value and death benefits. Any reset of contract value under provisions of the Contract or other riders will not increase the MGIB Benefit Base or Maximum MGIB Base. The MGIB Benefit Base is tracked separately for Covered, Special and Excluded Funds, based on initial allocation of eligible premium (or contract value) if applicable, and subsequently allocated eligible premiums, withdrawals and transfers. Contract value (not eligible premium) is used as the initial value if the rider is added after the contract date. The following investment options are designated as Special Funds for purposes of calculating the MGIB Benefit Base: the ING Liquid Assets Portfolio, the Wells Fargo VT Money Market Fund, the ING PIMCO Core Bond Portfolio, ING VP Intermediate Bond Portfolio, TSA Special Fixed Account, the Fixed Account, the Fixed Interest Division and the ProFunds VP Rising Rates Opportunity Portfolio. Please see "The Trust and Funds -- Covered Funds and Special Funds." No investment options are currently designated as Excluded Funds. 26 WF Landmark - 136960 Prior to your latest annuity start date, you may choose to exercise your right to receive payments under the MGIB rider. Payments under the rider begin on the MGIB Date. We require a 10-year waiting period before you can annuitize the MGIB rider benefit. The MGIB must be exercised in the 30-day period prior to the end of the waiting period or any subsequent contract anniversary. At your request, the Company may in its discretion extend the latest contract annuity start date without extending the MGIB Date. DETERMINING THE MGIB ANNUITY INCOME. On the MGIB Date, we calculate your MGIB annuity income as follows: 1) WE FIRST DETERMINE YOUR MGIB BENEFIT BASE: The MGIB Benefit Base is equal to the greater of the MGIB Rollup Base and the MGIB Ratchet Base. A) CALCULATION OF MGIB ROLLUP BASE The MGIB Rollup Base is equal to the lesser of the Maximum MGIB Base and the sum of (a), (b) and (c) where: (a) is the MGIB Rollup Base for Covered Funds; (b) is the MGIB Rollup Base for Special Funds; and (c) is the contract value of Excluded Funds. The Maximum MGIB Base applicable to the MGIB Rollup Base is 300% of eligible premiums adjusted pro-rata for withdrawals. This means that the Maximum MGIB Base is reduced for withdrawals by the same proportion that the withdrawal reduces the contract value. The Maximum MGIB Base is not allocated by Fund category. THE MGIB ROLLUP BASE ALLOCATED TO COVERED FUNDS equals the eligible premiums allocated to Covered Funds, adjusted for subsequent withdrawals and transfers taken or made while the MGIB rider is in effect, accumulated at the MGIB Rate to the earlier of the oldest owner reaching age 80 and the MGIB Rollup Base reaching the Maximum MGIB Base. The MGIB Rollup Base accumulates at 0% thereafter. The MGIB Rate is currently 7%. The MGIB Rate is an annual effective rate. We may, at our discretion, discontinue offering this rate. The MGIB Rate will not change for those contracts that have already purchased the MGIB rider. THE MGIB ROLLUP BASE ALLOCATED TO SPECIAL FUNDS equals the eligible premiums allocated to Special Funds, adjusted for subsequent withdrawals and transfers taken or made while the MGIB rider is in effect. The MGIB Rate does not apply to the MGIB Rollup Base allocated to Special Funds, so the MGIB Rollup Base allocated to Special Funds does not accumulate. THE MGIB ROLLUP BASE ALLOCATED TO EXCLUDED FUNDS equals the eligible premiums allocated to Excluded Funds, adjusted for subsequent withdrawals and transfers taken or made while the MGIB rider is in effect, accumulated at the MGIB rate to the earlier of the oldest owner reaching age 80 and the MGIB Rollup Base reaching the Maximum MGIB Base, and at 0% thereafter. THE MGIB ROLLUP BASE ALLOCATED TO EXCLUDED FUNDS IS USED ONLY FOR TRANSFER ADJUSTMENTS AND RIDER CHARGES. IT IS NOT INCLUDED IN THE MGIB ROLLUP BASE USED TO DETERMINE BENEFITS. Eligible premiums are those added more than 5 years before the earliest MGIB Date. This means that, generally, premiums must be paid within five years of purchasing the MGIB rider to be considered eligible premiums. Premiums paid after that are excluded from the MGIB Rollup Base. 27 WF Landmark - 136960 Withdrawals reduce the MGIB Rollup Base on a pro-rata basis. The percentage reduction in the MGIB Rollup Base for each Fund category (i.e. Covered, Special or Excluded) equals the percentage reduction in contract value in that Fund category resulting from the withdrawal. This means that the MGIB Rollup Base for Covered Funds, Special Funds or Excluded Funds is reduced for withdrawals by the same proportion that the withdrawal reduces the contract value allocated to Covered Funds, Special Funds or Excluded Funds. For example, if the contract value in Covered Funds is reduced by 25% as the result of a withdrawal, the MGIB Rollup Base allocated to Covered Funds is also reduced by 25% (rather than by the amount of the withdrawal). Because the MGIB Rollup Base is tracked separately for Covered, Special and Excluded Funds, when you make transfers between Covered, Special Funds and Excluded Funds, there is an impact on the MGIB Rollup Base. Net transfers between Covered Funds and Special Funds will reduce the MGIB Rollup Base allocated to Covered Funds or Special Funds, as applicable, on a pro-rata basis. This means that the MGIB Rollup Base allocated to Covered Funds or Special Funds will be reduced by the same percentage as the transfer bears to the contract value allocated to Covered Funds or Special Funds. For example, if the contract value in Covered Funds is reduced by 25% as the result of the transfer, the MGIB Rollup Base allocated to Covered Funds is also reduced by 25% (rather than by the amount of the transfer). The resulting increase in the MGIB Rollup Base allocated to Special or Excluded Funds, as applicable, will equal the reduction in the MGIB Rollup Base allocated to Covered Funds. Transfers from Special Funds to Covered Funds are treated in the same way. Net transfers from Excluded Funds will reduce the MGIB Rollup Base allocated to Excluded Funds on a pro-rata basis. The resulting increase in the MGIB Rollup Base allocated to Covered or Special Funds, as applicable, will equal the lesser of the contract value transferred and the reduction in the MGIB Rollup Base allocated to Excluded Funds. B) CALCULATION OF MGIB RATCHET BENEFIT BASE The MGIB Ratchet Benefit Base is equal to the sum of (a) and (b) where: (a) is the MGIB Ratchet Base for Covered Funds and Special Funds; and (b) is the contract value for Excluded Funds. THE MGIB RATCHET BASE FOR COVERED FUNDS, SPECIAL FUNDS AND EXCLUDED FUNDS equals: o on the rider date, eligible premiums or the contract value, (if the rider is added after the contract date,) allocated to Covered Funds, Special Funds and Excluded Funds; o on each "quarterly anniversary date" prior to attainment of age 90, the MGIB Ratchet Base for Covered Funds, Special Funds and Excluded Funds is set equal to the greater of : 1) the current contract value allocated to Covered Funds, Special Funds and Excluded Funds (after any deductions occurring on that date); and 2) the MGIB Ratchet Base for Covered Funds, Special Funds and Excluded Funds from the most recent prior quarterly anniversary date, adjusted for any new eligible premiums and withdrawals attributable to Covered Funds, Special Funds or Excluded Funds and transfers. 28 WF Landmark - 136960 o at other times, the MGIB Ratchet Base for Covered Funds, Special Funds and Excluded Funds is the MGIB Ratchet Base from the prior quarterly anniversary date, adjusted for subsequent eligible premiums and withdrawals attributable to Covered Funds, Special Funds or Excluded Funds and transfers. THE MGIB RATCHET BASE ALLOCATED TO EXCLUDED FUNDS IS USED ONLY FOR TRANSFER ADJUSTMENTS AND RIDER CHARGES. IT IS NOT INCLUDED IN THE MGIB RATCHET BENEFIT BASE USED TO DETERMINE BENEFITS. A "quarterly anniversary date" is the date three months from the contract date that falls on the same date in the month as the contract date. For example, if the contract date is February 12, the quarterly anniversary date is May 12. If there is no corresponding date in the month, the quarterly anniversary date will be the last date of such month. If the quarterly anniversary date falls on a weekend or holiday, we will use the value as of the subsequent business day. 2) THEN WE DETERMINE THE MGIB ANNUITY INCOME BY MULTIPLYING YOUR MGIB BENEFIT BASE (ADJUSTED FOR ANY SURRENDER CHARGE AND PREMIUM TAXES) BY THE INCOME FACTOR, AND THEN DIVIDE BY $1,000. MGIB INCOME OPTIONS The following are the MGIB Income Options available under the MGIB Rider: (i) Income for Life (Single Life or Joint with 100% Survivor) and 10-20 year certain. (ii) Income for 20-30 year certain. (iii) Any other income plan offered by the Company in conjunction with the MGIB rider on the MGIB Date. Once during the life of the Contract, you have the option to elect to apply up to 50% of the MGIB Benefit Base to one of the MGIB Income Options available under the Rider. This option may only be exercised on a contract anniversary at or after the end of the waiting period. The portion of the MGIB Benefit Base so applied will be used to determine the MGIB income, as is otherwise described in the prospectus. The contract value will be reduced on a pro-rata basis. Any subsequent exercise of your right to receive payments under the MGIB rider must be for 100% of the remaining value. The exercise of this partial annuitization of the MGIB Benefit Base does not affect your right to annuitize under the Contract without regard to the rider. The amount applied to the partial annuitization will be treated as a withdrawal for purposes of adjusting contract and rider values. PLEASE NOTE THAT IF YOU ELECT PARTIAL ANNUITIZATION, INCOME PAYMENTS RECEIVED WILL BE TAXED AS WITHDRAWALS. PLEASE CONSULT YOUR TAX ADVISER BEFORE MAKING THIS ELECTION, AS THE TAXATION OF PARTIAL ANNUITIZATION IS UNCERTAIN. PURCHASE. To purchase the MGIB rider, you must be age 79 or younger on the rider date and the ten-year waiting period must end at or prior to the latest annuity start date. Some broker dealers may limit availability of the rider to younger ages. The MGIB rider must be purchased (i) on the contract date, or (ii) within thirty days after the contract date. For contracts issued more than 30 days before the date this rider first became available in your state, the Company may in its discretion allow purchase of this rider during the 30-day period preceding the first contract anniversary after the date of this prospectus, or the date of state approval, whichever is later. There is a ten-year waiting period before you can annuitize under the MGIB rider. 29 WF Landmark - 136960 THE MGIB DATE. If you purchased the MGIB rider on the contract date or added the MGIB rider within 30 days following the contract date, the MGIB Date is the contract anniversary on or after the tenth contract anniversary when you decide to exercise your right to annuitize under the MGIB rider. If you added the MGIB rider at any other time, your MGIB Date is the contract anniversary at least 10 years after the rider date when you decide to exercise your right to annuitize under the MGIB rider. NO CHANGE OF ANNUITANT. Once you purchase the MGIB rider, the annuitant may not be changed except for the following exception. If an annuitant who is not a contract owner dies prior to annuitization, a new annuitant may be named in accordance with the provisions of your Contract. The MGIB Benefit Base is unaffected and continues to accumulate. NOTIFICATION. On or about 30 days prior to the MGIB Date, we will provide you with notification which will include an estimate of the amount of MGIB annuity benefit available if you choose to exercise it. We will determine the actual amount of the MGIB annuity benefit as of the MGIB Date. THE MGIB RIDER DOES NOT RESTRICT OR LIMIT YOUR RIGHT TO ANNUITIZE THE CONTRACT AT ANY TIME PERMITTED UNDER THE CONTRACT. THE MGIB RIDER DOES NOT RESTRICT YOUR RIGHT TO ANNUITIZE THE CONTRACT USING CONTRACT VALUES THAT MAY BE HIGHER THAN THE MGIB ANNUITY BENEFIT. THE BENEFITS ASSOCIATED WITH THE MGIB RIDER ARE AVAILABLE ONLY IF YOU ANNUITIZE YOUR CONTRACT UNDER THE RIDER AND IN ACCORDANCE WITH THE PROVISIONS SET FORTH ABOVE. ANNUITIZING USING THE MGIB MAY RESULT IN A MORE FAVORABLE STREAM OF INCOME PAYMENTS, AND DIFFERENT TAX CONSEQUENCES, UNDER YOUR CONTRACT. BECAUSE THE MGIB RIDER IS BASED ON CONSERVATIVE ACTUARIAL FACTORS, THE LEVEL OF LIFETIME INCOME THAT IT GUARANTEES MAY BE LESS THAN THE LEVEL THAT MIGHT BE PROVIDED BY THE APPLICATION OF YOUR CONTRACT VALUE TO THE CONTRACT'S APPLICABLE ANNUITY FACTORS. YOU SHOULD CONSIDER ALL OF YOUR OPTIONS AT THE TIME YOU BEGIN THE INCOME PHASE OF YOUR CONTRACT. ING LIFEPAY MINIMUM GUARANTEED WITHDRAWAL BENEFIT ("ING LIFEPAY") RIDER. The ING LifePay rider is an optional benefit which guarantees that if your contract value is reduced to zero by a withdrawal equal to or less than the Maximum Annual Withdrawal ("MAW"), we will pay an amount equal to the MAW annually until the death of the annuitant. LIFETIME GUARANTEED WITHDRAWAL STATUS. This status begins on the date the rider is issued (the "effective date of the rider") and continues until the earliest of: 1) the annuity commencement date; 2) reduction of the contract value to zero by a withdrawal in excess of the MAW (see "Lifetime Automatic Periodic Benefit Status" below); 3) reduction of the contract value to zero by a withdrawal less than or equal to the MAW; 4) the surrender or annuitization of the Contract; or 5) the death of the owner, or first owner, in the case of joint owners. PURCHASE. In order to elect the ING LifePay rider, the annuitant must be the owner or one of the owners. The only exception is if the owner is a non-natural owner. The minimum issue age is 50 and the maximum issue age is 80. The applicable age is the age of the owner (if there are joint owners or the owner is non-natural, the annuitant) on the contract anniversary on which the rider is effective. Some broker dealers may limit availability of the rider to younger ages. The ING LifePay rider will not be issued if the initial allocation to investment options is not in accordance with the investment option restrictions described below. The Company in its discretion may allow the rider to be elected during the 30-day period preceding a contract anniversary. Such election must be received in good order, including compliance with the investment option restrictions described below. The rider will be effective as of that contract anniversary. 30 WF Landmark - 136960 The ING LifePay Withdrawal Benefit rider has two phases. The first phase, called the Growth Phase, begins on the effective date of the rider. The Growth Phase ends as of the business day before the first withdrawal is taken (or when the annuity commencement date is reached). The second phase is called the Withdrawal Phase. This phase begins as of the date of the first withdrawal or the annuity commencement date, whichever occurs first. The ING LifePay Base (referred to as the "MGWB Base" in the Contract) is used to determine the MAW, 1) If you purchased the ING LifePay rider on the contract date: the initial ING LifePay Base is equal to the initial premium. 2) If you purchased the ING LifePay rider after the contract date: the initial ING LifePay Base is equal to the contract value on the effective date of the rider. The ING LifePay Base is increased dollar-for-dollar by any additional eligible premiums. Eligible premiums are premiums received during the Growth Phase. The ING LifePay Base is also increased to equal the contract value, if the contract value is greater, on each contract quarterly anniversary after the effective date of the rider and during the Growth Phase. Any additional premiums paid during the Withdrawal Phase are not eligible premiums for purposes of determining the ING LifePay Base or the MAW. However, premiums received during the Withdrawal Phase increase the contract value used to determine the reset MAW if you choose to reset the ING LifePay rider (see "ING LifePay Reset Option", below). We reserve the right to discontinue allowing premium payments during the Withdrawal Phase. DETERMINATION OF THE MAW. The MAW is determined on the date the Withdrawal Phase begins. It equals a percentage of the greater of the contract value and the ING LifePay Base as of the last day of the Growth Phase. The first withdrawal after the effective date of the rider (which causes the end of the Growth Phase) is treated as occurring on the first day of the Withdrawal Phase, immediately after the MAW is determined. The MAW percentage, which varies by age of the annuitant on the date the Withdrawal Phase begins, is as follows: ------------------------------------------------------------- Annuitant Age MAW % ------------------------------------------------------------- 50-59 4% ------------------------------------------------------------- 60-75 5% ------------------------------------------------------------- 76-80 6% ------------------------------------------------------------- 81+ 7% ------------------------------------------------------------- Once determined, the MAW percentage never changes for the Contract, except as provided for under spousal continuation. See "Continuation After Death- Spouse" below. If the rider is in Lifetime Guaranteed Withdrawal Status, and the annuity commencement date is reached, the rider will enter the Withdrawal Phase and will be annuitized. If a lifetime only annuitization option is elected, we will pay the greater of the annuity payout from the Contract and annual payments equal to the MAW. If withdrawals in any contract year exceed the MAW, the MAW will be reduced on a pro-rata basis. This means that the MAW will be reduced by the same proportion that the withdrawal in excess of the MAW is of the contract value determined: 1) before the withdrawal for the amount in excess of the MAW; and 2) after the withdrawal for the amount withdrawn up to the MAW without regard to the excess withdrawal. Please see Appendix H, ING LifePay Partial Withdrawal Examples. 31 WF Landmark - 136960 Whenever a withdrawal is made, the total withdrawals taken in a contract year are compared with the current MAW. To the extent that the withdrawal taken causes the total withdrawals in that year to exceed the current MAW, that withdrawal is considered excess. For purposes of determining whether the MAW has been exceeded, any applicable Market Value Adjustment or surrender charges will not be applied to the withdrawal. However, for purposes of determining the MAW reduction after an excess withdrawal, any surrender charges and/or Market Value Adjustment are considered to be part of the withdrawal. REQUIRED MINIMUM DISTRIBUTIONS. Withdrawals taken from this Contract to satisfy the Required Minimum Distribution rules of the Internal Revenue Code of 1986, as amended ("RMD"), that exceed the MAW for a specific contract year, will not be deemed excess withdrawals in that contract year, subject to the following rules: 1. If your RMD for a calendar year (determined on a date on or before January 31 of that year, applicable to this Contract, is greater than the MAW on that date, an Additional Withdrawal Amount will be set equal to that portion of the RMD that exceeds the MAW. 2. You may withdraw the Additional Withdrawal Amount from this Contract without it being deemed an excess withdrawal. 3. Any withdrawals taken in a Contract Year will count first against the MAW for that contract year. 4. Once the MAW for the then current contract year has been taken, additional amounts withdrawn in excess of the MAW, other than RMD's, will count against and reduce any Additional Withdrawal Amount. 5. Withdrawals that exceed the Additional Withdrawal Amount are excess withdrawals and will reduce the MAW on a pro-rata basis, as described above. 6. The Additional Withdrawal Amount is reset to zero at the end of each calendar year, and remains at zero until it is reset on January 31 of the following calendar year. 7. If the Contract is still in the Growth Phase on January 31, but enters the Withdrawal Phase later during that calendar year, the Additional Withdrawal Amount will be set equal to the excess, if any, of the RMD for that year over the MAW on the date the MAW is established. INVESTMENT ADVISORY FEES. Withdrawals taken pursuant to a program established by the owner for the payment of investment advisory fees to a named third party investment adviser for advice on management of this contract's values will not cause the Withdrawal Phase to begin. During the Growth Phase, such withdrawals reduce the ING LifePay Base on a pro-rata basis, and during the Withdrawal Phase, these withdrawals are treated as any other withdrawal. ING LIFEPAY RESET OPTION. Beginning one year after the Withdrawal Phase begins, you may choose to reset the MAW, if the MAW percentage times the contract value would be greater than your current MAW. You must elect to reset by a request in a form satisfactory to us. On the date the request is received (the "Reset Effective Date"), the MAW will increase to be equal to the MAW percentage times the contract value on the Reset Effective Date. After exercising the reset option, you must wait one year before electing to reset again. We will not accept a request to reset if the new MAW on the date the request is received would be less than your current MAW. If the reset option is exercised, the charge for the ING LifePay rider will be equal to the charge then in effect for a newly purchased rider but will not exceed the maximum annual charge of 1.20%. However, we guarantee that the rider charge will not increase for resets exercised within the first five contract years. INVESTMENT OPTION RESTRICTIONS. While the ING LifePay rider is in effect, there are limits on the portfolios to which your contract value may be allocated. To the extent your contract value is not allocated to Accepted Funds, your allocations will be rebalanced to maintain at least 20% of such contract value in Fixed Allocation Funds. See "Fixed Allocation Fund Automatic Rebalancing (`FAFAR')" below. ACCEPTED FUNDS. The Accepted Funds are as follows: ING LifeStyle Moderate Portfolio, ING LifeStyle Moderate Growth Portfolio, ING LifeStyle Growth Portfolio, ING MarketPro Portfolio, ING Liquid Assets Portfolio and Fixed Account II. We may change these designations at any time upon 30 days notice to you. If a change is made, the change will apply to contract value allocated to such portfolios after the date of the change. 32 WF Landmark - 136960 FIXED ALLOCATION FUNDS. The Fixed Allocation Fund is the ING VP Intermediate Bond Fund. While the rider is in effect, any allocation of contract value to a Fixed Allocation Fund will be considered a Covered Fund allocation for purposes of calculating any applicable death benefit guaranteed under the Contract. We may change these designations at any time upon 30 days notice to you. If a change is made, the change will apply to contract value allocated to such portfolios after the date of the change. OTHER FUNDS. All portfolios available under the Contract that are not Accepted Funds or Fixed Allocation Funds are considered Other Funds. FIXED ALLOCATION FUND AUTOMATIC REBALANCING ("FAFAR"). If the contract value in Fixed Allocation Funds is less than 20% of the contract value not allocated to Accepted Funds on any ING LifePay Rebalancing Date, we will automatically rebalance the contract value allocated to Fixed Allocation Funds and Other Funds to restore the required allocation. Accepted Funds are excluded from FAFAR. Any rebalancing is done on a pro-rata basis among Fixed Allocation Funds and Other Funds and will be the last transaction processed on that date. The ING LifePay Rebalancing Dates occur on each contract anniversary and after the following transactions: 1. receipt of additional premiums; 2. transfer or reallocation among Fixed Allocation Funds or Other Funds, whether automatic or specifically directed by you; 3. withdrawals from a Fixed Allocation Fund or Other Fund. FAFAR is separate from any other automatic rebalancing under the Contract. However, if the other automatic rebalancing under the Contract causes the allocations to not be in accordance with the investment option restrictions, FAFAR will occur immediately after that to restore the required allocations. LIFETIME AUTOMATIC PERIODIC BENEFIT ("LAPB") STATUS. If the contract value is reduced to zero (other than by a withdrawal in excess of the MAW), while the rider is in Lifetime Guaranteed Withdrawal Status, the status of the rider changes to LAPB Status and you are entitled to receive periodic payments in an annual amount equal to the MAW. If the contract value is reduced to zero by a withdrawal in excess of the MAW, the Contract and the rider will terminate due to the pro-rata reduction described above. When the rider enters LAPB Status, 1) the Contract will provide no further benefits other than as provided in the ING LifePay rider; 2) no further premium payments will be accepted; 3) any other riders attached to the Contract will terminate, unless otherwise specified in the rider. During LAPB Status, we will pay you periodic payments equal to the MAW. These payments will cease upon the death of the annuitant at which time both the rider and the Contract will terminate. The rider will remain in LAPB Status until it terminates without value upon the annuitant's death. The periodic payments will begin on the last day of the first full contract year following the date the rider enters LAPB Status and will continue to be paid annually thereafter. If, at the time the rider enters LAPB Status, you are receiving systematic withdrawals under the Contract more frequently than annually, the periodic payments will be made at the same frequency in equal amounts such that the sum of the payments in each contract year will equal the annual MAW. Such payments will be made on the same payment dates as previously set up, if the payments were being made monthly or quarterly. If the payments were being made semi-annually or annually, the payments will be made at the end of the half-contract year or contract year, as applicable. 33 WF Landmark - 136960 DEATH OF OWNER OR ANNUITANT. The ING LifePay rider and charges terminate on the earlier of: 1) if the rider is in Lifetime Guaranteed Withdrawal status, the date of receipt of due proof of death ("claim date") of the owner or first owner, in the case of joint owners, or the annuitant if there is a non-natural owner; 2) date the rider enters LAPB status. Under 1), above, the rider terminates on the death of the first owner, even if the owner is not the annuitant. Thus, you should not purchase this rider with multiple owners, unless the owners are spouses. CONTINUATION AFTER DEATH -- SPOUSE. If the surviving spouse of the deceased owner continues the contract (see, "Death Benefit Choices- Continuation After Death- Spouse"), this rider will also continue, provided the following conditions are met: 1) The spouse is at least 50 years old on the date the Contract is continued; and 2) The spouse becomes the annuitant and sole owner. If the rider is in the Growth Phase at the time of spousal continuation: 1) The rider will continue in the Growth Phase; 2) On the date the rider is continued, the ING LifePay Base will be reset to equal the then current contract value; 3) The ING LifePay charges will restart and be the same as were in effect prior to the claim date; and 4) The MAW percentage will be determined as of the date of the first withdrawal, whenever it occurs, and will be based on the spouse's age on that date. If the rider is in the Withdrawal Phase at the time of spousal continuation: 1) The rider will continue in the Withdrawal Phase; 2) On the contract anniversary following the date the rider is continued, a. If the surviving spouse had not been the annuitant before the owner's death, i. The MAW is recalculated as the MAW percentage based on the surviving spouse's age on that contract anniversary multiplied by the current contract value on that contract anniversary. ii. The MAW is considered to be zero from the claim date to that contract anniversary. Withdrawals are permitted pursuant to the other provisions of the Contract. Withdrawals causing the contract value to fall to zero will terminate the Contract and rider. b. If the surviving spouse had been the annuitant before the owner's death, i. The MAW is recalculated as the greater of the MAW on the claim date (adjusted for excess withdrawals thereafter) and the MAW resulting from multiplying the original MAW percentage by the current contract value on that contract anniversary. 34 WF Landmark - 136960 ii. The MAW does not go to zero on the claim date. Withdrawals may continue under the rider provisions. 3) The rider will continue in the Withdrawal Phase; 4) On the Contract anniversary following the date the rider is continued, the MAW is recalculated as follows: a. If the spouse had been the annuitant before the owner's death, the original MAW percentage will be used; b. If the spouse had not been the annuitant before the owner's death, the MAW percentage will be redetermined based on the spouse's age on the Contract anniversary; c. The new MAW will be the applicable MAW percentage multiplied by the then current contract value. 5) The rider charges will restart on the contract anniversary following the date the rider is continued and will be the same as were in effect prior to the claim date; CHANGE OF OWNER OR ANNUITANT. Other than as provided above under "Continuation After Death- Spouse", you may not change the annuitant. The rider and rider charges will terminate upon change of owner, including adding an additional owner, except for the following ownership changes: 1) spousal continuation as described above; 2) change of owner from one custodian to another custodian; 1) change of owner from a custodian for the benefit of an individual to the same individual; 2) change of owner from an individual to a custodian for the benefit of the same individual; 3) collateral assignments; 4) change in trust as owner where the individual owner and the grantor of the trust are the same individual; 5) change of owner from an individual to a trust where the individual owner and the grantor of the trust are the same individual; and 6) change of owner from a trust to an individual where the individual owner and the grantor of the trust are the same individual. TERMINATION OF THE RIDER. The ING LifePay rider may not be cancelled unless the Contract is surrendered or annuitized, other than as described above under "Lifetime Guaranteed Withdrawal Status" and "Death of Owner or Annuitant". For a discussion of the charges we deduct under the ING LifePay rider, see "Charges and Fees -- Optional Rider Charges." Each payment you receive under the ING LifePay rider will be taxed as a withdrawal and may be subject to a penalty tax. See "Withdrawals" and "Federal Tax Considerations" for more information. OTHER CONTRACTS We and our affiliates offer various other products with different features and terms than the Contracts, and that may offer some or all of the same investment portfolios. These products have different benefits, fees and charges, and may or may not better match your needs. Please note that some of the Company's management personnel and certain other employees may receive a portion of their employment compensation based on the amount of Contract values allocated to investment portfolios of Trusts or Funds affiliated with ING. You should be aware that there are alternative options available, and, if you are interested in learning more about these other products, contact our Customer Service Center or your registered representative. 35 WF Landmark - 136960 - -------------------------------------------------------------------------------- WITHDRAWALS - -------------------------------------------------------------------------------- Except under certain qualified Contracts, you may withdraw all or part of your money any time during the accumulation phase and before the death of the contract owner. If you request a withdrawal for more than 90% of the cash surrender value, and the remaining cash surrender value after the withdrawal is less than $2,500, we will treat it as a request to surrender the Contract. If any single withdrawal or the sum of withdrawals exceeds the Free Withdrawal Amount, you will incur a surrender charge. The Free Withdrawal Amount is the greater of (i) any earnings less previous withdrawals, and (ii) 10% of premium payments paid within 4 years prior to the date of the withdrawal and not previously withdrawn, less any withdrawals taken in the same contract year. You need to submit to us a written request specifying the Fixed Interest Allocations or subaccounts from which to withdraw amounts, otherwise we will make the withdrawal on a pro-rata basis from all of the subaccounts in which you are invested. If there is not enough contract value in the subaccounts, we will deduct the balance of the withdrawal from your Fixed Interest Allocations starting with the guaranteed interest periods nearest their maturity dates until we have honored your request. We will apply a Market Value Adjustment to any withdrawal from your Fixed Interest Allocation taken more than 30 days before its maturity date. Definitive guidance on the proper federal tax treatment of the Market Value Adjustment has not been issued. You may want to discuss the potential tax consequences of a Market Value Adjustment with your tax adviser. We will determine the contract value as of the close of business on the day we receive your withdrawal request at our Customer Service Center. The contract value may be more or less than the premium payments made. If you have elected the ING LifePay rider, your withdrawals will be subject to surrender charges if they exceed the free withdrawal amount. However, once your contract value is zero, the periodic payments paid under the ING LifePay rider are not subject to surrender charges. If the aggregate percentage cap on allocations to the Restricted Funds has been exceeded, any subsequent withdrawals must be taken so that the percentage of contract value in the Restricted Funds following the withdrawal would not be greater than the percentage of contract value in the Restricted Funds prior to the withdrawal. If a requested withdrawal would cause the percentage cap to be exceeded, the amount of the withdrawal in excess of the cap would be taken pro-rata from all variable subaccounts. For administrative purposes, we will transfer your money to a specially designated subaccount (currently, the Wells Fargo VT Money Market subaccount) prior to processing the withdrawal. This transfer will not affect the withdrawal amount you receive. Please be aware that the benefit we pay under certain optional benefit riders will be reduced by any withdrawals you take while the optional benefit rider is in effect. See "Optional Riders." We offer the following three withdrawal options: REGULAR WITHDRAWALS After the free look period, you may make regular withdrawals. Each withdrawal must be a minimum of $100. We will apply a Market Value Adjustment to any regular withdrawal you take from a Fixed Interest Allocation more than 30 days before its maturity date. See Appendix C and the Fixed Account II prospectus for more information on the application of the Market Value Adjustment. 36 WF Landmark - 136960 SYSTEMATIC WITHDRAWALS You may choose to receive automatic systematic withdrawal payments (i) from the contract value in the subaccounts in which you are invested, or (ii) from the interest earned in your Fixed Interest Allocations. You may not elect the systematic withdrawal option if you are taking IRA withdrawals. Systematic withdrawals may be taken monthly, quarterly or annually. If you have contract value allocated to one or more Restricted Funds, and you elect to receive systematic withdrawals from the subaccounts in which you are invested, the systematic withdrawals must be taken pro-rata from all subaccounts in which contract value is invested. If you do not have contract value allocated to a Restricted Fund and choose systematic withdrawals on a non pro-rata basis, we will monitor the withdrawals annually. If you subsequently allocate contract value to one or more Restricted Funds, we will require you to take your systematic withdrawals on a pro-rata basis from all subaccounts in which contract value is invested. There is no additional charge for this feature. You decide when you would like systematic payments to start as long as it is at least 28 days after your contract date. You also select the date on which the systematic withdrawals will be made, but this date cannot be later than the 28th day of the month. If you have elected to receive systematic withdrawals but have not chosen a date, we will make the withdrawals on the same calendar day of each month as your contract date. If your contract date is after the 28th day of the month, your systematic withdrawal will be made on the first day of each month. Each systematic withdrawal amount must be a minimum of $100. The amount of your systematic withdrawal can either be (i) a fixed dollar amount or (ii) an amount based on a percentage of the premiums not previously withdrawn from the subaccounts in which you are invested. Both forms of systematic withdrawals are subject to the following maximum, which is calculated on each withdrawal date: --------------------------------------------------------- MAXIMUM PERCENTAGE FREQUENCY OF PREMIUMS NOT PREVIOUSLY WITHDRAWN --------------------------------------------------------- Monthly 0.84% Quarterly 2.50% Annually 10.00% --------------------------------------------------------- If your systematic withdrawal is a fixed dollar amount and the amount to be withdrawn would exceed the applicable maximum percentage of your premium payments not previously withdrawn on any withdrawal date, we will automatically reduce the amount withdrawn so that it equals such percentage. Thus, your fixed dollar systematic withdrawals will never exceed the maximum percentage. If you want fixed dollar systematic withdrawals to exceed the maximum percentage and are willing to incur associated surrender charges, consider the Fixed Dollar Systematic Withdrawal Feature discussed below which you may add to your regular fixed dollar systematic withdrawal program. If your systematic withdrawal is based on a percentage of the premiums not previously withdrawn from the subaccounts in which you are invested and the amount to be withdrawn based on that percentage would be less than $100, we will automatically increase the amount to $100 as long as it does not exceed the maximum percentage. If the systematic withdrawal would exceed the maximum percentage, we will send the amount, and then automatically cancel your systematic withdrawal option. We limit systematic withdrawals from Fixed Interest Allocations to interest earnings during the prior month, quarter, or year, depending on the frequency you chose. Systematic withdrawals are not subject to a Market Value Adjustment, unless you have added the Fixed Dollar Systematic Withdrawal Feature discussed below and the payments exceed interest earnings. Systematic withdrawals from Fixed Interest Allocations under the Fixed Dollar Systematic Withdrawal Feature are available only in connection with Section 72(q) and 72(t) distributions. A Fixed Interest Allocation may not participate in both the systematic withdrawal option and the dollar cost averaging program at the same time. 37 WF Landmark - 136960 You may change the amount or percentage of your systematic withdrawal once each contract year or cancel this option at any time by sending satisfactory notice to our Customer Service Center at least 7 days before the next scheduled withdrawal date. If you submit a subsequent premium payment after you have applied for systematic withdrawals, we will not adjust future withdrawals under the systematic withdrawal program unless you specifically request that we do so. The systematic withdrawal option may commence in a contract year where a regular withdrawal has been taken but you may not change the amount or percentage of your withdrawals in any contract year during which you have previously taken a regular withdrawal. Subject to availability, a spousal or non-spousal beneficiary may elect to receive death benefits as payments over the beneficiary's lifetime ("stretch"). Stretch payments will be subject to the same limitations as systematic withdrawals, and non-qualified stretch payments will be reported on the same basis as other systematic withdrawals. FIXED DOLLAR SYSTEMATIC WITHDRAWAL FEATURE. You may add the Fixed Dollar Systematic Withdrawal Feature to your regular fixed dollar systematic withdrawal program. This feature allows you to receive a systematic withdrawal in a fixed dollar amount in addition to your systematic withdrawal program regardless of any surrender charges or Market Value Adjustments. Systematic withdrawals from Fixed Interest Allocations under the Fixed Dollar Systematic Withdrawal Feature are available only in connection with Section 72(q) and 72(t) distributions. You choose the amount of the fixed systematic withdrawals, which may total up to an annual maximum of 10% of your premium payments not previously withdrawn as determined on the day we receive your election of this feature. We will not recalculate the maximum limit when you make additional premium payments, unless you instruct us to do so. We will assess a surrender charge on the withdrawal date if the withdrawal exceeds the maximum limit as calculated on the withdrawal date. We will assess a Market Value Adjustment on the withdrawal date if the withdrawal from a Fixed Interest Allocation exceeds your interest earnings on the withdrawal date. We will apply the surrender charge and any Market Value Adjustment directly to your contract value (rather than to the withdrawal) so that the amount of each systematic withdrawal remains fixed. Flat dollar systematic withdrawals which are intended to satisfy the requirements of Section 72(q) or 72(t) of the Tax Code may exceed the maximum. Such withdrawals are subject to surrender charges and Market Value Adjustments when they exceed the applicable maximum percentage. IRA WITHDRAWALS If you have a non-Roth IRA Contract and will be at least age 70 1/2 during the current calendar year, you may elect to have distributions made to you to satisfy requirements imposed by federal tax law. IRA withdrawals provide payout of amounts required to be distributed by the Internal Revenue Service ("IRS") rules governing mandatory distributions under qualified plans. We will send you a notice before your distributions commence. You may elect to take IRA withdrawals at that time, or at a later date. You may not elect IRA withdrawals and participate in systematic withdrawals at the same time. If you do not elect to take IRA withdrawals, and distributions are required by federal tax law, distributions adequate to satisfy the requirements imposed by federal tax law may be made. Thus, if you are participating in systematic withdrawals, distributions under that option must be adequate to satisfy the mandatory distribution rules imposed by federal tax law. You may choose to receive IRA withdrawals on a monthly, quarterly or annual basis. You may elect payments to start as early as 28 days after the contract date. You select the day of the month when the withdrawals will be made, but it cannot be later than the 28th day of the month. If no date is selected, we will make the withdrawals on the same calendar day of the month as the contract date. If your contract date is after the 28th day of the month, your IRA withdrawal will be made on the first day of each month. You may request us to calculate the amount you are required to withdraw from your Contract each year based on the information you give us and various choices you make. For information regarding the calculation and choices you have, see the SAI. Or, we will accept your written instructions regarding the calculated amount required to be withdrawn from your Contract each year. The minimum dollar amount you can withdraw is $100. When we determine the required IRA withdrawal amount for a taxable year based on the frequency you select, if that amount is less than $100, we will pay $100. At any time where the IRA withdrawal amount is greater than the contract value, we will cancel the Contract and send you the amount of the cash surrender value. 38 WF Landmark - 136960 You may change the payment frequency of your IRA withdrawals once each contract year or cancel this option at any time by sending satisfactory notice to our Customer Service Center at least 7 days before the next scheduled withdrawal date. An IRA withdrawal from a Fixed Interest Allocation in excess of the amount allowed under systematic withdrawals will be subject to a Market Value Adjustment. CONSULT YOUR TAX ADVISER REGARDING THE TAX CONSEQUENCES ASSOCIATED WITH TAKING WITHDRAWALS. You are responsible for determining that withdrawals comply with applicable law. A withdrawal made before the taxpayer reaches age 59 1/2 may result in a 10% penalty tax. See "Federal Tax Considerations" for more details. - -------------------------------------------------------------------------------- TRANSFERS AMONG YOUR INVESTMENTS - -------------------------------------------------------------------------------- Between the end of the free look period and the annuity start date, you may transfer your contract value among the subaccounts in which you are invested and your Fixed Interest Allocations. We currently do not charge you for transfers made during a contract year, but reserve the right to charge for each transfer after the twelfth transfer in a contract year. WE ALSO RESERVE THE RIGHT TO LIMIT THE NUMBER OF TRANSFERS YOU MAY MAKE AND MAY OTHERWISE MODIFY OR TERMINATE TRANSFER PRIVILEGES IF REQUIRED BY OUR BUSINESS JUDGMENT OR IN ACCORDANCE WITH APPLICABLE LAW. We will apply a Market Value Adjustment to transfers from a Fixed Interest Allocation taken more than 30 days before its maturity date, unless the transfer is made under the dollar cost averaging program. Keep in mind that transfers between Covered Funds, Special Funds and Excluded Funds and other investment portfolios may negatively impact your death benefit or rider benefits. If you allocate contract value to an investment option that has been designated as a Restricted Fund, your ability to transfer contract value to the Restricted Fund may be limited. A transfer to the Restricted Funds will not be permitted to the extent that it would increase the contract value in the Restricted Fund to more than the applicable limits following the transfer. We do not limit transfers from Restricted Funds. If the result of multiple reallocations is to lower the percentage of total contract value in the Restricted Fund, the reallocation will be permitted even if the percentage of contract value in the Restricted Fund is greater than the limit. Please be aware that the benefit we pay under an optional benefit rider may be affected by certain transfers you make while the rider is in effect. Transfers, including those involving Special Funds or Excluded Funds, may also affect your optional rider base. See "The Annuity Contract -- Optional Riders." The minimum amount that you may transfer is $100 or, if less, your entire contract value held in a subaccount or a Fixed Interest Allocation. To make a transfer, you must notify our Customer Service Center and all other administrative requirements must be met. We will determine transfer values at the end of the business day on which we receive the transfer request at our Customer Service Center. If we receive your transfer request after 4 p.m. eastern time or the close of regular trading of the New York Stock Exchange, we will make the transfer on the next business day. Separate Account B and the Company will not be liable for following instructions communicated by telephone or other approved electronic means that we reasonably believe to be genuine. We may require personal identifying information to process a request for transfer made over the telephone, over the internet or other approved electronic means. 39 WF Landmark - 136960 LIMITS IMPOSED BY UNDERLYING FUNDS. Orders for the purchase of fund shares may be subject to acceptance or rejection by the underlying fund. We reserve the right to reject, without prior notice, any allocation of a premium payment to a subaccount if the subaccount's investment in its corresponding fund is not accepted by the fund for any reason. LIMITS ON FREQUENT OR DISRUPTIVE TRANSFERS. The Contract is not designed to serve as a vehicle for frequent trading. Frequent trading can disrupt management of a fund and raise its expenses through: 1) increased trading and transaction costs; 2) forced and unplanned portfolio turnover; 3) lost opportunity costs; and 4) large asset swings that decrease the fund's ability to provide maximum investment return to all contract owners. This in turn can have an adverse effect on fund performance. Accordingly, individuals or organizations that use market-timing investment strategies and make frequent transfers should not purchase the Contract. We monitor transfer activity. With regard to frequent transfers, in the event that an individual's or organization's transfer activity: 1. exceeds our then-current monitoring standard for frequent trading; 2. is identified as problematic by an underlying fund even if the activity does not exceed our monitoring standard for frequent trading; or 3. if we determine in our sole discretion that such transfer activity may not be in the best interests of other contract owners, we will take the following actions to deter such activity. Upon the first violation, we will send a one time warning letter. A second violation will result in the suspension of trading privileges via facsimile, telephone, email and internet, and limit trading privileges to submission by regular U.S. mail for a period of six months. At the end of that period, trading privileges will be reinstated. If there is another violation after such rights are reinstated, we will suspend such privileges permanently. We will notify you in writing if we take any of these actions. With regard to transfers initiated by a market-timing organization or individual or other party authorized to give transfer instructions on behalf of multiple contract owners, we will also take the following actions, without prior notice: (1) not accepting transfer instructions from an agent acting on behalf of more than one contract owner; and (2) not accepting preauthorized transfer forms from market timers or other entities acting on behalf of more than one contract owner at a time. Our current definition of frequent trading is more than one purchase and sale of the same underlying fund within a 30-day period. We do not count transfers associated with scheduled dollar cost averaging or automatic rebalancing programs, transfers involving funds that affirmatively permit short-term trading in their fund shares, such as the ProFund portfolios, movement between such funds and the Liquid Assets Portfolio or the Wells Fargo VT Money Market Fund, and transfers involving certain de minimis amounts when determining whether trading activity is excessive. We reserve the right to modify our general standard, or the standard as it may apply to a particular fund, at any time without prior notice, depending on, among other factors, the needs of the underlying fund(s), the best interests of contract owners and fund investors and/or state or federal regulatory requirements. If we modify such standard, it will be applied uniformly to all contract owners or, as applicable, to all contract owners investing in the underlying fund. In addition, if, due to the excessive dollar amounts of trades, even though not within our then current definition of frequent trading, an individual's or organization's transfer activity is determined, in our sole discretion, to be disruptive, we will take the same actions as are described above to limit frequent transfers. The Company does not allow waivers to the above policy. Our excessive trading policy may not be completely successful in preventing market timing or excessive trading activity. 40 WF Landmark - 136960 We currently require that orders received via facsimile to effect transactions in subaccounts that invest in ProFund portfolios be received at our Customer Service Center no later than 3 p.m. eastern time. DOLLAR COST AVERAGING You may elect to participate in our dollar cost averaging program if you have at least $1,200 of contract value in (i) the Wells Fargo VT Money Market subaccount, or (ii) a Fixed Interest Allocation with either a 6-month or a 1-year guaranteed interest period. These subaccounts or Fixed Interest Allocations serve as the source accounts from which we will, on a monthly basis, automatically transfer a set dollar amount of money to other subaccounts selected by you. We also may offer DCA Fixed Interest Allocations, which are 6-month and 1-year Fixed Interest Allocations available exclusively for use with the dollar cost averaging program. The DCA Fixed Interest Allocations require a minimum premium payment of $1,200 directed into a DCA Fixed Interest Allocation. A Fixed Interest Allocation or DCA Fixed Interest Allocation may not participate in the dollar cost averaging program and in systematic withdrawals at the same time. There is no additional charge for this feature. The dollar cost averaging program is designed to lessen the impact of market fluctuation on your investment. Since we transfer the same dollar amount to other subaccounts each month, more units of a subaccount are purchased if the value of its unit is low and fewer units are purchased if the value of its unit is high. Therefore, a lower than average value per unit may be achieved over the long term. However, we cannot guarantee this. When you elect the dollar cost averaging program, you are continuously investing in securities regardless of fluctuating price levels. You should consider your tolerance for investing through periods of fluctuating price levels. Unless you have a DCA Fixed Interest Allocation, you elect the dollar amount you want transferred under this program. Each monthly transfer must be at least $100. If your source account is the Wells Fargo VT Money Market subaccount or a 1-year Fixed Interest Allocation, the maximum amount that can be transferred each month is your contract value in such source account divided by 12. If your source account is a 6-month Fixed Interest Allocation, the maximum amount that can be transferred each month is your contract value in such source account divided by 6. You may change the transfer amount once each contract year. If you have a DCA Fixed Interest Allocation, there is no minimum or maximum transfer amount. We will transfer all your money allocated to that source account into the subaccount(s) in equal payments over the selected 6-month or 1-year period. The last payment will include earnings accrued over the course of the selected period. If you make an additional premium payment into a Fixed Interest Allocation subject to dollar cost averaging, the amount of your transfers under the dollar cost averaging program remains the same, unless you instruct us to increase the transfer amount. Transfers from a Fixed Interest Allocation or a DCA Fixed Interest Allocation under the dollar cost averaging program are not subject to a Market Value Adjustment. However, if you terminate the dollar cost averaging program for a DCA Fixed Interest Allocation and there is money remaining in the DCA Fixed Interest Allocation, we will transfer the remaining money to the Wells Fargo VT Money Market subaccount. Such transfer will trigger a Market Value Adjustment if the transfer is made more than 30 days before the maturity date of the DCA Fixed Interest Allocation. If you do not specify to which subaccounts you want to transfer the dollar amount of the source account, we will transfer the money to the subaccounts in which you are invested on a proportional basis. The transfer date is the same day each month as your contract date. If, on any transfer date, your contract value in a source account is equal or less than the amount you have elected to have transferred, the entire amount will be transferred and the program will end. You may terminate the dollar cost averaging program at any time by sending satisfactory notice to our Customer Service Center at least 7 days before the next transfer date. You are permitted to transfer contract value to a Restricted Fund, subject to the limitations described above in this section and in "Appendix B -- The Investment Portfolios." Compliance with the individual and aggregate Restricted Fund limits will be reviewed when the dollar cost averaging program is established. Transfers under the dollar cost averaging program must be within those limits. We will not review again your dollar cost averaging election for compliance with the individual and aggregate limits for investment in the Restricted Funds except in the case of the transactions described below. 41 WF Landmark - 136960 o Amount added to source account: If you add amounts to the source account which would increase the amount to be transferred under the dollar cost averaging program, we will review the amounts to be transferred to ensure that the individual and aggregate limits are not being exceeded. If such limits would be exceeded, we will require that the dollar cost averaging transfer amounts be changed to ensure that the transfers are within the limits based on the then-current allocation of contract value to the Restricted Fund(s) and the then-current value of the amount designated to be transferred to that Restricted Fund(s). o Additional premium paid: Up to the individual Restricted Fund percentage limit may be allocated to a Restricted Fund. If you request more than the individual limit be allocated to a Restricted Fund, we will look at the aggregate limit, subtract the current allocation to Restricted Funds, and subtract the current value of amounts to be transferred under the dollar cost averaging program to Restricted Funds. The excess, if any, is the maximum that may be allocated pro-rata to the Restricted Funds. o Reallocation request is made while the dollar cost averaging program is active: If the reallocation would increase the amount allocated to Restricted Funds, the maximum that may be so allocated is the individual Restricted Fund percentage limit, less the current allocation to Restricted Funds and less the current value of any remaining amounts to be transferred under the dollar cost averaging program to the Restricted Funds. We may offer additional subaccounts or withdraw any subaccount or Fixed Interest Allocation to or from the dollar cost averaging program, stop offering DCA Fixed Interest Allocations or otherwise modify, suspend or terminate this program. Such change will not affect any dollar cost averaging programs in operation at the time. AUTOMATIC REBALANCING If you have at least $10,000 of contract value invested in the subaccounts of Separate Account B, you may elect to have your investments in the subaccounts automatically rebalanced. Automatic rebalancing is not available if you participate in dollar cost averaging. Automatic rebalancing will not take place during the free look period. Transfers made pursuant to automatic rebalancing do not count toward the 12-transfer limit on free transfers. There is no additional charge for this feature. You are permitted to reallocate between Restricted and non-Restricted Funds, subject to the limitations described above, in this section and in Appendix B -- The Investment Portfolios. If the reallocation would increase the amount allocated to the Restricted Funds, the maximum that may be so allocated is the individual Restricted Fund percentage limit, less the current allocation to all Restricted Funds. We will transfer funds under your Contract on a quarterly, semi-annual, or annual calendar basis among the subaccounts to maintain the investment blend of your selected subaccounts. The minimum size of any allocation must be in full percentage points. Rebalancing does not affect any amounts that you have allocated to the Fixed Account. The program may be used in conjunction with the systematic withdrawal option only if withdrawals are taken pro-rata. To participate in automatic rebalancing, send satisfactory notice to our Customer Service Center. We will begin the program on the last business day of the period in which we receive the notice. You may cancel the program at any time. The program will automatically terminate if you choose to reallocate your contract value among the subaccounts or if you make an additional premium payment or partial withdrawal on other than a pro-rata basis. Additional premium payments and partial withdrawals made on a pro-rata basis will not cause the automatic rebalancing program to terminate. 42 WF Landmark - 136960 - -------------------------------------------------------------------------------- DEATH BENEFIT CHOICES - -------------------------------------------------------------------------------- DEATH BENEFIT DURING THE ACCUMULATION PHASE During the accumulation phase, a death benefit (and earnings multiplier benefit, if elected) is payable when either the contract owner, or the first of joint owners or the annuitant (when a contract owner is not an individual) dies. Assuming you are the contract owner, your beneficiary will receive a death benefit unless the beneficiary is your surviving spouse and elects to continue the Contract. We calculate the death benefit value as of the close of the business day on which we receive written notice and due proof of death, as well as any required paperwork, at our Customer Service Center ("claim date"). If your beneficiary wants to receive the death benefit on a date later than this, it may affect the amount of the benefit payable in the future. The proceeds may be received in a single sum, applied to any of the annuity options, or, if available, paid over the beneficiary's lifetime. (See "Systematic Withdrawals" above). A beneficiary's right to elect an annuity option or receive a lump-sum payment may have been restricted by the contract owner. If so, such rights or options will not be available to the beneficiary. If we do not receive a request to apply the death benefit proceeds to an annuity option, we will make a single sum distribution. Unless you elect otherwise, the distribution will be made into an interest bearing account, backed by our general account, that is accessed by the beneficiary through a checkbook feature. The beneficiary may access death benefit proceeds at any time without penalty. We will generally pay death benefit proceeds within 7 days after our Customer Service Center has received sufficient information to make the payment. For information on required distributions under federal income tax laws, you should see "Required Distributions upon Contract Owner's Death." Interest earned on this account may be less than interest paid on other settlement options. Your death benefit and mortality and expense risk charge depend on the category of contract owners to which you belong and on the death benefit that you choose. You may choose one of the following Death Benefits: (i) the Standard Death Benefit, (ii) the Quarterly Ratchet Enhanced Death Benefit or (iii) the Max 7 Enhanced Death Benefit. The Quarterly Ratchet Enhanced Death Benefit and the Max 7 Enhanced Death Benefit are available only if the contract owner or the annuitant (if the contract owner is not an individual) is not more than 79 years old at the time of purchase. The Enhanced Death Benefits are available only at the time you purchase your Contract. The Enhanced Death Benefits are not available where a Contract is owned by joint owners. Not all death benefits are available in every state. If you do not choose a death benefit, your death benefit will be the Standard Death Benefit. ONCE YOU CHOOSE A DEATH BENEFIT, YOU CANNOT CHANGE IT. We may stop or suspend offering any of the Enhanced Death Benefit options to new Contracts. A change in ownership of the Contract may affect the amount of the death benefit and the Enhanced Death Benefit. The ING LifePay rider may also affect the death benefit. The death benefit may be subject to certain mandatory distribution rules required by federal tax law. We use the BASE DEATH BENEFIT to help determine the minimum death benefit payable under each of the death benefit options described below. You do not elect the Base Death Benefit. The Base Death Benefit is equal to the greater of: 1) the contract value; or 2) the cash surrender value. The STANDARD DEATH BENEFIT equals the GREATER of: 1) the Base Death Benefit; and 2) the Standard Minimum Guaranteed Death Benefit ("Standard MGDB") for amounts allocated to Covered Funds plus the contract value allocated to Excluded Funds. 43 WF Landmark - 136960 The Standard MGDB allocated to Covered Funds equals premiums allocated to Covered Funds less pro-rata adjustments for any withdrawals and transfers. The Standard MGDB allocated to Excluded Funds equals premiums allocated to Excluded Funds less pro-rata adjustments for any withdrawals and transfers. This calculation is not used for benefit purposes, but only to determine the impact of transfers to and from Excluded Funds. Withdrawals reduce the Standard MGDB on a pro-rata basis. The percentage reduction in the Standard MGDB for each Fund category (i.e. Covered or Excluded) equals the percentage reduction in contract value in that Fund category resulting from the withdrawal. The pro-rata adjustment is based on the change in contract value resulting from the withdrawal, not the amount requested. Transfers among Fund categories do not reduce the overall Standard MGDB. o Net transfers from Covered Funds to Excluded Funds will reduce the Standard MGDB in the Covered Funds on a pro-rata basis. The increase in the Standard MGDB allocated to Excluded Funds will equal the decrease in the Standard MGDB in Covered Funds. o Net transfers from Excluded Funds to Covered Funds will reduce the Standard MGDB in Excluded Funds on a pro-rata basis. The increase in the Standard MGDB allocated to Covered Funds will equal the lesser of the net contract value transferred and the decrease in the Standard MGDB in Excluded Funds. ENHANCED DEATH BENEFIT OPTIONS. Under the Enhanced Death Benefit options, if you die before the annuity start date, your beneficiary will receive the greater of the Standard Death Benefit or the Enhanced Death Benefit option elected. We may, with 30 days notice to you, designate any investment portfolio as a Special Fund or Excluded Fund on existing Contracts with respect to new premiums added to such investment portfolio and also with respect to new transfers to such investment portfolio. Selecting a Special Fund or Excluded Fund may limit or reduce the Enhanced Death Benefit. For the period during which a portion of the contract value is allocated to a Special Fund or Excluded Fund, we may, at our discretion, reduce the mortality and expense risk charge attributable to that portion of the contract value. The reduced mortality and expense risk charge will be applicable only during that period. The QUARTERLY RATCHET ENHANCED DEATH BENEFIT equals the greater of: 1) the Standard Death Benefit; and 2) the Quarterly Ratchet Minimum Guaranteed Death Benefit ("Quarterly Ratchet MGDB") allocated to Covered Funds plus the contract value allocated to Excluded Funds. No funds are currently designated as Excluded Funds for purposes of the Quarterly Ratchet MGDB. The Quarterly Ratchet MGDB allocated to Covered Funds on the contract date equals the premium allocated to Covered Funds. On each quarterly anniversary (three months from the contract date and each three month anniversary of that date) that occurs on or prior to attainment of age 90, the Quarterly Ratchet MGDB in Covered Funds will be set to the greater of: 1) the current contract value in Covered Funds (after deductions occurring as of that date); or 2) the Quarterly Ratchet MGDB in Covered Funds from the prior quarterly anniversary (after deductions occurring on that date), adjusted for new premiums and partial withdrawals attributable to Covered Funds, and transfers. Other than on quarterly anniversaries, the Quarterly Ratchet MGDB in the Covered Funds is equal to the Quarterly Ratchet MGDB in the Covered Funds from the last quarterly anniversary, adjusted for new premiums and partial withdrawals attributable to Covered Funds, and transfers. 44 WF Landmark - 136960 The Quarterly Ratchet MGDB allocated to Excluded Funds on the contract date equals the premium allocated to Excluded Funds. The calculation is not used for benefit purposes, but only to determine the impact of transfers to and from Excluded Funds. On each quarterly anniversary that occurs on or prior to attainment of age 90, the Quarterly Ratchet MGDB in Excluded Funds will be set to the greater of: 1) the current contract value in Excluded Funds (after deductions occurring as of that date); or 2) the Quarterly Ratchet MGDB in the Excluded Funds from the prior quarterly anniversary (after deductions occurring on that date), adjusted for new premiums and partial withdrawals attributable to Excluded Funds, and transfers. Other than on quarterly anniversaries, the Quarterly Ratchet MGDB in the Excluded Funds is equal to the Quarterly Ratchet MGDB in the Excluded Funds from the last quarterly anniversary, adjusted for new premiums and partial withdrawals attributable to Excluded Funds, and transfers. Withdrawals reduce the Quarterly Ratchet MGDB on a pro-rata basis. The pro-rata adjustment is based on the change in contract value resulting from the withdrawal, not the amount requested. Net transfers from Covered Funds to Special or Excluded Funds will reduce the Quarterly Ratchet MGDB in Covered Funds on a pro-rata basis. The increase in the Quarterly Ratchet MGDB allocated to Special or Excluded Funds, as applicable, will equal the decrease in the Quarterly Ratchet MGDB in Covered Funds. Net transfers from Excluded Funds to Covered Funds will reduce the Quarterly Ratchet MGDB in Excluded Funds on a pro-rata basis. The increase in the Quarterly Ratchet MGDB allocated to Covered Funds will equal the lesser of the net contract value transferred and the reduction in the Quarterly Ratchet MGDB in Excluded Funds The MAX 7 ENHANCED DEATH BENEFIT equals the greater of the Quarterly Ratchet Enhanced Death Benefit and the 7% Solution Death Benefit Element. Each element of the Max 7 Enhanced Death Benefit is determined independently of the other at all times. The 7% SOLUTION DEATH BENEFIT ELEMENT is the greater of: 1) the Standard Death Benefit; and 2) the lesser of: a) 3 times all premium payments, adjusted for withdrawals (the "cap"); or b) the SUM OF the 7% Solution Minimum Guaranteed Death Benefit Element ("7% MGDB") allocated to Covered Funds, the 7% MGDB allocated to Special Funds, and the contract value allocated to Excluded Funds. For purposes of calculating the 7% Solution Death Benefit Element, the following investment options are designated as Special Funds: the ING Liquid Assets Portfolio, the Wells Fargo VT Money Market Fund, the ING VP Intermediate Bond Portfolio, the ING PIMCO Core Bond Portfolio, the Fixed Account, the Fixed Interest Division, and the TSA Special Fixed Account. No investment options are currently designated as Excluded Funds. The 7% MGDB allocated to Covered Funds equals premiums allocated to Covered Funds, adjusted for withdrawals and transfers, accumulated at 7% until age 80 or the 7% MGDB reaches the cap. There is no accumulation once the cap is reached. Payment of additional premiums may cause the accumulation to resume, but there is no catch-up for any period where accumulation was suspended. The 7% MGDB allocated to Special Funds equals premiums allocated to Special Funds, adjusted for withdrawals and transfers. There is no accumulation of Minimum Guaranteed Death Benefit allocated to Special Funds. 45 WF Landmark - 136960 The 7% MGDB allocated to Excluded Funds is determined in the same way as the 7% MGDB for Covered Funds, but the calculation is not used for benefit purposes, but only to determine the impact of transfers to and from Excluded Funds. Withdrawals reduce the 7% MGDB on a pro-rata basis. The percentage reduction in the 7% MGDB for each Fund category (i.e. Covered, Special or Excluded) equals the percentage reduction in contract value in that Fund category resulting from the withdrawal. The percentage reduction in the cap equals the percentage reduction in total contract value resulting from the withdrawal. The pro-rata adjustment is based on the change in contract value resulting from the withdrawal, not the amount requested. Transfers among Fund categories do not reduce the overall 7% MGDB, but do affect the amount of the 7% MGDB in a particular Fund category. Net transfers from among the Funds will reduce the 7% MGDB in the Funds on a pro-rata basis. Note: In all cases described above, the amount of the death benefit could be reduced by premium taxes owed and withdrawals not previously deducted. The enhanced death benefits may not be available in all states. EARNINGS MULTIPLIER BENEFIT RIDER. The earnings multiplier benefit rider is an optional rider that provides a separate death benefit in addition to the death benefit provided under the death benefit options described above. The rider is subject to state availability and is available only for issue ages 75 or under. You may add it at issue of the Contract or, if not yet available in your state, on the next contract anniversary following introduction of the rider in your state. The date on which the rider is added is referred to as the "rider effective date." If the rider is added at issue, the rider provides a benefit equal to a percentage of the gain under the Contract, up to a gain equal to 150% of premiums adjusted for withdrawals ("Maximum Base"). Currently, if added at issue, the earnings multiplier benefit is equal to 55% (30% for issue ages 70 and above) of the lesser of: i) the Maximum Base; and ii) the contract value on the claim date minus premiums adjusted for withdrawals. If added after issue, the earnings multiplier benefit is equal to 55% (30% for issue ages 70 and above) of the lesser of: i) 150% of the contract value on the rider effective date, plus subsequent premiums adjusted for subsequent withdrawals; and ii) the contract value on the claim date minus the contract value on the rider effective date, minus subsequent premiums adjusted for subsequent withdrawals. The adjustment to the benefit for withdrawals is pro-rata, meaning that the benefit will be reduced by the proportion that the withdrawal bears to the contract value at the time of the withdrawal. There is an extra charge for the earnings multiplier benefit rider and once selected, it may not be revoked. The rider does not provide a benefit if there is no gain under the Contract. As such, the Company would continue to assess a charge for the rider, even though no benefit would be payable at death under the rider if there are no gains under the Contract. Please see "Charges and Fees -- Earnings Multiplier Benefit Charge" for a description of the charge. The rider is available for both non-qualified and qualified contracts. Please see the discussions of possible tax consequences in "Federal Tax Considerations," "Individual Retirement Annuities," "Taxation of Qualified Contracts," and "Tax Consequences of Enhanced Death Benefit," in this prospectus. DEATH BENEFIT DURING THE INCOME PHASE If any contract owner or the annuitant dies after the annuity start date, we will pay the beneficiary any certain benefit remaining under the annuity in effect at the time. CONTINUATION AFTER DEATH -- SPOUSE If at the contract owner's death, the surviving spouse of the deceased contract owner is the beneficiary and such surviving spouse elects to continue the Contract as his or her own, the following will apply: 46 WF Landmark - 136960 If the guaranteed death benefit as of the date we receive due proof of death, minus the contract value on that date is greater than zero, we will add such difference to the contract value. We will allocate such addition to the variable subaccounts in proportion to the contract value in the subaccounts, unless you direct otherwise. If there is no contract value in any subaccount, we will allocate the addition to the Wells Fargo VT Money Market subaccount, or its successor. Such addition to contract value will not affect the guaranteed death benefit or any living benefit rider values. Any addition to contract value is available only to the spouse of the owner as of the date of death of the owner if such spouse under the provisions of the Contract elects to continue the Contract as his or her own. The death benefits under each of the available options will continue, based on the surviving spouse's age on the date that ownership changes. At subsequent surrender, we will waive any surrender charge applicable to premiums paid prior to the date we receive due proof of death of the contract owner. Any premiums paid later will be subject to any applicable surrender charge. If you elected the earnings multiplier benefit rider, and the benefit would otherwise be payable, we will add the benefit to the contract value and allocate the benefit among the variable subaccounts in proportion to the contract value in the subaccounts, unless you direct otherwise. If there is no contract value in any subaccount, we will allocate the benefit to the Wells Fargo VT Money Market subaccount, or its successor. The earnings multiplier benefit rider will continue, if the surviving spouse is eligible based on his or her attained age. If the surviving spouse is older than the maximum rider issue age, the rider will terminate. The Maximum Base and the percentages will be reset based on the adjusted contract value. The calculation of the benefit going forward will be: (i) based on the attained age of the spouse at the time of the ownership change using current values as of that date; (ii) computed as if the rider were added to the Contract after issue and after the increase; and (iii) based on the Maximum Base and percentages in effect on the original rider date. However, we may permit the surviving spouse to elect to use the then-current Maximum Base and percentages in the benefit calculation. CONTINUATION AFTER DEATH -- NOT A SPOUSE If the beneficiary or surviving joint owner is not the spouse of the owner, the Contract may continue in force subject to the required distribution rules of the Code. See next section, "Required Distributions Upon Contract Owner's Death." If the guaranteed death benefit as of the date we receive due proof of death, minus the contract value also on that date, is greater than zero, we will add such difference to the contract value. Such addition will be allocated to the variable subaccounts in proportion to the contract value in the subaccounts, unless we are directed otherwise. If there is no contract value in any subaccount, the addition will be allocated to the Wells Fargo VT Money Market subaccount, or its successor. The death benefit will then terminate. At subsequent surrender, any surrender charge applicable to premiums paid prior to the date we receive due proof of death of the contract owner will be waived. No additional premium payments may be made. If you elected the earnings multiplier benefit rider, and the benefit would otherwise be payable, we will add the benefit to the contract value and allocate the benefit among the variable subaccounts in proportion to the contract value in the subaccounts, unless you direct otherwise. If there is no contract value in any subaccount, we will allocate the benefit to the Wells Fargo VT Money Market subaccount, or its successor. The earnings multiplier benefit rider then terminates, whether or not a benefit was payable under the terms of the rider. REQUIRED DISTRIBUTIONS UPON CONTRACT OWNER'S DEATH We will not allow any payment of benefits provided under a non-qualified Contract which do not satisfy the requirements of Section 72(s) of the Code. 47 WF Landmark - 136960 If any contract owner of a non-qualified Contract dies before the annuity start date, we will distribute the death benefit payable to the beneficiary as follows: (a) the death benefit must be completely distributed within 5 years of the contract owner's date of death; or (b) the beneficiary may elect, within the 1-year period after the contract owner's date of death, to receive the death benefit in the form of an annuity from us, provided that (i) such annuity is distributed in substantially equal installments over the life of such beneficiary or over a period not extending beyond the life expectancy of such beneficiary; and (ii) such distributions begin not later than 1 year after the contract owner's date of death. Notwithstanding (a) and (b) above, if the sole contract owner's beneficiary is the deceased owner's surviving spouse, then such spouse may elect to continue the Contract under the same terms as before the contract owner's death. Upon receipt of such election from the spouse at our Customer Service Center: (i) all rights of the spouse as contract owner's beneficiary under the Contract in effect prior to such election will cease; (ii) the spouse will become the owner of the Contract and will also be treated as the contingent annuitant, if none has been named and only if the deceased owner was the annuitant; and (iii) all rights and privileges granted by the Contract or allowed by us will belong to the spouse as contract owner of the Contract. We deem the spouse to have made this election if such spouse makes a premium payment to the Contract or fails to make a timely election as described in this paragraph. If the owner's beneficiary is not a spouse, the distribution provisions described in subparagraphs (a) and (b) above, will apply even if the annuitant and/or contingent annuitant are alive at the time of the contract owner's death. Subject to availability, and our then current rules, a spousal or non-spousal beneficiary may elect to receive death benefits as payments over the life expectancy of the beneficiary ("stretch"). "Stretch" payments will be subject to the same limitations as systematic withdrawals, and non-qualified "stretch" payments will be reported on the same basis as other systematic withdrawals. If we do not receive an election from an owner's beneficiary who is not a spouse within the 1-year period after the contract owner's date of death, then we will pay the death benefit to the owner's beneficiary in a cash payment within five years from the date of death. We will determine the death benefit as of the date we receive proof of death. Such cash payment will be in full settlement of all our liability under the Contract. If a contract owner dies after the annuity start date, all of the contract owner's rights granted under the Contract or allowed by us will pass to the contract owner's beneficiary. If a Contract has joint owners we will consider the date of death of the first joint owner as the death of the contract owner, and the surviving joint owner will become the beneficiary of the Contract. If any contract owner is not an individual, the death of an annuitant shall be treated as the death of a contract owner. EFFECT OF ING LIFEPAY RIDER ON DEATH BENEFIT If you die before Lifetime Automatic Periodic Benefit Status under the ING LifePay rider, the death benefit is payable, but the rider terminates. However, if the beneficiary is the owner's spouse, and the spouse elects to continue the Contract, the death benefit is not payable until the spouse's death. Please see "ING LifePay Minimum Guaranteed Withdrawal Benefit Rider - Death or Change of Owner/Annuitant" for a description of the impact of the owner's death on the ING LifePay rider. If you die during Lifetime Automatic Periodic Benefit Status, we will continue to pay the periodic payments that you were receiving under the ING LifePay rider to the annuitant. No other death benefit is payable. Please see "ING LifePay Minimum Guaranteed Withdrawal Benefit Rider". 48 WF Landmark - 136960 - -------------------------------------------------------------------------------- THE ANNUITY OPTIONS - -------------------------------------------------------------------------------- ANNUITIZATION OF YOUR CONTRACT If the annuitant and contract owner are living on the annuity start date, we will begin making payments to the contract owner under an income plan. We will make these payments under the annuity option you chose. You may change an annuity option by making a written request to us at least 30 days before the annuity start date. The amount of the payments will be determined by applying your contract value, adjusted for any applicable Market Value Adjustment, on the annuity start date in accordance with the annuity option you chose. You may also elect an annuity option on surrender of the Contract for its cash surrender value or you may choose one or more annuity options for the payment of death benefit proceeds while it is in effect and before the annuity start date. If, at the time of the contract owner's death or the annuitant's death (if the contract owner is not an individual), no option has been chosen for paying death benefit proceeds, the beneficiary may choose an annuity option within 60 days. In all events, payments of death benefit proceeds must comply with the distribution requirements of applicable federal tax law. The minimum monthly annuity income payment that we will make is $20. We may require that a single sum payment be made if the contract value is less than $2,000 or if the calculated monthly annuity income payment is less than $20. For each annuity option we will issue a separate written agreement putting the annuity option into effect. Before we pay any annuity benefits, we require the return of your Contract. If your Contract has been lost, we will require that you complete and return the applicable lost Contract form. Various factors will affect the level of annuity benefits, such as the annuity option chosen, the applicable payment rate used and the investment performance of the portfolios and interest credited to the Fixed Interest Allocations. Our current annuity options provide only for fixed payments. Fixed annuity payments are regular payments, the amount of which is fixed and guaranteed by us. Some fixed annuity options provide fixed payments either for a specified period of time or for the life of the annuitant. The amount of life income payments will depend on the form and duration of payments you chose, the age of the annuitant or beneficiary (and gender, where appropriate under applicable law), the total contract value applied to periodic income payments, and the applicable payment rate. Our approval is needed for any option where: 1) The person named to receive payment is other than the contract owner or beneficiary; 2) The person named is not a natural person, such as a corporation; or 3) Any income payment would be less than the minimum annuity income payment allowed. SELECTING THE ANNUITY START DATE You select the annuity start date, which is the date on which the annuity payments commence. Unless we consent, the annuity start date must be at least 5 years from the contract date but before the month immediately following the annuitant's 90th birthday, or 10 years from the contract date, if later. If, on the annuity start date, a surrender charge remains, the elected annuity option must include a period certain of at least 5 years. If you do not select an annuity start date, it will automatically begin in the month following the annuitant's 90th birthday, or 10 years from the contract date, if later. If the annuity start date occurs when the annuitant is at an advanced age, such as over age 85, it is possible that the Contract will not be considered an annuity for federal tax purposes. For more information, see "Federal Tax Considerations" and the SAI. For a Contract purchased in connection with a qualified plan, other than a Roth IRA, distributions must commence not later than April 1st of the calendar year following the calendar year in which you reach age 70 1/2 or, in some cases, retire. Distributions may be made through annuitization or withdrawals. You should consult a tax adviser for tax advice before investing. 49 WF Landmark - 136960 FREQUENCY OF ANNUITY PAYMENTS You choose the frequency of the annuity payments. They may be monthly, quarterly, semi-annually or annually. If we do not receive written notice from you, we will make the payments monthly. There may be certain restrictions on minimum payments that we will allow. BENEFICIARY RIGHTS A beneficiary's right to elect an annuity option or receive a lump sum may have been restricted by the contract owner. If so, such options will not be available to the beneficiary. THE ANNUITY OPTIONS We offer the 4 annuity options shown below. Payments under Options 1, 2 and 3 are fixed. Payments under Option 4 may be fixed or variable, although only fixed payments are currently available. For a fixed annuity option, the contract value in the subaccounts is transferred to the Company's general account. OPTION 1. INCOME FOR A FIXED PERIOD. Under this option, we make monthly payments in equal installments for a fixed number of years based on the contract value on the annuity start date. We guarantee that each monthly payment will be at least the amount stated in your Contract. If you prefer, you may request that payments be made in annual, semi-annual or quarterly installments. We will provide you with illustrations if you ask for them. If the cash surrender value or contract value is applied under this option, a 10% penalty tax may apply to the taxable portion of each income payment until the contract owner reaches age 59 1/2. OPTION 2. INCOME FOR LIFE WITH A PERIOD CERTAIN. Under this option, we make payments for the life of the annuitant in equal monthly installments and guarantee the income for at least a period certain, such as 10 or 20 years. Other periods certain may be available to you on request. You may choose a refund period instead. Under this arrangement, income is guaranteed until payments equal the amount of your Contract. If the person named lives beyond the guaranteed period, we will continue payments until his or her death. We guarantee that each payment will be at least the amount specified in the Contract corresponding to the person's age on his or her last birthday before the annuity start date. Amounts for ages not shown in the Contract are available if you ask for them. OPTION 3. JOINT LIFE INCOME. This option is available when there are 2 persons named to determine annuity payments. At least one of the persons named must be either the contract owner or beneficiary of the Contract. We guarantee monthly payments will be made as long as at least one of the named persons is living. There is no minimum number of payments. Monthly payment amounts are available if you ask for them. OPTION 4. ANNUITY PLAN. Under this option, your contract value can be applied to any other annuitization plan that we choose to offer on the annuity start date. Annuity payments under Option 4 may be fixed or variable. If variable and subject to the 1940 Act, it will comply with the requirements of such Act. 50 WF Landmark - 136960 PAYMENT WHEN NAMED PERSON DIES When the person named to receive payment dies, we will pay any amounts still due as provided in the annuity agreement between you and ING USA. The amounts we will pay are determined as follows: 1) For Option 1, or any remaining guaranteed payments under Option 2, we will continue payments. Under Options 1 and 2, the discounted values of the remaining guaranteed payments may be paid in a single sum. This means we deduct the amount of the interest each remaining guaranteed payment would have earned had it not been paid out early. We will base the discount interest rate on the interest rate used to calculate the payments for Options 1 and 2. 2) For Option 3, no amounts are payable after both named persons have died. 3) For Option 4, the annuity option agreement will state the amount we will pay, if any. - -------------------------------------------------------------------------------- OTHER CONTRACT PROVISIONS - -------------------------------------------------------------------------------- REPORTS TO CONTRACT OWNERS We will send you a quarterly report within 31 days after the end of each calendar quarter. The report will show the contract value, cash surrender value, and the death benefit as of the end of the calendar quarter. The report will also show the allocation of your contract value and reflects the amounts deducted from or added to the contract value since the last report. You have 30 days to notify our Customer Service Center of any errors or discrepancies contained in the report and in any confirmation notice. We will also send you copies of any shareholder reports of the investment portfolios in which Separate Account B invests, as well as any other reports, notices or documents we are required by law to furnish to you. SUSPENSION OF PAYMENTS The Company reserves the right to suspend or postpone the date of any payment or determination of values on any business day (i) when the New York Stock Exchange is closed; (ii) when trading on the New York Stock Exchange is restricted; (iii) when an emergency exists as determined by the SEC so that the sale of securities held in Separate Account B may not reasonably occur or so that the Company may not reasonably determine the value of Separate Account B's net assets; or (iv) during any other period when the SEC so permits for the protection of security holders. We have the right to delay payment of amounts from a Fixed Interest Allocation for up to 6 months. IN CASE OF ERRORS IN YOUR APPLICATION If an age or gender given in the application or enrollment form is misstated, the amounts payable or benefits provided by the Contract shall be those that the premium payment would have bought had the age or gender not been misstated. ASSIGNING THE CONTRACT AS COLLATERAL You may assign a non-qualified Contract as collateral security for a loan but you should understand that your rights and any beneficiary's rights may be subject to the terms of the assignment. An assignment likely has federal tax consequences. You should consult a tax adviser for tax advice. You must give us satisfactory written notice at our Customer Service Center in order to make or release an assignment. We are not responsible for the validity of any assignment. CONTRACT CHANGES -- APPLICABLE TAX LAW We have the right to make changes in the Contract to continue to qualify the Contract as an annuity under applicable federal tax law. We will give you advance notice of such changes. 51 WF Landmark - 136960 FREE LOOK You may cancel your Contract within your 10-day free look period. We deem the free look period to expire 15 days after we mail the Contract to you. Some states may require a longer free look period. To cancel, you need to send your Contract to our Customer Service Center or to the agent from whom you purchased it. We will refund the contract value (which may be more or less than the premium payments you paid) or, if required by your state, the original amount of your premium payment. For purposes of the refund during the free look period, (i) we adjust your contract value for any market value adjustment (if you have invested in the Fixed Account), and (ii) then we include a refund of any charges deducted from your contract value. Because of the market risks associated with investing in the portfolios and the potential positive or negative effect of the market value adjustment, the contract value returned may be greater or less than the premium payment you paid. Some states require us to return to you the amount of the paid premium (rather than the contract value) in which case you will not be subject to investment risk during the free look period. In these states, your premiums designated for investment in the subaccounts may be allocated during the free look period to a subaccount specially designated by the Company for this purpose (currently, the Wells Fargo VT Money Market subaccount). We may, in our discretion, require that premiums designated for investment in the subaccounts from all other states as well as premiums designated for a Fixed Interest Allocation be allocated to the specially designated subaccount during the free look period. Your Contract is void as of the day we receive your Contract and cancellation request in good order. We determine your contract value at the close of business on the day we void your Contract. If you keep your Contract after the free look period and the investment is allocated to a subaccount specially designated by the Company, we will put your money in the subaccount(s) chosen by you, based on the accumulation unit value next computed for each subaccount, and/or in the Fixed Interest Allocation chosen by you. SPECIAL ARRANGEMENTS We may reduce or waive any Contract, rider, or benefit fees or charges for certain group or sponsored arrangements, under special programs, and for certain employees, agents, and related persons of our parent corporation and its affiliates. We reduce or waive these items based on expected economies, and the variations are based on differences in costs or services. SELLING THE CONTRACT Our affiliate, Directed Services, Inc. ("DSI"), 1475 Dunwoody Drive, West Chester, PA 19380 is the principal underwriter and distributor of the Contract as well as for other ING USA contracts. DSI, a New York corporation, is registered with the SEC as a broker/dealer under the Securities Exchange Act of 1934, and is a member of the National Association of Securities Dealers, Inc. ("NASD"). DSI does not retain any commissions or compensation paid to it by ING USA for Contract sales. DSI enters into selling agreements with affiliated and unaffiliated broker/dealers to sell the Contracts through their registered representatives who are licensed to sell securities and variable insurance products ("selling firms"). Selling firms are also registered with the SEC and are NASD member firms. DSI pays selling firms compensation for the promotion and sale of the Contracts. Registered representatives of the selling firms who solicit sales of the Contracts typically receive a portion of the compensation paid by DSI to the selling firm in the form of commissions or other compensation, depending on the agreement between the selling firm and the registered representative. This compensation, as well as other incentives or payments, is not paid directly by contract owners or the Separate Account. We intend to recoup this compensation and other sales expenses paid to selling firms through fees and charges imposed under the Contracts. 52 WF Landmark - 136960 DSI pays selling firms for Contract sales according to one or more schedules. This compensation is generally based on a percentage of premium payments. DSI has entered into a selling agreement with Wells Fargo Securities, Inc. ("Wells Fargo") to sell the Contracts through registered representatives of Wells Fargo and its affiliated broker dealers. Wells Fargo may receive commissions of up to 7.0% of premium payments. In addition, selling firms may receive ongoing annual compensation of up to 1.25% of all, or a portion, of values of Contracts sold through the firm. Individual representatives may receive all or a portion of compensation paid to their selling firm, depending on the firm's practices. Commissions and annual compensation, when combined, could exceed 7.0% of total premium payments. To the extent permitted by SEC and NASD rules and other applicable laws and regulations, DSI may pay or allow other promotional incentives or payments in the form of cash or other compensation to selling firms. DSI may also enter into special compensation arrangements with certain selling firms based on those firms' aggregate or anticipated sales of the Contracts or other criteria. These special compensation arrangements will not be offered to all selling firms, and the terms of such arrangements may differ among selling firms based on various factors. Any such compensation payable to a selling firm will not result in any additional direct charge to you by us. In addition to the direct cash compensation for sales of contracts described above, DSI may also pay selling firms additional compensation or reimbursement for their efforts in selling Contracts to you and other customers, including for, among other things, training of sales personnel, marketing or other sales-related services they provide to us or our affiliates. This compensation or reimbursement is not reflected in the fees and expenses listed in the Fund Expense Table in this prospectus and may take the form of: o Marketing allowances; o Education and training allowances to facilitate our attendance at certain educational and training meetings to provide information and training about our products, including holding training programs at our expense; o Sponsorship payments to support attendance at meetings by registered representatives who sell our products; o Reimbursement for the cost of attendance by registered representatives at conventions that we sponsor. The following is a list of the top 25 selling firms that, during 2004, received the largest dollar amounts, in the aggregate, from DSI in connection with the sale of annuity contracts, ranked by total dollars received: 1. UBS Financial Services Inc 14. Financial Network Investment Corp 2. Morgan Stanley Dean Witter 15. McDonald & Company 3. Linsco Private Ledger 16. RBC Dain Rauscher 4. Merrill Lynch 17. Mutual Service Corporation 5. Citigroup Global Markets 18. First Financial Planners, Inc 6. Wachovia Securities 19. Securities America 7. ING Financial Partners 20. Investors Capital 8. Planning Corporation of America 21. Wells Fargo Investments, LLC 9. National Planning Corporation 22. Waterstone Financial 10. PrimeVest 23. Commonwealth Financial Network 11. A.G. Edwards 24. Quick & Reilly, Inc. 12. ING Financial Advisers, LLC 25. NFP Securities Inc 13. Multi-Financial Securities Corp DSI may also compensate wholesalers/distributors, and their sales management personnel, for Contract sales within the wholesale/distribution channel. This compensation may be based on a percentage of premium payments and/or a percentage of Contract values. 53 WF Landmark - 136960 Affiliated selling firms may include Bancnorth Investment Group, Inc. Baring Investment Services, Inc., Financial Network Investment Corporation, Guaranty Brokerage Services, Inc., ING America Equities, Inc., ING DIRECT Securities, Inc., ING Financial Advisers LLC, ING Financial Markets, LLC., ING Financial Partners, Inc., ING Funds Distributor, LLC, ING Investment Management Services, LLC, Multi-Financial Securities Corporation, PrimeVest Financial Services, Inc. and Systematized Benefits Administrators, Inc. We do not pay any additional compensation on the sale or exercise of any of the Contract's optional benefit riders offered in this prospectus. This is a general discussion of the types and levels of compensation paid by us for sales of annuity contracts. It is important for you to know that the payment of volume-based compensation to a selling firm or registered representative may provide that registered representative a financial incentive to promote our contracts over those of another company. - -------------------------------------------------------------------------------- OTHER INFORMATION - -------------------------------------------------------------------------------- VOTING RIGHTS We will vote the shares of a Trust owned by Separate Account B according to your instructions. However, if the 1940 Act or any related regulations should change, or if interpretations of it or related regulations should change, and we decide that we are permitted to vote the shares of a Trust in our own right, we may decide to do so. We determine the number of shares that you have in a subaccount by dividing the Contract's contract value in that subaccount by the net asset value of one share of the portfolio in which a subaccount invests. We count fractional votes. We will determine the number of shares you can instruct us to vote 180 days or less before a Trust shareholder meeting. We will ask you for voting instructions by mail at least 10 days before the meeting. If we do not receive your instructions in time, we will vote the shares in the same proportion as the instructions received from all Contracts in that subaccount. We will also vote shares we hold in Separate Account B which are not attributable to contract owners in the same proportion. STATE REGULATION We are regulated by the Insurance Department of the State of Iowa. We are also subject to the insurance laws and regulations of all jurisdictions where we do business. The Contract offered by this prospectus has been approved where required by those jurisdictions. We are required to submit annual statements of our operations, including financial statements, to the Insurance Departments of the various jurisdictions in which we do business to determine solvency and compliance with state insurance laws and regulations. LEGAL PROCEEDINGS We are not aware of any pending legal proceedings which involve Separate Account B as a party. We are, or may be in the future, a defendant in various legal proceedings in connection with the normal conduct of our insurance operations. Some of these cases may seek class action status and may include a demand for punitive damages as well as for compensatory damages. In the opinion of management, the ultimate resolution of any existing legal proceeding is not likely to have a material adverse effect on our ability to meet our obligations under the contract. Directed Services, Inc., the principal underwriter and distributor of the contract, is not involved in any legal proceeding which, in the opinion of management, is likely to have a material adverse effect on its ability to distribute the contract. INDUSTRY DEVELOPMENTS - TRADING 54 WF Landmark - 136960 As with many financial services companies, the Company and affiliates of the Company have received requests for information from various governmental and self-regulatory agencies in connection with investigations related to trading in investment company shares. In each case, full cooperation and responses are being provided. The Company is also reviewing its policies and procedures in this area. EXPERTS The audited consolidated financial statements and schedules of the Company as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004, along with the statement of assets and liabilities of Separate Account B as of December 31, 2004 and the related statement of operations for the year then ended, and the statements of changes in net assets for each of the two years in the period then ended, included in the SAI and Registration Statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon included in the SAI and in the Registration Statement, and are included in reliance on such reports given on the authority of such firm as experts in accounting and auditing. - -------------------------------------------------------------------------------- FEDERAL TAX CONSIDERATIONS - -------------------------------------------------------------------------------- INTRODUCTION This section discusses our understanding of current federal income tax laws affecting the contract. You should keep the following in mind when reading it: o Your tax position (or the tax position of the designated beneficiary, as applicable) determines federal taxation of amounts held or paid out under the contract; o Tax laws change. It is possible that a change in the future could affect contracts issued in the past; o This section addresses federal income tax rules and does not discuss federal estate and gift tax implications, state and local taxes, foreign taxes or any other tax provisions; and o We do not make any guarantee about the tax treatment of the contract or transactions involving the contract. We do not intend this information to be tax advice. For advice about the effect of federal income taxes or any other taxes on amounts held or paid out under the contract, consult a tax adviser. For more comprehensive information, contact the Internal Revenue Service (IRS). TYPES OF CONTRACTS: NON-QUALIFIED OR QUALIFIED The Contract may be purchased on a non-tax-qualified basis or purchased on a tax-qualified basis. Non-qualified contracts are purchased with after tax contributions and are not related to retirement plans that receive special income tax treatment under the Code. Qualified Contracts are designed for use by individuals whose premium payments are comprised solely of proceeds from and/or contributions under retirement plans that are intended to qualify as plans entitled to special income tax treatment under Sections 401(a), 403(a), 403(b), 408, 408A or 457 of the Code. The ultimate effect of federal income taxes on the amounts held under a Contract, or annuity payments, depends on the type of retirement plan, on the tax and employment status of the individual concerned, and on your tax status. In addition, certain requirements must be satisfied in purchasing a qualified Contract with proceeds from a tax-qualified plan in order to continue receiving favorable tax treatment. Some retirement plans are subject to additional distribution and other requirements that are not incorporated into our Contract. Because the Plan is not part of the Contract, we are not bound by any Plan's terms or conditions. Contract owners, participants and beneficiaries are responsible for determining that contributions, distributions and other transactions with respect to the Contract comply with applicable law. Therefore, you should seek competent legal and tax advice regarding the suitability of a Contract for your particular situation. The following discussion assumes that qualified Contracts are purchased with proceeds from and/or contributions under retirement plans that qualify for the intended special federal income tax treatment. 55 WF Landmark - 136960 TAXATION OF NON-QUALIFIED CONTRACTS TAXATION PRIOR TO DISTRIBUTION We believe that if you are a natural person you will generally not be taxed on increases in the value of a non-qualified Contract until a distribution occurs or until annuity payments begin. This assumes that the Contract will qualify as an annuity contract for federal income tax purposes. For these purposes, the agreement to assign or pledge any portion of the contract value generally will be treated as a distribution. In order to receive deferral of taxation, the following requirements must be satisfied: DIVERSIFICATION. Internal Revenue Code Section 817(h) requires investments of a variable account be adequately diversified in order for a contract to be treated as an annuity contract for federal income tax purposes. The Treasury has issued regulations which set the standards for measuring the adequacy of any diversification. To be adequately diversified, each variable investment option must meet certain tests. Each sub-account's corresponding fund has represented that it will meet the diversification standards that apply to your policy. We therefore believe that Separate Account B, through the subaccounts, will satisfy these diversification requirements. INVESTOR CONTROL. Although earnings under non-qualified contracts are generally not taxed until withdrawn, the Internal Revenue Service (IRS) has stated in published rulings that a variable contract owner will be considered the owner of separate account assets if the contract owner possesses incidents of investment control over the assets. In these circumstances, income and gains from the separate account assets would be currently includible in the variable contract owner's gross income. Future guidance regarding the extent to which owners could direct their investments among subaccounts without being treated as owners of the underlying assets of the separate account may adversely affect the tax treatment of existing contracts. The Company therefore reserves the right to modify the contract as necessary to attempt to prevent the contract holder from being considered the federal tax owner of a pro-rata share of the assets of the separate account. REQUIRED DISTRIBUTIONS. In order to be treated as an annuity contract for federal income tax purposes, the Code requires any non-qualified Contract to contain certain provisions specifying how your interest in the Contract will be distributed in the event of your death. The non-qualified Contracts contain provisions that are intended to comply with these Code requirements, although no regulations interpreting these requirements have yet been issued. We intend to review such distribution provisions and modify them if necessary to assure that they comply with the applicable requirements when such requirements are clarified by regulation or otherwise. See "Death Benefit Choices" for additional information on required distributions from non-qualified contracts. NON-NATURAL PERSONS. The owner of any annuity contract who is not a natural person generally must include in income any increase in the excess of the contract value over the "investment in the contract" (generally, the premiums or other consideration you paid for the contract less any nontaxable withdrawals) during the taxable year. There are some exceptions to this rule and a prospective contract owner that is not a natural person may wish to discuss these with a tax adviser. 56 WF Landmark - 136960 DELAYED ANNUITY STARTING DATE. If the Contract's annuity starting date occurs (or is scheduled to occur) at a time when the annuitant has reached an advanced age (e.g., age 85), it is possible that the Contract would not be treated as an annuity for federal income tax purposes. In that event, the income and gains under the Contract could be currently includible in your income. TAXATION OF DISTRIBUTIONS GENERAL. When a withdrawal from a non-qualified Contract occurs (including amounts paid to you under the ING LifePay rider), the amount received will be treated as ordinary income subject to tax up to an amount equal to the excess (if any) of the contract value (unreduced by the amount of any surrender charge) immediately before the distribution over the contract owner's investment in the contract at that time. Investment in the contract is generally equal to the amount of all contributions to the contract, plus amounts previously included in your gross income as the result of certain loans, assignments or gifts, less the aggregate amount of non-taxable distributions previously made. The contract value that applies for this purpose is unclear in some respects. For example, the living benefits provided under riders to the Contract, i.e., the ING LifePay and MGIB riders, as well as the market value adjustment could increase the contract value that applies. Thus, the income on the Contracts could be higher than the amount of income that would be determined without regard to such benefits. As a result, you could have higher amounts of income than will be reported to you. In the case of a surrender under a non-qualified Contract, the amount received generally will be taxable only to the extent it exceeds the contract owner's cost basis in the contract. 10% PENALTY TAX. A distribution from a non-qualified Contract may be subject to a federal tax penalty equal to 10% of the amount treated as income. In general, however, there is no penalty on distributions: o made on or after the taxpayer reaches age 59 1/2; o made on or after the death of a contract owner; o attributable to the taxpayer's becoming disabled; or o made as part of a series of substantially equal periodic payments for the life (or life expectancy) of the taxpayer. Other exceptions may be applicable under certain circumstances and special rules may be applicable in connection with the exceptions enumerated above. A tax adviser should be consulted with regard to exceptions from the penalty tax. TAX-FREE EXCHANGES. Section 1035 of the Tax Code permits the exchange of a life insurance, endowment or annuity contract for an annuity contract on a tax-free basis. In such instance, the "investment in the contract" in the old contract will carry over to the new contract. You should consult with your tax advisor regarding procedures for making Section 1035 exchanges. If your Contract is purchased through a tax-free exchange of a life insurance, endowment or annuity contract that was purchased prior to August 14, 1982, then any distributions other than annuity payments will be treated, for tax purposes, as coming: o First, from any remaining "investment in the contract" made prior to August 14, 1982 and exchanged into the Contract; o Next, from any "income on the contract" attributable to the investment made prior to August 14, 1982; 57 WF Landmark - 136960 o Then, from any remaining "income on the contract"; and o Lastly, from any remaining "investment in the contract". The IRS has concluded that in certain instances, the partial exchange of a portion of one annuity contract for another contract will be tax-free. However, the IRS has reserved the right to treat transactions it considers abusive as ineligible for favorable partial 1035 tax-free exchange treatment. It is not certain whether the IRS would treat an immediate withdrawal or annuitization after a partial exchange as abusive. In addition, it is unclear how the IRS will treat a partial exchange from a life insurance, endowment, or annuity contract directly into an immediate annuity. Currently, we will accept a partial 1035 exchange from a non-qualified annuity into a deferred annuity or an immediate annuity as a tax-free transaction unless we believe that we would be expected to treat the transaction as abusive. We are not responsible for the manner in which any other insurance company, for tax reporting purposes, or the IRS, with respect to the ultimate tax treatment, recognizes or reports a partial exchange. We strongly advise you to discuss any proposed 1035 exchange with your tax advisor prior to proceeding with the transaction. TAXATION OF ANNUITY PAYMENTS. Although tax consequences may vary depending on the payment option elected under an annuity contract, a portion of each annuity payment is generally not taxed and the remainder is taxed as ordinary income. The non-taxable portion of an annuity payment is generally determined in a manner that is designed to allow you to recover your investment in the contract ratably on a tax-free basis over the expected stream of annuity payments, as determined when annuity payments start. Once your investment in the contract has been fully recovered, however, the full amount of each annuity payment is subject to tax as ordinary income. The tax treatment of partial annuitizations is unclear. We currently treat any partial annuitizations, such as those associated with the MGIB benefit, as withdrawals rather than as annuity payments. Please consult your tax adviser before electing a partial annuitization. DEATH BENEFITS. Amounts may be distributed from a Contract because of your death or the death of the annuitant. Generally, such amounts are includible in the income of the recipient as follows: (i) if distributed in a lump sum, they are taxed in the same manner as a surrender of the Contract, or (ii) if distributed under a payment option, they are taxed in the same way as annuity payments. Special rules may apply to amounts distributed after a Beneficiary has elected to maintain Contract value and receive payments. The Contract offers a death benefit (including the benefit provided by the earnings multiplier benefit rider) that may exceed the greater of the premium payments and the contract value. Certain charges are imposed with respect to the death benefit. It is possible that these charges (or some portion thereof) could be treated for federal tax purposes as a distribution from the Contract. ASSIGNMENTS AND OTHER TRANSFERS. A transfer, pledge or assignment of ownership of a Contract, or the designation of an annuitant or payee other than an owner, may result in certain tax consequences to you that are not discussed herein. A contract owner contemplating any such transfer, pledge, assignment, or designation or exchange, should consult a tax adviser as to the tax consequences. IMMEDIATE ANNUITIES. Under section 72 of the Tax Code, an immediate annuity means an annuity (1) which is purchased with a single premium, (2) with annuity payments starting within one year from the date of purchase, and (3) which provides a series of substantially equal periodic payments made annually or more frequently. Treatment as an immediate annuity will have significance with respect to exceptions from the 10% early withdrawal penalty, to contracts owned by non-natural persons, and for certain policy exchanges. MULTIPLE CONTRACTS. The tax law requires that all non-qualified deferred annuity contracts that are issued by a company or its affiliates to the same contract owner during any calendar year be treated as one non-qualified deferred annuity contract for purposes of determining the amount includible in such contract owner's income when a taxable distribution occurs. 58 WF Landmark - 136960 WITHHOLDING. We will withhold and remit to the U.S. government a part of the taxable portion of each distribution made under a Contract unless the distributee notifies us at or before the time of the distribution that he or she elects not to have any amounts withheld. Withholding will be mandatory, however, if the distribute fails to provide a valid taxpayer identification number or if we are notified by the IRS that the taxpayer identification number we have on file is incorrect. The withholding rates applicable to the taxable portion of periodic annuity payments are the same as the withholding rates generally applicable to payments of wages. In addition, a 10% withholding rate applies to the taxable portion of non-periodic payments. Regardless of whether you elect not to have federal income tax withheld, you are still liable for payment of federal income tax on the taxable portion of the payment. TAXATION OF QUALIFIED CONTRACTS GENERAL The Contracts are designed for use with several types of qualified plans. The tax rules applicable to participants in these qualified plans vary according to the type of plan and the terms and conditions of the plan itself. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from: contributions in excess of specified limits; distributions before age 59 1/2 (subject to certain exceptions); distributions that do not conform to specified commencement and minimum distribution rules; and in other specified circumstances. Therefore, no attempt is made to provide more than general information about the use of the Contracts with the various types of qualified retirement plans. Contract owners, annuitants, and beneficiaries are cautioned that the rights of any person to any benefits under these qualified retirement plans may be subject to the terms and conditions of the plans themselves, regardless of the terms and conditions of the Contract, but we shall not be bound by the terms and conditions of such plans to the extent such terms contradict the Contract, unless the Company consents. You will not generally pay taxes on earnings from the annuity contract described in this prospectus until they are withdrawn. When an annuity contract is used to fund one of these tax qualified retirement arrangements, you should know that the annuity contract does not provide any additional tax deferral of earnings beyond the tax deferral provided by the tax-qualified retirement arrangement. Tax-qualified retirement arrangements under Tax Code sections 401(a), 401(k), 403(a), 403(b) or governmental 457 plans also generally defer payment of taxes on earnings until they are withdrawn (or in the case of a non-governmental 457 plan, paid or made available to you or a designated beneficiary). However, annuities do provide other features and benefits which may be valuable to you. You should discuss your alternatives with your local representative. DISTRIBUTIONS - GENERAL For qualified plans under Section 401(a) and 403(b), the Code requires that distributions generally must commence no later than the later of April 1 of the calendar year following the calendar year in which the plan participant for whose benefit the contract is purchased (i) reaches age 70 1/2 or (ii) retires, and must be made in a specified form or manner. If the plan participant is a "5 percent owner" (as defined in the Code), distributions generally must begin no later than April 1 of the calendar year following the calendar year in which the plan participant reaches age 70 1/2. For IRAs described in Section 408, distributions generally must commence no later than by April 1 of the calendar year following the calendar year in which the individual contract owner reaches age 70 1/2. Roth IRAs under Section 408A do not require distributions at any time before the contract owner's death. Please note that required minimum distributions under qualified Contracts may be subject to surrender charges and/or market value adjustment, in accordance with the terms of the Contract. This could affect the amount that must be taken from the Contract in order to satisfy required minimum distributions. 59 WF Landmark - 136960 DIRECT ROLLOVERS If the Contract is used in connection with a pension, profit-sharing, or annuity plan qualified under sections 401(a) or 403(a) of the Code, or is a tax-sheltered annuity under section 403(b) of the Code, or is used with an eligible deferred compensation plan that has a government sponsor and that is qualified under section 457(b), any "eligible rollover distribution" from the Contract will be subject to the direct rollover and mandatory withholding requirements. An eligible rollover distribution generally is any taxable distribution from a qualified pension plan under section 401(a) of the Code, qualified annuity plan under section 403(a) of the Code, section 403(b) annuity or custodial account, or an eligible section 457(b) deferred compensation plan that has a government sponsor, excluding certain amounts (such as minimum distributions required under section 401(a)(9) of the Code, distributions which are part of a "series of substantially equal periodic payments" made for life or a specified period of 10 years or more, or hardship distributions as defined in the tax law). Under these requirements, federal income tax equal to 20% of the eligible rollover distribution will be withheld from the amount of the distribution. Unlike withholding on certain other amounts distributed from the Contract, discussed below, you cannot elect out of withholding with respect to an eligible rollover distribution. However, this 20% withholding will not apply if, instead of receiving the eligible rollover distribution, you elect to have it directly transferred to certain qualified plans. Prior to receiving an eligible rollover distribution, you will receive a notice (from the plan administrator or us) explaining generally the direct rollover and mandatory withholding requirements and how to avoid the 20% withholding by electing a direct rollover. CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS Section 401(a) of the Code permits corporate employers to establish various types of retirement plans for employees, and permits self-employed individuals to establish these plans for themselves and their employees. These retirement plans may permit the purchase of the Contracts to accumulate retirement savings under the plans. Adverse tax or other legal consequences to the plan, to the participant, or to both may result if this Contract is assigned or transferred to any individual as a means to provide benefit payments, unless the plan complies with all legal requirements applicable to such benefits before transfer of the Contract. Employers intending to use the Contract with such plans should seek competent advice. INDIVIDUAL RETIREMENT ANNUITIES - GENERAL Section 408 of the Code permits eligible individuals to contribute to an individual retirement program known as an "Individual Retirement Annuity" or "IRA." These IRAs are subject to limits on the amount that can be contributed, the deductible amount of the contribution, the persons who may be eligible, and the time when distributions commence. Also, distributions from certain other types of qualified retirement plans may be "rolled over" on a tax-deferred basis into an IRA. Also, amounts in another IRA or individual retirement account can be rolled over or transferred tax-free to an IRA. There are significant restrictions on rollover or transfer contributions from Savings Incentive Match Plans for Employees (SIMPLE), under which certain employers may provide contributions to IRAs on behalf of their employees, subject to special restrictions. Employers may establish Simplified Employee Pension (SEP) Plans to provide IRA contributions on behalf of their employees. If you make a tax-free rollover of a distribution from any of these IRAs, you may not make another tax-free rollover from the IRA within a 1-year period. Sales of the Contract for use with IRAs may be subject to special requirements of the IRS. INDIVIDUAL RETIREMENT ANNUITIES - DISTRIBUTIONS All distributions from a traditional IRA are taxed as received unless either one of the following is true: o The distribution is rolled over to a plan eligible to receive rollovers or to another traditional IRA or certain qualified plans in accordance with the Tax Code; or o You made after-tax contributions to the IRA. In this case, the distribution will be taxed according to rules detailed in the Tax Code. 60 WF Landmark - 136960 To avoid certain tax penalties, you and any designated beneficiary must also meet the minimum distribution requirements imposed by the Tax Code. The requirements do not apply to Roth IRA contracts while the owner is living. These rules may dictate the following: o Start date for distributions; o The time period in which all amounts in your account(s) must be distributed; and o Distribution amounts. Generally, you must begin receiving distributions from a traditional IRA by April 1 of the calendar year following the calendar year in which you attain age 70 1/2. We must pay out distributions from the contract over a period not extending beyond one of the following time periods: o Over your life or the joint lives of you and your designated beneficiary; or o Over a period not greater than your life expectancy or the joint life expectancies of you and your designated beneficiary. The amount of each periodic distribution must be calculated in accordance with IRS regulations. If you fail to receive the minimum required distribution for any tax year, a 50% excise tax may be imposed on the required amount that was not distributed. The following applies to the distribution of death proceeds under 408(b) and 408A (Roth IRA - See below) plans. Different distribution requirements apply after your death. If your death occurs on or after you begin receiving minimum distributions under the contract, distributions must be made at least as rapidly as under the method in effect at the time of your death. Code section 401(a)(9) provides specific rules for calculating the required minimum distributions at your death. The death benefit under the contract and also certain other contract benefits, such as living benefits, may affect the amount of the required minimum distribution that must be taken. If your death occurs before you begin receiving minimum distributions under the contract, your entire balance must be distributed by December 31 of the calendar year containing the fifth anniversary of the date of your death. For example, if you die on September 1, 2005, your entire balance must be distributed to the designated beneficiary by December 31, 2010. However, if distributions begin by December 31 of the calendar year following the calendar year of your death, and you have named a designated beneficiary, then payments may be made over either of the following time frames: o Over the life of the designated beneficiary; or o Over a period not extending beyond the life expectancy of the designated beneficiary. If the designated beneficiary is your spouse, distributions must begin on or before the later of the following: o December 31 of the calendar year following the calendar year of your death; or o December 31 of the calendar year in which you would have attained age 70 1/2. ROTH IRAS - GENERAL Section 408A of the Code permits certain eligible individuals to contribute to a Roth IRA. Contributions to a Roth IRA, which are subject to limits on the amount of the contributions and the persons who may be eligible to contribute, are not deductible, and must be made in cash or as a rollover or transfer from another Roth IRA or other IRA. Certain qualifying individuals may convert an IRA, SEP, or SIMPLE IRA, to a Roth IRA. Such rollovers and conversions are subject to tax, and other special rules may apply. If you make a tax-free rollover of a distribution from a Roth IRA to another Roth IRA, you may not make another tax-free rollover from the Roth IRA from which the rollover was made within a 1-year period. A 10% penalty may apply to amounts attributable to a conversion to a Roth IRA if the amounts are distributed during the five taxable years beginning with the year in which the conversion was made. 61 WF Landmark - 136960 ROTH IRAS - DISTRIBUTIONS A qualified distribution from a Roth IRA is not taxed when it is received. A qualified distribution is a distribution: o Made after the five-taxable year period beginning with the first taxable year for which a contribution was made to a Roth IRA of the owner; and o Made after you attain age 59 1/2, die, become disabled as defined in the Tax Code, or for a qualified first-time home purchase. If a distribution is not qualified, it will be taxable to the extent of the accumulated earnings. Under special ordering rules, a partial distribution will first be treated generally as a return of contributions which is not taxable and then as taxable accumulated earnings. TAX SHELTERED ANNUITIES - GENERAL The Contracts may be used by individuals whose premium payments are comprised solely of proceeds from and/or contributions under retirement plans that are intended to qualify as plans entitled to special income tax treatment under Code section 403(b) plans. Section 403(b) of the Code allows employees of certain Section 501(c)(3) organizations and public schools to exclude from their gross income the premium payments made, within certain limits, to a Contract that will provide an annuity for the employee's retirement. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from: contributions in excess of specified limits; distributions before age 59 1/2 (subject to certain exceptions); distributions that do not conform to specified commencement and minimum distribution rules; and other specified circumstances. 403(b) plans may be subject to additional distribution and other requirements that are not incorporated into our Contract. In addition, the Treasury proposed 403(b) regulations in November, 2004 which, if finalized, do not take effect until after 2005. These proposed regulations may not be relied upon until they become final. The proposed regulations include rules governing the ability of a 403(b) plan to be terminated which would entitle a participant to a distribution, a revocation of IRS Revenue Ruling 90-204 which would increase restrictions on a participant's right to transfer his or her 403(b) account, the imposition of withdrawal restrictions on non-salary reduction amounts, as well as other changes. As a result, no attempt is made to provide more than general information about the use of the Contracts with 403(b) plans. Contract owners, annuitants, and beneficiaries are cautioned that the rights of any person to any benefits under these 403(b) plans may be subject to the terms and conditions of the plans themselves, regardless of the terms and conditions of the Contract, but we are not bound by the terms and conditions of such plans to the extent such terms contradict the Contract. Contract owners, participants and beneficiaries are responsible for determining that contributions, distributions and other transactions with respect to the Contract comply with applicable law. You should seek competent legal and tax advice regarding the suitability of a Contract for your particular situation. The following discussion assumes that Contracts are purchased with proceeds from and/or contributions under 403(b) plans that qualify for the intended special federal income tax treatment. 62 WF Landmark - 136960 TAX SHELTERED ANNUITIES - LOANS Loans may be available if you purchased your contract in connection with a non-ERISA plan qualified under Section 403(b) of the Code ("TSA"). We do not currently permit loans under Section 403(b) Contracts that are subject to ERISA. If your Contract was issued in connection with a TSA and the terms of your plan permit, you may take a loan from us, using your surrender value as collateral for the loan. Loans are subject to the terms of the Contract, your 403(b) plan, the Code and other federal and state regulations. The amount and number of loans outstanding at any one time under your TSA are limited, whether under our contracts or those of other carriers. We may modify the terms of a loan to comply with changes in applicable law. Various mandatory repayment requirements apply to loans, and failure to repay generally would result in income to you and the potential application of tax penalties. We urge you to consult with a qualified tax advisor prior to effecting a loan transaction under your Contract. We may apply additional restrictions or limitations on loans, and you must make loan requests in accordance with our administrative practices and loan request procedures in effect at the time you submit your request. Read the terms of the loan agreement before submitting any request. Any outstanding loan balance impacts the following: o Withdrawals and Charges: We determine amounts available for maximum withdrawal amounts, free partial withdrawals, systematic withdrawals and waiver of administrative charges by reducing the otherwise applicable amounts by the amount of any outstanding loan balance. o Death Benefits, Annuitization and Surrenders: We deduct the outstanding loan balance from any amounts otherwise payable and in determining the amount available for annuitization. o Riders: - Minimum Guaranteed Income Benefit ("MGIB") Rider. If you exercise the MGIB rider, we reduce the MGIB Base by an amount equal to the ratio of the outstanding loan balance to the contract value multiplied by the MGIB Base. - ING LifePay Minimum Guaranteed Withdrawal Benefit (" ING LifePay") Rider. The portion of the contract value used to pay off the outstanding loan balance will reduce the ING LifePay Base or MAW as applicable. We do not recommend the ING LifePay rider if loans are contemplated. TAX SHELTERED ANNUITIES - DISTRIBUTIONS All distributions from Section 403(b) plans are taxed as received unless either of the following is true: o The distribution is rolled over to another plan eligible to receive rollovers or to a traditional individual retirement annuity/account (IRA) in accordance with the Tax Code; or o You made after-tax contributions to the plan. In this case, the amount will be taxed according to rules detailed in the Tax Code. Generally, you must begin receiving distributions by April 1 of the calendar year following the calendar year in which you attain age 70 1/2 or retire, whichever occurs later, unless you had amounts under the contract as of December 31, 1986. In this case, distribution of these amounts generally must begin by the end of the calendar year in which you attain age 75 or retire, if later. The death benefit under the contract and also certain other contract benefits, such as the living benefits, may affect the amount of the required minimum distribution that must be taken. If you take any distributions in excess of the required minimum amount, then special rules require that some or all of the December 31, 1986 balance be distributed earlier. 63 WF Landmark - 136960 TAX CONSEQUENCES OF ENHANCED DEATH BENEFIT The Contract offers a death benefit (including the benefit provided by the earnings multiplier benefit rider) that may exceed the greater of the premium payments and the contract value. It is possible that the IRS could characterize such a death benefit as an incidental death benefit. There are limitations on the amount of incidental benefits that may be provided under pension and profit sharing plans. In addition, the provision of such benefits may result in currently taxable income to participants. Also, as stated above, the presence of the death benefit, as well as certain other contract benefits, could affect the amount of required minimum distributions. OTHER TAX CONSEQUENCES As noted above, the foregoing comments about the federal tax consequences under the Contracts are not exhaustive, and special rules are provided with respect to other tax situations not discussed in this prospectus. Further, the federal income tax consequences discussed herein reflect our understanding of current law, and the law may change. Federal estate and state and local estate, inheritance and other tax consequences of ownership or receipt of distributions under a Contract depend on the individual circumstances of each contract owner or recipient of the distribution. A competent tax adviser should be consulted for further information. POSSIBLE CHANGES IN TAXATION Although the likelihood of legislative change is uncertain, there is always the possibility that the tax treatment of the Contracts could change by legislation or other means. It is also possible that any change could be retroactive (that is, effective before the date of the change). You should consult a tax adviser with respect to legislative developments and their effect on the Contract. FEDERAL INCOME TAX WITHHOLDING We will withhold and remit to the U.S. government a part of the taxable portion of each distribution made under a Contract unless the distributee notifies us at or before the time of the distribution that he or she elects not to have any amounts withheld. In certain circumstances, we may be required to withhold tax, as explained above. The withholding rates applicable to the taxable portion of periodic annuity payments (other than eligible rollover distributions) are the same as the withholding rates generally applicable to payments of wages. In addition, a 10% withholding rate applies to the taxable portion of non-periodic payments (including withdrawals prior to the annuity starting date) and conversions of, and rollovers from, non-Roth IRAs to Roth IRAs. Regardless of whether you elect not to have federal income tax withheld, you are still liable for payment of federal income tax on the taxable portion of the payment. As discussed above, the withholding rate applicable to eligible rollover distributions is 20%. ASSIGNMENTS Adverse tax consequences to the plan and/or to you may result if your beneficial interest in the contract is assigned or transferred to persons other than: a plan participant as a means to provide benefit payments; an alternate payee under a qualified domestic relations order in accordance with code section 414(p); or to the Company as collateral for a loan. TAXATION OF COMPANY We are taxed as a life insurance company under the Tax Code. The Separate Account is not a separate entity from us. Therefore, it is not taxed separately as a "regulated investment company," but is taxed as part of the Company. 64 WF Landmark - 136960 We automatically apply investment income and capital gains attributable to the separate account to increase reserves under the contracts. Because of this, under existing federal tax law we believe that any such income and gains will not be taxed to the extent that such income and gains are applied to increase reserves under the contracts. In addition, any foreign tax credits attributable to the separate account will be first used to reduce any income taxes imposed on the separate account before being used by the Company. In summary, we do not expect that we will incur any federal income tax liability attributable to the separate account and we do not intend to make any provision for such taxes. However, changes in federal tax laws and/or their interpretation may result in our being taxed on income or gains attributable to the separate account. In this case, we may impose a charge against the separate account (with respect to some or all of the contracts) to set aside provisions to pay such taxes. We may deduct this amount from the separate account, including from your account value invested in the subaccounts. 65 WF Landmark - 136960 This page intentionally left blank. 66 WF Landmark - 136960 - -------------------------------------------------------------------------------- STATEMENT OF ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- TABLE OF CONTENTS Item Introduction Description of ING USA Annuity and Life Insurance Company Safekeeping of Assets The Administrator Independent Registered Public Accounting Firm Distribution of Contracts Performance Information IRA Partial Withdrawal Option Other Information Financial Statements of ING USA Annuity and Life Insurance Company Financial Statements of ING USA Annuity and Life Insurance Company Separate Account B - -------------------------------------------------------------------------------- PLEASE TEAR OFF, COMPLETE AND RETURN THE FORM BELOW TO ORDER A FREE STATEMENT OF ADDITIONAL INFORMATION FOR THE CONTRACTS OFFERED UNDER THE PROSPECTUS. SEND THE FORM TO OUR CUSTOMER SERVICE CENTER AT THE ADDRESS SHOWN ON THE PROSPECTUS COVER. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - PLEASE SEND ME A FREE COPY OF THE STATEMENT OF ADDITIONAL INFORMATION FOR SEPARATE ACCOUNT B. Please Print or Type: __________________________________________________ NAME __________________________________________________ SOCIAL SECURITY NUMBER __________________________________________________ STREET ADDRESS __________________________________________________ CITY, STATE, ZIP WF Landmark -136960 11/01/2005 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - SAI-1 WF Landmark - 136960 - -------------------------------------------------------------------------------- APPENDIX A - -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION Except for subaccounts which did not commence operations as of December 31, 2004, the following tables give (1) the accumulation unit value ("AUV") at the beginning of the period, (2) the AUV at the end of the period and (3) the total number of accumulation units outstanding at the end of the period for each subaccount of ING USA Separate Account B available under the Contract for the indicated periods.
2004 2003 ---- ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 1.65% FIDELITY VIP EQUITY - INCOME (Fund first available in this product during November 2003) AUV at beginning of period $9.98 $7.80 AUV at end of period $10.92 $9.98 Number of accumulation units outstanding at end of period 1,820,927 947,458 ING AIM MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $13.77 $9.71 AUV at end of period $14.57 $13.77 Number of accumulation units outstanding at end of period 646,998 477,375 ING ALLIANCE MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $16.31 $9.92 AUV at end of period $19.17 $16.31 Number of accumulation units outstanding at end of period 1,007,648 845,094 ING AMERICAN FUNDS GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $10.76 $10.00 AUV at end of period $11.85 $10.76 Number of accumulation units outstanding at end of period 7,574,705 1,003,541 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available in this product during November 2003) AUV at beginning of period $10.98 $10.00 AUV at end of period $11.86 $10.98 Number of accumulation units outstanding at end of period 5,275,914 536,261 ING AMERICAN FUNDS INTERNATIONAL (Fund first available in this product during November 2003) AUV at beginning of period $11.61 $10.00 AUV at end of period $13.54 $11.61 Number of accumulation units outstanding at end of period 2,513,020 241,840 ING DEVELOPING WORLD (Fund first available in this product during November 2003) AUV at beginning of period $8.88 $6.16 AUV at end of period $10.28 $8.88 Number of accumulation units outstanding at end of period 1,024,922 472,273 ING EAGLE ASSET CAPITAL APPRECIATION (Fund first available in this product during November 2003) AUV at beginning of period $18.08 $14.68 AUV at end of period $20.43 $18.08 Number of accumulation units outstanding at end of period 394,924 364,191 ING FMRSM DIVERSIFIED MID-CAP (Fund first available in this product during November 2003) AUV at beginning of period $9.44 $7.19 AUV at end of period $11.52 $9.44 Number of accumulation units outstanding at end of period 2,007,253 1,236,349 ING JANUS SPECIAL EQUITY (Fund first available in this product during November 2003) AUV at beginning of period $8.94 $6.04 AUV at end of period $10.30 $8.94 Number of accumulation units outstanding at end of period 395,916 344,837
A1 WF Landmark - 136960
2004 2003 ---- ---- ING JENNISON EQUITY OPPORTUNITIES (Fund first available in this product during November 2003) AUV at beginning of period $18.88 $14.64 AUV at end of period $20.91 $18.88 Number of accumulation units outstanding at end of period 411,913 463,551 ING JPMORGAN INTERNATIONAL (Fund first available in this product during November 2003) AUV at beginning of period $11.86 $10.00 AUV at end of period $13.85 $11.86 Number of accumulation units outstanding at end of period 566,780 56,919 ING JPMORGAN SMALL CAP EQUITY (Fund first available in this product during November 2003) AUV at beginning of period $10.34 $7.83 AUV at end of period $13.63 $10.34 Number of accumulation units outstanding at end of period 1,021,256 506,711 ING JULIUS BAER FOREIGN (Fund first available in this product during November 2003) AUV at beginning of period $10.59 $8.21 AUV at end of period $12.29 $10.59 Number of accumulation units outstanding at end of period 1,879,994 296,301 ING LEGG MASON VALUE (Fund first available in this product during November 2003) AUV at beginning of period $8.45 $7.01 AUV at end of period $9.46 $8.45 Number of accumulation units outstanding at end of period 2,715,141 2,048,406 ING MARSICO GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $13.49 $10.34 AUV at end of period $14.93 $13.49 Number of accumulation units outstanding at end of period 2,512,016 1,979,404 ING MFS MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $21.54 $15.74 AUV at end of period $24.37 $21.54 Number of accumulation units outstanding at end of period 1,290,210 1,153,663 ING OPPENHEIMER MAIN STREET (Fund first available in this product during November 2003) AUV at beginning of period $18.16 $14.82 AUV at end of period $20.16 $18.16 Number of accumulation units outstanding at end of period 887,678 933,001 ING PIMCO CORE BOND (Fund first available in this product during November 2003) AUV at beginning of period $12.82 $12.44 AUV at end of period $13.22 $12.82 Number of accumulation units outstanding at end of period 3,434,155 2,698,621 ING PIMCO HIGH YIELD (Fund first available in this product during May 2004) AUV at beginning of period $10.00 AUV at end of period $10.80 Number of accumulation units outstanding at end of period 4,403,121 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $10.81 $10.00 AUV at end of period $11.63 $10.81 Number of accumulation units outstanding at end of period 1,121,331 94,036 ING SALOMON BROTHERS ALL CAP (Fund first available in this product during November 2003) AUV at beginning of period $11.59 $8.49 AUV at end of period $12.29 $11.59 Number of accumulation units outstanding at end of period 2,410,480 2,190,115 ING SALOMON BROTHERS INVESTORS (Fund first available in this product during November 2003) AUV at beginning of period $10.34 $8.01 AUV at end of period $11.18 $10.34 Number of accumulation units outstanding at end of period 1,173,059 1,081,824
A2 WF Landmark - 136960
2004 2003 ---- ---- ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available in this product during November 2003) AUV at beginning of period $33.19 $26.95 AUV at end of period $38.07 $33.19 Number of accumulation units outstanding at end of period 3,119,934 1,938,760 ING T. ROWE PRICE EQUITY INCOME (Fund first available in this product during November 2003) AUV at beginning of period $24.27 $19.72 AUV at end of period $27.43 $24.27 Number of accumulation units outstanding at end of period 2,602,040 1,543,749 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available in this product during November 2003) AUV at beginning of period $10.97 $8.83 AUV at end of period $12.15 $10.97 Number of accumulation units outstanding at end of period 1,143,284 441,247 ING VAN KAMPEN GROWTH & INCOME (Fund first available in this product during November 2003) AUV at beginning of period $22.32 $17.75 AUV at end of period $25.05 $22.32 Number of accumulation units outstanding at end of period 1,423,862 1,070,653 ING VAN KAMPEN REAL ESTATE (Fund first available in this product during November 2003) AUV at beginning of period $36.64 $27.05 AUV at end of period $49.64 $36.64 Number of accumulation units outstanding at end of period 672,058 395,687 ING VP INDEX PLUS LARGECAP (Fund first available in this product during November 2003) AUV at beginning of period $8.92 $10.00 AUV at end of period $9.67 $8.92 Number of accumulation units outstanding at end of period 1,211,622 392,888 ING VP INTERMEDIATE BOND (Fund first available in this product during November 2003) AUV at beginning of period $11.08 $10.63 AUV at end of period $11.40 $11.08 Number of accumulation units outstanding at end of period 1,881,640 337,031 ING VP MAGNACAP (Fund first available in this product during November 2003) AUV at beginning of period $9.09 $7.07 AUV at end of period $9.74 $9.09 Number of accumulation units outstanding at end of period 247,085 219,722 ING VP MIDCAP OPPORTUNITIES (Fund first available in this product during April 2004) AUV at beginning of period $7.09 AUV at end of period $7.45 Number of accumulation units outstanding at end of period 316,589 ING VP SMALLCAP OPPORTUNITIES (Fund first available in this product during November 2003) AUV at beginning of period $6.26 $4.60 AUV at end of period $6.77 $6.26 Number of accumulation units outstanding at end of period 1,295,970 951,109 ING VP WORLDWIDE GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $6.57 $5.17 AUV at end of period $7.07 $6.57 Number of accumulation units outstanding at end of period 521,142 424,273 PROFUND VP BULL (Fund first available in this product during November 2003) AUV at beginning of period $8.20 $6.64 AUV at end of period $8.78 $8.20 Number of accumulation units outstanding at end of period 391,752 212,538 PROFUND VP SMALL CAP (Fund first available in this product during November 2003) AUV at beginning of period $10.08 $7.18 AUV at end of period $11.58 $10.08 Number of accumulation units outstanding at end of period 702,471 550,359
A3 WF Landmark - 136960
2004 2003 ---- ---- WELLS FARGO VT ASSET ALLOCATION FUND (Fund first available in this product during January 2004) AUV at beginning of period $10.75 AUV at end of period $11.34 Number of accumulation units outstanding at end of period 66,510 WELLS FARGO VT EQUITY INCOME FUND (Fund first available in this product during March 2004) AUV at beginning of period $11.29 AUV at end of period $11.75 Number of accumulation units outstanding at end of period 16,526 WELLS FARGO VT EQUITY VALUE FUND (Fund first available in this product during January 2004) AUV at beginning of period $10.80 AUV at end of period $11.75 Number of accumulation units outstanding at end of period 10,233 WELLS FARGO VT LARGE COMPANY GROWTH FUND (Fund first available in this product during January 2004) AUV at beginning of period $10.44 AUV at end of period $10.42 Number of accumulation units outstanding at end of period 65,130 WELLS FARGO VT SMALL CAP GROWTH FUND (Fund first available in this product during January 2004) AUV at beginning of period $11.30 AUV at end of period $11.91 Number of accumulation units outstanding at end of period 14,649 WELLS FARGO VT TOTAL RETURN BOND FUND (Fund first available in this product during February 2004) AUV at beginning of period $10.25 AUV at end of period $10.40 Number of accumulation units outstanding at end of period 18,206
2004 2003 ---- ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 1.80% FIDELITY VIP EQUITY - INCOME (Fund first available in this product during November 2003) AUV at beginning of period $9.94 $7.79 AUV at end of period $10.86 $9.94 Number of accumulation units outstanding at end of period 1,417,019 1,180,858 ING AIM MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $13.60 $9.61 AUV at end of period $14.37 $13.60 Number of accumulation units outstanding at end of period 1,327,212 1,533,657 ING ALLIANCE MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $16.11 $9.82 AUV at end of period $18.91 $16.11 Number of accumulation units outstanding at end of period 2,040,024 2,304,112 ING AMERICAN FUNDS GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $10.76 $10.00 AUV at end of period $11.82 $10.76 Number of accumulation units outstanding at end of period 3,253,026 913,862 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available in this product during November 2003) AUV at beginning of period $10.98 $10.00 AUV at end of period $11.83 $10.98 Number of accumulation units outstanding at end of period 2,706,900 724,335
A4 WF Landmark - 136960
2004 2003 ---- ---- ING AMERICAN FUNDS INTERNATIONAL (Fund first available in this product during November 2003) AUV at beginning of period $11.60 $10.00 AUV at end of period $13.52 $11.60 Number of accumulation units outstanding at end of period 1,413,483 261,151 ING DEVELOPING WORLD (Fund first available in this product during November 2003) AUV at beginning of period $8.80 $6.11 AUV at end of period $10.18 $8.80 Number of accumulation units outstanding at end of period 1,042,282 847,929 ING EAGLE ASSET CAPITAL APPRECIATION (Fund first available in this product during November 2003) AUV at beginning of period $17.84 $14.50 AUV at end of period $20.12 $17.84 Number of accumulation units outstanding at end of period 904,507 983,871 ING FMRSM DIVERSIFIED MID-CAP (Fund first available in this product during November 2003) AUV at beginning of period $9.39 $7.17 AUV at end of period $11.45 $9.39 Number of accumulation units outstanding at end of period 2,325,815 2,031,360 ING JANUS SPECIAL EQUITY (Fund first available in this product during November 2003) AUV at beginning of period $8.89 $6.02 AUV at end of period $10.23 $8.89 Number of accumulation units outstanding at end of period 573,273 629,201 ING JENNISON EQUITY OPPORTUNITIES (Fund first available in this product during November 2003) AUV at beginning of period $18.55 $14.41 AUV at end of period $20.51 $18.55 Number of accumulation units outstanding at end of period 1,286,081 1,511,002 ING JPMORGAN INTERNATIONAL (Fund first available in this product during November 2003) AUV at beginning of period $11.86 $10.00 AUV at end of period $13.82 $11.86 Number of accumulation units outstanding at end of period 176,344 80,497 ING JPMORGAN SMALL CAP EQUITY (Fund first available in this product during November 2003) AUV at beginning of period $10.31 $7.82 AUV at end of period $13.63 $10.31 Number of accumulation units outstanding at end of period 873,013 681,441 ING JULIUS BAER FOREIGN (Fund first available in this product during November 2003) AUV at beginning of period $10.57 $8.20 AUV at end of period $12.24 $10.57 Number of accumulation units outstanding at end of period 630,752 268,993 ING LEGG MASON VALUE (Fund first available in this product during November 2003) AUV at beginning of period $8.41 $6.99 AUV at end of period $9.40 $8.41 Number of accumulation units outstanding at end of period 3,269,858 3,698,410 ING MARSICO GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $13.34 $10.23 AUV at end of period $14.73 $13.34 Number of accumulation units outstanding at end of period 4,872,617 5,319,925 ING MFS MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $21.24 $15.55 AUV at end of period $24.00 $21.24 Number of accumulation units outstanding at end of period 2,244,738 2,586,393 ING OPPENHEIMER MAIN STREET (Fund first available in this product during November 2003) AUV at beginning of period $17.91 $14.64 AUV at end of period $19.85 $17.91 Number of accumulation units outstanding at end of period 1,916,552 2,135,321
A5 WF Landmark - 136960
2004 2003 ---- ---- ING PIMCO CORE BOND (Fund first available in this product during November 2003) AUV at beginning of period $12.64 $12.29 AUV at end of period $13.02 $12.64 Number of accumulation units outstanding at end of period 4,229,657 4,187,288 ING PIMCO HIGH YIELD (Fund first available in this product during May 2004) AUV at beginning of period $10.00 AUV at end of period $10.79 Number of accumulation units outstanding at end of period 5,910,000 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $10.80 $10.00 AUV at end of period $11.61 $10.80 Number of accumulation units outstanding at end of period 414,445 147,757 ING SALOMON BROTHERS ALL CAP (Fund first available in this product during November 2003) AUV at beginning of period $11.52 $8.45 AUV at end of period $12.20 $11.52 Number of accumulation units outstanding at end of period 3,539,089 4,017,738 ING SALOMON BROTHERS INVESTORS (Fund first available in this product during November 2003) AUV at beginning of period $10.28 $7.98 AUV at end of period $11.10 $10.28 Number of accumulation units outstanding at end of period 1,181,536 1,251,944 ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available in this product during November 2003) AUV at beginning of period $32.45 $26.38 AUV at end of period $37.15 $32.45 Number of accumulation units outstanding at end of period 5,095,640 4,498,234 ING T. ROWE PRICE EQUITY INCOME (Fund first available in this product during November 2003) AUV at beginning of period $23.73 $19.30 AUV at end of period $26.77 $23.73 Number of accumulation units outstanding at end of period 2,660,206 2,387,635 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available in this product during November 2003) AUV at beginning of period $10.94 $8.82 AUV at end of period $12.10 $10.94 Number of accumulation units outstanding at end of period 793,145 565,302 ING VAN KAMPEN GROWTH & INCOME (Fund first available in this product during November 2003) AUV at beginning of period $21.98 $17.50 AUV at end of period $24.63 $21.98 Number of accumulation units outstanding at end of period 1,987,888 2,020,012 ING VAN KAMPEN REAL ESTATE (Fund first available in this product during November 2003) AUV at beginning of period $35.82 $26.48 AUV at end of period $48.45 $35.82 Number of accumulation units outstanding at end of period 1,026,075 933,790 ING VP INDEX PLUS LARGECAP (Fund first available in this product during November 2003) AUV at beginning of period $8.89 $7.19 AUV at end of period $9.62 $8.89 Number of accumulation units outstanding at end of period 578,842 335,685 ING VP INTERMEDIATE BOND (Fund first available in this product during November 2003) AUV at beginning of period $11.05 $10.62 AUV at end of period $11.35 $11.05 Number of accumulation units outstanding at end of period 1,363,166 785,879 ING VP MAGNACAP (Fund first available in this product during November 2003) AUV at beginning of period $9.05 $7.05 AUV at end of period $9.69 $9.05 Number of accumulation units outstanding at end of period 285,036 304,573
A6 WF Landmark - 136960
2004 2003 ---- ---- ING VP MIDCAP OPPORTUNITIES (Fund first available in this product during April 2004) AUV at beginning of period $7.06 AUV at end of period $7.41 Number of accumulation units outstanding at end of period 348,463 ING VP SMALLCAP OPPORTUNITIES (Fund first available in this product during November 2003) AUV at beginning of period $6.24 $4.59 AUV at end of period $6.73 $6.24 Number of accumulation units outstanding at end of period 1,460,032 1,478,756 ING VP WORLDWIDE GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $6.53 $5.15 AUV at end of period $7.02 $6.53 Number of accumulation units outstanding at end of period 872,735 910,436 PROFUND VP BULL (Fund first available in this product during November 2003) AUV at beginning of period $8.17 $6.62 AUV at end of period $8.73 $8.17 Number of accumulation units outstanding at end of period 883,577 990,737 PROFUND VP SMALL CAP (Fund first available in this product during November 2003) AUV at beginning of period $10.04 $7.16 AUV at end of period $11.51 $10.04 Number of accumulation units outstanding at end of period 972,699 1,323,338
2004 2003 ---- ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 1.90% FIDELITY VIP EQUITY - INCOME (Fund first available in this product during November 2003) AUV at beginning of period $9.92 $7.78 AUV at end of period $10.82 $9.92 Number of accumulation units outstanding at end of period 3,034,707 1,794,730 ING AIM MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $13.49 $9.54 AUV at end of period $14.23 $13.49 Number of accumulation units outstanding at end of period 2,226,475 2,013,485 ING ALLIANCE MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $15.99 $9.76 AUV at end of period $18.75 $15.99 Number of accumulation units outstanding at end of period 3,046,960 2,753,698 ING AMERICAN FUNDS GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $10.75 $10.00 AUV at end of period $11.81 $10.75 Number of accumulation units outstanding at end of period 12,085,363 1,785,979 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available in this product during November 2003) AUV at beginning of period $10.97 $10.00 AUV at end of period $11.82 $10.97 Number of accumulation units outstanding at end of period 9,395,072 1,387,064 ING AMERICAN FUNDS INTERNATIONAL (Fund first available in this product during November 2003) AUV at beginning of period $11.60 $10.00 AUV at end of period $13.50 $11.60 Number of accumulation units outstanding at end of period 3,432,847 564,361
A7 WF Landmark - 136960
2004 2003 ---- ---- ING DEVELOPING WORLD (Fund first available in this product during November 2003) AUV at beginning of period $8.75 $6.08 AUV at end of period $10.11 $8.75 Number of accumulation units outstanding at end of period 1,999,161 1,334,968 ING EAGLE ASSET CAPITAL APPRECIATION (Fund first available in this product during November 2003) AUV at beginning of period $17.67 $14.38 AUV at end of period $19.92 $17.67 Number of accumulation units outstanding at end of period 1,083,314 1,029,028 ING FMRSM DIVERSIFIED MID-CAP (Fund first available in this product during November 2003) AUV at beginning of period $9.36 $7.15 AUV at end of period $11.40 $9.36 Number of accumulation units outstanding at end of period 3,937,987 3,090,180 ING JANUS SPECIAL EQUITY (Fund first available in this product during November 2003) AUV at beginning of period $8.86 $6.01 AUV at end of period $10.19 $8.86 Number of accumulation units outstanding at end of period 1,251,267 1,098,078 ING JENNISON EQUITY OPPORTUNITIES (Fund first available in this product during November 2003) AUV at beginning of period $18.33 $14.25 AUV at end of period $20.24 $18.33 Number of accumulation units outstanding at end of period 1,841,165 1,998,516 ING JPMORGAN INTERNATIONAL (Fund first available in this product during November 2003) AUV at beginning of period $11.85 $10.00 AUV at end of period $13.80 $11.85 Number of accumulation units outstanding at end of period 725,812 104,296 ING JPMORGAN SMALL CAP EQUITY (Fund first available in this product during November 2003) AUV at beginning of period $10.30 $7.82 AUV at end of period $13.63 $10.30 Number of accumulation units outstanding at end of period 2,099,655 1,006,794 ING JULIUS BAER FOREIGN (Fund first available in this product during November 2003) AUV at beginning of period $10.55 $8.20 AUV at end of period $12.20 $10.55 Number of accumulation units outstanding at end of period 3,062,604 582,823 ING LEGG MASON VALUE (Fund first available in this product during November 2003) AUV at beginning of period $8.38 $6.97 AUV at end of period $9.36 $8.38 Number of accumulation units outstanding at end of period 4,964,766 4,168,723 ING MARSICO GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $13.23 $10.16 AUV at end of period $14.60 $13.23 Number of accumulation units outstanding at end of period 5,851,107 5,372,714 ING MFS MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $21.04 $15.42 AUV at end of period $23.75 $21.04 Number of accumulation units outstanding at end of period 3,541,706 3,633,581 ING OPPENHEIMER MAIN STREET (Fund first available in this product during November 2003) AUV at beginning of period $17.74 $14.51 AUV at end of period $19.64 $17.74 Number of accumulation units outstanding at end of period 2,260,629 2,358,725 ING PIMCO CORE BOND (Fund first available in this product during November 2003) AUV at beginning of period $12.52 $12.19 AUV at end of period $12.88 $12.52 Number of accumulation units outstanding at end of period 6,098,052 5,824,732
A8 WF Landmark - 136960
2004 2003 ---- ---- ING PIMCO HIGH YIELD (Fund first available in this product during November 2003) AUV at beginning of period $10.00 AUV at end of period $10.78 Number of accumulation units outstanding at end of period 8,122,576 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $10.80 $10.00 AUV at end of period $11.59 $10.80 Number of accumulation units outstanding at end of period 1,947,332 291,189 ING SALOMON BROTHERS ALL CAP (Fund first available in this product during November 2003) AUV at beginning of period $11.47 $8.42 AUV at end of period $12.14 $11.47 Number of accumulation units outstanding at end of period 6,906,094 6,946,527 ING SALOMON BROTHERS INVESTORS (Fund first available in this product during November 2003) AUV at beginning of period $10.24 $7.95 AUV at end of period $11.04 $10.24 Number of accumulation units outstanding at end of period 2,375,113 2,433,238 ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available in this product during November 2003) AUV at beginning of period $31.96 $26.01 AUV at end of period $36.56 $31.96 Number of accumulation units outstanding at end of period 6,613,564 5,130,780 ING T. ROWE PRICE EQUITY INCOME (Fund first available in this product during November 2003) AUV at beginning of period $23.37 $19.03 AUV at end of period $26.34 $23.37 Number of accumulation units outstanding at end of period 5,039,682 3,453,724 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available in this product during November 2003) AUV at beginning of period $10.92 $8.82 AUV at end of period $12.07 $10.92 Number of accumulation units outstanding at end of period 1,699,597 898,110 ING VAN KAMPEN GROWTH & INCOME (Fund first available in this product during November 2003) AUV at beginning of period $21.75 $17.34 AUV at end of period $24.35 $21.75 Number of accumulation units outstanding at end of period 2,982,066 2,428,852 ING VAN KAMPEN REAL ESTATE (Fund first available in this product during November 2003) AUV at beginning of period $35.28 $26.11 AUV at end of period $47.67 $35.28 Number of accumulation units outstanding at end of period 1,760,569 1,166,070 ING VP INDEX PLUS LARGECAP (Fund first available in this product during November 2003) AUV at beginning of period $8.87 $10.00 AUV at end of period $9.59 $8.87 Number of accumulation units outstanding at end of period 1,954,792 957,662 ING VP INTERMEDIATE BOND (Fund first available in this product during November 2003) AUV at beginning of period $11.04 $10.61 AUV at end of period $11.32 $11.04 Number of accumulation units outstanding at end of period 2,895,223 889,844 ING VP MAGNACAP (Fund first available in this product during November 2003) AUV at beginning of period $9.03 $7.04 AUV at end of period $9.65 $9.03 Number of accumulation units outstanding at end of period 375,601 424,572 ING VP MIDCAP OPPORTUNITIES (Fund first available in this product during April 2004) AUV at beginning of period $7.04 AUV at end of period $7.38 Number of accumulation units outstanding at end of period 814,033
A9 WF Landmark - 136960
2004 2003 ---- ---- ING VP SMALLCAP OPPORTUNITIES (Fund first available in this product during November 2003) AUV at beginning of period $6.22 $4.58 AUV at end of period $6.71 $6.22 Number of accumulation units outstanding at end of period 2,585,684 2,876,835 ING VP WORLDWIDE GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $6.51 $5.14 AUV at end of period $6.99 $6.51 Number of accumulation units outstanding at end of period 1,550,262 1,506,719 PROFUND VP BULL (Fund first available in this product during November 2003) AUV at beginning of period $8.15 $6.61 AUV at end of period $8.70 $8.15 Number of accumulation units outstanding at end of period 1,940,698 1,278,503 PROFUND VP SMALL CAP (Fund first available in this product during November 2003) AUV at beginning of period $10.01 $7.15 AUV at end of period $11.47 $10.01 Number of accumulation units outstanding at end of period 1,815,670 1,694,421 WELLS FARGO VT ASSET ALLOCATION FUND (Fund first available in this product during January 2004) AUV at beginning of period $10.54 AUV at end of period $11.30 Number of accumulation units outstanding at end of period 40,366 WELLS FARGO VT EQUITY INCOME FUND (Fund first available in this product during March 2004) AUV at beginning of period $11.75 AUV at end of period $11.71 Number of accumulation units outstanding at end of period 12,520 WELLS FARGO VT EQUITY VALUE FUND (Fund first available in this product during May 2004) AUV at beginning of period $10.64 AUV at end of period $11.72 Number of accumulation units outstanding at end of period 5,175 WELLS FARGO VT LARGE COMPANY GROWTH FUND (Fund first available in this product during January 2004) AUV at beginning of period $10.26 AUV at end of period $10.39 Number of accumulation units outstanding at end of period 40,919 WELLS FARGO VT MONEY MARKET FUND (Fund first available in this product during July 2004) AUV at beginning of period $9.89 AUV at end of period $9.85 Number of accumulation units outstanding at end of period 14,384 WELLS FARGO VT SMALL CAP GROWTH FUND (Fund first available in this product during January 2004) AUV at beginning of period $10.64 AUV at end of period $11.88 Number of accumulation units outstanding at end of period 12,059 WELLS FARGO VT TOTAL RETURN BOND FUND (Fund first available in this product during April 2004) AUV at beginning of period $10.08 AUV at end of period $10.37 Number of accumulation units outstanding at end of period 5,970
A10 WF Landmark - 136960
2004 2003 ---- ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 1.95% FIDELITY VIP EQUITY - INCOME (Fund first available in this product during November 2003) AUV at beginning of period $9.91 $7.77 AUV at end of period $10.80 $9.91 Number of accumulation units outstanding at end of period 125,507 58,993 ING AIM MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $13.43 $9.50 AUV at end of period $14.16 $13.43 Number of accumulation units outstanding at end of period 3,740 2,798 ING ALLIANCE MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $15.92 $9.72 AUV at end of period $18.66 $15.92 Number of accumulation units outstanding at end of period 3,599 220 ING AMERICAN FUNDS GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $10.75 $10.00 AUV at end of period $11.80 $10.75 Number of accumulation units outstanding at end of period 362,211 72,592 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available in this product during November 2003) AUV at beginning of period $10.97 $10.00 AUV at end of period $11.81 $10.97 Number of accumulation units outstanding at end of period 348,070 63,213 ING AMERICAN FUNDS INTERNATIONAL (Fund first available in this product during November 2003) AUV at beginning of period $11.60 $10.00 AUV at end of period $13.49 $11.60 Number of accumulation units outstanding at end of period 161,298 17,513 ING DEVELOPING WORLD (Fund first available in this product during November 2003) AUV at beginning of period $8.72 $6.07 AUV at end of period $10.07 $8.72 Number of accumulation units outstanding at end of period 2,102 928 ING EAGLE ASSET CAPITAL APPRECIATION (Fund first available in this product during November 2003) AUV at beginning of period $17.59 $14.32 AUV at end of period $19.82 $17.59 Number of accumulation units outstanding at end of period 20,783 15,780 ING FMRSM DIVERSIFIED MID-CAP (Fund first available in this product during November 2004) AUV at beginning of period $10.20 AUV at end of period $11.37 Number of accumulation units outstanding at end of period 451 ING JANUS SPECIAL EQUITY (Fund first available in this product during November 2003) AUV at beginning of period $8.85 $6.00 AUV at end of period $10.16 $8.85 Number of accumulation units outstanding at end of period 3,447 2,108 ING JENNISON EQUITY OPPORTUNITIES (Fund first available in this product during November 2003) AUV at beginning of period $18.22 $14.17 AUV at end of period $20.11 $18.22 Number of accumulation units outstanding at end of period 2,019 98 ING JPMORGAN INTERNATIONAL (Fund first available in this product during November 2003) AUV at beginning of period $11.85 $10.00 AUV at end of period $13.79 $11.85 Number of accumulation units outstanding at end of period 24,195 8,655 ING JPMORGAN SMALL CAP EQUITY (Fund first available in this product during November 2003) AUV at beginning of period $10.29 $7.82 AUV at end of period $13.63 $10.29 Number of accumulation units outstanding at end of period 68,789 26,587
A11 WF Landmark - 136960
2004 2003 ---- ---- ING JULIUS BAER FOREIGN (Fund first available in this product during November 2003) AUV at beginning of period $10.54 $8.19 AUV at end of period $12.19 $10.54 Number of accumulation units outstanding at end of period 72,649 20,511 ING LEGG MASON VALUE (Fund first available in this product during November 2003) AUV at beginning of period $8.37 $6.96 AUV at end of period $9.34 $8.37 Number of accumulation units outstanding at end of period 68,437 26,957 ING MARSICO GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $13.18 $10.13 AUV at end of period $14.53 $13.18 Number of accumulation units outstanding at end of period 27,999 7,966 ING MFS MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $20.94 $15.35 AUV at end of period $23.63 $20.94 Number of accumulation units outstanding at end of period 3,927 2,196 ING OPPENHEIMER MAIN STREET (Fund first available in this product during November 2003) AUV at beginning of period $17.65 $14.45 AUV at end of period $19.54 $17.65 Number of accumulation units outstanding at end of period 9,183 12,028 ING PIMCO CORE BOND (Fund first available in this product during November 2003) AUV at beginning of period $12.46 $12.13 AUV at end of period $12.82 $12.46 Number of accumulation units outstanding at end of period 279,024 105,747 ING PIMCO HIGH YIELD (Fund first available in this product during May 2004) AUV at beginning of period $10.00 AUV at end of period $10.78 Number of accumulation units outstanding at end of period 134,849 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $10.79 $10.00 AUV at end of period $11.58 $10.79 Number of accumulation units outstanding at end of period 59,803 5,105 ING SALOMON BROTHERS ALL CAP (Fund first available in this product during November 2003) AUV at beginning of period $11.45 $8.41 AUV at end of period $12.11 $11.45 Number of accumulation units outstanding at end of period 44,955 16,669 ING SALOMON BROTHERS INVESTORS (Fund first available in this product during November 2003) AUV at beginning of period $10.22 $7.94 AUV at end of period $11.01 $10.22 Number of accumulation units outstanding at end of period 20,350 6,274 ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available in this product during November 2003) AUV at beginning of period $31.72 $25.83 AUV at end of period $36.26 $31.72 Number of accumulation units outstanding at end of period 30,850 16,339 ING T. ROWE PRICE EQUITY INCOME (Fund first available in this product during November 2003) AUV at beginning of period $23.19 $18.90 AUV at end of period $26.13 $23.19 Number of accumulation units outstanding at end of period 55,676 3,253 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available in this product during November 2003) AUV at beginning of period $10.91 $8.81 AUV at end of period $12.05 $10.91 Number of accumulation units outstanding at end of period 14,300 4,280
A12 WF Landmark - 136960
2004 2003 ---- ---- ING VAN KAMPEN GROWTH & INCOME (Fund first available in this product during November 2003) AUV at beginning of period $21.63 $17.26 AUV at end of period $24.21 $21.63 Number of accumulation units outstanding at end of period 3,750 2,913 ING VAN KAMPEN REAL ESTATE (Fund first available in this product during November 2003) AUV at beginning of period $35.01 $25.92 AUV at end of period $47.29 $35.01 Number of accumulation units outstanding at end of period 18,394 1,917 ING VP INDEX PLUS LARGECAP (Fund first available in this product during November 2003) AUV at beginning of period $8.86 $7.18 AUV at end of period $9.57 $8.86 Number of accumulation units outstanding at end of period 156,482 74,850 ING VP INTERMEDIATE BOND (Fund first available in this product during February 2004) AUV at beginning of period $11.15 AUV at end of period $11.31 Number of accumulation units outstanding at end of period 9,453 ING VP MAGNACAP (Fund first available in this product during November 2003) AUV at beginning of period $9.02 $7.04 AUV at end of period $9.63 $9.02 Number of accumulation units outstanding at end of period 37,654 16,409 ING VP MIDCAP OPPORTUNITIES (Fund first available in this product during April 2004) AUV at beginning of period $7.03 AUV at end of period $7.36 Number of accumulation units outstanding at end of period 12,026 ING VP SMALLCAP OPPORTUNITIES (Fund first available in this product during November 2003) AUV at beginning of period $6.21 $4.58 AUV at end of period $6.70 $6.21 Number of accumulation units outstanding at end of period 15,222 5,697 ING VP WORLDWIDE GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $6.50 $5.13 AUV at end of period $6.97 $6.50 Number of accumulation units outstanding at end of period 8,288 3,247 PROFUND VP BULL (Fund first available in this product during November 2003) AUV at beginning of period $8.13 $6.61 AUV at end of period $8.68 $8.13 Number of accumulation units outstanding at end of period 3,195 705 PROFUND VP SMALL CAP (Fund first available in this product during November 2003) AUV at beginning of period $10.00 $7.14 AUV at end of period $11.45 $10.00 Number of accumulation units outstanding at end of period 45,553 15,408 WELLS FARGO VT LARGE COMPANY GROWTH FUND (Fund first available in this product during March 2004) AUV at beginning of period $10.13 AUV at end of period $10.39 Number of accumulation units outstanding at end of period 12,519 WELLS FARGO VT TOTAL RETURN BOND FUND (Fund first available in this product during December 2004) AUV at beginning of period $10.32 AUV at end of period $10.36 Number of accumulation units outstanding at end of period 58
A13 WF Landmark - 136960
2004 2003 ---- ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 2.00% FIDELITY VIP EQUITY - INCOME (Fund first available in this product during November 2003) AUV at beginning of period $9.89 $7.76 AUV at end of period $10.79 $9.89 Number of accumulation units outstanding at end of period 308,446 221,381 ING AIM MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $13.37 $9.47 AUV at end of period $14.10 $13.37 Number of accumulation units outstanding at end of period 105,949 90,471 ING ALLIANCE MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $15.86 $9.69 AUV at end of period $18.58 $15.86 Number of accumulation units outstanding at end of period 143,731 144,731 ING AMERICAN FUNDS GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $10.75 $10.00 AUV at end of period $11.79 $10.75 Number of accumulation units outstanding at end of period 829,532 290,167 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available in this product during November 2003) AUV at beginning of period $10.97 $10.00 AUV at end of period $11.80 $10.97 Number of accumulation units outstanding at end of period 665,072 234,073 ING AMERICAN FUNDS INTERNATIONAL (Fund first available in this product during November 2003) AUV at beginning of period $11.59 $10.00 AUV at end of period $13.48 $11.59 Number of accumulation units outstanding at end of period 269,604 71,827 ING DEVELOPING WORLD (Fund first available in this product during November 2003) AUV at beginning of period $8.70 $6.05 AUV at end of period $10.03 $8.70 Number of accumulation units outstanding at end of period 111,442 80,874 ING EAGLE ASSET CAPITAL APPRECIATION (Fund first available in this product during November 2003) AUV at beginning of period $17.51 $14.27 AUV at end of period $19.72 $17.51 Number of accumulation units outstanding at end of period 85,355 78,240 ING FMRSM DIVERSIFIED MID-CAP (Fund first available in this product during November 2003) AUV at beginning of period $9.33 $7.13 AUV at end of period $11.35 $9.33 Number of accumulation units outstanding at end of period 247,897 207,580 ING JANUS SPECIAL EQUITY (Fund first available in this product during November 2003) AUV at beginning of period $8.84 $5.99 AUV at end of period $10.14 $8.84 Number of accumulation units outstanding at end of period 44,257 78,180 ING JENNISON EQUITY OPPORTUNITIES (Fund first available in this product during November 2003) AUV at beginning of period $18.11 $14.10 AUV at end of period $19.98 $18.11 Number of accumulation units outstanding at end of period 67,038 68,657 ING JPMORGAN INTERNATIONAL (Fund first available in this product during November 2003) AUV at beginning of period $11.85 $10.00 AUV at end of period $13.78 $11.85 Number of accumulation units outstanding at end of period 29,416 13,821 ING JPMORGAN SMALL CAP EQUITY (Fund first available in this product during November 2003) AUV at beginning of period $10.28 $7.81 AUV at end of period $13.63 $10.28 Number of accumulation units outstanding at end of period 145,849 121,614
A14 WF Landmark - 136960
2004 2003 ---- ---- ING JULIUS BAER FOREIGN (Fund first available in this product during November 2003) AUV at beginning of period $10.53 $8.19 AUV at end of period $12.17 $10.53 Number of accumulation units outstanding at end of period 138,775 45,763 ING LEGG MASON VALUE (Fund first available in this product during November 2003) AUV at beginning of period $8.35 $6.95 AUV at end of period $9.32 $8.35 Number of accumulation units outstanding at end of period 401,515 307,687 ING MARSICO GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $13.13 $10.09 AUV at end of period $14.47 $13.13 Number of accumulation units outstanding at end of period 349,744 339,229 ING MFS MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $20.85 $15.29 AUV at end of period $23.50 $20.85 Number of accumulation units outstanding at end of period 167,581 164,912 ING OPPENHEIMER MAIN STREET (Fund first available in this product during November 2003) AUV at beginning of period $17.57 $14.39 AUV at end of period $19.44 $17.57 Number of accumulation units outstanding at end of period 150,163 159,402 ING PIMCO CORE BOND (Fund first available in this product during November 2003) AUV at beginning of period $12.40 $12.08 AUV at end of period $12.75 $12.40 Number of accumulation units outstanding at end of period 788,210 685,841 ING PIMCO HIGH YIELD (Fund first available in this product during May 2004) AUV at beginning of period $10.00 AUV at end of period $10.77 Number of accumulation units outstanding at end of period 671,366 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $10.79 $10.00 AUV at end of period $11.58 $10.79 Number of accumulation units outstanding at end of period 44,213 7,733 ING SALOMON BROTHERS ALL CAP (Fund first available in this product during November 2003) AUV at beginning of period $11.43 $8.40 AUV at end of period $12.08 $11.43 Number of accumulation units outstanding at end of period 404,311 403,321 ING SALOMON BROTHERS INVESTORS (Fund first available in this product during November 2003) AUV at beginning of period $10.20 $7.93 AUV at end of period $10.99 $10.20 Number of accumulation units outstanding at end of period 202,420 200,601 ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available in this product during November 2003) AUV at beginning of period $31.47 $25.65 AUV at end of period $35.97 $31.47 Number of accumulation units outstanding at end of period 529,273 415,984 ING T. ROWE PRICE EQUITY INCOME (Fund first available in this product during November 2003) AUV at beginning of period $23.02 $18.76 AUV at end of period $25.91 $23.02 Number of accumulation units outstanding at end of period 429,673 336,483 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available in this product during November 2003) AUV at beginning of period $10.90 $8.81 AUV at end of period $12.04 $10.90 Number of accumulation units outstanding at end of period 133,602 92,038
A15 WF Landmark - 136960
2004 2003 ---- ---- ING VAN KAMPEN GROWTH & INCOME (Fund first available in this product during November 2003) AUV at beginning of period $21.52 $17.17 AUV at end of period $24.07 $21.52 Number of accumulation units outstanding at end of period 238,814 233,334 ING VAN KAMPEN REAL ESTATE (Fund first available in this product during November 2003) AUV at beginning of period $34.74 $25.74 AUV at end of period $46.91 $34.74 Number of accumulation units outstanding at end of period 87,409 58,412 ING VP INDEX PLUS LARGECAP (Fund first available in this product during November 2003) AUV at beginning of period $8.84 $10.00 AUV at end of period $9.56 $8.84 Number of accumulation units outstanding at end of period 139,303 73,289 ING VP INTERMEDIATE BOND (Fund first available in this product during November 2003) AUV at beginning of period $11.02 $10.60 AUV at end of period $11.29 $11.02 Number of accumulation units outstanding at end of period 147,886 49,551 ING VP MAGNACAP (Fund first available in this product during November 2003) AUV at beginning of period $9.00 $7.03 AUV at end of period $9.61 $9.00 Number of accumulation units outstanding at end of period 27,916 34,266 ING VP MIDCAP OPPORTUNITIES (Fund first available in this product during April 2004) AUV at beginning of period $7.02 AUV at end of period $7.35 Number of accumulation units outstanding at end of period 45,752 ING VP SMALLCAP OPPORTUNITIES (Fund first available in this product during November 2003) AUV at beginning of period $6.20 $4.57 AUV at end of period $6.68 $6.20 Number of accumulation units outstanding at end of period 250,032 249,210 ING VP WORLDWIDE GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $6.48 $5.12 AUV at end of period $6.95 $6.48 Number of accumulation units outstanding at end of period 133,300 113,212 PROFUND VP BULL (Fund first available in this product during November 2003) AUV at beginning of period $8.12 $6.60 AUV at end of period $8.66 $8.12 Number of accumulation units outstanding at end of period 83,416 79,556 PROFUND VP SMALL CAP (Fund first available in this product during November 2003) AUV at beginning of period $9.99 $7.14 AUV at end of period $11.43 $9.99 Number of accumulation units outstanding at end of period 95,672 93,987 WELLS FARGO VT ASSET ALLOCATION FUND (Fund first available in this product during April 2004) AUV at beginning of period $10.78 AUV at end of period $11.29 Number of accumulation units outstanding at end of period 587 WELLS FARGO VT EQUITY VALUE FUND (Fund first available in this product during January 2004) AUV at beginning of period $11.17 AUV at end of period $11.70 Number of accumulation units outstanding at end of period 850 WELLS FARGO VT LARGE COMPANY GROWTH FUND (Fund first available in this product during February 2004) AUV at beginning of period $10.58 AUV at end of period $10.38 Number of accumulation units outstanding at end of period 940
A16 WF Landmark - 136960
2004 2003 ---- ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 2.10% FIDELITY VIP EQUITY - INCOME (Fund first available in this product during November 2003) AUV at beginning of period $9.87 $7.75 AUV at end of period $10.75 $9.87 Number of accumulation units outstanding at end of period 1,289,231 448,420 ING AIM MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $13.26 $9.40 AUV at end of period $13.97 $13.26 Number of accumulation units outstanding at end of period 441,646 224,903 ING ALLIANCE MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $15.74 $9.62 AUV at end of period $18.42 $15.74 Number of accumulation units outstanding at end of period 672,084 439,259 ING AMERICAN FUNDS GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $10.75 $10.00 AUV at end of period $11.77 $10.75 Number of accumulation units outstanding at end of period 6,721,770 882,976 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available in this product during November 2003) AUV at beginning of period $10.96 $10.00 AUV at end of period $11.78 $10.96 Number of accumulation units outstanding at end of period 5,253,841 709,118 ING AMERICAN FUNDS INTERNATIONAL (Fund first available in this product during November 2003) AUV at beginning of period $11.59 $10.00 AUV at end of period $13.46 $11.59 Number of accumulation units outstanding at end of period 2,085,943 296,661 ING DEVELOPING WORLD (Fund first available in this product during November 2003) AUV at beginning of period $8.64 $6.02 AUV at end of period $9.96 $8.64 Number of accumulation units outstanding at end of period 614,996 251,031 ING EAGLE ASSET CAPITAL APPRECIATION (Fund first available in this product during November 2003) AUV at beginning of period $17.35 $14.15 AUV at end of period $19.52 $17.35 Number of accumulation units outstanding at end of period 261,179 228,990 ING FMRSM DIVERSIFIED MID-CAP (Fund first available in this product during November 2003) AUV at beginning of period $9.30 $7.12 AUV at end of period $11.30 $9.30 Number of accumulation units outstanding at end of period 1,202,124 724,929 ING JANUS SPECIAL EQUITY (Fund first available in this product during November 2003) AUV at beginning of period $8.81 $5.98 AUV at end of period $10.10 $8.81 Number of accumulation units outstanding at end of period 160,339 149,245 ING JENNISON EQUITY OPPORTUNITIES (Fund first available in this product during November 2003) AUV at beginning of period $17.90 $13.94 AUV at end of period $19.73 $17.90 Number of accumulation units outstanding at end of period 228,038 185,364 ING JPMORGAN NTERNATIONAL (Fund first available in this product during November 2003) AUV at beginning of period $11.85 $10.00 AUV at end of period $13.76 $11.85 Number of accumulation units outstanding at end of period 333,308 22,489 ING JPMORGAN SMALL CAP EQUITY (Fund first available in this product during November 2003) AUV at beginning of period $10.26 $7.81 AUV at end of period $13.63 $10.26 Number of accumulation units outstanding at end of period 643,342 260,352
A17 WF Landmark - 136960
2004 2003 ---- ---- ING JULIUS BAER FOREIGN (Fund first available in this product during November 2003) AUV at beginning of period $10.51 $8.19 AUV at end of period $12.14 $10.51 Number of accumulation units outstanding at end of period 1,232,792 128,362 ING LEGG MASON VALUE (Fund first available in this product during November 2003) AUV at beginning of period $8.32 $6.94 AUV at end of period $9.28 $8.32 Number of accumulation units outstanding at end of period 1,677,706 854,803 ING MARSICO GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $13.02 $10.02 AUV at end of period $14.34 $13.02 Number of accumulation units outstanding at end of period 1,389,051 845,399 ING MFS MID CAP GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $20.65 $15.16 AUV at end of period $23.26 $20.65 Number of accumulation units outstanding at end of period 704,318 527,276 ING OPPENHEIMER MAIN STREET (Fund first available in this product during November 2003) AUV at beginning of period $17.41 $14.27 AUV at end of period $19.24 $17.41 Number of accumulation units outstanding at end of period 379,152 360,253 ING PIMCO CORE BOND (Fund first available in this product during November 2003) AUV at beginning of period $12.29 $11.98 AUV at end of period $12.62 $12.29 Number of accumulation units outstanding at end of period 1,738,298 1,262,012 ING PIMCO HIGH YIELD (Fund first available in this product during May 2004) AUV at beginning of period $10.00 AUV at end of period $10.77 Number of accumulation units outstanding at end of period 2,439,916 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $10.79 $10.00 AUV at end of period $11.56 $10.79 Number of accumulation units outstanding at end of period 974,672 109,745 ING SALOMON BROTHERS ALL CAP (Fund first available in this product during November 2003) AUV at beginning of period $11.38 $8.37 AUV at end of period $12.02 $11.38 Number of accumulation units outstanding at end of period 1,693,260 1,445,599 ING SALOMON BROTHERS INVESTORS (Fund first available in this product during November 2003) AUV at beginning of period $10.16 $7.91 AUV at end of period $10.93 $10.16 Number of accumulation units outstanding at end of period 619,270 474,812 ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available in this product during November 2003) AUV at beginning of period $31.00 $25.28 AUV at end of period $35.39 $31.00 Number of accumulation units outstanding at end of period 2,380,506 998,381 ING T. ROWE PRICE EQUITY INCOME (Fund first available in this product during November 2003) AUV at beginning of period $22.67 $18.50 AUV at end of period $25.50 $22.67 Number of accumulation units outstanding at end of period 1,619,276 860,125 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available in this product during November 2003) AUV at beginning of period $10.88 $8.80 AUV at end of period $12.00 $10.88 Number of accumulation units outstanding at end of period 789,277 200,135
A18 WF Landmark - 136960
2004 2003 ---- ---- ING VAN KAMPEN GROWTH & INCOME (Fund first available in this product during November 2003) AUV at beginning of period $21.30 $17.01 AUV at end of period $23.79 $21.30 Number of accumulation units outstanding at end of period 677,755 424,242 ING VAN KAMPEN REAL ESTATE (Fund first available in this product during November 2003) AUV at beginning of period $34.22 $25.38 AUV at end of period $46.15 $34.22 Number of accumulation units outstanding at end of period 518,437 182,707 ING VP INDEX PLUS LARGECAP (Fund first available in this product during November 2003) AUV at beginning of period $8.82 $10.00 AUV at end of period $9.52 $8.82 Number of accumulation units outstanding at end of period 689,799 247,476 ING VP INTERMEDIATE BOND (Fund first available in this product during November 2003) AUV at beginning of period $11.00 $10.59 AUV at end of period $11.26 $11.00 Number of accumulation units outstanding at end of period 1,029,703 182,945 ING VP MAGNACAP (Fund first available in this product during November 2003) AUV at beginning of period $8.98 $7.02 AUV at end of period $9.58 $8.98 Number of accumulation units outstanding at end of period 100,899 60,421 ING VP MIDCAP OPPORTUNITIES (Fund first available in this product during April 2004) AUV at beginning of period $7.00 AUV at end of period $7.32 Number of accumulation units outstanding at end of period 215,454 ING VP SMALLCAP OPPORTUNITIES (Fund first available in this product during November 2003) AUV at beginning of period $6.19 $4.57 AUV at end of period $6.66 $6.19 Number of accumulation units outstanding at end of period 823,490 521,035 ING VP WORLDWIDE GROWTH (Fund first available in this product during November 2003) AUV at beginning of period $6.46 $5.11 AUV at end of period $6.92 $6.46 Number of accumulation units outstanding at end of period 312,656 252,106 PROFUND VP BULL (Fund first available in this product during November 2003) AUV at beginning of period $8.10 $6.59 AUV at end of period $8.63 $8.10 Number of accumulation units outstanding at end of period 278,604 83,177 PROFUND VP SMALL CAP (Fund first available in this product during November 2003) AUV at beginning of period $9.96 $7.13 AUV at end of period $11.38 $9.96 Number of accumulation units outstanding at end of period 453,800 255,439 WELLS FARGO VT ASSET ALLOCATION FUND (Fund first available in this product during March 2004) AUV at beginning of period $10.94 AUV at end of period $11.27 Number of accumulation units outstanding at end of period 29,735 WELLS FARGO VT EQUITY INCOME FUND (Fund first available in this product during March 2004) AUV at beginning of period $11.27 AUV at end of period $11.68 Number of accumulation units outstanding at end of period 35,621 WELLS FARGO VT EQUITY VALUE FUND (Fund first available in this product during November 2004) AUV at beginning of period $10.95 AUV at end of period $11.69 Number of accumulation units outstanding at end of period 1,754 A19 WF Landmark - 136960 WELLS FARGO VT LARGE COMPANY GROWTH FUND (Fund first available in this product during January 2004) AUV at beginning of period $10.50 AUV at end of period $10.37 Number of accumulation units outstanding at end of period 85,897 WELLS FARGO VT MONEY MARKET FUND (Fund first available in this product during April 2004) AUV at beginning of period $9.92 AUV at end of period $9.82 Number of accumulation units outstanding at end of period 23,139 WELLS FARGO VT SMALL CAP GROWTH FUND (Fund first available in this product during March 2004) AUV at beginning of period $11.44 AUV at end of period $11.85 Number of accumulation units outstanding at end of period 17,233 WELLS FARGO VT TOTAL RETURN BOND FUND (Fund first available in this product during February 2004) AUV at beginning of period $10.29 AUV at end of period $10.35 Number of accumulation units outstanding at end of period 10,447
A20 WF Landmark - 136960 - -------------------------------------------------------------------------------- APPENDIX B - -------------------------------------------------------------------------------- THE INVESTMENT PORTFOLIOS During the accumulation phase, you may allocate your premium payments and contract value to any of the investment portfolios available under this Contract. They are listed in this appendix. You bear the entire investment risk for amounts you allocate to any investment portfolio, and you may lose your principal. The investment results of the mutual funds (funds) are likely to differ significantly and there is no assurance that any of the funds will achieve their respective investment objectives. You should consider the investment objectives, risks and charges and expenses of the funds carefully before investing. Please refer to the fund prospectuses for this and additional information. Shares of the funds will rise and fall in value and you could lose money by investing in the funds. Shares of the funds are not bank deposits and are not guaranteed, endorsed or insured by any financial institution, the Federal Deposit Insurance Corporation or any other government agency. Except as noted, all funds are diversified, as defined under the Investment Company Act of 1940. Fund prospectuses may be obtained free of charge, from our Customer Service Center at the address and telephone number listed in the prospectus, by accessing the SEC's web site or by contacting the SEC Public Reference Room. Certain funds offered under the contracts have investment objectives and policies similar to other funds managed by the fund's investment adviser. The investment results of a fund may be higher or lower than those of other funds managed by the same adviser. There is no assurance and no representation is made that the investment results of any fund will be comparable to those of another fund managed by the same investment adviser. Certain funds offered under the contracts have investment objectives and policies similar to other funds managed by the fund's investment adviser. The investment results of a fund may be higher or lower than those of other funds managed by the same adviser. There is no assurance and no representation is made that the investment results of any fund will be comparable to those of another fund managed by the same investment adviser. Certain funds are designated as "Master-Feeder", "LifeStyle Funds" or "MarketPro Funds". Funds offered in a Master-Feeder structure (such as the American Funds) or fund of funds structure (such as LifeStyle or MarketPro Funds) may have higher fees and expenses than a fund that invests directly in debt and equity securities.
- ------------------------------------------------------------------------------------------------------------------------------ LIST OF FUND NAME CHANGES - ------------------------------------------------------------------------------------------------------------------------------ FORMER FUND NAME CURRENT FUND NAME - ------------------------------------------------------------------------------------------------------------------------------ ING Alliance Mid Cap Growth Portfolio ING AllianceBernstein Mid Cap Growth Portfolio - ------------------------------------------------------------------------------------------------------------------------------ ING Capital Guardian Managed Global Portfolio ING Templeton Global Growth Portfolio - ------------------------------------------------------------------------------------------------------------------------------ ING Developing World Portfolio ING JPMorgan Emerging Markets Equity Portfolio - ------------------------------------------------------------------------------------------------------------------------------ ING Janus Special Equity Portfolio ING Janus Contrarian Portfolio - ------------------------------------------------------------------------------------------------------------------------------ ING Jennison Equity Opportunities Portfolio ING Wells Fargo Mid Cap Disciplined Portfolio - ------------------------------------------------------------------------------------------------------------------------------ ING Mercury Focus Value Portfolio ING Mercury Large Cap Value Portfolio - ------------------------------------------------------------------------------------------------------------------------------ ING Salomon Brothers Investors Portfolio ING Lord Abbett Affiliated Portfolio - ------------------------------------------------------------------------------------------------------------------------------ ING VP Worldwide Growth Portfolio ING VP Global Equity Dividend Portfolio - ------------------------------------------------------------------------------------------------------------------------------
B1 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING INVESTORS TRUST 7337 E. Doubletree Ranch Road, Scottsdale, AZ 85258 - ------------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------- ING ALLIANCEBERNSTEIN MID CAP GROWTH PORTFOLIO Seeks long-term total return. Invests in common stocks of (Class S)* middle capitalization companies. Normally invests (formerly ING Alliance Mid Cap Growth Portfolio) substantially all of its assets in high-quality common INVESTMENT ADVISER: Directed Services, Inc. stocks that the subadviser expects to increase in value. INVESTMENT SUBADVISER: Alliance Capital Management, L.P. *NAME CHANGE EFFECTIVE 12/05/05 - ------------------------------------------------------------------------------------------------------------------------------- ING AMERICAN FUNDS GROWTH PORTFOLIO Seeks to make your investment grow. The Portfolio operates INVESTMENT ADVISER: ING Investments, LLC as a "feeder fund" which invests all of its assets in the INVESTMENT SUBADVISER: Capital Research and Management "master fund" which is Class 2 shares of the Growth Fund, a Company series of American Funds Insurance Series(R), a registered open-end investment company. The master fund invests primarily in common stocks of companies that appear to offer superior opportunities for growth of capital. The Growth Fund is designed for investors seeking long-term capital appreciation through stocks. - ------------------------------------------------------------------------------------------------------------------------------- ING AMERICAN FUNDS GROWTH-INCOME PORTFOLIO Seeks to make your investment grow and provide you with INVESTMENT ADVISER: ING Investments, LLC income over time. The Portfolio operates as a "feeder INVESTMENT SUBADVISER: Capital Research and Management fund" which invests all of its assets in the "master fund" Company which is Class 2 shares of the Growth-Income Fund, a series of American Funds Insurance Series(R), a registered open-end investment company. The master fund invests primarily in common stocks or other securities which demonstrate the potential for appreciation and/or dividends. The Growth-Income Fund is designed for investors seeking both capital appreciation and income. - ------------------------------------------------------------------------------------------------------------------------------- ING AMERICAN FUNDS INTERNATIONAL PORTFOLIO Seeks to make your investment grow over time. The Portfolio INVESTMENT ADVISER: ING Investments, LLC operates as a "feeder fund" which invests all of its assets INVESTMENT SUBADVISER: Capital Research and Management in the "master fund" which is Class 2 shares of the Company International Fund, a series of American Funds Insurance Series(R), a registered open-end investment company. The master fund invests primarily in common stocks of companies located outside the United States. The International Fund is designed for investors seeking capital appreciation through stocks. - ------------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------- ING CAPITAL GUARDIAN SMALL/MID CAP PORTFOLIO Seeks long-term capital appreciation. Invests at least 80% (Class S) of its assets in equity securities of small/mid INVESTMENT ADVISER: Directed Services, Inc. capitalization ("small/mid-cap") companies. INVESTMENT SUBADVISER: Capital Guardian Trust Company - -------------------------------------------------------------------------------------------------------------------------------
B2 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING CAPITAL GUARDIAN U.S. EQUITIES PORTFOLIO Seeks long-term growth of capital and income. Invests, (Class S) under normal market conditions, at least 80% of its assets INVESTMENT ADVISER: Directed Services, Inc. in equity and equity-related securities of issuers located INVESTMENT SUBADVISER: Capital Guardian Trust Company in the United States. - ------------------------------------------------------------------------------------------------------------------------------- ING EAGLE ASSET CAPITAL APPRECIATION PORTFOLIO Seeks capital appreciation. Dividend income is a secondary (Class S) objective. Normally invests at least 80% of its assets in INVESTMENT ADVISER: Directed Services, Inc. equity securities of domestic and foreign issuers that meet INVESTMENT SUBADVISER: Eagle Asset Management, Inc. quantitative standards relating to financial soundness and high intrinsic value relative to price. - ------------------------------------------------------------------------------------------------------------------------------- ING EVERGREEN HEALTH SCIENCES PORTFOLIO A non-diversified Portfolio that seeks long-term capital (Class S) growth. Normally invests at 80% of its assets in the INVESTMENT ADVISER: Directed Services, Inc. equity securities of healthcare companies. May invest in INVESTMENT SUBADVISER: Evergreen Investment Management Co., securities of relatively well-known and large companies as Inc. well as small- and medium-sized companies. - ------------------------------------------------------------------------------------------------------------------------------- ING EVERGREEN OMEGA PORTFOLIO (Class S) Seeks long-term capital growth. Invests primarily in INVESTMENT ADVISER: Directed Services, Inc. common stocks and securities convertible into common stocks INVESTMENT SUBADVISER: Evergreen Investment Management Co., of U.S. companies across all market capitalizations. May Inc. invest up to 25% of its assets in foreign securities. - ------------------------------------------------------------------------------------------------------------------------------- ING FMR(SM) DIVERSIFIED MID CAP PORTFOLIO Seeks long-term growth of capital. Normally invests (Class S) primarily in common stocks and normally invests at least INVESTMENT ADVISER: Directed Services, Inc. 80% of assets in securities of companies with medium market INVESTMENT SUBADVISER: Fidelity Management & Research Co. capitalizations. - ------------------------------------------------------------------------------------------------------------------------------- ING FMR(SM) EARNINGS GROWTH PORTFOLIO Seeks growth of capital over the long term. Normally (Class S) invests primarily in common stocks. Invests the assets in INVESTMENT ADVISER: Directed Services, Inc. companies it believes have above-average growth potential. INVESTMENT SUBADVISER: Fidelity Management & Research Co. Growth may be measured by factors such as earnings or revenue. Companies with high growth potential tend to be companies with higher than average price/earnings (P/E) or price/book (P/B) ratios. - ------------------------------------------------------------------------------------------------------------------------------- ING GLOBAL RESOURCES PORTFOLIO (Class S) A non-diversified Portfolio that seeks long-term capital INVESTMENT ADVISER: Directed Services, Inc. appreciation. Normally invests at least 80% of its assets INVESTMENT SUBADVISER: ING Investment Management Co. in the equities of producers of commodities. - ------------------------------------------------------------------------------------------------------------------------------- ING GOLDMAN SACHS TOLLKEEPER(SM) PORTFOLIO* (Class S) Seeks long-term growth of capital. Invests, under normal INVESTMENT ADVISER: Directed Services, Inc. circumstances, at least 80% of its net assets plus any INVESTMENT SUBADVISER: Goldman Sachs Asset Management, L.P. borrowings for investment purposes (measured at time of * Goldman Sachs Tollkeeper(SM) is a service mark of purchase) in equity investments in "Tollkeeper" companies, Goldman Sachs & Co. which are high-quality technology, media, or service companies that adopt or use technology to improve cost structure, revenue opportunities, and/or competitive advantage. - -------------------------------------------------------------------------------------------------------------------------------
B3 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING JANUS CONTRARIAN PORTFOLIO (Class S) A non-diversified Portfolio that seeks capital (formerly ING Janus Special Equity Portfolio) appreciation. Invests, under normal circumstances, at least INVESTMENT ADVISER: Directed Services, Inc. 80% of its net assets (plus borrowings for investment INVESTMENT SUBADVISER: Janus Capital Management, LLC purposes) in equity securities with the potential for long-term growth of capital. - ------------------------------------------------------------------------------------------------------------------------------- ING JPMORGAN EMERGING MARKETS EQUITY PORTFOLIO (Class S) Seeks capital appreciation. Normally invests at least 80% (formerly ING Developing World Portfolio) of its assets in securities of issuers located in at least INVESTMENT ADVISER: Directed Services, Inc. three countries with emerging securities markets. May also INVESTMENT SUBADVISER: J.P. Morgan Investment Management invest to a lesser extent in debt securities of issuers in Inc. countries with emerging markets. May also invest in high-quality, short-term money market instruments and repurchase agreements. - ------------------------------------------------------------------------------------------------------------------------------- ING JPMORGAN SMALL CAP EQUITY PORTFOLIO Seeks capital growth over the long term. Under normal (Class S) market conditions, invests at least 80% of its total assets INVESTMENT ADVISER: Directed Services, Inc. in equity securities of small-cap companies. May invest up INVESTMENT SUBADVISER: J.P. Morgan Investment Management to 20% of its assets in foreign securities, convertible Inc. securities and high quality money market instruments and repurchase agreements. May invest in REITs and derivatives. - ------------------------------------------------------------------------------------------------------------------------------- ING JPMORGAN VALUE OPPORTUNITIES PORTFOLIO Seeks to provide long-term capital appreciation. Under (Class S) normal market conditions, the Portfolio invests at least INVESTMENT ADVISER: Directed Services, Inc. 80% of its assets in equity securities of mid and INVESTMENT SUBADVISER: J.P. Morgan Investment Management large-capitalization companies at the time of purchase. Inc. - ------------------------------------------------------------------------------------------------------------------------------- ING JULIUS BAER FOREIGN PORTFOLIO (Class S) Seeks long-term growth of capital. Under normal INVESTMENT ADVISER: Directed Services, Inc. conditions, invests in a wide variety of international INVESTMENT SUBADVISER: Julius Baer Investment Management LLC equity securities issued through the world, normally excluding the United States. Normally invests at least 80% of its assets in equity securities tied economically to countries outside the United States. - ------------------------------------------------------------------------------------------------------------------------------- ING LEGG MASON VALUE PORTFOLIO (Class S) A non-diversified portfolio that seeks long-term growth of (formerly ING Janus Growth and Income Portfolio) capital. Normally invests in equity securities, including INVESTMENT ADVISER: Directed Services, Inc. foreign securities, that offer the potential for capital INVESTMENT SUBADVISER: Legg Mason Funds Management, Inc. growth. May also invest in companies with market capitalizations greater than $5 billion, but may invest in companies of any size. May also invest up to 25% of its total assets in long-term debt securities. - ------------------------------------------------------------------------------------------------------------------------------- ING LIFESTYLE AGGRESSIVE GROWTH PORTFOLIO (Class S1) Seeks growth of capital. Invests in a combination of INVESTMENT ADVISER: ING Investments, LLC underlying funds according to a fixed formula that over time should reflect an allocation of approximately 100% in equity securities. - ------------------------------------------------------------------------------------------------------------------------------- ING LIFESTYLE GROWTH PORTFOLIO (Class S1) Seeks growth of capital and some current income. Invests INVESTMENT ADVISER: ING Investments, LLC in a combination of underlying funds according to a fixed formula that over time should reflect an allocation of approximately 80% in equity securities and 20% in fixed income securities. - -------------------------------------------------------------------------------------------------------------------------------
B4 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING LIFESTYLE MODERATE GROWTH PORTFOLIO (Class S1) Seeks growth of capital and current income. Invests in a INVESTMENT ADVISER: ING Investments, LLC combination of underlying funds according to a fixed formula that over time should reflect an allocation of approximately 50% in equity securities and 50% in fixed income securities. - ------------------------------------------------------------------------------------------------------------------------------- ING LIFESTYLE MODERATE PORTFOLIO (Class S1) Seeks growth of capital and a low to moderate level of INVESTMENT ADVISER: ING Investments, LLC current income. Invests in a combination of underlying funds according to a fixed formula that over time should reflect an allocation of approximately 65% in equity securities and 35% in fixed income securities. - ------------------------------------------------------------------------------------------------------------------------------- ING LIQUID ASSETS PORTFOLIO (Class S) Seeks high level of current income consistent with the INVESTMENT ADVISER: Directed Services, Inc. preservation of capital and liquidity. Strives to maintain INVESTMENT SUBADVISER: ING Investment Management Co. a stable $1 per share net asset value and its investment strategy focuses on safety of principal, liquidity and yield, in order of importance, to achieve this goal. - ------------------------------------------------------------------------------------------------------------------------------- ING LORD ABBETT AFFILIATED PORTFOLIO (Class S)* Seeks long-term growth of capital. Secondarily seeks (formerly ING Salomon Brothers Investors Portfolio) current income. Invests primarily in equity securities of INVESTMENT ADVISER: Directed Services, Inc. U.S. companies. May also invest in other securities. To a INVESTMENT SUBADVISER: Lord Abbett & Co., LLC* lesser degree, invests in income producing securities such as debt securities, and may also invest in securities of *NAME CHANGE AND SUBADVISER CHANGE EFFECTIVE 12/05/05 foreign issuers. - ------------------------------------------------------------------------------------------------------------------------------- ING MARKETPRO PORTFOLIO (Class S)* Seeks capital appreciation. Income is a secondary INVESTMENT ADVISER: ING Investments, LLC consideration. Seeks to obtain its investment objective by investing in a combination of underlying funds according to *PORTFOLIO AVAILABLE 12/05/05 fixed percentages that reflect an allocation of approximately 70% in equity securities and 30% in fixed income securities. - ------------------------------------------------------------------------------------------------------------------------------- ING MARSICO GROWTH PORTFOLIO (Class S) Seeks capital appreciation. Invests primarily in equity INVESTMENT ADVISER: Directed Services, Inc. securities selected for their growth potential. May invest INVESTMENT SUBADVISER: Marsico Capital Management, LLC in companies of any size, from larger, well-established companies to smaller, emerging growth companies. - ------------------------------------------------------------------------------------------------------------------------------- ING MARSICO INTERNATIONAL OPPORTUNITIES PORTFOLIO (Class S) Seeks long-term growth of capital. Invests primarily (no INVESTMENT ADVISER: Directed Services, Inc. less than 65% of its total assets) in common stocks of INVESTMENT SUBADVISER: Marsico Capital Management, LLC foreign companies that are selected for their long-term growth potential. May invest in companies of any size throughout the world. Normally invests in issuers from at least three different countries not including the United States and generally maintains a core position of between 35 and 50 common stocks. May invest in common stocks of companies operating in emerging markets. - -------------------------------------------------------------------------------------------------------------------------------
B5 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING MERCURY LARGECAP GROWTH PORTFOLIO Seeks long-term growth of capital. Invests at least 80% of (Class S) its assets in equity securities of large capitalization INVESTMENT ADVISER: Directed Services, Inc. companies located in the United States believed to have INVESTMENT SUBADVISER: Mercury Advisors good prospects for earnings growth. These securities will be selected from companies that are included in the Russell 1000(R) Growth Index. May invest up to 10% of its total assets in securities issued by foreign companies. Normally will invest a portion of its assets in short-term debt securities. - ------------------------------------------------------------------------------------------------------------------------------- ING MERCURY LARGE CAP VALUE PORTFOLIO (Class S) Seeks long-term growth of capital. Invests at least 80% of (formerly ING Mercury Focus Value Portfolio) its assets in a diversified portfolio of equity securities INVESTMENT ADVISER: Directed Services, Inc. of large capitalization companies that the Portfolio INVESTMENT SUBADVISER: Mercury Advisors Manager believes are undervalued. - ------------------------------------------------------------------------------------------------------------------------------- ING MFS MID CAP GROWTH PORTFOLIO (Class S) Seeks long-term growth of capital. Normally invests at INVESTMENT ADVISER: Directed Services, Inc. least 80% of its net assets in common stocks and related INVESTMENT SUBADVISER: Massachusetts Financial Services securities (such as preferred stocks, convertible Company securities and depositary receipts) of companies with medium market capitalizations (or "mid-cap companies") which it believes have above-average growth potential. - ------------------------------------------------------------------------------------------------------------------------------- ING MFS TOTAL RETURN PORTFOLIO (Class S) Seeks above-average income (compared to a portfolio INVESTMENT ADVISER: Directed Services, Inc. entirely invested in equity securities) consistent with the INVESTMENT SUBADVISER: Massachusetts Financial Services prudent employment of capital. Secondarily seeks reasonable Company opportunity for growth of capital and income. Invests in a combination of equity and fixed income securities. - ------------------------------------------------------------------------------------------------------------------------------- ING MFS UTILITIES PORTFOLIO (Class S) A non-diversified portfolio that seeks capital growth and INVESTMENT ADVISER: Directed Services, Inc. current income. Normally invests at least 80% of its net INVESTMENT SUBADVISER: Massachusetts Financial Services assets in equity and debt securities of domestic and Company foreign (including emerging markets) companies in the utilities industry. - ------------------------------------------------------------------------------------------------------------------------------- ING OPPENHEIMER MAIN STREET PORTFOLIO (Class S) Seeks long-term growth of capital and future income. INVESTMENT ADVISER: Directed Services, Inc. Normally invests mainly in common stocks of U.S. companies INVESTMENT SUBADVISER: OppenheimerFunds, Inc. of different capitalization ranges, presently focusing on large-capitalization issuers. May also invest in debt securities, such as bonds and debentures, but does not currently emphasize these investments. - ------------------------------------------------------------------------------------------------------------------------------- ING PIMCO CORE BOND PORTFOLIO (Class S) Seeks maximum total return, consistent with preservation of INVESTMENT ADVISER: Directed Services, Inc. capital and prudent investment management. Invests, under INVESTMENT SUBADVISER: Pacific Investment Management normal circumstances, at least 80% of its net assets (plus Company LLC borrowings for investment purposes) in a diversified portfolio of fixed income instruments of varying maturities. - -------------------------------------------------------------------------------------------------------------------------------
B6 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING PIMCO HIGH YIELD PORTFOLIO (Class S) Seeks maximum total return, consistent with preservation of INVESTMENT ADVISER: Directed Services, Inc. capital and prudent investment management. Normally INVESTMENT SUBADVISER: Pacific Investment Management invests at least 80% of its net assets (plus borrowings for Company LLC investment purposes) in a diversified portfolio of high yield securities ("junk bonds") rated below investment grade but rated at least CCC/Caa by Moody's Investors Service, Inc., Standard and Poor's Rating Service, or Fitch, or if unrated, determined by PIMCO to be of comparable quality, subject to a maximum of 5% of total assets in CCC/Caa securities, determined at the time of investment. - ------------------------------------------------------------------------------------------------------------------------------- ING PIONEER FUND PORTFOLIO (Class S) Seeks reasonable income and capital growth. Invests in a INVESTMENT ADVISER: Directed Services, Inc. broad list of carefully selected securities believed to be INVESTMENT SUBADVISER: Pioneer Investment Management, Inc. reasonably priced, rather than in securities whose prices reflect a premium resulting from their current market popularity. Invests the major portion of its assets in equity securities, primarily of U.S. issuers. - ------------------------------------------------------------------------------------------------------------------------------- ING PIONEER MID CAP VALUE PORTFOLIO (Class S) Seeks capital appreciation. Normally invests at least 80% INVESTMENT ADVISER: Directed Services, Inc. of its total assets in equity securities of mid-size INVESTMENT SUBADVISER: Pioneer Investment Management, Inc. companies, that is companies with market values within the range of market values of companies included in the Russell Midcap Value Index. - ------------------------------------------------------------------------------------------------------------------------------- ING SALOMON BROTHERS ALL CAP PORTFOLIO (Class S) A non-diversified Portfolio that seeks capital appreciation INVESTMENT ADVISER: Directed Services, Inc. through investment in securities which it believes have INVESTMENT SUBADVISER: Salomon Brothers Asset Management, above-average capital appreciation potential. Invests Inc. primarily in common stocks and common stock equivalents, such as preferred stocks and securities convertible into common stocks, of companies it believes are undervalued in the marketplace. - ------------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------- ING T. ROWE PRICE CAPITAL APPRECIATION PORTFOLIO Seeks, over the long-term, a high total investment return, (Class S) consistent with the preservation of capital and prudent INVESTMENT ADVISER: Directed Services, Inc. investment risk. Pursues an active asset allocation INVESTMENT SUBADVISER: T. Rowe Price Associates, Inc. strategy whereby investments are allocated among three asset classes - equity securities, debt securities and money market instruments. May invest up to 25% of its net assets in foreign equity securities. - ------------------------------------------------------------------------------------------------------------------------------- ING T. ROWE PRICE EQUITY INCOME PORTFOLIO Seeks substantial dividend income as well as long-term (Class S) growth of capital. Normally invests at least 80% of its INVESTMENT ADVISER: Directed Services, Inc. assets in common stocks, with 65% in the common stocks of INVESTMENT SUBADVISER: T. Rowe Price Associates, Inc. well-established companies paying above-average dividends. May also invest in convertible securities, warrants and preferred stocks, foreign securities, debt securities including high-yield debt securities and future and options. - -------------------------------------------------------------------------------------------------------------------------------
B7 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING TEMPLETON GLOBAL GROWTH PORTFOLIO (Class S)* Seeks capital appreciation. Current income is only an (formerly ING Capital Guardian Managed Global Portfolio) incidental consideration. Invests primarily in common INVESTMENT ADVISER: Directed Services, Inc. stocks traded in securities markets throughout the world. INVESTMENT SUBADVISER: Templeton Global Advisors Limited* May invest up to 100% of its total assets in securities *NAME CHANGE AND SUBADVISER CHANGE EFFECTIVE 12/05/05 traded in securities markets outside the United States. Generally invests at least 65% of its total assets in at least three different countries, one of which may be the United States. - ------------------------------------------------------------------------------------------------------------------------------- ING UBS U.S. ALLOCATION PORTFOLIO (Class S) Seeks to maximize total return over the long term by INVESTMENT ADVISER: Directed Services, Inc. allocating its assets among stocks, bonds, short-term INVESTMENT SUBADVISER: UBS Global Asset Management instruments and other investments. Allocates its assets (Americas) Inc. among the following classes, or types, of investments: stocks, bonds, and short-term money market debt obligations. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN EQUITY GROWTH PORTFOLIO Seeks long-term capital appreciation. Under normal (Class S) circumstances, at least 80% of the net assets of the INVESTMENT ADVISER: Directed Services, Inc. Portfolio will be invested in equity securities (plus INVESTMENT SUBADVISER: Van Kampen borrowings for investment purposes). Invests primarily in growth-oriented companies. May invest, to a limited extent, in foreign companies that are listed on U.S. exchanges or traded in U.S. markets. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN GLOBAL FRANCHISE PORTFOLIO A non-diversified Portfolio that seeks long-term capital (Class S) appreciation. Invests primarily in equity securities of INVESTMENT ADVISER: Directed Services, Inc. issuers located throughout the world that it believes have, INVESTMENT SUBADVISER: Van Kampen among other things, resilient business franchises and growth potential. Under normal market conditions, invests at least 65% of its total assets in securities of issuers from at least three different countries, which may include the United States. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN GROWTH AND INCOME PORTFOLIO Seeks long-term growth of capital and income. Under normal (Class S) market conditions, investing primarily in what it believes INVESTMENT ADVISER: Directed Services, Inc. to be income-producing equity securities, including common INVESTMENT SUBADVISER: Van Kampen stocks and convertible securities; although investments are also made in non-convertible preferred stocks and debt securities rated "investment grade," which are securities rated within the four highest grades assigned by Standard & Poor's or by Moody's Investors Service, Inc. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN REAL ESTATE PORTFOLIO (Class S) A non-diversified Portfolio that seeks capital appreciation INVESTMENT ADVISER: Directed Services, Inc. and secondarily seeks current income. Invests at least 80% INVESTMENT SUBADVISER: Van Kampen of its assets in equity securities of companies in the U.S. real estate industry that are listed on national exchanges or the National Association of Securities Dealers Automated Quotation System ("NASDAQ"). - -------------------------------------------------------------------------------------------------------------------------------
B8 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING VP INDEX PLUS INTERNATIONAL EQUITY PORTFOLIO (Class S)* Seeks to out perform the total return performance of the INVESTMENT ADVISER: ING Investments, LLC. Standard & Poor's 500 Composite Stock Price Index (S&P 500 INVESTMENT SUBADVISER: ING Investment Management Advisors, Index), while maintaining a market level of risk. B.V. *PORTFOLIO AVAILABLE 12/05/05 - ------------------------------------------------------------------------------------------------------------------------------- ING WELLS FARGO MID CAP DISCIPLINED PORTFOLIO Seeks long-term capital growth. Normally invests at least (Class S) 80% of its net assets (plus any borrowings for investment (formerly ING Jennison Equity Opportunities Portfolio) purposes) in securities of mid-capitalization companies. INVESTMENT ADVISER: Directed Services, Inc. The Portfolio manager defines mid-capitalization companies INVESTMENT SUBADVISER: Wells Capital Management, Inc. as those with market capitalizations within the range of companies comprising the Russell Midcap (R) Value Index at the time of purchase. - ------------------------------------------------------------------------------------------------------------------------------- ING WELLS FARGO SMALL CAP DISCIPLINED PORTFOLIO (Class S)* A non-diversified Portfolio that seeks capital appreciation INVESTMENT ADVISER: Directed Services, Inc. and secondarily seeks current income. Invests at least 80% INVESTMENT SUBADVISER: Wells Fargo Funds Management, LLC of its assets in equity securities of companies in the U.S. *PORTFOLIO AVAILABLE 12/05/05 real estate industry that are listed on national exchanges or the National Association of Securities Dealers Automated Quotation System ("NASDAQ"). - ------------------------------------------------------------------------------------------------------------------------------- ING PARTNERS, INC. 151 Farmington Avenue, Hartford, CT 06156-8962 - ------------------------------------------------------------------------------------------------------------------------------- ING BARON SMALL CAP GROWTH PORTFOLIO (Service Class) Seeks capital appreciation. Invests primarily (at least 80% INVESTMENT ADVISER: ING Life Insurance and Annuity Co. of total assets under normal circumstances) in securities INVESTMENT SUBADVISER: Bamco, Inc. of smaller companies with market values under $2.5 billion as measured at the time of purchase. - ------------------------------------------------------------------------------------------------------------------------------- ING DAVIS VENTURE VALUE PORTFOLIO (Service Class)* Seeks long-term growth of capital. Under normal INVESTMENT ADVISER: Directed Services, Inc. circumstances, invests majority of assets in equity INVESTMENT SUBADVISER: Davis Selected Advisers L.P securities issued by large companies with market *PORTFOLIO AVAILABLE 12/05/05 capitalizations of at least 10 billion. May invest a limited portion of its assets in companies of any size in foreign securities and may invest in non-equity securities. - ------------------------------------------------------------------------------------------------------------------------------- ING FUNDAMENTAL RESEARCH PORTFOLIO (Service Class) Seeks to maximize total return through investments in a INVESTMENT ADVISER: ING Life Insurance and Annuity Co. diversified portfolio of common stocks and securities INVESTMENT SUBADVISER: ING Investment Management Co. convertible into common stock. Prior to July 5, 2005, invests at least 80% of assets in stocks included in the S&P 500 Index. Effective July 5, 2005, will invest at least 65% of total assets in common stocks and securities convertible into common stocks. May invest principally in common stocks having significant potential for capital appreciation emphasizing stocks of larger companies. May also invest a portion of assets in stocks of mid-sized companies, and up to 25% of assets in stocks of foreign issuers, depending upon market conditions. May also invest in derivative instruments. - -------------------------------------------------------------------------------------------------------------------------------
B9 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING JPMORGAN FLEMING INTERNATIONAL PORTFOLIO Seeks long-term growth of capital. Invests primarily (at (Service Class) least 65% of total assets) in the equity securities of INVESTMENT ADVISER: ING Life Insurance and Annuity Company foreign companies that the subadviser believes have high INVESTMENT SUBADVISER: J.P. Morgan Fleming Asset Management growth potential. Will normally invest in securities of at (London) Ltd. least three different countries other than the U.S. and will invest in both developed and developing markets. - ------------------------------------------------------------------------------------------------------------------------------- ING OPPENHEIMER GLOBAL PORTFOLIO (Service Class) Seeks capital appreciation. Invests mainly in common stocks INVESTMENT ADVISER: ING Life Insurance and Annuity Company of companies in the U.S. and foreign countries. Can invest INVESTMENT SUBADVISER: OppenheimerFund, Inc. without limit in foreign securities in any country, including countries with emerging markets. Currently emphasizes investments in developed markets such as the United States, Western European countries and Japan. May invest in companies of any size, but currently focuses its investments in mid- and large-cap companies. Normally will invest in at least three countries (one of which may be the United States). - ------------------------------------------------------------------------------------------------------------------------------- ING SALOMON BROTHERS AGGRESSIVE GROWTH PORTFOLIO Seeks long-term growth of capital. Invests primarily (at (Service Class) least 80% of net assets under normal circumstances) in INVESTMENT ADVISER: ING Life Insurance and Annuity Company common stocks and related securities, such as preferred INVESTMENT SUBADVISER: Salomon Brothers Asset Management stock, convertible securities and depositary receipts, of Inc. emerging growth companies. May invest in foreign securities (including emerging market securities). - ------------------------------------------------------------------------------------------------------------------------------- ING UBS U.S. LARGE CAP EQUITY PORTFOLIO Seeks long-term growth of capital and future income. Under (Service Class) normal circumstances, invests at least 80% of net assets INVESTMENT ADVISER: ING Life Insurance and Annuity Company (plus borrowings for investment purposes, if any) in equity INVESTMENT SUBADVISER: UBS Global Asset Management securities of U.S. large capitalization companies. Investments in equity securities may include dividend-paying securities, common stock and preferred stock. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN COMSTOCK PORTFOLIO (Service Class) Seeks capital growth and income. Invests in a portfolio of INVESTMENT ADVISER: ING Life Insurance and Annuity Company equity securities, including common stocks, preferred INVESTMENT SUBADVISER: Van Kampen stocks and securities convertible into common and preferred stocks. May invest up to 25% of total assets in securities of foreign issuers and may purchase and sell certain derivative instruments, such as options, futures and options on futures, for various portfolio management purposes. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN EQUITY AND INCOME PORTFOLIO (Service Class) Seeks total return, consisting of long-term capital INVESTMENT ADVISER: ING Life Insurance and Annuity Company appreciation and current income. Normally invests at least INVESTMENT SUBADVISER: Van Kampen 80% of net assets (plus any borrowings for investment purposes) in equity and income securities at the time of investment. Normally invests at least 65% of assets in income producing equity instruments (including common stocks, preferred stocks and convertible securities) and investment grade quality debt securities. May invest up to 25% of total assets in securities of foreign issuers. May purchase and sell certain derivative instruments, such as options, futures contracts, and options on futures contracts, for various portfolio management purposes, including to earn income, to facilitate portfolio management and to mitigate risks. - -------------------------------------------------------------------------------------------------------------------------------
B10 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING VARIABLE INSURANCE TRUST 7337 E. Doubletree Ranch Road, Scottsdale, AZ 85258 - ------------------------------------------------------------------------------------------------------------------------------- ING VP GLOBAL EQUITY DIVIDEND PORTFOLIO Seeks growth of capital with dividend income as a secondary (formerly ING VP Worldwide Growth Portfolio) consideration. Normally invests at least 80% of assets in INVESTMENT ADVISER: ING Investments, LLC equity securities of dividend paying companies. At least INVESTMENT SUBADVISER: ING Investment Management Co. 65% of assets will be invested in equity securities of issuers in at least three countries, one of which may be the U.S., with at least 75% of total assets in common and preferred stocks, warrants and convertible securities. May invest in companies located in countries with emerging securities markets when the fund's subadviser believes they present attractive investment opportunities. - ------------------------------------------------------------------------------------------------------------------------------- ING VARIABLE PORTFOLIOS, INC. 7337 E. Doubletree Ranch Road, Scottsdale, AZ 85258 - ------------------------------------------------------------------------------------------------------------------------------- ING VP INDEX PLUS LARGECAP PORTFOLIO (Class S) Seeks to outperform the total return performance of the INVESTMENT ADVISER: ING Investments, LLC Standard & Poor's 500 Composite Stock Price Index (S&P 500 INVESTMENT SUBADVISER: ING Investment Index), while maintaining a market level of risk. Invests Management Co., at least 80% of assets in stocks included in the S&P 500 Index. The subadviser's objective is to overweight those stocks in the S&P 500 Index that it believes will outperform the index and underweight (or avoid altogether) those stocks it believes will underperform the index. May invest in derivatives. - ------------------------------------------------------------------------------------------------------------------------------- ING VP INDEX PLUS MIDCAP PORTFOLIO (Class S) Seeks to outperform the total return performance of the INVESTMENT ADVISOR: ING Investments, LLC Standard & Poor's MidCap 400 Index (S&P MidCap 400 Index), INVESTMENT SUBADVISER: ING Investment Management Co. while maintaining a market level of risk. Invests at least 80% of assets in stocks included in the S&P MidCap 400 Index. The subadviser's objective is to overweight those stocks in the S&P MidCap 400 Index that it believes will outperform the index and underweight (or avoid altogether) those stocks that it believes will underperform the index. May invest in derivatives. - ------------------------------------------------------------------------------------------------------------------------------- ING VP INDEX PLUS SMALLCAP PORTFOLIO (Class S) Seeks to outperform the total return performance of the INVESTMENT ADVISOR: ING Investments, LLC Standard & Poor's SmallCap 600 Index (S&P 600 Index), while INVESTMENT SUBADVISER: ING Investment Management Co. maintaining a market level of risk. Invests at least 80% of assets in stocks included in the S&P 600 Index. The subadviser's objective is to overweight those stocks in the S&P 600 Index that it believes will outperform the index and underweight (or avoid altogether) those stocks that it believes will underperform the index. May invest in derivatives. - ------------------------------------------------------------------------------------------------------------------------------- ING VARIABLE PRODUCTS TRUST 7337 E. Doubletree Ranch Road, Scottsdale, AZ 85258 - ------------------------------------------------------------------------------------------------------------------------------- ING VP FINANCIAL SERVICES PORTFOLIO (Class S) Seeks long-term capital appreciation. Under normal INVESTMENT ADVISER: ING Investments, LLC conditions, invests at least 80% of assets in equity INVESTMENT SUBADVISER: ING Investment Management Co. securities and equity equivalent securities of companies principally engaged in the financial services industry. Equity securities in which the Portfolio invests are normally common stocks, but may also include preferred stocks, warrants and convertible securities. May invest in initial public offerings. - -------------------------------------------------------------------------------------------------------------------------------
B11 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING VP SMALLCAP OPPORTUNITIES PORTFOLIO (Class S) Seeks long-term capital appreciation. Normally invests at INVESTMENT ADVISER: ING Investments, LLC least 80% of assets in the common stock of smaller, INVESTMENT SUBADVISER: ING Investment Management Co. lesser-known U.S. companies that the sub-adviser believes have above average prospects for growth. For this Portfolio, smaller companies are those with market capitalizations that fall within the range of companies in the Russell 2000 Growth Index. - ------------------------------------------------------------------------------------------------------------------------------- ING VP INTERMEDIATE BOND PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------------- ING VP INTERMEDIATE BOND PORTFOLIO (Class S) Seeks to maximize total return consistent with reasonable (formerly ING VP Bond Portfolio) risk, through investment in a diversified portfolio INVESTMENT ADVISER: ING Investments, LLC consisting primarily of debt securities. It is anticipated INVESTMENT SUBADVISER: ING Investment that capital appreciation and investment income will both Management Co., be major factors in achieving total return. Under normal market conditions, the Portfolio invests at least 80% of its assets in a portfolio of bonds, including but not limited to corporate, government and mortgage bonds, which, at the time of investment, are rated investment grade or have an equivalent rating by a nationally recognized statistical rating organization, or of comparable quality if unrated. May also invest in: preferred stocks; high quality money market instruments; municipal bonds; debt securities of foreign issuers; mortgage- and asset-backed securities; and options and futures contracts involving securities, securities indices and interest rates. Although the portfolio may invest in high yield debt securities rated below investment grade, it seeks to maintain a minimum average portfolio quality of at least investment grade. - ------------------------------------------------------------------------------------------------------------------------------- AIM VARIABLE INSURANCE FUNDS 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173 - ------------------------------------------------------------------------------------------------------------------------------- AIM V.I. LEISURE FUND (Series I) Seeks capital growth. Normally invests at least 80% of net INVESTMENT ADVISER: A I M Advisors, Inc. assets in the equity securities and equity-related instruments of companies engaged in the design, production, and distribution of products related to the leisure activities. - ------------------------------------------------------------------------------------------------------------------------------- FIDELITY(R) VARIABLE INSURANCE PRODUCTS 82 Devonshire Street, Boston, MA 02109 - ------------------------------------------------------------------------------------------------------------------------------- FIDELITY(R) VIP CONTRAFUND PORTFOLIO (Service Class 2) Seeks long-term capital appreciation. Normally invests INVESTMENT ADVISER: Fidelity Management & Research Co. primarily in common stocks of companies whose value the INVESTMENT SUBADVISER: FMR Co., Inc. Portfolio's investment adviser believes is not fully recognized by the public. - ------------------------------------------------------------------------------------------------------------------------------- FIDELITY(R) VIP EQUITY-INCOME PORTFOLIO Seeks reasonable income. Also considers the potential for (Service Class 2) capital appreciation. Seeks to achieve a yield which INVESTMENT ADVISER: Fidelity Management & Research Co. exceeds the composite yield on the securities comprising INVESTMENT SUBADVISER: FMR Co., Inc. the Standard & Poor's 500(SM) Index. Normally invests at least 80% of total assets in income-producing equity securities (which tends to lead to investments in large cap "value" stocks). - ------------------------------------------------------------------------------------------------------------------------------- LIBERTY VARIABLE INSURANCE TRUST 600 Atlantic Avenue, Boston, MA 02210 - -------------------------------------------------------------------------------------------------------------------------------
B12 WF Landmark - 136960
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- COLONIAL SMALL CAP VALUE FUND (Class B) The Fund seeks long-term growth by investing primarily in INVESTMENT ADVISER: Columbia Management Advisers, Inc. smaller capitalization (small-cap) equities. - ------------------------------------------------------------------------------------------------------------------------------- PROFUNDS VP 3435 Stelzer Road, Suite 1000, P.O. Box 182100, Columbus, OH 43218-2000 - ------------------------------------------------------------------------------------------------------------------------------- PROFUND VP BULL Seeks daily investment results, before fees and expenses, INVESTMENT ADVISER: ProFund Advisors LLC that correspond to the daily performance of the S&P 500 Index. - ------------------------------------------------------------------------------------------------------------------------------- PROFUND VP EUROPE 30 Seeks daily investment results, before fees and expenses, INVESTMENT ADVISER: ProFund Advisors LLC that correspond to the daily performance of the ProFunds Europe 30 Index. - ------------------------------------------------------------------------------------------------------------------------------- PROFUND VP RISING RATES OPPORTUNITY Seeks daily investment results, before fees and expenses, INVESTMENT ADVISER: ProFund Advisors LLC that correspond to one and one-quarter times (125%) the inverse (opposite) of the daily price movement of the most recently issued 30-year U.S. Treasury Bond ("Long Bond"). - ------------------------------------------------------------------------------------------------------------------------------- PROFUND VP SMALL-CAP Seeks daily investment results, before fees and expenses, INVESTMENT ADVISER: ProFund Advisors LLC that correspond to the daily performance of the Russell 2000 Index. - ------------------------------------------------------------------------------------------------------------------------------- WELLS FARGO VARIABLE TRUST 525 Market Street, San Francisco, CA - ------------------------------------------------------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND Seeks long-term total return, consistent with reasonable INVESTMENT ADVISER: Wells Fargo Funds Management, LLC risk. - ------------------------------------------------------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND Seeks long-term capital appreciation and above-average INVESTMENT ADVISER: Wells Fargo Funds Management, LLC dividend income. - ------------------------------------------------------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND Seeks maximum long-term total return, consistent with (formerly Wells Fargo VT Equity Value Fund) minimizing risk to principal. INVESTMENT ADVISER: Cooke & Bieler, LP - ------------------------------------------------------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND Seeks long-term capital appreciation. INVESTMENT ADVISER: Wells Fargo Funds Management, LLC - ------------------------------------------------------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT MONEY MARKET FUND Seeks current income, while preserving capital and INVESTMENT ADVISER: Wells Fargo Funds Management, LLC liquidity. - ------------------------------------------------------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND Seeks long-term capital appreciation. INVESTMENT ADVISER: Wells Fargo Funds Management, LLC - ------------------------------------------------------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND Seeks total return consisting of income and capital INVESTMENT ADVISER: Wells Fargo Funds Management, LLC appreciation. - -------------------------------------------------------------------------------------------------------------------------------
B13 WF Landmark - 136960 THE FOLLOWING PORTFOLIOS ARE WITHIN THE CURRENT GROUP OF ING PORTFOLIOS INCLUDED IN ONE OR MORE OF THE ING LIFESTYLE PORTFOLIOS: ING AllianceBernstein Mid Cap Growth Portfolio ING Salomon Brothers All Cap Portfolio ING JPMorgan Emerging Markets Equity Portfolio ING JPMorgan Fleming International Portfolio ING T. Rowe Price Growth Equity Portfolio ING JPMorgan Value Opportunities Portfolio ING Van Kampen Comstock Portfolio ING Julius Baer Foreign Portfolio ING Van Kampen Real Estate Portfolio ING Legg Mason Value Portfolio ING VP High Yield Bond Portfolio ING Liquid Assets Portfolio ING VP Index Plus LargeCap Portfolio ING Lord Abbett Affiliated Portfolio ING PIMCO Core Bond Portfolio ING VP Index Plus MidCap Portfolio ING PIMCO High Yield Portfolio ING VP Index Plus SmallCap Portfolio ING Pioneer Mid Cap Value Portfolio ING VP Intermediate Bond Portfolio ING Salomon Brothers Aggressive Growth Portfolio ING VP Small Company Portfolio
THE FOLLOWING PORTFOLIOS ARE THOSE WITHIN THE GROUP OF ING PORTFOLIOS THAT MAY BE INCLUDED IN ONE OR MORE OF THE ING LIFESTYLE PORTFOLIOS: ING Oppenheimer Strategic Income Portfolio ING AllianceBernstein Mid Cap Growth Portfolio ING PIMCO Core Bond Portfolio ING American Century Large Company Value Portfolio ING PIMCO High Yield Portfolio ING American Century Select Portfolio ING Pioneer Fund Portfolio ING Pioneer Mid Cap Value Portfolio ING Capital Guardian Small/Mid Cap Portfolio ING Salomon Brothers Aggressive Growth Portfolio ING Capital Guardian U.S. Equities Portfolio ING Salomon Brothers All Cap Portfolio ING Eagle Asset Capital Appreciation Portfolio ING Evergreen Omega Portfolio ING T. Rowe Price Capital Appreciation Portfolio ING FMR(SM) Diversified Mid Cap Portfolio ING T. Rowe Price Diversified Mid Cap Growth Portfolio ING FMR(SM) Earnings Growth Portfolio ING T. Rowe Price Equity Income Portfolio ING Fundamental Research Portfolio ING T. Rowe Price Growth Equity Portfolio ING Templeton Global Growth Portfolio ING International Portfolio ING UBS U.S. Large Cap Equity Portfolio ING Janus Contrarian Portfolio ING Van Kampen Comstock Portfolio ING Van Kampen Equity and Income Portfolio ING JPMorgan Emerging Markets Equity Portfolio ING Van Kampen Equity Growth Portfolio ING JPMorgan Fleming International Portfolio ING Van Kampen Global Franchise Portfolio ING JPMorgan Mid Cap Value Portfolio ING Van Kampen Growth and Income Portfolio ING JPMorgan Small Cap Equity Portfolio ING Van Kampen Real Estate Portfolio ING JPMorgan Value Opportunities Portfolio ING VP Balanced Portfolio ING Julius Baer Foreign Portfolio ING VP Growth and Income Portfolio ING Legg Mason Value Portfolio ING VP Growth Portfolio ING Liquid Asset Portfolio ING VP High Yield Bond Portfolio ING Lord Abbett Affiliated Portfolio ING VP Index Plus LargeCap Portfolio ING Marsico Growth Portfolio ING VP Index Plus MidCap Portfolio ING Marsico International Opportunities Portfolio ING VP Index Plus SmallCap Portfolio ING Mercury Large Cap Growth Portfolio ING VP Intermediate Bond Portfolio ING Mercury Large Cap Value Portfolio ING VP International Equity Portfolio ING MFS Capital Opportunities Portfolio ING VP MidCap Opportunities Portfolio ING MFS Mid Cap Growth Portfolio ING VP Real Estate Portfolio ING MFS Total Return Portfolio ING VP Small Company Portfolio ING OpCap Balanced Value Portfolio ING VP SmallCap Opportunities Portfolio ING Oppenheimer Global Portfolio ING VP Value Opportunity Portfolio ING Oppenheimer Main Street Portfolio(R) ING Wells Fargo Mid Cap Disciplined PortfoliO
B14 WF Landmark - 136960 ALL OF THE ABOVE PORTFOLIOS ARE SERVICE CLASS SHARES. THE PROSPECTUS FOR THE ING LIFESTYLE PORTFOLIOS CONTAINS INFORMATION ABOUT THE UNDERLYING PORTFOLIOS INCLUDED IN THE ING LIFESTYLE PORTFOLIOS. THE FOLLOWING PORTFOLIOS ARE INCLUDED IN ONE OR MORE OF THE MARKETPRO PORTFOLIOS: ING FMR Diversified MidCap Portfolio ING JPMorgan Fleming International Equity Portfolio ING Legg Mason Value Portfolio ING Marsico Growth ING Mercury Large Cap Value Portfolio ING Salomon Brothers Aggressive Growth Portfolio ING T. Rowe Price Capital Appreciation Portfolio ING Van Kampen Equity and Income Portfolio ING VP Intermediate Bond Portfolio The prospectus for the ING MarketPro Portfolio contains additional information about the underlying portfolios included in the ING MarketPro Portfolio. B15 WF Landmark - 136960 - -------------------------------------------------------------------------------- APPENDIX C - -------------------------------------------------------------------------------- FIXED ACCOUNT II Fixed Account II ("Fixed Account") is an optional fixed interest allocation offered during the accumulation phase of your variable annuity contract between you and ING USA Annuity and Life Insurance Company ("ING USA," the "Company," "we" or "our"). The Fixed Account, which is a segregated asset account of ING USA, provides a means for you to invest on a tax-deferred basis and earn a guaranteed interest for guaranteed interest periods (Fixed Interest Allocation(s)). We will credit your Fixed Interest Allocation(s) with a fixed rate of interest. We currently offer Fixed Interest Allocations with guaranteed interest periods that may vary by maturity, state of issue and rate. In addition, we may offer DCA Fixed Interest Allocations, which are 6-month and 1-year Fixed Interest Allocations available exclusively in connection with our dollar cost averaging program. We may offer additional guaranteed interest periods in some or all states, may not offer all guaranteed interest periods on all contracts or in all states and the rates for a given guaranteed interest period may vary among contracts. We set the interest rates periodically. We may credit a different interest rate for each interest period. The interest you earn in the Fixed Account as well as your principal is guaranteed by ING USA, as long as you do not take your money out before the maturity date for the applicable interest period. If you take your money out from a Fixed Interest Allocation more than 30 days before the applicable maturity date, we will apply a market value adjustment ("Market Value Adjustment"). A Market Value Adjustment could increase or decrease your contract value and/or the amount you take out. A surrender charge may also apply to withdrawals from your contract. You bear the risk that you may receive less than your principal because of the Market Value Adjustment. For contracts sold in some states, not all Fixed Interest Allocations are available. You have a right to return a contract for a refund as described in the prospectus. THE FIXED ACCOUNT You may allocate premium payments and transfer your Contract value to the guaranteed interest periods of the Fixed Account during the accumulation period as described in the prospectus. Every time you allocate money to the Fixed Account, we set up a Fixed Interest Allocation for the guaranteed interest period you select. We will credit your Fixed Interest Allocation with a guaranteed interest rate for the interest period you select, so long as you do not withdraw money from that Fixed Interest Allocation before the end of the guaranteed interest period. Each guaranteed interest period ends on its maturity date, which is the last day of the month in which the interest period is scheduled to expire. Your Contract value in the Fixed Account is the sum of your Fixed Interest Allocations and the interest credited as adjusted for any withdrawals, transfers or other charges we may impose, including any Market Value Adjustment. Your Fixed Interest Allocation will be credited with the guaranteed interest rate in effect for the guaranteed interest period you selected when we receive and accept your premium or reallocation of Contract value. We will credit interest daily at a rate that yields the quoted guaranteed interest rate. If you surrender, withdraw, transfer or annuitize your investment in a Fixed Interest Allocation more than 30 days before the end of the guaranteed interest period, we will apply a Market Value Adjustment to the transaction. A Market Value Adjustment could increase or decrease the amount you surrender, withdraw, transfer or annuitize, depending on current interest rates at the time of the transaction. You bear the risk that you may receive less than your principal because of the Market Value Adjustment. GUARANTEED INTEREST RATES Each Fixed Interest Allocation will have an interest rate that is guaranteed as long as you do not take your money out until its maturity date. We do not have a specific formula for establishing the guaranteed interest rates for the different guaranteed interest periods. We determine guaranteed interest rates at our sole discretion. We cannot predict the level of future interest rates. For more information see the prospectus for Fixed Account II. C1 WF Landmark - 136960 TRANSFERS FROM A FIXED INTEREST ALLOCATION You may transfer your Contract value in a Fixed Interest Allocation to one or more new Fixed Interest Allocations with new guaranteed interest periods, or to any of the subaccounts of ING USA's Separate Account B as described in the prospectus on the maturity date of a guaranteed interest period. The minimum amount that you can transfer to or from any Fixed Interest Allocation is $100. Transfers from a Fixed Interest Allocation may be subject to a Market Value Adjustment. If you have a special Fixed Interest Allocation that was offered exclusively with our dollar cost averaging program, canceling dollar cost averaging will cause a transfer of the entire Contract value in such Fixed Interest Allocation to the Wells Fargo VT Money Market subaccount, and such a transfer will be subject to a Market Value Adjustment. Please be aware that the benefit we pay under certain optional benefit riders will be adjusted by any transfers you make to and from the Fixed Interest Allocations during specified periods while the rider is in effect. See "Optional Riders" in the prospectus. WITHDRAWALS FROM A FIXED INTEREST ALLOCATION During the accumulation phase, you may withdraw a portion of your Contract value in any Fixed Interest Allocation. You may make systematic withdrawals of only the interest earned during the prior month, quarter or year, depending on the frequency chosen, from a Fixed Interest Allocation under our systematic withdrawal option. A withdrawal from a Fixed Interest Allocation may be subject to a Market Value Adjustment and a contract surrender charge. Be aware that withdrawals may have federal income tax consequences, including a 10% penalty tax, as well as state income tax consequences. Please be aware that the benefit we pay under any of the optional benefit riders will be reduced by any withdrawals you made from the Fixed Interest Allocations during the period while the rider is in effect. See "Optional Riders" in the prospectus. MARKET VALUE ADJUSTMENT A Market Value Adjustment may decrease, increase or have no effect on your Contract value. We will apply a Market Value Adjustment (i) whenever you withdraw or transfer money from a Fixed Interest Allocation (unless made within 30 days before the maturity date of the applicable guaranteed interest period, or under the systematic withdrawal or dollar cost averaging program) and (ii) if on the annuity start date a guaranteed interest period for any Fixed Interest Allocation does not end on or within 30 days of the annuity start date. A Market Value Adjustment may be positive, negative or result in no change. In general, if interest rates are rising, you bear the risk that any Market Value Adjustment will likely be negative and reduce your Contract value. On the other hand, if interest rates are falling, it is more likely that you will receive a positive Market Value Adjustment that increases your Contract value. In the event of a full surrender, transfer or annuitization from a Fixed Interest Allocation, we will add or subtract any Market Value Adjustment from the amount surrendered, transferred or annuitized. In the event of a partial withdrawal, transfer or annuitization, we will add or subtract any Market Value Adjustment from the total amount withdrawn, transferred or annuitized in order to provide the amount requested. If a negative Market Value Adjustment exceeds your Contract value in the Fixed Interest Allocation, we will consider your request to be a full surrender, transfer or annuitization of the Fixed Interest Allocation. CONTRACT VALUE IN THE FIXED INTEREST ALLOCATIONS On the contract date, the Contract value in any Fixed Interest Allocation in which you are invested is equal to the portion of the initial premium paid and designated for allocation to the Fixed Interest Allocation. On each business day after the contract date, we calculate the amount of Contract value in each Fixed Interest Allocation as follows: (1) We take the Contract value in the Fixed Interest Allocation at the end of the preceding business day. (2) We credit a daily rate of interest on (1) at the guaranteed rate since the preceding business day. C2 WF Landmark - 136960 (3) We add (1) and (2). (4) We subtract from (3) any transfers from that Fixed Interest Allocation. (5) We subtract from (4) any withdrawals, and then subtract any contract fees (including any rider charges) and premium taxes. Additional premium payments and transfers allocated to the Fixed Account will be placed in a new Fixed Interest Allocation. The Contract value on the date of allocation will be the amount allocated. Several examples which illustrate how the Market Value Adjustment works are included in the prospectus for the Fixed Account. CASH SURRENDER VALUE The cash surrender value is the amount you receive when you surrender the Contract. The cash surrender value of amounts allocated to the Fixed Account will fluctuate daily based on the interest credited to Fixed Interest Allocations, any Market Value Adjustment, and any surrender charge. We do not guarantee any minimum cash surrender value. On any date during the accumulation phase, we calculate the cash surrender value as follows: we start with your Contract value, then we adjust for any Market Value Adjustment, and then we deduct any surrender charge, any charge for premium taxes, the annual contract administrative fee (unless waived), and any optional benefit rider charge, and any other charges incurred but not yet deducted. DOLLAR COST AVERAGING FROM FIXED INTEREST ALLOCATIONS You may elect to participate in our dollar cost averaging program if you have at least $1,200 of Contract value in Fixed Account Interest Allocations with a guaranteed interest period of 1 year or less. The Fixed Interest Allocations serve as the source accounts from which we will, on a monthly basis, automatically transfer a set dollar amount of money to other Fixed Interest Allocations or contract investment portfolio subaccounts selected by you. The dollar cost averaging program is designed to lessen the impact of market fluctuation on your investment. Since we transfer the same dollar amount to subaccounts each month, more units of a subaccount are purchased if the value of its unit is low and fewer units are purchased if the value of its unit is high. Therefore, a lower than average value per unit may be achieved over the long term. However, we cannot guarantee this. When you elect the dollar cost averaging program, you are continuously investing in securities regardless of fluctuating price levels. You should consider your tolerance for investing through periods of fluctuating price levels. You elect the dollar amount you want transferred under this program. Each monthly transfer must be at least $100. You may change the transfer amount once each contract year. Transfers from a Fixed Interest Allocation under the dollar cost averaging program are not subject to a Market Value Adjustment. We may in the future offer additional subaccounts or withdraw any subaccount or Fixed Interest Allocation to or from the dollar cost averaging program or otherwise modify, suspend or terminate this program. Of course, such change will not affect any dollar cost averaging programs in operation at the time. SUSPENSION OF PAYMENTS We have the right to delay payment of amounts from a Fixed Interest Allocation for up to 6 months. MORE INFORMATION See the prospectus for Fixed Account II. C3 WF Landmark - 136960 - -------------------------------------------------------------------------------- APPENDIX D - -------------------------------------------------------------------------------- FIXED INTEREST DIVISION A Fixed Interest Division option is available through the group and individual deferred variable annuity contracts offered by ING USA Annuity and Life Insurance Company. The Fixed Interest Division is part of the ING USA General Account. Interests in the Fixed Interest Division have not been registered under the Securities Act of 1933, and neither the Fixed Interest Division nor the General Account is registered under the Investment Company Act of 1940. Interests in the Fixed Interest Division are offered in certain states through an Offering Brochure, dated April 29, 2005. The Fixed Interest Division is different from the Fixed Account which is described in the prospectus but which is not available in your state. If you are unsure whether the Fixed Account is available in your state, please contact our Customer Service Center at (800) 366-0066. When reading through the Prospectus, the Fixed Interest Division should be counted among the various investment options available for the allocation of your premiums, in lieu of the Fixed Account. The Fixed Interest Division may not be available in some states. Some restrictions may apply. You will find more complete information relating to the Fixed Interest Division in the Offering Brochure. Please read the Offering Brochure carefully before you invest in the Fixed Interest Division. D1 WF Landmark - 136960 - -------------------------------------------------------------------------------- APPENDIX E - -------------------------------------------------------------------------------- SURRENDER CHARGE FOR EXCESS WITHDRAWALS EXAMPLE The following assumes you made an initial premium payment of $25,000 and additional premium payments of $25,000 in each of the second and third contract years, for total premium payments under the Contract of $75,000. It also assumes a withdrawal at the beginning of the third contract year of 30% of the contract value of $90,000. In this example, $15,000 (the greater of earnings less any previous withdrawals, which is $90,000 - $75,000, which equals $15,000, and 10% of premium payments, which is $7,500) is the maximum free withdrawal amount that you may withdraw without a surrender charge. The total amount withdrawn from the contract would be $27,000 ($90,000 x .30). Therefore, $12,000 ($27,000 - $15,000) is considered an excess withdrawal and would be subject to a 4% surrender charge of $480 ($12,000 x .04). This example does not take into account any Market Value Adjustment or deduction of any premium taxes. E1 WF Landmark - 136960 - -------------------------------------------------------------------------------- APPENDIX F - -------------------------------------------------------------------------------- SPECIAL FUNDS AND EXCLUDED FUNDS EXAMPLES EXAMPLE #1: The following examples are intended to demonstrate the impact on your 7% Solution Death Benefit Element ("7% MGDB") of allocating your Contract Value to Special Funds.
- ------------------------------------------ ----------------------------------------- -------------------------------------- 7% MGDB IF 50% INVESTED 7% MGDB IF 0% INVESTED 7% MGDB IF 100% INVESTED IN SPECIAL FUNDS IN SPECIAL FUNDS IN SPECIAL FUNDS - ------------------------------------------ ----------------------------------------- -------------------------------------- END END END OF YR COVERED SPECIAL TOTAL OF YR COVERED SPECIAL TOTAL OF YR COVERED SPECIAL TOTAL 0 500 500 1,000 0 1,000 -- 1,000 0 0 1,000 1,000 1 535 500 1,035 1 1,070 -- 1,070 1 0 1,000 1,000 2 572 500 1,072 2 1,145 -- 1,145 2 0 1,000 1,000 3 613 500 1,113 3 1,225 -- 1,225 3 0 1,000 1,000 4 655 500 1,155 4 1,311 -- 1,311 4 0 1,000 1,000 5 701 500 1,201 5 1,403 -- 1,403 5 0 1,000 1,000 6 750 500 1,250 6 1,501 -- 1,501 6 0 1,000 1,000 7 803 500 1,303 7 1,606 -- 1,606 7 0 1,000 1,000 8 859 500 1,359 8 1,718 -- 1,718 8 0 1,000 1,000 9 919 500 1,419 9 1,838 -- 1,838 9 0 1,000 1,000 10 984 500 1,484 10 1,967 -- 1,967 10 0 1,000 1,000 - ------------------------------------------ ----------------------------------------- -------------------------------------- - ------------------------------------------ ----------------------------------------- 7% MGDB IF TRANSFERRED TO 7% MGDB IF TRANSFERRED TO SPECIAL FUNDS COVERED FUNDS AT THE BEGINNING OF YEAR 6 AT THE BEGINNING OF YEAR 6 - ------------------------------------------ ----------------------------------------- END END OF YR COVERED SPECIAL TOTAL OF YR COVERED SPECIAL TOTAL 0 1,000 -- 1,000 0 -- 1,000 1,000 1 1,070 -- 1,070 1 -- 1,000 1,000 2 1,145 -- 1,145 2 -- 1,000 1,000 3 1,225 -- 1,225 3 -- 1,000 1,000 4 1,311 -- 1,311 4 -- 1,000 1,000 5 1,403 -- 1,403 5 -- 1,000 1,000 6 -- 1,403 1,403 6 1,070 -- 1,070 7 -- 1,403 1,403 7 1,145 -- 1,145 8 -- 1,403 1,403 8 1,225 -- 1,225 9 -- 1,403 1,403 9 1,311 -- 1,311 10 -- 1,403 1,403 10 1,403 -- 1,403 - ------------------------------------------ -----------------------------------------
F1 WF Landmark - 136960 EXAMPLE #2: The following examples are intended to demonstrate the impact on your 7% Solution Death Benefit Element ("7% MGDB") of allocating your Contract Value to Excluded Funds. - ----------------------------------------------------------------------------- 7% MGDB IF 50% INVESTED IN EXCLUDED FUNDS - ----------------------------------------------------------------------------- Covered Excluded Total -------------------------------------------------------- End 7% MGDB Death of Yr AV "7% MGDB" AV 7% MGDB AV Benefit 0 500 500 500 500 1,000 1,000 1,000 1 535 510 535 510 1,045 1,020 1,045 2 572 490 572 490 1,062 980 1,062 3 613 520 613 520 1,133 1,040 1,133 4 655 550 655 550 1,205 1,100 1,205 5 701 450 701 450 1,151 900 1,151 6 750 525 750 525 1,275 1,050 1,275 7 803 600 803 600 1,403 1,200 1,403 8 859 750 859 750 1,609 1,500 1,609 9 919 500 919 500 1,419 1,000 1,419 10 984 300 984 300 1,284 600 1,284 - ----------------------------------------------------------------------------- - --------------------------------------- ------------------------------------- 7% MGDB IF 0% INVESTED 7% MGDB IF 100% INVESTED IN EXCLUDED FUNDS IN EXCLUDED FUNDS - --------------------------------------- ------------------------------------- Covered Excluded -------------------- --------------------- End Death End Death of Yr 7% MGDB AV Benefit of Yr "7% MGDB" AV Benefit 0 1,000 1,000 1,000 0 1,000 1,000 1,000 1 1,070 1,020 1,070 1 1,070 1,020 1,020 2 1,145 980 1,145 2 1,145 980 980 3 1,225 1,040 1,225 3 1,225 1,040 1,040 4 1,311 1,100 1,311 4 1,311 1,100 1,100 5 1,403 900 1,403 5 1,403 900 900 6 1,501 1,050 1,501 6 1,501 1,050 1,050 7 1,606 1,200 1,606 7 1,606 1,200 1,200 8 1,718 1,500 1,718 8 1,718 1,500 1,500 9 1,838 1,000 1,838 9 1,838 1,000 1,000 10 1,967 600 1,967 10 1,967 600 600 - --------------------------------------- ------------------------------------- Note: AV are hypothetical illustrative values. Not a projection. "7% MGDB" for Excluded funds is notional. Not payable as a benefit. Death Benefit for Excluded Funds equals Accumulation Value (AV) F2 WF Landmark - 136960 - ------------------------------------------------------------------------------- TRANSFER FROM COVERED FUNDS TO EXCLUDED FUNDS AT THE BEGINNING OF YEAR 6 - ------------------------------------------------------------------------------- Covered Excluded Total --------------------------------------------------------- End 7% "7% 7% Death of Yr MGDB AV MGDB" AV MGDB AV Benefit -- 1,000 1,000 -- -- 1,000 1,000 1,000 1 1,050 1,020 -- -- 1,050 1,020 1,050 2 1,103 980 -- -- 1,103 980 1,103 3 1,158 1,040 -- -- 1,158 1,040 1,158 4 1,216 1,100 -- -- 1,216 1,100 1,216 5 1,276 900 -- -- 1,276 900 1,276 6 -- -- 1,340 1,050 1,050 1,050 1,050 7 -- -- 1,407 1,200 1,200 1,200 1,200 8 -- -- 1,477 1,500 1,500 1,500 1,500 9 -- -- 1,551 1,000 1,000 1,000 1,000 10 -- -- 1,629 600 600 600 600 - ------------------------------------------------------------------------------- Note: 7% MGDB transferred to Excluded Funds equals the 7% MGDB in Covered Funds (or pro-rata portion thereof for partial transfer). Transfers from Special Funds to Excluded Funds work the same as Covered to Excluded (except 7% MGDB in Special Funds does not accumulate). - ------------------------------------------------------------------------------- TRANSFER FROM EXCLUDED FUNDS TO COVERED FUNDS AT THE BEGINNING OF YEAR 6 - ------------------------------------------------------------------------------- Covered Excluded Total --------------------------------------------------------- End 7% "7% 7% Death of Yr MGDB AV MGDB" AV MGDB AV Benefit -- -- -- 1,000 1,000 1,000 1,000 1,000 1 -- -- 1,050 1,020 1,020 1,020 1,020 2 -- -- 1,103 980 980 980 980 3 -- -- 1,158 1,040 1,040 1,040 1,040 4 -- -- 1,216 1,100 1,100 1,100 1,100 5 -- -- 1,276 900 900 900 900 6 945 1,050 -- -- 945 1,050 1,050 7 992 1,200 -- -- 992 1,200 1,200 8 1,042 1,500 -- -- 1,042 1,500 1,500 9 1,094 1,000 -- -- 1,094 1,000 1,094 10 1,149 600 -- -- 1,149 600 1,149 - ------------------------------------------------------------------------------- Note: 7% MGDB transferred to Covered Funds is the lesser of 7% MGDB in Excluded Funds (or portion thereof for partial transfer) and AV transferred to Covered Funds. Transfers from Excluded Funds to Special Funds work the same as Excluded to Covered (except 7% MGDB in Special Funds does not accumulate). F3 WF Landmark - 136960 - -------------------------------------------------------------------------------- APPENDIX G - -------------------------------------------------------------------------------- EXAMPLES OF MINIMUM GUARANTEED INCOME BENEFIT CALCULATION EXAMPLE 1 AGE CONTRACT WITHOUT CONTRACT WITH - --- THE MGIB RIDER THE MGIB RIDER -------------- -------------- 55 Initial Value $100,000 $100,000 Accumulation Rate 0.0% 0.00% Rider Charge 0.0% 0.75% 65 Contract Value $100,000 $89,167 Contract Annuity Factor 4.71 4.71 Monthly Income $471.00 $419.98 MGIB Rollup n/a $196,715 MGIB Ratchet n/a $100,000 MGIB Annuity Factor n/a 4.43 MGIB Income N/A $871.44 Income $471.00 $871.44 EXAMPLE 2 AGE CONTRACT WITHOUT CONTRACT WITH - --- THE MGIB RIDER THE MGIB RIDER -------------- -------------- 55 Initial Value $100,000 $100,000 Accumulation Rate 3.0% 3.0% Rider Charge 0.0% 0.75% 65 Contract Value $134,392 $122,019 Contract Annuity Factor 4.71 4.71 Monthly Income $632.98 $574.70 MGIB Rollup n/a $196,715 MGIB Ratchet n/a $122,019 MGIB Annuity Factor n/a 4.43 MGIB Income N/A $871.44 Income $632.98 $871.44 G1 WF Landmark - 136960 EXAMPLE 3 AGE CONTRACT WITHOUT CONTRACT WITH - --- THE MGIB RIDER THE MGIB RIDER -------------- -------------- 55 Initial Value $100,000 $100,000 Accumulation Rate 8.0% 8.0% Rider Charge 0.0% 0.75% 65 Contract Value $215,892 $200,423 Contract Annuity Factor 4.71 4.71 Monthly Income $1,016.85 $943.99 MGIB Rollup n/a $196,715 MGIB Ratchet n/a $200,423 MGIB Annuity Factor n/a 4.43 MGIB Income N/A $887.87 Income $1,016.85 $943.99 The Accumulation Rates shown under "Contract" are hypothetical and intended to illustrate various market conditions. These rates are assumed to be net of all fees and charges. Fees and charges are not assessed against the MGIB Rollup Rate. G2 WF Landmark - 136960 - -------------------------------------------------------------------------------- APPENDIX H - -------------------------------------------------------------------------------- ING LIFEPAY PARTIAL WITHDRAWAL AMOUNT EXAMPLES The following are examples of adjustments to the Maximum Annual Withdrawal ("MAW") amount for withdrawals in excess of the MAW: ILLUSTRATION 1: ADJUSTMENT TO THE MAXIMUM ANNUAL WITHDRAWAL ("MAW") AMOUNT FOR A WITHDRAWAL IN EXCESS OF THE MAW, INCLUDING SURRENDER AND/OR MVA CHARGES. Assume the MAW is $5,000. The first withdrawal taken during the contract year is $3,000 net, with $500 of surrender and/or MVA charges. The MAW is not exceeded. The next withdrawal taken during the contract year is $1,500 net, with $300 of surrender and/or MVA charges. The MAW is not exceeded because total net withdrawals, $4,500, do not exceed the MAW, $5,000. The next withdrawal taken during the contract year is $1,500 net, with $200 of surrender and/or MVA charges. Because total net withdrawals taken, $6,000, exceed the MAW, $5,000, then there is an adjustment to the MAW. Total gross withdrawals during the contract year are $7,000 ($3,000 + $500 + $1,500 + $300 + $1,500 + $200). The adjustment is the lesser of the amount by which the total gross withdrawals for the year exceed the MAW, $2,000, and the amount of the current gross withdrawal, $1,700. If the Account Value before this withdrawal is $50,000, then the MAW is reduced by 3.40% ($1,700 / $50,000) to $4,830 ((1 - 3.40%) * $5,000) ILLUSTRATION 2: ADJUSTMENT TO THE MAW AMOUNT FOR A WITHDRAWAL IN EXCESS OF THE MAW. Assume the MAW is $5,000. The first withdrawal taken during the contract year is $3,000 net, with $0 of surrender and/or MVA charges. The MAW is not exceeded. The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. The MAW is not exceeded because total net withdrawals, $4,500, do not exceed the MAW, $5,000. The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. Because total net withdrawals taken, $6,000, exceed the MAW, $5,000, there is an adjustment to the MAW. Total gross withdrawals during the contract year are $6,000 ($3,000 + $1,500 + $1,500). The adjustment is the lesser of the amount by which the total gross withdrawals for the year exceed the MAW, $1,000, and the amount of the current gross withdrawal, $1,500. If the Account Value after the part of the gross withdrawal that was within the MAW, $500, is $49,500, then the MAW is reduced by 2.02% ($1,000 / $49,500) to $4,899 ((1 - 2.02%) * $5,000) H1 WF Landmark - 136960 ILLUSTRATION 3: A WITHDRAWAL EXCEEDS THE MAW AMOUNT BUT DOES NOT EXCEED THE ADDITIONAL WITHDRAWAL AMOUNT ("AWA"). Assume the MAW is $5,000. On January 31, the RMD for the current calendar year applicable to this contract is determined to be $6,000. The AWA is set equal to the excess of this amount above the MAW, $1,000 ($6,000 - $5,000). The first withdrawal taken during the contract year is $3,000 net, with $0 of surrender and/or MVA charges. The MAW is not exceeded. The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. The MAW is not exceeded because total net withdrawals, $4,500, do not exceed the MAW, $5,000. The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. Total net withdrawals taken, $6,000, exceed the MAW, $5,000, however, the MAW is not adjusted until the AWA is exhausted. The amount by which total net withdrawals taken exceed the MAW, $1,000 ($6,000 - $5,000), is the same as the AWA, so no adjustment to the MAW is made. If total net withdrawals taken had exceeded the sum of the MAW and the AWA, then an adjustment would be made to the MAW. ILLUSTRATION 4: THE RESET OPTION IS UTILIZED. Assume the MAW is $5,000 and the MAW percentage is 5%. One year after the first withdrawal is taken, the contract value has increased to $120,000, and the Reset Option is utilized. The MAW is now $6,000 ($120,000 * 5%). One year after the Reset Option was first utilized, the contract value has increased further to $130,000. The Reset Option is utilized again, and the MAW is now $6,500 ($130,000 * 5%). H2 WF Landmark - 136960 - -------------------------------------------------------------------------------- APPENDIX I - -------------------------------------------------------------------------------- MINIMUM GUARANTEED WITHDRAWAL BENEFIT (APPLICABLE TO CONTRACTS ISSUED IN STATES WHERE ING LIFEPAY IS NOT AVAILABLE) MINIMUM GUARANTEED WITHDRAWAL BENEFIT RIDER (MGWB). The MGWB rider, marketed under the name, ING PrincipalGuard Withdrawal Benefit, is an optional benefit which guarantees that if your contract value is reduced to zero, you will receive periodic payments. The amount of the periodic payments is based on the amount in the MGWB Withdrawal Account. ONLY PREMIUMS ADDED TO YOUR CONTRACT DURING THE FIRST TWO-YEAR PERIOD AFTER YOUR RIDER DATE ARE INCLUDED IN THE MGWB WITHDRAWAL ACCOUNT. Any additional premium payments added after the second rider anniversary are not included in the MGWB Withdrawal Account. Thus, the MGWB rider may not be appropriate for you if you plan to add substantial premium payments after your second rider anniversary. The guarantee provides that, subject to the conditions described below, the amount you will receive in periodic payments is equal to your Eligible Payment Amount adjusted for any prior withdrawals. Your Eligible Payment Amount depends on when you purchase the MGWB rider and equals: 1) if you purchased the MGWB rider on the contract date: your premium payments received during the first two contract years; 2) if you purchased the MGWB rider after the contract date: your contract value on the Rider Date, including any premiums received that day, and any subsequent premium payments received during the two-year period commencing on the Rider Date. To maintain the guarantee, withdrawals in any contract year may not exceed 7% of your Eligible Payment Amount adjusted, as defined below. If your contract value is reduced to zero, your periodic payments will be 7% of your Eligible Payment Amount every year. Payments continue until your MGWB Withdrawal Account is reduced to zero. Please note that before Automatic Periodic Benefit status is reached, withdrawals in excess of the free withdrawal amount will be subject to surrender charges. Once your contract reaches Automatic Period Benefit Status, the periodic payments paid under the MGWB rider are not subject to surrender charges. The MGWB Withdrawal Account is equal to the Eligible Payment Amount adjusted for any withdrawals and transfers between Covered and Excluded Funds. The MGWB Withdrawal Account is tracked separately for Covered and Excluded Funds. The MGWB Withdrawal Account equals the sum of (a) the MGWB Withdrawal Account allocated to Covered Funds, and (b) the lesser of (i) the MGWB Withdrawal Account allocated to Excluded Funds and (ii) the contract value in Excluded Funds. Thus, investing in the Excluded Funds may limit the MGWB Withdrawal Account. No investment options are currently designated as Excluded Funds for the Minimum Guaranteed Withdrawal Benefit. The Maximum Annual Withdrawal Amount (or "MAW") is equal to 7% of the Eligible Payment Amount. Withdrawals from Covered Funds of up to the MAW will reduce the value of your MGWB Withdrawal Account by the dollar amount of the withdrawal. Any withdrawals from Covered Funds greater than the MAW will cause a reduction in the MGWB Withdrawal Account allocated to Covered Funds by the proportion that the excess withdrawal bears to the remaining contract value in Covered Funds after the withdrawal of the MAW. All withdrawals from Excluded Funds will reduce the value of the MGWB Withdrawal Account allocated to Excluded Funds on a pro-rata basis. If a single withdrawal involves both Covered and Excluded Funds and exceeds 7%, the withdrawal will be treated as taken first from Covered Funds. Any withdrawals greater than the MAW will also cause a reduction in the Eligible Payment Amount by the proportion that the excess portion of the withdrawal bears to the contract value remaining after withdrawal of the MAW at the time of the withdrawal. Please see Appendix J, MGWB Excess Withdrawal Amount Examples. I1 WF Landmark - 136960 Once your contract value is zero, any periodic payments paid under the MGWB rider also reduce the MGWB Withdrawal Account by the dollar amount of the payments. If a withdrawal reduces the MGWB Withdrawal Account to zero, the MGWB rider terminates and no further benefits are payable under the rider. Net transfers from Covered Funds to Excluded Funds will reduce the MGWB Withdrawal Account allocated to Covered Funds on a pro-rata basis. The resulting increase in the MGWB Withdrawal Account allocated to Excluded Funds equals the reduction in the MGWB Withdrawal Account for Covered Funds. Net transfers from Excluded Funds to Covered Funds will reduce the MGWB Withdrawal Account allocated to Excluded Funds on a pro-rata basis. The resulting increase in the MGWB Withdrawal Account allocated to Covered Funds will equal the lesser of the reduction in the MGWB Withdrawal Account for Excluded Funds and the net contract value transferred. YOU SHOULD NOT MAKE ANY WITHDRAWALS IF YOU WISH TO RETAIN THE OPTION TO ELECT THE STEP-UP BENEFIT (SEE BELOW). The MGWB Withdrawal Account is only a calculation which represents the remaining amount available for periodic payments. It does not represent a contract value, nor does it guarantee performance of the subaccounts in which you are invested. It will not affect your annuitization, surrender and death benefits. GUARANTEED WITHDRAWAL STATUS. You may continue to make withdrawals in any amount permitted under your Contract so long as your contract value is greater than zero. See "Withdrawals." However, making any withdrawals in any year greater than the MAW will reduce the Eligible Payment Amount and payments under the MGWB rider by the proportion that the withdrawal bears to the contract value at the time of the withdrawal. The MGWB rider will remain in force and you may continue to make withdrawals each year so long as: 1) your contract value is greater than zero; 2) your MGWB Withdrawal Account is greater than zero; 3) you have not reached your latest allowable annuity start date; 4) you have not elected to annuitize your Contract; and 5) you have not died (unless your spouse has elected to continue the Contract), changed the ownership of the Contract or surrendered the Contract. The standard Contract provision limiting withdrawals to no more than 90% of the cash surrender value is not applicable under the MGWB rider. AUTOMATIC PERIODIC BENEFIT STATUS. Under the MGWB rider, in the event your contract value is reduced to zero, your Contract is given Automatic Periodic Benefit Status, if: 1) your MGWB Withdrawal Account is greater than zero; 2) you have not reached your latest allowable annuity start date; 3) you have not elected to annuitize your Contract; and 4) you have not died, changed the ownership of the Contract or surrendered the Contract. Once your Contract is given Automatic Periodic Benefit Status, we will pay you the annual MGWB periodic payments, beginning on the next contract anniversary until the earliest of (i) your Contract's latest annuity start date, (ii) the death of the owner; or (iii) your MGWB Withdrawal Account is exhausted. These payments are equal to the lesser of the remaining MGWB Withdrawal Account or the MAW. We will reduce the MGWB Withdrawal Account by the amount of each payment. Once your Contract is given Automatic Periodic Benefit Status, we will not accept any additional premium payments in your Contract, and the Contract will not provide any benefits except those provided by the MGWB rider. Any other rider terminates. Your Contract will remain in Automatic Periodic Benefit Status until the earliest of (i) payment of all MGWB periodic payments, (ii) payment of the Commuted Value (defined below) or (iii) the owner's death. I2 WF Landmark - 136960 On the Contract's latest annuity start date, in lieu of making the remaining MGWB periodic payments, we will pay you the Commuted Value of your MGWB periodic payments remaining. We may, at our option, extend your annuity start date in order to continue the MGWB periodic payments. The Commuted Value is the present value of any then-remaining MGWB periodic payments at the current interest rate plus 0.50%. The current interest rate will be determined by the average of the Ask Yields for U.S. Treasury STRIPS as quoted by a national quoting service for period(s) applicable to the remaining payments. Once we pay you the last MGWB periodic payment or the Commuted Value, your Contract and the MGWB rider terminate. RESET OPTION. Beginning on the fifth contract anniversary following the Rider Date, if the contract value is greater than the MGWB Withdrawal Account, you may choose to reset the MGWB Rider. The effect will be to terminate the existing MGWB Rider and add a new MGWB Rider ("New Rider"). The MGWB Withdrawal Account under the New Rider will equal the contract value on the date the New Rider is effective. The charge for the MGWB under the New Rider and any right to reset again will be based on the terms of the New Rider when it is issued. We reserve the right to limit the reset election to contract anniversaries only. If you elect the Reset Option, the Step-Up benefit is not available. STEP-UP BENEFIT. If the Rider Date is the same as the Contract Date, beginning on the fifth contract anniversary following the Rider Date, if you have not made any previous withdrawals, you may elect to increase the MGWB Withdrawal Account, the adjusted Eligible Payment Amount and the MAW by a factor of 20%. This option is available whether or not the contract value is greater than the MGWB Withdrawal Account. If you elect the Step-Up Benefit: 1) we reserve the right to increase the charge for the MGWB Rider up to a maximum annual charge of 1.00% of contract value; 2) you must wait at least five years from the Step-Up date to elect the Reset Option. The Step-Up Benefit may be elected only one time under the MGWB Rider. We reserve the right to limit the election of the Step-Up Benefit to contract anniversaries only. Please note that if you have a third party investment advisor who charges a separate advisory fee, and you have chosen to use withdrawals from your contract to pay this fee, these will be treated as any other withdrawals, and the Step-Up Benefit will not be available. DEATH OF OWNER. BEFORE AUTOMATIC PERIODIC BENEFIT STATUS. The MGWB rider terminates on the first owner's date of death (death of annuitant, if there is a non-natural owner), but the death benefit is payable. However, if the beneficiary is the owner's spouse, the spouse elects to continue the Contract, and the contract value steps up to the minimum guaranteed death benefit, the MGWB Withdrawal Account and MAW are also reset. The MGWB charge will continue at the existing rate. Reset upon spousal continuation does not affect any then existing Reset Option. DURING AUTOMATIC PERIODIC BENEFIT STATUS. The death benefit payable during Automatic Periodic Benefit Status is your MGWB Withdrawal Account which equals the sum of the remaining MGWB periodic payments. PURCHASE. To purchase the MGWB rider, you must be age 80 or younger on the Rider Date. The MGWB rider must be purchased on the contract date. If the rider is not yet available in your state, the Company may in its discretion allow purchase of this rider during the 30-day period preceding the first contract anniversary after the date of this prospectus, or the date of state approval, whichever is later. I3 WF Landmark - 136960 MINIMUM GUARANTEED WITHDRAWAL BENEFIT RIDER(8):
- ------------------------------------------------------------------------------------------ MAXIMUM ANNUAL CHARGE IF STEP-UP AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE BENEFIT ELECTED(8) - ------------------------------------------------------------------------------------------ 0.45% of contract value 0.12% of contract value 1.00% of contract value - ------------------------------------------------------------------------------------------
(6) We deduct optional rider charges from the subaccounts in which you are invested on each quarterly contract anniversary and pro-rata on termination of the Contract; if the value in the subaccounts is insufficient, the optional rider charges will be deducted from the Fixed Interest Allocation(s) nearest maturity, and the amount deducted may be subject to a Market Value Adjustment. (7) Please see "Charges and Fees - Optional Rider Charges" and "Optional Riders" in the prospectus. (8) If you elect the Step-Up Benefit, we reserve the right to increase the charge for the MGWB to a maximum annual charge of 1.00% of contract value. Please see "Minimum Guarantee Withdrawal Benefit Step-Up Benefit, above." I4 WF Landmark - 136960 - -------------------------------------------------------------------------------- APPENDIX J - -------------------------------------------------------------------------------- MGWB EXCESS WITHDRAWAL AMOUNT EXAMPLES The following are examples of adjustments to the MGWB Withdrawal Account and the Maximum Annual Withdrawal Amount for Transfers and Withdrawals in Excess of the Maximum Annual Withdrawal Amount ("Excess Withdrawals Amount"): EXAMPLE #1: OWNER HAS INVESTED ONLY IN COVERED FUNDS Assume the Contract Value (CV) before the withdrawal is $100,000 and is invested in Covered Funds only, the Eligible Payment Amount (EPA) is $100,000, the Maximum Annual Withdrawal Amount (MAW) is $7,000, the MGWB Withdrawal Account allocated to Covered Funds ("Covered Withdrawal Account") is $120,000, and a withdrawal of $10,000 is made. The effect of the withdrawal is calculated as follows: The new CV is $90,000 ($100,000 - $10,000). The Excess Withdrawal Amount is $3,000 ($10,000 - $7,000). The Covered Withdrawal Account is first reduced dollar-for-dollar by the portion of the withdrawal up to the MAW to $113,000 ($120,000 - $7,000), and is then reduced pro-rata based on the ratio of the Excess Withdrawal Amount to the CV (after being reduced for the withdrawal up to the MAW) to $109,354.84 ($113,000 * (1 - $3,000 / $93,000)). The EPA is reduced pro-rata based on the ratio of the Excess Withdrawal Amount to the CV (after being reduced for the withdrawal up to the MAW) to $96,774.19 ($100,000 * (1 - $3,000 / $93,000)). The reduction to the EPA for withdrawals of Excess Withdrawal Amount is applied pro-rata regardless of whether CV is allocated to Covered or Excluded Funds. The MAW is then recalculated to be 7% of the new EPA, $6,774.19 ($96,774.19 * 7%). EXAMPLE #2: OWNER HAS INVESTED ONLY IN EXCLUDED FUNDS Assume the Contract Value (CV) before the withdrawal is $100,000 and is invested in Excluded Funds only, the Eligible Payment Amount (EPA) is $100,000, the Maximum Annual Withdrawal Amount (MAW) is $7,000, the MGWB Withdrawal Account allocated to Excluded Funds ("Excluded Withdrawal Account") is $120,000, and a withdrawal of $10,000 is made. The effect of the withdrawal is calculated as follows: The new CV is $90,000 ($100,000 - $10,000). The Excess Withdrawal Amount is $3,000 ($10,000 - $7.000). The Excluded Withdrawal Account is reduced pro-rata based on the ratio of the entire amount withdrawn to the CV (before the withdrawal) to $108,000 ($120,000 * (1 - $10,000 / $100,000)). The EPA is reduced pro-rata based on the ratio of the Excess Withdrawal Amount to the CV (after being reduced for the withdrawal up to the MAW) to $96,774.19 ($100,000 * (1 - $3,000/$93,000)). The reduction to the EPA for withdrawals of Excess Withdrawal Amount is applied pro-rata regardless of whether CV is allocated to Covered or Excluded Funds. The MAW is then recalculated to be 7% of the new EPA, $6,774.19 ($96,774.19 * 7%). J1 WF Landmark - 136960 EXAMPLE #3: OWNER HAS INVESTED IN BOTH COVERED AND EXCLUDED FUNDS Assume the Contract Value (CV) before the withdrawal is $100,000 and is invested $60,000 in Covered Funds and $40,000 in Excluded Funds. Further assume that the Eligible Payment Amount (EPA) is $100,000, the Maximum Annual Withdrawal Amount (MAW) is $7,000, the MGWB Withdrawal Account allocated to Covered Funds ("Covered Withdrawal Account") is $75,000, the MGWB Withdrawal Account allocated to Excluded Funds ("Excluded Withdrawal Account") is $45,000, and a withdrawal is made of $10,000 ($8,000 from Covered Funds and $2,000 from Excluded Funds). The new CV for Covered Funds is $52,000 ($60,000 - $8,000), and the new CV for Excluded Funds is $38,000 ($40,000 - $2,000). The Covered Withdrawal Account is first reduced dollar-for-dollar by the lesser of the MAW ($7,000) and the amount withdrawn from Covered Funds ($8,000) to $68,000 ($75,000 - $7,000), and is then reduced pro-rata based on the ratio of any Excess Withdrawal Amount from Covered Funds to the CV in Covered Funds (after being reduced for the withdrawal up to the MAW) to $66,716.98 ($68,000 * (1 - $1,000 / $53,000). The Excluded Withdrawal Account is reduced pro-rata based on the ratio of the amount withdrawn from Excluded Funds to the CV in Excluded Funds (prior to the withdrawal) to $42,750 ($45,000 * (1 - $2,000 / $40,000)). The EPA is reduced pro-rata based on the ratio of the Excess Withdrawal Amount to the CV (after being reduced for the withdrawal up to the MAW) to $96,774.19 ($100,000 * (1 - $3,000 / $93,000)). The reduction to the EPA for withdrawals of Excess Withdrawal Amount is applied pro-rata regardless of whether CV is allocated to Covered or Excluded Funds. The MAW is then recalculated to be 7% of the new EPA, $6,774.19 ($96,774.19 * 7%). EXAMPLE #4: OWNER TRANSFERS FUNDS FROM EXCLUDED FUNDS TO COVERED FUNDS Assume the Contract Value (CV) before the transfer is $100,000 and is invested $60,000 in Covered Funds and $40,000 in Excluded Funds. Further assume that the MGWB Withdrawal Account allocated to Covered Funds ("Covered Withdrawal Account") is $75,000, the MGWB Withdrawal Account allocated to Excluded Funds ("Excluded Withdrawal Account") is $45,000, and a transfer is made of $10,000 from Excluded Funds to Covered Funds. The new CV for Covered Funds is $70,000 ($60,000 + $10,000), and the new CV for Excluded Funds is $30,000 ($40,000 - $10,000). The Excluded Withdrawal Account is reduced pro-rata based on the ratio of the amount transferred from Excluded Funds to the CV in Excluded Funds (prior to the transfer) to $33,750 ($45,000 * (1 - $10,000 / $40,000)). The Covered Withdrawal Account is increased by the lesser of the reduction of the Excluded Withdrawal Account of $11,250 ($45,000 - $33,750) and the actual amount transferred of $10,000. Thus, the Covered Withdrawal Account is increased to $85,000 ($75,000 + $10,000). J2 WF Landmark - 136960 ING USA ANNUITY AND LIFE INSURANCE COMPANY ING USA Annuity and Life Insurance Company is a stock company domiciled in Iowa. WF Landmark - 136960 11/01/2005 - -------------------------------------------------------------------------------- ING USA ANNUITY AND LIFE INSURANCE COMPANY SEPARATE ACCOUNT B OF ING USA ANNUITY AND LIFE INSURANCE COMPANY DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY PROSPECTUS ING GOLDENSELECT LEGENDS - -------------------------------------------------------------------------------- NOVEMBER 1, 2005 This prospectus describes ING GoldenSelect Legends, a group and individual deferred variable annuity contract (the "Contract") offered by ING USA Annuity and Life Insurance Company ("ING USA," the "Company," "we," "us" or "our"). The Contract is available in connection with certain retirement plans that qualify for special federal income tax treatment ("qualified Contracts") as well as those that do not qualify for such treatment ("non-qualified Contracts"). The Contract provides a means for you to invest your premium payments in one or more mutual fund investment portfolios. You may also allocate premium payments to our Fixed Account with guaranteed interest periods. Your contract value will vary daily to reflect the investment performance of the investment portfolio(s) you select and any interest credited to your allocations in the Fixed Account. For Contracts sold in some states, not all Fixed Interest Allocations or subaccounts are available. The investment portfolios available under your Contract are listed on the next page. You have a right to return a Contract within 10 days after you receive it for a refund of the adjusted contract value (which may be more or less than the premium payments you paid), or if required by your state, the original amount of your premium payment. Longer free look periods apply in some states and in certain situations. REPLACING AN EXISTING ANNUITY WITH THE CONTRACT MAY NOT BE BENEFICIAL TO YOU. YOUR EXISTING ANNUITY MAY BE SUBJECT TO FEES OR PENALTIES ON SURRENDER, AND THE CONTRACT MAY HAVE NEW CHARGES. This prospectus provides information that you should know before investing and should be kept for future reference. A Statement of Additional Information ("SAI"), dated April 29, 2005, has been filed with the Securities and Exchange Commission ("SEC"). It is available without charge upon request. To obtain a copy of this document, write to our Customer Service Center at P.O. Box 9271, Des Moines, Iowa 50306-9271 or call (800) 366-0066, or access the SEC's website (http://www.sec.gov). The table of contents of the SAI is on the last page of this prospectus and the SAI is made part of this prospectus by reference. THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN ANY SUBACCOUNT THROUGH A TRUST OR FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED BY ANY BANK OR BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. - -------------------------------------------------------------------------------- THE INVESTMENT PORTFOLIOS ARE LISTED ON THE NEXT PAGE. - -------------------------------------------------------------------------------- Legends - 136958 The investment portfolios available under your Contract are: ING INVESTORS TRUST ING AllianceBernstein Mid Cap Growth Portfolio (Service 2) ING American Funds Growth Portfolio ING American Funds Growth-Income Portfolio ING American Funds International Portfolio ING Capital Guardian Small/Midcap Portfolio (Service 2) ING Capital Guardian U.S. Equities Portfolio (Service 2) ING Eagle Asset Capital Appreciation Portfolio (Service 2) ING Evergreen Omega Portfolio (Service 2) ING FMR(SM) Diversified Mid Cap Portfolio (Service 2) ING FMR(SM) Earnings Growth Portfolio (Service 2) ING Global Resources Portfolio (Service 2) ING Goldman Sachs Tollkeeper (SM) Portfolio (Service 2) ING Janus Contrarian Portfolio (Service 2) ING JPMorgan Emerging Markets Equity Portfolio (Service 2) ING JPMorgan Small Cap Equity Portfolio (Service 2) ING JPMorgan Value Opportunities Portfolio (Service 2) ING Julius Baer Foreign Portfolio (Service 2) ING Legg Mason Value Portfolio (Service 2) ING Liquid Assets Portfolio (Service 2) ING Lord Abbett Affiliated Portfolio (Service 2) ING MarketPro Portfolio (Service 2) ING Marsico Growth Portfolio (Service 2) ING Marsico International Opportunities Portfolio (Service Class) ING Mercury Large Cap Value Portfolio (Service 2) ING MFS Mid Cap Growth Portfolio (Service 2) ING MFS Total Return Portfolio (Service 2) ING Oppenheimer Main Street Portfolio (Service 2) ING PIMCO Core Bond Portfolio (Service 2) ING PIMCO High Yield Portfolio (Service) ING Pioneer Fund Portfolio (Service) ING Pioneer Mid Cap Value Portfolio (Service) ING Salomon Brothers All Cap Portfolio (Service 2) ING T. Rowe Price Capital Appreciation Portfolio (Service 2) ING T. Rowe Price Equity Income Portfolio (Service 2) ING Templeton Global Growth Portfolio (Service 2) ING UBS U.S. Allocation Portfolio (Service 2) ING Van Kampen Equity Growth Portfolio (Service 2) ING Van Kampen Global Franchise Portfolio (Service 2) ING Van Kampen Growth and Income Portfolio (Service 2) ING Van Kampen Real Estate Portfolio (Service 2) ING VP Index Plus International Equity Portfolio (Service 2) ING Wells Fargo Mid Cap Disciplines Portfolio (Service 2) ING Wells Fargo Small Cap Disciplines Portfolio (Service 2) ING PARTNERS, INC. ING Baron Small Cap Growth Portfolio (Service Class) ING Davis Venture Value Portfolio (Service 2) ING Fundamental Research Portfolio (Service Class) ING JPMorgan Fleming International Portfolio (Service Class) ING Oppenheimer Global Portfolio (Service Class) ING Salomon Brothers Aggressive Growth Portfolio (Service Class) ING UBS U.S. Large Cap Equity Portfolio (Service Class) ING Van Kampen Comstock Portfolio (Service Class) ING Van Kampen Equity and Income Portfolio (Service Class) ING VARIABLE INSURANCE TRUST ING GET U.S. Core Portfolio ING VP Global Equity Dividend Portfolio ING VARIABLE PORTFOLIOS, INC. ING VP Index Plus LargeCap Portfolio (Class S) ING VP Index Plus MidCap Portfolio (Class S) ING VP Index Plus SmallCap Portfolio (Class S) ING VARIABLE PRODUCTS TRUST ING VP Financial Services Portfolio (Class S) ING VP SmallCap Opportunities Portfolio (Class S) ING VP INTERMEDIATE BOND PORTFOLIO (CLASS S) AIM VARIABLE INSURANCE FUNDS AIM V.I. Leisure Fund (Series I) FIDELITY VARIABLE INSURANCE PRODUCTS PORTFOLIO Fidelity VIP Contrafund Portfolio (Service 2) Fidelity VIP Equity-Income Portfolio (Service 2) LIBERTY VARIABLE INSURANCE TRUST Colonial Small Cap Value Fund (Class B) PROFUNDS VP ProFund VP Bull ProFund VP Europe 30 ProFund VP Rising Rates Opportunity ProFund VP Small-Cap Legends - 136958 - -------------------------------------------------------------------------------- TABLE OF CONTENTS - -------------------------------------------------------------------------------- PAGE Index of Special Terms..................................................... ii Fees and Expenses.......................................................... 1 Condensed Financial Information............................................ 8 Accumulation Unit........................................................ 8 The Net Investment Factor................................................ 9 Performance Information.................................................. 9 Financial Statements..................................................... 10 ING USA Annuity and Life Insurance Company................................. 10 ING USA Separate Account B................................................. 10 The Trusts and Funds....................................................... 11 Covered Funds, Special Funds and Excluded Funds............................ 12 Charges and Fees........................................................... 12 Charge Deduction Subaccount.............................................. 13 Charges Deducted from the Contract Value................................. 13 Surrender Charge..................................................... 13 Waiver of Surrender Charge for Extended Medical Care................. 13 Free Withdrawal Amount............................................... 13 Surrender Charge for Excess Withdrawals.............................. 13 Premium Taxes........................................................ 14 Administrative Charge................................................ 14 Transfer Charge...................................................... 14 Charges Deducted from the Subaccounts.................................... 14 Mortality and Expense Risk Charge.................................... 14 Asset-Based Administrative Charge.................................... 15 Earnings Multiplier Benefit Charge................................... 15 Optional Rider Charges............................................... 15 Trust and Fund Expenses.................................................. 16 The Annuity Contract....................................................... 17 Contract Date and Contract Year ......................................... 18 Contract Owner........................................................... 18 Annuity Start Date....................................................... 18 Annuitant................................................................ 19 Beneficiary.............................................................. 19 Purchase and Availability of the Contract................................ 20 Crediting of Premium Payments............................................ 20 Administrative Procedures................................................ 22 Contract Value........................................................... 22 Cash Surrender Value..................................................... 22 Addition, Deletion or Substitution of Subaccounts and Other Changes...... 23 The Fixed Account........................................................ 23 Optional Riders.......................................................... 23 Other Contracts.......................................................... 32 Withdrawals................................................................ 32 Transfers Among Your Investments........................................... 36 Death Benefit Choices...................................................... 39 Death Benefit During the Accumulation Phase.............................. 39 Standard Death Benefit............................................... 40 Enhanced Death Benefit Options....................................... 41 Earnings Multiplier Benefit Rider.................................... 43 Death Benefit During the Income Phase.................................... 43 Continuation After Death -- Spouse....................................... 43 Continuation After Death -- Not a Spouse................................. 44 Required Distributions Upon Contract Owner's Death....................... 44 The Annuity Options........................................................ 45 Other Contract Provisions.................................................. 48 Other Information.......................................................... 51 Federal Tax Considerations................................................. 52 Statement of Additional Information Table of Contents........................................................SAI-1 Appendix A Condensed Financial Information.......................................... A1 Appendix B The Investment Portfolios................................................ B1 Appendix C Fixed Account II......................................................... C1 Appendix D Fixed Interest Division.................................................. D1 Appendix E Surrender Charge for Excess Withdrawals Example.......................... E1 Appendix F Special Funds and Excluded Funds Examples................................ F1 Appendix G Minimum Guaranteed Income Benefit Calculation Examples................... G1 Appendix H ING LifePay Withdrawal Examples.......................................... H1 Appendix I MGWB For Contracts In States Where ING LifePay Not Available............. I1 Appendix J MGWB Excess Withdrawal Amount Examples For Contracts In States Where ING LifePay Not Available........................................ J1 i Legends - 136958 - -------------------------------------------------------------------------------- INDEX OF SPECIAL TERMS - -------------------------------------------------------------------------------- The following special terms are used throughout this prospectus. Refer to the page(s) listed for an explanation of each term: -------------------------------------------------------------------- SPECIAL TERM PAGE -------------------------------------------------------------------- Accumulation Unit 8 -------------------------------------------------------------------- Annuitant 19 -------------------------------------------------------------------- Annuity Start Date 18 -------------------------------------------------------------------- Cash Surrender Value 22 -------------------------------------------------------------------- Contract Date 18 -------------------------------------------------------------------- Claim Date 39 -------------------------------------------------------------------- Contract Owner 18 -------------------------------------------------------------------- Contract Value 22 -------------------------------------------------------------------- Contract Year 18 -------------------------------------------------------------------- Covered Fund 12 -------------------------------------------------------------------- Earnings Multiplier Benefit 43 -------------------------------------------------------------------- Excluded Fund 12 -------------------------------------------------------------------- Free Withdrawal Amount 13 -------------------------------------------------------------------- Market Value Adjustment C1 -------------------------------------------------------------------- Max 7 Enhanced Death Benefit 43 -------------------------------------------------------------------- Net Investment Factor 9 -------------------------------------------------------------------- Net Rate of Return 9 -------------------------------------------------------------------- Quarterly Ratchet Enhanced Death Benefit 41 -------------------------------------------------------------------- Restricted Fund 11 -------------------------------------------------------------------- Rider Date 24 -------------------------------------------------------------------- 7% Solution Death Benefit Element 42 -------------------------------------------------------------------- Special Fund 12 -------------------------------------------------------------------- Standard Death Benefit 40 -------------------------------------------------------------------- The following terms as used in this prospectus have the same or substituted meanings as the corresponding terms currently used in the Contract: ------------------------------------------------------------------------ TERM USED IN THIS PROSPECTUS CORRESPONDING TERM USED IN THE CONTRACT ------------------------------------------------------------------------ Accumulation Unit Value Index of Investment Experience ------------------------------------------------------------------------ Annuity Start Date Annuity Commencement Date ------------------------------------------------------------------------ Contract Owner Owner or Certificate Owner ------------------------------------------------------------------------ Contract Value Accumulation Value ------------------------------------------------------------------------ Transfer Charge Excess Allocation Charge ------------------------------------------------------------------------ Fixed Interest Allocation Fixed Allocation ------------------------------------------------------------------------ Free Look Period Right to Examine Period ------------------------------------------------------------------------ Guaranteed Interest Period Guarantee Period ------------------------------------------------------------------------ ING LifePay Base MGWB Base ------------------------------------------------------------------------ Subaccount(s) Division(s) ------------------------------------------------------------------------ Net Investment Factor Experience Factor ------------------------------------------------------------------------ Regular Withdrawals Conventional Partial Withdrawals ------------------------------------------------------------------------ Withdrawals Partial Withdrawals ------------------------------------------------------------------------ ii Legends - 136958 - -------------------------------------------------------------------------------- FEES AND EXPENSES - -------------------------------------------------------------------------------- The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the Contract. The first table describes the fees and expenses that you will pay at the time that you buy the Contract, surrender the Contract, or transfer contract value between investment options. State premium taxes may also be deducted. CONTRACT OWNER TRANSACTION EXPENSES (1) Surrender Charge: COMPLETE YEARS ELAPSED 0 1 2 3 4+ SINCE PREMIUM PAYMENT SURRENDER CHARGE (AS A 6% 5% 4% 3% 0% PERCENTAGE OF PREMIUM PAYMENT) Transfer Charge (2).............................$25 per transfer, if you make more than 12 transfers in a contract year (1) If you invested in a Fixed Interest Allocation, a Market Value Adjustment may apply to certain transactions. This may increase or decrease your contract value and/or your transfer or surrender amount. (2) We currently do not impose this charge, but may do so in the future. The next table describes the fees and expenses that you will pay periodically during the time that you own the Contract, not including Trust or Fund fees and expenses. ANNUAL CONTRACT ADMINISTRATIVE CHARGE (3).................................. $30 (We waive this charge if the total of your premium payments is $100,000 or more or if your contract value at the end of a contract year is $100,000 or more.) (3) We deduct this charge on each contract anniversary and on surrender. SEPARATE ACCOUNT ANNUAL CHARGES (4) ------------------------------------------------------------------------- ENHANCED DEATH BENEFITS STANDARD ----------------------- DEATH QUARTERLY BENEFIT RATCHET MAX 7 ------------------------------------------------------------------------- Mortality & Expense Risk Charge 1.50% 1.75% 2.05% Asset-Based Administrative Charge 0.15% 0.15% 0.15% ---- ---- ---- Total 1.65% 1.90% 2.20% ------------------------------------------------------------------------- (4) As a percentage of average daily assets in each subaccount. The Separate Account Annual Charges are deducted daily. EARNINGS MULTIPLIER BENEFIT RIDER CHARGE (5) -------------------------------------------------------------------------- AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE -------------------------------------------------------------------------- 0.30% of contract value 0.08% of contract value -------------------------------------------------------------------------- (5) We deduct the rider charge from the subaccounts in which you are invested on each quarterly contract anniversary and pro-rata on termination of the Contract; if the value in the subaccounts is insufficient, the rider charge will be deducted from the Fixed Interest Allocation(s) nearest maturity, and the amount deducted may be subject to a Market Value Adjustment. 1 Legends - 136958 OPTIONAL RIDER CHARGES (6) MINIMUM GUARANTEED INCOME BENEFIT RIDER: -------------------------------------------------------------------------- AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE -------------------------------------------------------------------------- 0.75% of the MGIB Benefit Base(7) 0.19% of the MGIB Benefit Base(7) -------------------------------------------------------------------------- ING LIFEPAY MINIMUM GUARANTEED WITHDRAWAL BENEFIT RIDER(8):
----------------------------------------------------------------------------------------------------------- MAXIMUM ANNUAL CHARGE IF RESET AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE BENEFIT ELECTED(8) ----------------------------------------------------------------------------------------------------------- 0.50% of contract value 0.125% of contract value 1.20% of contract value -----------------------------------------------------------------------------------------------------------
(6) We deduct optional rider charges from the subaccounts in which you are invested on each quarterly contract anniversary, in arrears, and pro-rata on termination of the Contract; if the value in the subaccounts is insufficient, the optional rider charges will be deducted from the Fixed Interest Allocation(s) nearest maturity, and the amount deducted may be subject to a Market Value Adjustment. (7) Please see "Charges and Fees - Optional Rider Charges" and "Optional Riders" later in this prospectus. (8) If you elect the Reset Benefit on or after the fifth rider anniversary, we reserve the right to increase the charge for the ING LifePay rider to a maximum annual charge of 1.20% of contract value. Please see "ING LifePay Minimum Guarantee Withdrawal Benefit - ING LifePay Reset Option." TABLE OF SEPARATE ACCOUNT CHARGES This table shows the total charges as a percentage of contract value that you would pay if you elect the earnings multiplier benefit and the ING LifePay Withdrawal Benefit. ------------------------------------------------------------------------- ENHANCED DEATH BENEFITS STANDARD ----------------------- DEATH QUARTERLY BENEFIT RATCHET MAX 7 ------------------------------------------------------------------------- Mortality & Expense Risk Charge 1.40% 1.65% 1.95% Asset-Based Administrative Charge 0.15% 0.15% 0.15% Earning Multiplier Benefit Rider 0.30% 0.30% 0.30% ING LifePay Minimum Guaranteed Withdrawal Benefit Rider 0.50% 0.50% 0.50% ----- ----- ----- Total 2.35% 2.60% 2.90% ------------------------------------------------------------------------- If you elect the Minimum Guaranteed Income Benefit instead of the ING LifePay Withdrawal Benefit, your total separate account charges as a percentage of contract value would be as follows, but the Minimum Guaranteed Income Benefit charge of 0.75% of MGIB Benefit Base would be deducted in addition to these charges: ------------------------------------------------------------------------- ENHANCED DEATH BENEFITS STANDARD ----------------------- DEATH QUARTERLY BENEFIT RATCHET MAX 7 ------------------------------------------------------------------------- Mortality & Expense Risk Charge 1.40% 1.65% 1.95% Asset-Based Administrative Charge 0.15% 0.15% 0.15% Earning Multiplier Benefit Rider 0.30% 0.30% 0.30% ----- ----- ----- Total 1.85% 2.10% 2.40% ------------------------------------------------------------------------- 2 Legends - 136958 As noted in the expense examples below, your charges will be higher if you elect the Minimum Guaranteed Income Benefit than they would if you elect the ING LifePay Withdrawal Benefit. TRUST OR FUND EXPENSES The next item shows the minimum and maximum total operating expenses charged by the Trust or Fund that you may pay periodically during the time that you own the Contract. More detail concerning each Trust or Fund's fees and expenses is contained in the prospectus for each Trust or Fund.
------------------------------------------------------------------------------------------------------- TOTAL ANNUAL TRUST OR FUND OPERATING EXPENSES(9) MINIMUM MAXIMUM ------------------------------------------------------------------------------------------------------- (expenses that are deducted from Trust or Fund assets, including management fees, distribution and/or service (12b-1) fees(10), and other expenses): 0.69% 1.86% -------------------------------------------------------------------------------------------------------
(9) The minimum and maximum total operating expenses charged by a Trust or Fund including applicable expense reimbursement or fee waiver arrangements would be 0.69% to 1.78%. The expense reimbursement or fee arrangement reflected is contractual and expected to continue through May 1, 2006. (10) The Company may receive compensation from each of the funds or the funds' affiliates based on an annual percentage of the average net assets held in that fund by the Company. The percentage paid may vary from one fund company to another. For certain funds, some of this compensation may be paid out of 12b-1 fees or service fees that are deducted from fund assets. Any such fees deducted from fund assets are disclosed in the Fund or Trust prospectuses. The Company may also receive additional compensation from certain funds for administrative, recordkeeping or other services provided by the Company to the funds or the funds' affiliates. These additional payments are made by the funds or the funds' affiliates to the Company and do not increase, directly or indirectly, the fees and expenses shown above. The following table shows the annual operating expenses separately for each Trust or Fund. FUND EXPENSE TABLE (1), (2) The column labeled "Total Fund Annual Expenses Without Waivers or Reductions" shows the total annual operating expenses charged by a Trust or Fund, absent expense reimbursement or fee waiver arrangements. The column labeled "Net Fund Annual Expenses After Waivers or Reductions" shows such total annual operating expenses after applicable expense reimbursement or fee waiver arrangements where such reimbursement or waiver is contractual and is expected to continue through May 1, 2006. Expenses shown are actual expenses for the year ended 12/31/04 unless otherwise noted.
TOTAL FUND NET FUND DISTRIBUTION ANNUAL ANNUAL AND/OR EXPENSES TOTAL EXPENSES INVESTMENT SERVICE WITHOUT WAIVERS AFTER ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR FUND NAME FEES FEES EXPENSES REDUCTIONS REDUCTIONS REDUCTIONS - ------------------------------------------------------------------------------------------------------------------------ ING INVESTORS TRUST - ------------------------------------------------------------------------------------------------------------------------ ING AllianceBernstein Mid Cap Growth Portfolio (Service 2) (3) (4) (22) 0.77% 0.50% 0.01% 1.28% 0.10% 1.18% - ------------------------------------------------------------------------------------------------------------------------ ING American Funds Growth Portfolio (5) (6) 0.35% 0.75% 0.04% 1.14% 0.00% 1.14% - ------------------------------------------------------------------------------------------------------------------------ ING American Funds Growth-Income Portfolio (5) (6) 0.29% 0.75% 0.05% 1.09% 0.00% 1.09% - ------------------------------------------------------------------------------------------------------------------------ ING American Funds International Portfolio (5) (6) 0.54% 0.75% 0.08% 1.37% 0.00% 1.37% - ------------------------------------------------------------------------------------------------------------------------ ING Capital Guardian Small/Mid Cap Portfolio (Service 2) (3) (4) 0.66% 0.50% 0.01% 1.17% 0.10% 1.07% - ------------------------------------------------------------------------------------------------------------------------ ING Capital Guardian U.S. Equities Portfolio (Service 2) (3) (4) (7) 0.74% 0.50% 0.01% 1.25% 0.10% 1.15% - ------------------------------------------------------------------------------------------------------------------------
3 Legends - 136958
TOTAL FUND NET FUND DISTRIBUTION ANNUAL ANNUAL AND/OR EXPENSES TOTAL EXPENSES INVESTMENT SERVICE WITHOUT WAIVERS AFTER ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR FUND NAME FEES FEES EXPENSES REDUCTIONS REDUCTIONS REDUCTIONS - ------------------------------------------------------------------------------------------------------------------------ ING Eagle Asset Capital Appreciation Portfolio (Service 2) (3) (4) 0.66% 0.50% 0.01% 1.17% 0.10% 1.07% - ------------------------------------------------------------------------------------------------------------------------ ING Evergreen Omega Portfolio (Service 2) (3a) 0.60% 0.50% 0.00% 1.10% 0.10% 1.00% - ------------------------------------------------------------------------------------------------------------------------ ING FMR(SM) Diversified Mid Cap Portfolio (Service 2) (3) 0.75% 0.50% 0.01% 1.26% 0.10% 1.16% - ------------------------------------------------------------------------------------------------------------------------ ING FMR(SM) Earnings Growth Portfolio (Service 2) (8) (9) 0.62% 0.50% 0.15% 1.27% 0.12% 1.15% - ------------------------------------------------------------------------------------------------------------------------ ING Global Resources Portfolio (Service 2) (3) 0.66% 0.50% 0.00% 1.16% 0.10% 1.06% - ------------------------------------------------------------------------------------------------------------------------ ING Goldman Sachs Tollkeeper(SM) Portfolio (Service 2) (3) (9) 1.35% 0.50% 0.01% 1.86% 0.31% 1.55% - ------------------------------------------------------------------------------------------------------------------------ ING Janus Contrarian Portfolio (Service 2) (3) (4) 0.80% 0.50% 0.01% 1.31% 0.10% 1.21% - ------------------------------------------------------------------------------------------------------------------------ ING JPMorgan Emerging Markets Equity Portfolio (Service 2) (3) 1.25% 0.50% 0.02% 1.77% 0.10% 1.67% - ------------------------------------------------------------------------------------------------------------------------ ING JPMorgan Small Cap Equity Portfolio (Service 2) (3) (4) (10) 0.90% 0.50% 0.00% 1.40% 0.13% 1.27% - ------------------------------------------------------------------------------------------------------------------------ ING JPMorgan Value Opportunities Portfolio (Service 2) (8) (9) 0.40% 0.50% 0.15% 1.05% 0.12% 0.93% - ------------------------------------------------------------------------------------------------------------------------ ING Julius Baer Foreign Portfolio (Service 2) (3) 0.96% 0.50% 0.00% 1.46% 0.10% 1.36% - ------------------------------------------------------------------------------------------------------------------------ ING Legg Mason Value Portfolio (Service 2) (3) (4) 0.80% 0.50% 0.01% 1.31% 0.10% 1.21% - ------------------------------------------------------------------------------------------------------------------------ ING Liquid Assets Portfolio (Service 2) (3) 0.27% 0.50% 0.02% 0.79% 0.10% 0.69% - ------------------------------------------------------------------------------------------------------------------------ ING Lord Abbett Affiliated Portfolio (Service 2) (3) (23) 0.74% 0.50% 0.01% 1.25% 0.10% 1.15% - ------------------------------------------------------------------------------------------------------------------------ ING MarketPro Portfolio (Service 2) (25)(26)(27) 0.70% 0.50% 0.10% 1.30% 0.10% 1.20% - ------------------------------------------------------------------------------------------------------------------------ ING Marsico Growth Portfolio (Service 2) (3)(4) 0.77% 0.50% 0.01% 1.28% 0.10% 1.18% - ------------------------------------------------------------------------------------------------------------------------ ING Marsico International Opportunities Portfolio (Service 2) (8) (9) 0.54% 0.50% 0.17% 1.21% 0.13% 1.08% - ------------------------------------------------------------------------------------------------------------------------ ING Mercury Large Cap Value Portfolio (Service 2) (3) (10) 0.80% 0.50% 0.00% 1.30% 0.15% 1.15% - ------------------------------------------------------------------------------------------------------------------------ ING MFS Mid Cap Growth Portfolio (Service 2) (3) (4) (11) 0.64% 0.50% 0.00% 1.14% 0.10% 1.04% - ------------------------------------------------------------------------------------------------------------------------ ING MFS Total Return Portfolio (Service 2) (3) (4) 0.64% 0.50% 0.00% 1.14% 0.10% 1.04% - ------------------------------------------------------------------------------------------------------------------------ ING Oppenheimer Main Street Portfolio (Service 2) (3) (4) 0.64% 0.50% 0.00% 1.14% 0.10% 1.04% - ------------------------------------------------------------------------------------------------------------------------ ING PIMCO Core Bond Portfolio (Service 2) (3) 0.60% 0.50% 0.01% 1.11% 0.10% 1.01% - ------------------------------------------------------------------------------------------------------------------------ ING PIMCO High Yield Portfolio (Service 2) (3a) 0.49% 0.50% 0.00% 0.99% 0.10% 0.89% - ------------------------------------------------------------------------------------------------------------------------ ING Pioneer Fund Portfolio (Service 2) (12) 0.75% 0.50% 0.01% 1.26% 0.15% 1.11% - ------------------------------------------------------------------------------------------------------------------------ ING Pioneer Mid Cap Value Portfolio (Service 2) (12) 0.64% 0.50% 0.01% 1.15% 0.10% 1.05% - ------------------------------------------------------------------------------------------------------------------------ ING Salomon Brothers All Cap Portfolio (Service 2) (3) (4) 0.74% 0.50% 0.01% 1.25% 0.10% 1.15% - ------------------------------------------------------------------------------------------------------------------------ ING T. Rowe Price Capital Appreciation Portfolio (Service 2) (3) (4) 0.66% 0.50% 0.01% 1.17% 0.10% 1.07% - ------------------------------------------------------------------------------------------------------------------------ ING T. Rowe Price Equity Income Portfolio (Service 2) (3) (4) 0.66% 0.50% 0.01% 1.17% 0.10% 1.07% - ------------------------------------------------------------------------------------------------------------------------ ING Templeton Global Growth Portfolio (Service 2) (3) (4) (24) 0.97% 0.50% 0.01% 1.48% 0.10% 1.38% - ------------------------------------------------------------------------------------------------------------------------ ING UBS U.S. Allocation Portfolio (Service 2) (3) (10) 0.75% 0.50% 0.01% 1.26% 0.12% 1.14% - ------------------------------------------------------------------------------------------------------------------------ ING Van Kampen Equity Growth Portfolio (Service 2) (3)(10) 0.65% 0.50% 0.00% 1.15% 0.15% 1.00% - ------------------------------------------------------------------------------------------------------------------------ ING Van Kampen Global Franchise Portfolio (Service 2)(3) 1.00% 0.50% 0.00% 1.50% 0.10% 1.40% - ------------------------------------------------------------------------------------------------------------------------ ING Van Kampen Growth and Income Portfolio (Service 2) (3) (4) 0.66% 0.50% 0.01% 1.17% 0.10% 1.07% - ------------------------------------------------------------------------------------------------------------------------ ING Van Kampen Real Estate Portfolio (Service 2) (3) 0.66% 0.50% 0.00% 1.16% 0.10% 1.06% - ------------------------------------------------------------------------------------------------------------------------ ING VP Index Plus International Equity Portfolio (Service 2) (27) 0.45% 0.50% 0.22% 1.17% 0.22% 0.95% - ------------------------------------------------------------------------------------------------------------------------ ING Wells Fargo Mid Cap Disciplined Portfolio (Service 2) (3) (4) 0.66% 0.50% 0.01% 1.17% 0.10% 1.07% - ------------------------------------------------------------------------------------------------------------------------ ING Wells Fargo Small Cap Disciplined Portfolio (Service 2) (27) 0.77% 0.50% 0.21% 1.48% 0.21% 1.27% - ------------------------------------------------------------------------------------------------------------------------ ING PARTNERS, INC. - ------------------------------------------------------------------------------------------------------------------------ ING Baron Small Cap Growth Portfolio (Service Class) (13) 0.85% 0.25% 0.40% 1.50% 0.05% 1.45% - ------------------------------------------------------------------------------------------------------------------------ ING Davis Venture Value Portfolio (Service Class)(27) 0.80% 0.25% 0.00% 0.10% 0.00% 1.15% - ------------------------------------------------------------------------------------------------------------------------ ING Fundamental Research Portfolio (Service Class) 0.60% 0.25% 0.20% 1.05% 0.00% 1.05% - ------------------------------------------------------------------------------------------------------------------------ ING JPMorgan Fleming International Portfolio (Service Class) 0.80% 0.25% 0.20% 1.25% 0.00% 1.25% - ------------------------------------------------------------------------------------------------------------------------ ING Oppenheimer Global Portfolio (Service Class) 0.60% 0.25% 0.06% 0.91% 0.00% 0.91% - ------------------------------------------------------------------------------------------------------------------------ ING Salomon Brothers Aggressive Growth Portfolio (Service Class) 0.69% 0.25% 0.13% 1.07% 0.00% 1.07% - ------------------------------------------------------------------------------------------------------------------------ ING UBS U.S. Large Cap Equity Portfolio (Service Class) 0.70% 0.25% 0.15% 1.10% 0.00% 1.10% - ------------------------------------------------------------------------------------------------------------------------ ING Van Kampen Comstock Portfolio (Service Class) (13) 0.60% 0.25% 0.35% 1.20% 0.07% 1.13% - ------------------------------------------------------------------------------------------------------------------------
4 Legends - 136958
TOTAL FUND NET FUND DISTRIBUTION ANNUAL ANNUAL AND/OR EXPENSES TOTAL EXPENSES INVESTMENT SERVICE WITHOUT WAIVERS AFTER ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR FUND NAME FEES FEES EXPENSES REDUCTIONS REDUCTIONS REDUCTIONS - ------------------------------------------------------------------------------------------------------------------------ ING Van Kampen Equity and Income Portfolio (Service Class) (14) 0.55% 0.25% 0.02% 0.82% 0.00% 0.82% - ------------------------------------------------------------------------------------------------------------------------ ING VARIABLE INSURANCE TRUST - ------------------------------------------------------------------------------------------------------------------------ INF VP Global Equity Dividend Portfolio (15) (16) 1.00% 0.00% 0.20% 1.20% (0.03%) 1.23% - ------------------------------------------------------------------------------------------------------------------------ ING VARIABLE PORTFOLIOS, INC. - ------------------------------------------------------------------------------------------------------------------------ ING VP Index Plus LargeCap Portfolio (Class S) (17) (18) 0.35% 0.25% 0.09% 0.69% 0.00% 0.69% - ------------------------------------------------------------------------------------------------------------------------ ING VP Index Plus MidCap Portfolio (Class S) (17) (18) 0.40% 0.25% 0.09% 0.74% 0.00% 0.74% - ------------------------------------------------------------------------------------------------------------------------ ING VP Index Plus SmallCap Portfolio (Class S) (17) (18) 0.40% 0.25% 0.09% 0.74% 0.00% 0.74% - ------------------------------------------------------------------------------------------------------------------------ ING VARIABLE PRODUCTS TRUST - ------------------------------------------------------------------------------------------------------------------------ ING VP Financial Services Portfolio (Service Class S) (19) (20) 0.75% 0.25% 0.25% 1.25% 0.20% 1.05% - ------------------------------------------------------------------------------------------------------------------------ ING VP SmallCap Opportunities Portfolio (Service Class S) (19) (20) 0.75% 0.00% 0.19% 1.19% 0.09% 1.10% - ------------------------------------------------------------------------------------------------------------------------ ING VP INTERMEDIATE BOND PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------ ING VP Intermediate Bond Portfolio (Class S) (19) 0.40% 0.25% 0.08% 0.73% 0.00% 0.73% - ------------------------------------------------------------------------------------------------------------------------ AIM VARIABLE INSURANCE FUNDS - ------------------------------------------------------------------------------------------------------------------------ AIM V.I. Leisure Fund (Series I) (21) 0.75% 0.00% 0.59% 1.34% 0.04% 1.30% - ------------------------------------------------------------------------------------------------------------------------ FIDELITY VARIABLE INSURANCE PRODUCTS PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------ Fidelity(R) VIP Contrafund Portfolio (Service 2) 0.57% 0.25% 0.11% 0.93% 0.00% 0.93% - ------------------------------------------------------------------------------------------------------------------------ Fidelity(R) VIP Equity-Income Portfolio (Service 2) 0.47% 0.25% 0.11% 0.83% 0.00% 0.83% - ------------------------------------------------------------------------------------------------------------------------ LIBERTY VARIABLE INSURANCE TRUST - ------------------------------------------------------------------------------------------------------------------------ Colonial Small Cap Value Fund (Class B) 0.80% 0.25% 0.17% 1.22% 0.00% 1.22% - ------------------------------------------------------------------------------------------------------------------------ PROFUNDS VP - ------------------------------------------------------------------------------------------------------------------------ ProFund VP Bull 0.75% 0.25% 0.78% 1.78% 0.00% 1.78% - ------------------------------------------------------------------------------------------------------------------------ ProFund VP Europe 30 0.75% 0.25% 0.61% 1.61% 0.00% 1.61% - ------------------------------------------------------------------------------------------------------------------------ ProFund Rising Rates Opportunity 0.75% 0.25% 0.78% 1.78% 0.00% 1.78% - ------------------------------------------------------------------------------------------------------------------------ ProFund VP Small-Cap 0.75% 0.25% 0.75% 1.75% 0.00% 1.75% - ------------------------------------------------------------------------------------------------------------------------
Footnotes to the "Fund Expense Table" (1) The Company may receive compensation from each of the funds or the funds' affiliates based on an annual percentage of the average net assets held in that fund by the Company. The percentage paid may vary from one fund company to another. For certain funds, some of this compensation may be paid out of 12b-1 fees or service fees that are deducted from fund assets. Any such fees deducted from fund assets are disclosed in this Fund Expense Table and the fund prospectuses. The Company may also receive additional compensation from certain funds for administrative, recordkeeping or other services provided by the Company to the funds or the funds' affiliates. These additional payments are made by the funds or the funds' affiliates to the Company and do not increase, directly or indirectly, the fees and expenses shown above. See "Fees - Fund Expenses" for additional information. (2) In the case of fund companies affiliated with the Company, where the Company or an affiliated investment adviser employs subadvisers to manage the funds, no payments are made to the Company or the affiliated investment adviser by the subadvisers. However, the investment management fee shown in the table is apportioned between the Company or other affiliated investment adviser and subadviser. This apportionment varies by subadviser, resulting in varying amounts of revenue retained by the investment adviser, including the Company. This apportionment of the investment advisory fee does not increase, directly or indirectly, the fees and expenses shown above. See "Fees - Fund Expenses" for additional information. (3) The amounts shown are estimated operating expenses for Service 2 shares of each Portfolio as a ratio of expenses to average daily net assets based on each Portfolio's actual operating expenses for Service 2 shares for its most recently completed fiscal year, as adjusted for contractual changes, if any, and fee waivers to which Directed Services, Inc. (DSI) as adviser to each Portfolio, has agreed for each Portfolio for the current fiscal year. Effective March 1, 2004, the management fee structure for ING JPMorgan Emerging Markets Equity Portfolio was revised. Effective January 1, 2005, the management fee structure for ING Capital Guardian Managed Global Portfolio was revised. DSI has contractually agreed to waive 0.10% of the distribution fee for Service 2 shares of the Portfolios, so that the actual fee paid by a Portfolio is an annual rate of 0.15%. Absent this waiver, the distribution fee is 0.25% of net assets. The expense waiver will continue through at least May 1, 2006. There is no guarantee that this waiver will continue after this date. Through a "bundled fee" arrangement, DSI, the Trust's manager, is paid a single fee for advisory, administrative, custodial, transfer agency, auditing and legal services necessary for the ordinary operation of the Portfolios. The Portfolios would also bear any extraordinary expenses. 5 Legends - 136958 (3a) The amounts shown are estimated operating expenses for Service 2 shares of each Portfolio as a ratio of expenses to average daily net assets. For the ING Evergreen Health Sciences and ING Evergreen Omega Portfolios, which have not had a full year of operations, operating expenses are based on estimated amounts for the current fiscal year. For ING PIMCO High Yield Portfolio, operating expenses are based on estimated amounts as Service 2 shares had not commenced operations as of December 31, 2004 and Class S shares have not had a full year of operations as of December 31, 2004. DSI has contractually agreed to waive 0.10% of the distribution fee for Service 2 shares of the Portfolios, so that the actual fee paid by a Portfolio is an annual rate of 0.15%. Absent this waiver, the distribution fee is 0.25% of net assets. The expense waiver will continue through at least May 1, 2006. There is no guarantee that this waiver will continue after this date. Through a "bundled fee" arrangement, DSI, the Trust's manager, is paid a single fee for advisory, administrative, custodial, transfer agency, auditing and legal services necessary for the ordinary operation of the Portfolios. The Portfolios would also bear any (4) A portion of the brokerage commissions that the ING AIM Mid Cap Growth, ING Alliance Mid Cap Growth, ING Capital Guardian Managed Global, ING Capital Guardian Small/Mid Cap, ING Capital Guardian U.S. Equities, ING Eagle Asset Capital Appreciation, ING Janus Contrarian, ING Wells Fargo Mid Cap Disciplined, ING JPMorgan Small Cap Equity, ING Legg Mason Value, ING Marsico Growth, ING MFS Mid Cap Growth, ING MFS Total Return, ING Oppenheimer Main Street, ING Salomon Brothers All Cap, ING T. Rowe Price Capital Appreciation, ING T. Rowe Price Equity Income and ING Van Kampen Growth and Income Portfolios pay is used to reduce each Portfolio's expenses. Including these reductions and the MFS Voluntary Management fee waiver the Total Annual Fund Operating Expenses for each Portfolio for the year ended December 31, 2004 was 1.02%, 1.12%, 1.41%, 1.06%, 1.14%, 1.06%, 1.20%, 1.03%, 1.27%, 1.21%, 1.15%, 1.02%, 1.03%, 1.01%, 1.13%, 1.05%, 1.06%, and 1.07%, respectively. This arrangement may be discontinued at any time. (5) This table shows the estimated operating expenses for the Portfolios as a ratio of expenses to average daily net assets. These estimates are based on each Portfolio's actual operating expenses for its most recently completed fiscal year. This table reflects the aggregate annual operating expenses of each Portfolio and its corresponding Master Fund (Class 2 shares of American Funds Insurance Series(R) - Growth Fund, Growth-Income Fund, and International Fund.) Each Master Fund pays Capital Research Management Company (CRMC), the investment adviser to the Master Funds, a management fee for advisory expenses at current asset levels of the Master Funds of 0.35%, 0.53% and 0.28%, respectively. Pursuant to its investment management agreement with the Trust, ING Investments, LLC may charge an annual advisory fee at asset levels that are the same as the current asset levels of the Master Funds equal to 0.35%, 0.29% and 0.54% of average daily net assets for the ING American Funds Growth Portfolio, the ING American Funds Growth-Income Portfolio, and the ING American Funds International Portfolio, respectively, if the respective Portfolio does not invest substantially all of its assets in another investment company. If a Portfolio invests substantially all of its assets in another investment company, ING Investments, LLC does not charge an advisory fee. Each Portfolio anticipates investing substantially all of its assets in another investment company. CRMC has voluntarily agreed to waive a portion of its management fee. Including this waiver, the Total Fund Annual Operating Expenses for the ING American Funds Growth Portfolio, the ING American Funds Growth-Income Portfolio, and the ING American Funds International Portfolio would have been 1.13%, 1.08%, and 1.36%, respectively. This arrangement may be discontinued by CRMC at any time. (6) Shares of each Portfolio are subject to a Rule 12b-1 fee at an annual rate of 0.50% of average daily net assets payable to Directed Services, Inc. In addition, Class 2 shares of each of the Master Funds pay 0.25% of average net assets annually pursuant to a Plan of Distribution or 12b-1 plan. Shareholders of the Class 2 shares of the Master Funds pay only their proportionate share of 12b-1 plan expenses. Pursuant to its administration agreement with the Trust, ING Funds Services, LLC may receive an annual administration fee equal to 0.10% of average daily net assets for ING American Funds Growth Portfolio, ING American Funds Growth-Income Portfolio, and ING American Funds International Portfolio, respectively, if the respective Portfolio does not invest substantially all of its assets in another investment company. If a Portfolio invests substantially all of its assets in another investment company, ING Funds Services, LLC does not charge an administration fee. Each Portfolio anticipates investing substantially all of its assets in another investment company. (7) Directed Services, Inc. (DSI), the adviser, has contractually agreed to waive a portion of the management fee for the Portfolio. Based upon net assets as of December 31, 2004, the management fee waiver for each Portfolio would equal 0.00% for ING Capital Guardian U.S. Equities Portfolio; 0.03% for ING JPMorgan Small Cap Equity Portfolio; 0.05% for ING Mercury Focus Value Portfolio; 0.05% for ING Mercury Large Cap Growth Portfolio; and 0.02% for ING UBS U.S. Allocation Portfolio. This expense waiver will continue through at least May 1, 2006. There is no guarantee that this waiver will continue after this date. This agreement will only renew if DSI elects to renew it. 6 Legends - 136958 (8) The amounts shown are estimated operating expenses for Service 2 shares of each Portfolio as a ratio of expenses to average daily net assets. Operating expenses for each Portfolio are estimated as they had not commenced operations as of December 31, 2004. DSI has contractually agreed to waive 0.10% of the distribution fee for Service 2 shares of the Portfolios, so that the actual fee paid by a Portfolio is an annual rate of 0.15%. Absent this waiver, the distribution fee is 0.25% of net assets. The expense waiver will continue through at least May 1, 2006. There is no guarantee that this waiver will continue after this date. Pursuant to its administration agreement with the Trust, ING Funds Services, LLC may receive an annual administration fee equal to 0.10% of average daily net assets for this Portfolio. Other Expenses for each Portfolio are estimated because the Portfolio did not have a full calendar year of operations as of December 31, 2004 (the Portfolio's fiscal year end). (9) Directed Services, Inc. (DSI), the adviser, has entered into a written expense limitation agreement with respect to these Portfolios under which it will limit expenses of these Portfolios, excluding taxes, brokerage and extraordinary expenses, subject to possible recoupment by DSI within three years. The amount of these Portfolios' expenses that are proposed to be waived or reimbursed in the ensuing fiscal year is shown under the heading Fees and Expenses Waived or Reimbursed. This amount also includes the 0.10% distribution (12b-1) fee waiver which is explained in more detail in footnotes (3) and (4). The expense limitation agreement will continue through at least May 1, 2006. Further, regarding ING Goldman Sachs Tollkeeper(SM) Portfolio, DSI has agreed to waive its rights to recoupment for the period from January 1, 2005 through December 31, 2005. For further information regarding the expense limitation agreements, see the Fund's prospectus and Statement of Additional Information. (10) Directed Services, Inc. (DSI), the adviser, has contractually agreed to waive a portion of the management fee for the Portfolio. Based upon net assets as of December 31, 2004, the management fee waiver for each Portfolio would equal 0.00% for ING Capital Guardian U.S. Equities Portfolio; 0.03% for ING JPMorgan Small Cap Equity Portfolio; 0.05% for ING Mercury Large Cap Value Portfolio; 0.05% for ING Mercury Large Cap Growth Portfolio; 0.02% for ING UBS U.S. Allocation Portfolio; and 0.05% for ING Van Kampen Equity Growth Portfolio. This expense waiver will continue through at least May 1, 2006. There is no guarantee that this waiver will continue after this date. This agreement will only renew if DSI elects to renew it. (11) Directed Services, Inc. (DSI) has voluntarily agreed to waive a portion of its management fee for ING MFS Mid Cap Growth Portfolio. Including this waiver, the Net Annual Fund Operating Expenses for the Portfolio for the year ended December 31, 2004, would have been 1.02%. This arrangement may be discontinued by DSI at any time. (12) The amounts shown are estimated operating expenses for Service 2 shares of each Portfolio as a ratio of expenses to average daily net assets. Operating expenses for each Portfolio are estimated as they had not commenced operations as of December 31, 2004. DSI has contractually agreed to waive 0.10% of the distribution fee for Service 2 shares of the Portfolios, so that the actual fee paid by a Portfolio is an annual rate of 0.15%. Absent this waiver, the distribution fee is 0.25% of net assets. The expense waiver will continue through at least May 1, 2006. There is no guarantee that this waiver will continue after this date. Through a "bundled fee" arrangement, DSI, the Trust's manager, is paid a single fee for advisory, administrative, custodial, transfer agency, auditing and legal services necessary for the ordinary operation of the Portfolios. The Portfolios would also bear any extraordinary expenses. Other Expenses for each Portfolio are estimated because the Portfolio did not have a full calendar year of operations as of December 31, 2004 (the Portfolio's fiscal year end). (13) The Administrator of the Fund has contractually agreed to waive all or a portion of its administrative services fees and/or reimburse administrative expenses for ING American Century Small Cap Value, ING Baron Small Cap Growth, and ING Van Kampen Comstock Portfolios so that the Net Annual Fund Operating Expenses for these Portfolios shall not exceed 1.55%, 1.45%, and 1.13%, respectively, through May 1, 2006. Without this waiver, the Net Annual Fund Operating Expenses would be 1.65% for ING American Century Small Cap Value, 1.50% for ING Baron Small Cap Growth and 1.20% for ING Van Kampen Comstock Portfolios. (14) Effective December 1, 2004, Management (Advisory) Fees were restated to reflect a decrease for ING Van Kampen Equity and Income Portfolio. Effective December 1, 2004, the administrative fees (included in Other Expenses) were restated to reflect an increase/decrease as follows: from 0.20% to 0.02% ING Van Kampen Equity and Income Portfolio and from 0.60% to 0.06% for ING Oppenheimer Global Portfolio. (15) The amounts shown are the estimated operating expenses for shares of the Portfolio as a ratio of expenses to average daily net assets. These estimates are based on the Portfolio's actual operating expenses for its most recently completed fiscal year, as adjusted for contractual changes, if any, and a fee waiver to which ING Investments, LLC, the investment adviser to the Portfolio, has agreed for the Portfolio. (16) ING Investments, LLC has entered into a written expense limitation agreement with the Portfolio under which it will limit expenses of the Portfolio, excluding interest, taxes, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments, LLC within three years. The amount of the Portfolio's expenses waived, reimbursed or recouped during the last fiscal year by ING Investments, LLC is shown under the heading Fees and Expenses Waived or Reimbursed. Recoupments are shown as negative numbers. The expense limit for the Portfolio is shown as Net Annual Fund Operating Expenses. The expense limit will continue through at least May 1, 2006. In addition, effective January 1, 2005, pursuant to a side agreement which is not reflected in the fund expense table, ING Investments, LLC has lowered the expense limit for the Portfolio to 1.15% through at least December 31, 2005. There is no guarantee that this side agreement will continue after that date. Any fees waived pursuant to the side agreement shall not be eligible for recoupment. For further information regarding the expense limitation agreements, see the Fund's prospectus. 7 Legends - 136958 (17) The amounts shown are estimated operating expenses for Class S shares of each Portfolio as a ratio of expenses to average daily net assets. These estimates, unless otherwise noted, are based on each Portfolio's actual operating expenses for its most recently completed fiscal year, adjusted for contractual changes, if any, and fee waivers to which ING Investments, LLC, the investment adviser to each Portfolio, has agreed for each Portfolio. ING Funds Services, LLC receives an annual administrative fee (included in Other Expenses) equal to 0.055% on the first $5 billion of daily net assets and 0.03% thereafter. (18) ING Investments, LLC, the investment adviser to each Portfolio, has entered into written expense limitation agreements with each Portfolio under which it will limit expenses of the Portfolios, excluding interest, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments, LLC within three years. The amount of each Portfolio's expenses waived, reimbursed or recouped during the last fiscal year is shown under the heading Fees and Expenses Waived or Reimbursed. Recoupments are shown as negative numbers under Fees and Expenses Waived or Reimbursed. The expense limits will continue through at least May 1, 2006. For further information regarding the expense limitation agreements, see the Fund's prospectus. (19) For the ING VP Financial Services Portfolio, which has not had a full year of operations, expenses are based on estimated amounts for the current fiscal year. In each case, the estimated operating expenses for the Class S shares are based on a ratio of expenses to average daily net assets. For all other Portfolios, estimated operating expenses are based on each Portfolio's actual operating expenses for Class S shares for its most recently completed fiscal year, as adjusted for contractual changes, if any, and fee waivers to which ING Investments, LLC, the investment adviser, has agreed for each Portfolio for the current fiscal year. (20) ING Funds Services, LLC receives an annual administration fee (included in Other Expenses) equal to 0.10% of each Portfolio's average daily net assets. ING Investments, LLC has entered into a written expense limitation agreement with ING Variable Products Trust under which it will limit expenses of the Portfolios, excluding interest, taxes, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments, LLC within three years. The amount of each Portfolio's expenses waived, reimbursed or recouped during the last fiscal year by ING Investments, LLC is shown under the heading Fees and Expenses Waived or Reimbursed. The amount of expenses proposed to be waived during the current fiscal year by ING Investments, LLC for ING VP Financial Services Portfolio, ING VP High Yield Bond Portfolio, ING VP Disciplined LargeCap Portfolio and ING VP Real Estate Portfolio, are shown under the heading Fees and Expenses Waived or Reimbursed. For each Portfolio, the expense limits will continue through at least May 1, 2006. For further information regarding the expense limitation agreements, see the Fund's prospectus. (21) The Fund's advisor and/or distributor has contractually agreed to waive advisory fees and/or reimburse expenses of Series II shares to the extent necessary to limit Total Annual Fund Operating Expenses (excluding certain items as discussed in the fund's prospectus) of Series II shares to 1.45% of average daily net assets for each series portfolio of AIM Variable Insurance Funds. The expense limitation agreements are in effect through April 30, 2006. Please refer to the fund's prospectus for more detailed information. (22) Effective December 5, 2005, the portfolio name "ING Alliance Mid Cap Growth Portfolio" is changed to "ING AllianceBernstein Mid Cap Growth Portfolio". (23) Effective December 5, 2005, the portfolio name "ING Salomon Brothers Investors Portfolio" is changed to "ING Lord Abbett Affiliated Portfolio". (24) Effective December 5, 2005, the portfolio name "ING Capital Guardian Managed Global Portfolio" is changed to "ING Templeton Global Growth Portfolio". (25) In addition to the expenses of each Portfolio, each Portfolio will indirectly bear the proportionate expenses of the Institutional Class shares of the Underlying Funds. Because the Fund uses a weighted average in calculating expenses attributable to a Portfolio, the amount of the expenses of Underlying Funds indirectly borne by a Portfolio will vary based on the Portfolio's allocation of assets to, and the annualized net operating expenses of, the particular Underlying Funds during the Portfolio's fiscal year. The fees reflected in the Fund Expense Table, above, are the aggregate annual net expense ratios (as an annual percentage of average daily net assets) for each Portfolio and its Underlying Funds as of December 31, 2004. (26) ING Investments, the investment advisor to each Portfolio, has entered into a written expense limitation agreement with respect to each Portfolio under which it will limit expenses of the Portfolios, excluding interest, taxes, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments within three years. The amount of each Portfolio's expenses that are proposed to be waived or reimbursed in the ensuing fiscal year is shown under the heading, "Total Waivers or Reductions." The expense limitation agreement will continue through at least May 1, 2007. The expense limitation agreements are contractual and shall renew automatically for one-year terms unless ING Investments provides written notice of the termination of an expense limitation agreement at least 90 days prior to the end of the then current term or upon termination of the investment management agreement. 8 Legends - 136958 (27) Effective December 5, 2005, this portfolio is available as an investment option under the contract. EXAMPLE: This example is intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity contracts. These costs include contract owner transaction expenses, contract fees, separate account annual expenses, and Trust or Fund fees and expenses. The example assumes that you invest $10,000 in the Contract for the time periods indicated. The example also assumes that your investment has a 5% return each year and assumes the maximum fees and expenses of any of the Trusts or Funds. Specifically, the example assumes election of the Max 7 Enhanced Death Benefit and election of the earnings multiplier benefit rider with a charge of 0.30% of the contract value annually. The example reflects the deduction of a mortality and expense risk charge, an asset-based administrative charge, and the annual contract administrative charge as an annual charge of 0.01% of assets. The example also assumes you elected the Minimum Guaranteed Income Benefit Rider. Note that surrender charges may apply if you choose to annuitize your Contract within the first 4 contract years. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: -------------------------------------------------------------------------- 1) If you surrender your contract at the end of the applicable time period: -------------------------------------------------------------------------- 1 year 3 years 5 years 10 years $1,150 $2,040 $2,720 $5,372 -------------------------------------------------------------------------- 2) If you annuitize at the end of the applicable time period: -------------------------------------------------------------------------- 1 year 3 years 5 years 10 years $1,150 $2,040 $2,720 $5,372 -------------------------------------------------------------------------- 3) If you do not surrender your contract: -------------------------------------------------------------------------- 1 year 3 years 5 years 10 years $550 $1,640 $2,720 $5,372 -------------------------------------------------------------------------- Compensation is paid for the sale of the Contracts. For information about this compensation, see "Selling the Contract." - -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION - -------------------------------------------------------------------------------- ACCUMULATION UNIT We use accumulation units to calculate the value of a Contract. Each subaccount of Separate Account B has its own accumulation unit value. The accumulation units are valued each business day that the New York Stock Exchange is open for trading. Their values may increase or decrease from day to day according to a Net Investment Factor, which is primarily based on the investment performance of the applicable investment portfolio. Shares in the investment portfolios are valued at their net asset value. 9 Legends - 136958 Tables containing (i) the accumulation unit value history of each subaccount of ING USA Separate Account B offered in this prospectus and (ii) the total investment value history of each such subaccount are presented in Appendix A -- Condensed Financial Information. The numbers show the year-end unit values of each subaccount from the time purchase payments were first received in the subaccounts under the Contract. THE NET INVESTMENT FACTOR The Net Investment Factor is an index number which reflects certain charges under the Contract and the investment performance of the subaccount. The Net Investment Factor is calculated for each subaccount as follows: 1) We take the net asset value of the subaccount at the end of each business day. 2) We add to (1) the amount of any dividend or capital gains distribution declared for the subaccount and reinvested in such subaccount. We subtract from that amount a charge for our taxes, if any. 3) We divide (2) by the net asset value of the subaccount at the end of the preceding business day. 4) We then subtract the applicable daily mortality and expense risk charge and the daily asset-based administrative charge from the subaccount. Calculations for the subaccounts are made on a per share basis. The Net Rate of Return equals the Net Investment Factor minus one. PERFORMANCE INFORMATION From time to time, we may advertise or include in reports to contract owners performance information for the subaccounts of Separate Account B, including the average annual total return performance, yields and other nonstandard measures of performance. Such performance data will be computed, or accompanied by performance data computed, in accordance with standards defined by the SEC. Except for the Liquid Assets subaccount, quotations of yield for the subaccounts will be based on all investment income per unit (contract value divided by the accumulation unit) earned during a given 30-day period, less expenses accrued during such period. Information on standard total average annual return performance will include average annual rates of total return for 1, 5 and 10 year periods, or lesser periods depending on how long Separate Account B has been investing in the portfolio. We may show other total returns for periods of less than one year. We will base total return figures on the actual historic performance of the subaccounts of Separate Account B, assuming an investment at the beginning of the period when the separate account first invested in the portfolios, and withdrawal of the investment at the end of the period, adjusted to reflect the deduction of all applicable portfolio and current contract charges. We may also show rates of total return on amounts invested at the beginning of the period with no withdrawal at the end of the period. Total return figures which assume no withdrawals at the end of the period will reflect all recurring charges, but will not reflect the surrender charge. In addition, we may present historic performance data for the investment portfolios since their inception reduced by some or all of the fees and charges under the Contract. Such adjusted historic performance includes data that precedes the inception dates of the subaccounts of Separate Account B. This data is designed to show the performance that would have resulted if the Contract had been in existence before the separate account began investing in the portfolios. Current yield for the Liquid Assets subaccount is based on income received by a hypothetical investment over a given 7-day period, less expenses accrued, and then "annualized" (i.e., assuming that the 7-day yield would be received for 52 weeks). We calculate "effective yield" for the Liquid Assets subaccount in a manner similar to that used to calculate yield, but when annualized, the income earned by the investment is assumed to be reinvested. The "effective yield" will thus be slightly higher than the "yield" because of the compounding effect of earnings. We calculate quotations of yield for the remaining subaccounts on all investment income per accumulation unit earned during a given 30-day period, after subtracting fees and expenses accrued during the period, assuming no surrender. YOU SHOULD BE AWARE THAT THERE IS NO GUARANTEE THAT THE LIQUID ASSETS SUBACCOUNT WILL HAVE A POSITIVE OR LEVEL RETURN. 10 Legends - 136958 We may compare performance information for a subaccount to: (i) the Standard & Poor's 500 Stock Index, Dow Jones Industrial Average, Donoghue Money Market Institutional Averages, or any other applicable market indices, (ii) other variable annuity separate accounts or other investment products tracked by Lipper Analytical Services (a widely used independent research firm which ranks mutual funds and other investment companies), or any other rating service, and (iii) the Consumer Price Index (measure for inflation) to determine the real rate of return of an investment in the Contract. Our reports and promotional literature may also contain other information including the ranking of any subaccount based on rankings of variable annuity separate accounts or other investment products tracked by Lipper Analytical Services or by similar rating services. Performance information reflects only the performance of a hypothetical contract and should be considered in light of other factors, including the investment objective of the investment portfolio and market conditions. Please keep in mind that past performance is not a guarantee of future results. FINANCIAL STATEMENTS The statement of assets and liabilities of Separate Account B as of December 31, 2004, and the related statement of operations for the year then ended, and the statements of changes in net assets for each of the two years in the period then ended are included in the Statement of Additional Information. The consolidated financial statements and schedules of ING USA Annuity and Life Insurance Company as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004 are included in the Statement of Additional Information. - -------------------------------------------------------------------------------- ING USA ANNUITY AND LIFE INSURANCE COMPANY - -------------------------------------------------------------------------------- ING USA Annuity and Life Insurance Company ("ING USA") is an Iowa stock life insurance company, which was originally incorporated in Minnesota on January 2, 1973. ING USA is a wholly owned subsidiary of Lion Connecticut Holdings Inc. ("Lion Connecticut"), which in turn is a wholly owned subsidiary of ING Groep N.V. ("ING"), a global financial services holding company based in The Netherlands. ING USA is authorized to sell insurance and annuities in all states, except New York, and the District of Columbia. ING USA's consolidated financial statements appear in the Statement of Additional Information. Lion Connecticut is the holding company for Directed Services, Inc., the investment manager of the ING Investors Trust and the distributor of the Contracts, and other interests. ING also owns ING Investments, LLC and ING Investment Management Co., portfolio managers of the ING Investors Trust, and the investment managers of the ING Variable Insurance Trust and ING Variable Products Trust and ING Variable Product Portfolios, respectively. ING also owns Baring International Investment Limited, another portfolio manager of the ING Investors Trust. Our principal office is located at 1475 Dunwoody Drive, West Chester, Pennsylvania 19380. - -------------------------------------------------------------------------------- ING USA SEPARATE ACCOUNT B - -------------------------------------------------------------------------------- ING USA Separate Account B ("Separate Account B") was established as a separate account of the Company on July 14, 1988. It is registered with the SEC as a unit investment trust under the Investment Company Act of 1940, as amended (the "1940 Act"). Separate Account B is a separate investment account used for our variable annuity contracts. We own all the assets in Separate Account B but such assets are kept separate from our other accounts. 11 Legends - 136958 Separate Account B is divided into subaccounts. Each subaccount invests exclusively in shares of one investment portfolio of a Trust or Fund. Each investment portfolio has its own distinct investment objectives and policies. Income, gains and losses, realized or unrealized, of a portfolio are credited to or charged against the corresponding subaccount of Separate Account B without regard to any other income, gains or losses of the Company. Assets equal to the reserves and other contract liabilities with respect to each are not chargeable with liabilities arising out of any other business of the Company. They may, however, be subject to liabilities arising from subaccounts whose assets we attribute to other variable annuity contracts supported by Separate Account B. If the assets in Separate Account B exceed the required reserves and other liabilities, we may transfer the excess to our general account. We are obligated to pay all benefits and make all payments provided under the Contracts. Note: We currently offer other variable annuity contracts that invest in Separate Account B, but are not discussed in this prospectus. Separate Account B may also invest in other investment portfolios which are not available under your Contract. Under certain circumstances, we may make certain changes to the subaccounts. For more information, see "The Annuity Contract -- Addition, Deletion, or Substitution of Subaccounts and Other Changes." - -------------------------------------------------------------------------------- THE TRUSTS AND FUNDS - -------------------------------------------------------------------------------- YOU WILL FIND INFORMATION ABOUT THE TRUSTS AND FUNDS CURRENTLY AVAILABLE UNDER YOUR CONTRACT IN APPENDIX B -- THE INVESTMENT PORTFOLIOS. A PROSPECTUS CONTAINING MORE COMPLETE INFORMATION ON EACH TRUST OR FUND MAY BE OBTAINED BY CALLING OUR CUSTOMER SERVICE CENTER AT 800-366-0066. YOU SHOULD READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. Certain funds are designated as "Master-Feeder" or "MarketPro" Funds. Funds offered in a Master-Feeder structure (such as the American Funds) or fund of funds structure (such as the MarketPro Funds) may have higher fees and expenses than a fund that invests directly in debt and equity securities. See "Trust and Fund Expenses". If, due to differences in tax treatment or other considerations, the interests of contract owners of various contracts participating in the Trusts or Funds conflict, we, the Boards of Trustees or Directors of the Trusts or Funds, and any other insurance companies participating in the Trusts or Funds will monitor events to identify and resolve any material conflicts that may arise. RESTRICTED FUNDS We may, with 30 days notice to you, designate any investment option as a Restricted Fund and limit the amount you may allocate or transfer to a Restricted Fund. We may also change the limitations on existing contracts with respect to new premiums added to investment portfolios and with respect to new transfers to investment portfolios. We may establish any limitations, at our discretion, as a percentage of premium or contract value, or as a specified dollar amount, and change the limitation at any time. Currently, we have not designated any investment option as a Restricted Fund. If we designate an investment option as a Restricted Fund or set applicable limitations, such change will apply only to transactions made after the designation. We limit your investment in the Restricted Funds on an aggregate basis for all Restricted Funds and for each individual Restricted Fund. Currently, we limit an investment in Restricted Funds to the following limitations: no more than $999,999,999, and no more than 30 percent of contract value. We may change these limits, in our discretion, for new contracts, premiums, transfers or withdrawals. We monitor the aggregate and individual limits on investments in Restricted Funds for each transaction (e.g. premium payments, reallocations, withdrawals, dollar cost averaging). If the contract value in the Restricted Funds has increased beyond the applicable limit due to market growth, we will not require the reallocation or withdrawal of contract value from the Restricted Funds. However, if the contract value in the Restricted Funds exceed the aggregate limit, if you take a withdrawal, it must come from either the Restricted Funds or pro-rata from all investment options in which contract value is allocated, so that the percentage of contract value in the Restricted Funds following the withdrawal is less than or equal to the percentage of contract value in the Restricted Funds prior to the withdrawal. 12 Legends - 136958 We will not permit a transfer to the Restricted Funds if it would increase the contract value in the Restricted Fund or in all Restricted Funds to more than the applicable limits set forth above. We will not limit transfers from Restricted Funds. If the multiple reallocations lower the percentage of total contract value in Restricted Funds, we will permit the reallocation even if the percentage of contract value in a Restricted Fund is greater than its limit. Please see "Withdrawals" and "Transfers Among Your Investments" in this prospectus for more information on the effect of Restricted Funds. - -------------------------------------------------------------------------------- COVERED FUNDS, SPECIAL FUNDS AND EXCLUDED FUNDS - -------------------------------------------------------------------------------- For purposes of determining death benefits and benefits under the optional benefit riders (but not the earnings multiplier benefit rider), we assign the investment options to one of three categories of funds. The categories are: 1) Covered Funds; 2) Special Funds; and 3) Excluded Funds. Allocations to Covered Funds participate fully in all guaranteed benefits. Allocations to Special Funds could affect the death benefit and/or optional benefit rider guarantee that may otherwise be provided. Allocations to Excluded Funds do not participate in any guaranteed benefits, due to their potential for volatility. No investment options are currently designated as Excluded Funds. Designation of investment options under these categories may vary by benefit. For example, we may designate an investment option a Special Fund for purposes of calculating a benefit under an optional benefit rider, but not a death benefit, or for calculating one death benefit and not another. We may, with 30 days notice to you, designate any investment option as a Special or Excluded Fund with respect to new premiums added to such investment option and also with respect to new transfers to such investment option. Please see Appendix F for examples. - -------------------------------------------------------------------------------- CHARGES AND FEES - -------------------------------------------------------------------------------- We deduct the contract charges described below to compensate us for our costs and expenses, services provided and risks assumed under the Contracts. We incur certain costs and expenses for distributing and administering the Contracts, including compensation and expenses paid in connection with sales of the Contracts, for paying the benefits payable under the Contracts and for bearing various risks associated with the Contracts. The amount of a contract charge will not always correspond to the actual costs associated with the charge. For example, the surrender charge collected may not fully cover all of the distribution expenses incurred by us with the service or benefits provided. If there are any profits from fees and charges deducted under the Contract, including the mortality and expense risk charge and rider and benefit charges, we may use such profits to finance the distribution of Contracts. 13 Legends - 136958 CHARGE DEDUCTION SUBACCOUNT You may elect to have all charges against your contract value deducted directly from a single subaccount designated by the Company. Currently we use the Liquid Assets subaccount for this purpose. If you do not elect this option, or if the amount of the charges is greater than the amount in the designated subaccount, we will deduct the charges as discussed below. You may cancel this option at any time by sending satisfactory notice to our Customer Service Center. CHARGES DEDUCTED FROM THE CONTRACT VALUE We deduct the following charges from your contract value: SURRENDER CHARGE. We will deduct a contingent deferred sales charge (a "surrender charge") if you surrender your Contract or if you take a withdrawal in excess of the Free Withdrawal Amount during the 4-year period from the date we receive and accept a premium payment. We base the surrender charge on a percentage of each premium payment withdrawn. The surrender charge is based on the amount requested for withdrawal. The surrender charge is deducted from the contract value remaining after you have received the amount requested for withdrawal. This charge is intended to cover sales expenses that we have incurred. We may reduce or waive the surrender charge in certain situations. We will never charge more than the maximum surrender charges. The percentage of premium payments deducted at the time of surrender or excess withdrawal depends on the number of complete years that have elapsed since that premium payment was made. We determine the surrender charge as a percentage of each premium payment as follows: COMPLETE YEARS ELAPSED 0 1 2 3 4+ SINCE PREMIUM PAYMENT SURRENDER CHARGE (AS A 6% 5% 4% 3% 0% PERCENTAGE OF PREMIUM PAYMENT) WAIVER OF SURRENDER CHARGE FOR EXTENDED MEDICAL CARE. We will waive the surrender charge in most states in the following events: (i) you begin receiving qualified extended medical care on or after the first contract anniversary for at least 45 days during a 60-day period and we receive your request for the surrender or withdrawal, together with all required documentation at our Customer Service Center during the term of your care or within 90 days after the last day of your care; or (ii) you are first diagnosed by a qualified medical professional, on or after the first contract anniversary, as having a qualifying terminal illness. We have the right to require an examination by a physician of our choice. If we require such an examination, we will pay for it. You are required to send us satisfactory written proof of illness. See your Contract for more information. The waiver of surrender charge may not be available in all states. FREE WITHDRAWAL AMOUNT. The Free Withdrawal Amount is the greater of (i) any earnings less previous withdrawals, and (ii) 10% of premium payments paid within 4 years prior to the date of withdrawal and not previously withdrawn, less any previous withdrawals taken in the same contract year. SURRENDER CHARGE FOR EXCESS WITHDRAWALS. We will deduct a surrender charge for excess withdrawals, which may include a withdrawal you make to satisfy required minimum distribution requirements under the Internal Revenue Code (the "Code"). We consider a withdrawal to be an excess withdrawal when the amount you withdraw in any contract year exceeds the Free Withdrawal Amount. When you are receiving systematic withdrawals, any combination of regular withdrawals taken and any systematic withdrawals expected to be received in a contract year will be included in determining the amount of the excess withdrawal. Such a withdrawal will be considered a partial surrender of the Contract and we will impose a surrender charge and any associated premium tax. We will deduct such charges from the contract value in proportion to the contract value in each subaccount or Fixed Interest Allocation from which the excess withdrawal was taken. In instances where the excess withdrawal equals the entire contract value in such subaccounts or Fixed Interest Allocations, we will deduct charges proportionately from all other subaccounts and Fixed Interest Allocations in which you are invested. ANY WITHDRAWAL FROM A FIXED INTEREST ALLOCATION MORE THAN 30 DAYS BEFORE ITS MATURITY DATE WILL TRIGGER A MARKET VALUE ADJUSTMENT. See Appendix C and the Fixed Account II prospectus for more information. 14 Legends - 136958 For the purpose of calculating the surrender charge for an excess withdrawal: (i) we treat premiums as being withdrawn on a first-in, first-out basis; and (ii) amounts withdrawn which are not considered an excess withdrawal are not considered a withdrawal of any premium payments. We have included an example of how this works in Appendix E. Although we treat premium payments as being withdrawn before earnings for purpose of calculating the surrender charge for excess withdrawals, the federal tax law treats earnings as withdrawn first. PREMIUM TAXES. We may charge for state and local premium taxes depending on your state of residence. These taxes can range from 0% to 3.5% of the premium payment. We have the right to change this amount to conform with changes in the law or if you change your state of residence. We deduct the premium tax from your contract value (or from the MGIB Benefit Base, if exercised) on the annuity start date. However, some jurisdictions impose a premium tax at the time initial and additional premiums are paid, regardless of when the annuity payments begin. In those states we may defer collection of the premium taxes from your contract value and deduct it when you surrender the Contract, when you take an excess withdrawal or on the annuity start date. ADMINISTRATIVE CHARGE. We deduct an annual administrative charge on each contract anniversary. If you surrender your Contract prior to a contract anniversary, we deduct an administrative charge when we determine the cash surrender value payable to you. The charge is $30 per Contract. We waive this charge if your contract value is $100,000 or more at the end of a contract year or the total of your premium payments is $100,000 or more or under other under conditions established by ING USA. We deduct the charge proportionately from all subaccounts in which you are invested. If there is no contract value in those subaccounts, we will deduct the charge from your Fixed Interest Allocations starting with the guaranteed interest periods nearest their maturity dates until the charge has been paid. TRANSFER CHARGE. We currently do not deduct any charges for transfers made during a contract year. We have the right, however, to assess up to $25 for each transfer after the twelfth transfer in a contract year. The charge will not apply to any transfers due to the election of dollar cost averaging or automatic rebalancing. REDEMPTION FEES. If applicable, we may deduct the amount of any redemption fees imposed by the underlying portfolios as a result of withdrawals, transfers or other fund transactions you initiate. Redemption fees, if any, are separate and distinct from any transaction charges or other charges deducted from your contract value. CHARGES DEDUCTED FROM THE SUBACCOUNTS MORTALITY AND EXPENSE RISK CHARGE. The amount of the mortality and expense risk charge depends on the death benefit you have elected. THE CHARGE IS DEDUCTED ON EACH BUSINESS DAY AND IS A PERCENTAGE OF AVERAGE DAILY ASSETS BASED ON THE ASSETS YOU HAVE IN EACH SUBACCOUNT. THE MORTALITY AND EXPENSE RISK CHARGE COMPENSATES THE COMPANY FOR DEATH BENEFIT AND ANNUITIZATION RISKS AND THE RISK THAT EXPENSE CHARGES WILL NOT COVER ACTUAL EXPENSES. If there are any profits from the mortality and expense risk charge, we may use such profits to finance the distribution of Contracts. 15 Legends - 136958 - -------------------------------------------------------------------------------- QUARTERLY RATCHET MAX 7 STANDARD ENHANCED ENHANCED DEATH BENEFIT DEATH BENEFIT DEATH BENEFIT - -------------------------------------------------------------------------------- Annual Annual Annual Charge Charge Charge Expressed Expressed Expressed Annual as Daily Annual as Daily Annual as Daily Charge Rate Charge Rate Charge Rate 1.50% 0.004141% 1.75% 0.004837% 2.05% 0.005675% - -------------------------------------------------------------------------------- ASSET-BASED ADMINISTRATIVE CHARGE. The amount of the asset-based administrative charge, on an annual basis, is equal to 0.15% of the assets you have in each subaccount. We deduct the charge from your assets in each subaccount on each business day at the rate of 0.000411% for each day since the previous business day. EARNINGS MULTIPLIER BENEFIT CHARGE. Subject to state availability, you may purchase the earnings multiplier benefit rider for both qualified and non-qualified Contracts either at issue or on the next contract anniversary following the introduction of the benefit in your state, if later. So long as the rider is in effect, we will deduct a separate quarterly charge for the rider through a pro-rata reduction of the contract value of the subaccounts in which you are invested. If there is insufficient contract value in the subaccounts, we will deduct the charges from your Fixed Interest Allocations starting with the allocation nearest its maturity date. If that is insufficient, we will deduct the charge from the allocation next nearest its maturity date, and so on. We deduct the rider charge on each quarterly contract anniversary in arrears, meaning we deduct the first charge on the first quarterly anniversary following the rider date. If you surrender or annuitize your Contract, we will deduct a pro-rata portion of the charge for the current quarter based on the current contract value immediately prior to the surrender or annuitization. The quarterly charge for the earnings multiplier benefit rider is 0.08% (0.30% annually). For a description of the rider, see "Earnings Multiplier Benefit Rider." OPTIONAL RIDER CHARGES. Subject to state availability, you may purchase one of two optional benefit riders that you may elect at issue. So long as the rider is in effect, we will deduct a separate quarterly charge for each optional benefit rider through a pro-rata reduction of the contract value of the subaccounts in which you are invested. If there is insufficient contract value in the subaccount, we will deduct the charges from your Fixed Interest Allocations nearest their maturity date. We deduct each rider charge on each quarterly contract anniversary in arrears, meaning we deduct the first charge on the first quarterly anniversary following the rider date. For a description of the riders and the defined terms used in connection with the riders, see "The Annuity Contract -- Optional Riders." MINIMUM GUARANTEED INCOME BENEFIT (MGIB). The charge for the MGIB rider is as follows: ---------------------------------------------------------------------------- AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE ---------------------------------------------------------------------------- 0.75% of the MGIB Benefit Base 0.19% of the MGIB Benefit Base ---------------------------------------------------------------------------- Please see "Optional Riders-Minimum Guaranteed Income Benefit" for a description of the MGIB Benefit Base and the MGIB Rate. 16 Legends - 136958 ING LIFEPAY MINIMUM GUARANTEED WITHDRAWAL BENEFIT (ING LIFEPAY). The annual charge for the ING LifePay rider is 0.50% (0.125% quarterly) of the contract value. The charge is deducted from the contract value in the subaccounts on each quarterly contract anniversary date, in arrears. We will deduct charges during the period starting on the rider date and up to your rider's Lifetime Automatic Periodic Benefit ("LAPB") Status. LAPB Status will occur if your contract value is reduced to zero and other conditions are met. Please see "ING LifePay Minimum Guaranteed Withdrawal Benefit Rider - Lifetime Automatic Periodic Benefit Status" later in this prospectus. If you surrender or annuitize your Contract, we will deduct a pro-rata portion of the charge for the current quarter based on the current quarterly charge rate immediately prior to the surrender or annuitization. TRUST AND FUND EXPENSES As shown in the Fund Expense Table, each fund deducts management fees from the amounts allocated to the funds. In addition, each fund deducts other expenses which may include service fees which are used to compensate service providers, including the Company and its affiliates, for administrative and contract owner services provided on behalf of the fund. Furthermore, certain funds deduct a distribution or 12b-1 fee, which is used to finance any activity that is primarily intended to result in the sale of fund shares. FOR A MORE COMPLETE DESCRIPTION OF THE FUNDS' FEES AND EXPENSES, REVIEW EACH FUND'S PROSPECTUS. The Company, or its U.S. affiliates, receives from each of the funds or the funds' affiliates varying levels and types of revenue with respect to each of the funds available through the Contract. In terms of total dollar amounts received, the greatest amount of revenue comes from assets allocated to funds managed by ING Investments, LLC or other Company affiliates, which funds may or may not also be sub-advised by another Company affiliate. Assets allocated to funds managed by a Company affiliate, Directed Services, Inc., for example, but which are sub-advised by unaffiliated third parties generate the next greatest amount of revenue. Finally, assets allocated to unaffiliated funds generate the least amount of revenue. TYPES OF REVENUE RECEIVED FROM AFFILIATED FUNDS Affiliated funds are (a) funds managed by ING Investments, LLC or other Company affiliates, which may or may not also be sub-advised by a Company affiliate; and (b) funds managed by a Company affiliate but which are sub-advised by unaffiliated third parties. Revenues received by the Company from affiliated funds include: o Service fees that are deducted from fund assets and included within the "Other Expenses" column of the Fund Expense Table contained in this prospectus. o For certain share classes, the Company may also receive compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "Distribution and/or Service (12b-1) Fees" column of the Fund Expense Table. o Additionally, the Company receives other revenues from affiliated funds and/or their affiliates which may be based either on an annual percentage of average net assets held in the fund by the Company or a percentage of the management fees shown in the Fund Expense Table. These revenues may be received as cash payments or according to a variety of financial accounting techniques which are used to allocate revenue and profits across ING businesses. For funds sub-advised by unaffiliated third parties, once the sub-adviser has been paid, the adviser may share a portion of the remaining management fee with the Company. Because sub-advisory fees vary by sub-adviser, varying amounts of revenue are retained by the affiliated investment adviser and ultimately shared with the Company. 17 Legends - 136958 TYPES OF REVENUE RECEIVED FROM UNAFFILIATED FUNDS Revenues received from each of the unaffiliated funds or their affiliates is based on an annual percentage of the average net assets held in that fund by the Company. Some unaffiliated funds or their affiliates pay us more than others and some of the amounts we receive may be significant. Revenues received by the Company from unaffiliated funds include: o For certain funds, compensation paid from 12b-1 fees or service fees that are deducted from fund assets. Any such fees deducted from fund assets are disclosed in the Fund Expense Table. o We may also receive additional payments for administrative, recordkeeping or other services which we provide to the funds or their affiliates or as an incentive for us to make the funds available through the Contract. These additional payments are not disclosed in the Fund Expense Table. These additional payments may be used by us to finance distribution of the Contract. The following table shows the unaffiliated fund families which have funds currently offered through the Contract, ranked according to total dollar amounts they paid to the Company or its affiliates in 2004: Fidelity Variable Insurance Products Portfolio ProFunds VP AIM Variable Insurance Funds Liberty Variable Insurance Trust If the revenues received from affiliated funds were included in the table above, payments to the Company or its affiliates by ING Investments, LLC and other Company affiliates would be at the top of the list. Management personnel of the Company, and of its affiliated broker-dealers, may receive additional compensation if the overall amount of investments in funds advised by the Company or its affiliates meets certain target levels or increases over time. Compensation for certain management personnel, including sales management personnel, may be enhanced if the overall amount of investments in the contracts and other products issued or advised by the Company or its affiliates increases over time. Certain sales management personnel may also receive compensation that is a specific percentage of the commissions paid to distributors or of purchase payments received under the contracts. Certain funds are designated as "Master-Feeder" or "MarketPro" Funds. Funds offered in a Master Feeder structure (such as the American Funds) or fund of funds structure (such as the MarketPro Funds) may have higher fees and expenses than a fund that invests directly in debt and equity securities. The Fund Expense Table included in "Fees and Expenses" reflects the aggregate annual operating expenses of each portfolio and its corresponding underlying fund or funds. These funds are identified in the Fund Expense Table. See "Fees and Expenses -- Trust or Fund Expenses." - -------------------------------------------------------------------------------- THE ANNUITY CONTRACT - -------------------------------------------------------------------------------- The Contract described in this prospectus is a deferred combination variable and fixed annuity contract. The Contract provides a means for you to invest in one or more of the available mutual fund portfolios of the Trusts and Funds through Separate Account B. It also provides a means for you to invest in a Fixed Interest Allocation through the Fixed Account. See Appendix C and the Fixed Account II prospectus for more information on the Fixed Interest Allocation and Fixed Account. If you have any questions concerning this Contract, contact your registered representative or call our Customer Service Center at 1-800-366-0066. 18 Legends - 136958 CONTRACT DATE AND CONTRACT YEAR The date the Contract became effective is the contract date. Each 12-month period following the contract date is a contract year. CONTRACT OWNER You are the contract owner. You have the rights and options described in the Contract. One or more persons may own the Contract. If there are multiple owners named, the age of the oldest owner will determine the applicable death benefit if such death benefit is available for multiple owners. In the event a selected death benefit is not available, the Standard Death Benefit will apply. The death benefit becomes payable when you die. In the case of a sole contract owner who dies before the annuity start date, we will pay the beneficiary the death benefit then due. The sole contract owner's estate will be the beneficiary if no beneficiary has been designated or the beneficiary has predeceased the contract owner. In the case of a joint owner of the Contract dying before the annuity start date, we will designate the surviving contract owner as the beneficiary. This will override any previous beneficiary designation. See "Joint Owner" below. If the contract owner is a trust and a beneficial owner of the trust has been designated, the beneficial owner will be treated as the contract owner for determining the death benefit. If a beneficial owner is changed or added after the contract date, we will treat this as a change of contract owner for determining the death benefit (likely a taxable event). If no beneficial owner of the trust has been designated, the availability of Enhanced Death Benefits will be based on the age of the annuitant at the time you purchase the Contract. JOINT OWNER. For non-qualified Contracts only, joint owners may be named in a written request before the Contract is in effect. Joint owners may independently exercise transfers and other transactions allowed under the Contract. All other rights of ownership must be exercised by both owners. Joint owners own equal shares of any benefits accruing or payments made to them. All rights of a joint owner end at death of that owner if the other joint owner survives. The entire interest of the deceased joint owner in the Contract will pass to the surviving joint owner and the death benefit will be payable. Joint owners may only select the Standard Death Benefit option. The earnings multiplier benefit rider is not available when there are joint owners. Any addition or deletion of a joint owner is treated as a change of owner which may affect the amount of the death benefit. See "Change of Contract Owner or Beneficiary" below. If you have elected an Enhanced Death Benefit, and you add a joint owner after issue, the Enhanced Death Benefit from the date of change will end. If the older joint owner is attained age 85 or under, the Standard Death Benefit will apply. If the older joint owner is attained age 86 or over on the date of the ownership change, the death benefit will be the cash surrender value. The mortality and expense risk charge going forward will reflect the change in death benefit. If you elected the earnings multiplier benefit rider, it will terminate if you add a joint owner after issue. Note that returning a Contract to single owner status will not restore any Enhanced Death Benefit or the earnings multiplier benefit. Unless otherwise specified, the term "age" when used for joint owners shall mean the age of the oldest owner. ANNUITY START DATE The annuity start date is the date you start receiving annuity payments under your Contract. The Contract, like all deferred variable annuity contracts, has two phases: the accumulation phase and the income phase. The accumulation phase is the period between the contract date and the annuity start date. The income phase begins when you start receiving regular annuity payments from your Contract on the annuity start date. 19 Legends - 136958 ANNUITANT The annuitant is the person designated by you to be the measuring life in determining annuity payments. You are the annuitant unless you name another annuitant in the application. The annuitant's age determines when the income phase must begin and the amount of the annuity payments to be paid. The contract owner will receive the annuity benefits of the Contract if the annuitant is living on the annuity start date. You may not change the annuitant after the Contract is in effect. If the contract owner is an individual, and the annuitant dies before the annuity start date and you have named a contingent annuitant, the contingent annuitant becomes the annuitant. If the annuitant dies before the annuity start date and there is no contingent annuitant, the contract owner will become the annuitant. The contract owner may designate a new annuitant within 60 days of the death of the annuitant. If the annuitant was the sole contract owner and there is no beneficiary designation, the annuitant's estate will be the beneficiary. If the contract owner is not an individual, and the annuitant dies before the annuity start date, we will pay the designated beneficiary the death benefit then due. If a beneficiary has not been designated, or if there is no designated beneficiary living, the contract owner will be the beneficiary. Regardless of whether a death benefit is payable, if the annuitant dies and any contract owner is not an individual, distribution rules under federal tax law will apply. You should consult your tax adviser for more information if the contract owner is not an individual. BENEFICIARY The beneficiary is named by you in a written request. The beneficiary is the person who receives any death benefit proceeds. We pay death benefits to the primary beneficiary (unless there are joint owners, in which case death proceeds are payable to the surviving owner(s)). If the beneficiary dies before the annuitant or the contract owner, we pay the death benefit proceeds to the contingent beneficiary, if any. If there is no surviving beneficiary, we pay the death benefit proceeds to the contract owner's estate. One or more persons may be a beneficiary or contingent beneficiary. In the case of more than one beneficiary, we will assume any death benefit proceeds are to be paid in equal shares to the surviving beneficiaries, unless you indicate otherwise in writing. CHANGE OF CONTRACT OWNER OR BENEFICIARY. During the annuitant's lifetime, you may transfer ownership of a non-qualified Contract. A change in ownership may affect the amount of the death benefit, the guaranteed minimum death benefit and/or the death benefit option applied to the Contract, the amount of the earnings multiplier benefit, if applicable, and the continuation of any other optional rider that you have elected. The new owner's age, as of the date of the change, will be used as the basis for determining the applicable benefits and charges. The new owner's death will determine when a death benefit is payable. If you have elected the Standard Death Benefit option, the minimum guaranteed death benefit will continue if the new owner is age 85 or under on the date of the ownership change. For the Enhanced Death Benefit options, if the new owner is age 79 or under on the date that ownership changes, the minimum guaranteed death benefit will continue. If the new owner is age 80 to 85, the Enhanced Death Benefit will end, and the death benefit will become the Standard Death Benefit. For all death benefit options, 1) if the new owner's attained age is 86 or over on the date of the ownership change, or 2) if the new owner is not an individual (other than a trust for the benefit of the owner or annuitant), the death benefit will be the cash surrender value. The mortality and expense risk charge going forward will reflect the change in death benefit. Please note that once a death benefit has been changed due to a change in owner, a subsequent change to a younger owner will not restore any Enhanced Death Benefits. 20 Legends - 136958 If you have elected the earnings multiplier benefit rider, and the new owner is under age 76, the rider will continue. The benefit will be adjusted to reflect the attained age of the new owner as the issue age. We will use the Maximum Base and Benefit Base percentages in effect on the original rider date to calculate the benefit. If the new owner is age 76 or over, the rider will terminate. If you have not elected the earnings multiplier benefit rider, the new owner may not add the rider upon the change of ownership. If you have elected another optional rider, the rider will terminate upon a change of ownership. A change of owner likely has tax consequences. See "Federal Tax Considerations" in this prospectus. You have the right to change beneficiaries during the annuitant's lifetime unless you have designated an irrevocable beneficiary. If you have designated an irrevocable beneficiary, you and the irrevocable beneficiary may have to act together to exercise some of the rights and options under the Contract. You may also restrict a beneficiary's right to elect an annuity option or receive a lump sum payment. If so, such rights or options will not be available to the beneficiary. All requests for changes must be in writing and submitted to our Customer Service Center. Please date your requests. The change will be effective as of the day we receive the request. The change will not affect any payment made or action taken by us before recording the change. PURCHASE AND AVAILABILITY OF THE CONTRACT We will issue a Contract only if both the annuitant and the contract owner are age 75 or younger. The initial premium payment must be $10,000 or more ($1,500 for qualified Contracts). You may make additional payments of $500 or more ($50 for qualified Contracts) at any time after the free look period and up to the contract anniversary after your 85th birthday. Under certain circumstances, we may waive the minimum premium payment requirement. We may also change the minimum initial or additional premium requirements for certain group or sponsored arrangements. An initial or additional premium payment that would cause the contract value of all annuities that you maintain with us to exceed $1,000,000 requires our prior approval. The Contract may not be available to all ages through all broker dealers. The Contract is designed for people seeking long-term tax-deferred accumulation of assets, generally for retirement or other long-term purposes. The tax-deferred feature is more attractive to people in high federal and state tax brackets. YOU SHOULD NOT BUY THIS CONTRACT: (I) IF YOU ARE LOOKING FOR A SHORT-TERM INVESTMENT; (II) IF YOU CANNOT RISK GETTING BACK LESS MONEY THAN YOU PUT IN; OR (III) IF YOUR ASSETS ARE IN A PLAN WHICH PROVIDES FOR TAX-DEFERRAL AND YOU SEE NO OTHER REASON TO PURCHASE THIS CONTRACT. IRAs and other qualified plans already have the tax-deferral feature found in this Contract. For an additional cost, the Contract provides other features and benefits including death benefits and the ability to receive a lifetime income. You should not purchase a qualified Contract unless you want these other features and benefits, taking into account their cost. See "Fees and Expenses" in this prospectus. IF YOU ARE CONSIDERING AN ENHANCED DEATH BENEFIT OPTION AND/OR THE EARNINGS MULTIPLIER BENEFIT RIDER AND YOUR CONTRACT WILL BE AN IRA, SEE "TAXATION OF QUALIFIED CONTRACTS -- INDIVIDUAL RETIREMENT ANNUITIES" AND "TAX CONSEQUENCES OF ENHANCED DEATH BENEFIT" IN THIS PROSPECTUS. CREDITING OF PREMIUM PAYMENTS We will process your initial premium within 2 business days after receipt, if the application and all information necessary for processing the Contract are complete. We will process subsequent premium payments within 1 business day if we receive all information necessary. In certain states we also accept initial and additional premium payments by wire order. Wire transmittals must be accompanied by sufficient electronically transmitted data. We may retain your initial premium payment for up to 5 business days while attempting to complete an incomplete application. If the application cannot be completed within this period, we will inform you of the reasons for the delay. We will also return the premium payment immediately unless you direct us to hold the premium payment until the application is completed. If you choose to have us hold the premium payment, it will be held in a non-interest bearing account. 21 Legends - 136958 We will allocate your initial payment according to the instructions you specified. If a subaccount is not available or requested in error, we will make inquiry about a replacement subaccount. If we are unable to reach you or your representative, we will consider the application incomplete. For initial premium payments designated for a subaccount of Separate Account B, we will credit the payment at the accumulation unit value next determined after we receive your premium payment and the completed application. Once the completed application is received, we will allocate the payment to the subaccounts and/or Fixed Interest Allocation of Separate Account B specified by you within 2 business days. If your premium payment was transmitted by wire order from your broker/dealer, we will follow one of the following two procedures after we receive and accept the wire order and investment instructions. The procedure we follow depends on state availability and the procedures of your broker/dealer. 1) If either your state or broker/dealer do not permit us to issue a Contract without an application, we reserve the right to rescind the Contract if we do not receive and accept a properly completed application or enrollment form within 5 days of the premium payment. If we do not receive the application or form within 5 days of the premium payment, we will refund the contract value plus any charges we deducted, and the Contract will be voided. Some states require that we return the premium paid. 2) If your state and broker/dealer allow us to issue a Contract without an application, we will issue and mail the Contract to you or your representative, together with a Contract Acknowledgement and Delivery Statement for your execution. Until our Customer Service Center receives the executed Contract Acknowledgement and Delivery Statement, neither you nor the broker/dealer may execute any financial transactions on your Contract unless they are requested in writing by you. We may require additional information before complying with your request (e.g., signature guarantee). We will ask about any missing information related to subsequent payments. We will allocate the subsequent payment(s) pro-rata according to the current variable subaccount allocation unless you specify otherwise. Any fixed allocation(s) will not be considered in the pro-rata calculations. If a subaccount is no longer available or requested in error, we will allocate the subsequent payment(s) proportionally among the other subaccount(s) in your current allocation or your allocation instructions. For any subsequent premium payments, we will credit the payment designated for a subaccount of Separate Account B at the accumulation unit value next determined after receipt of your premium payment and instructions. Once we allocate your premium payment to the subaccounts selected by you, we convert the premium payment into accumulation units. We divide the amount of the premium payment allocated to a particular subaccount by the value of an accumulation unit for the subaccount to determine the number of accumulation units of the subaccount to be held in Separate Account B with respect to your Contract. The net investment results of each subaccount vary with its investment performance. In some states, we may require that an initial premium designated for a subaccount of Separate Account B or the Fixed Account be allocated to a subaccount specially designated by the Company (currently, the Liquid Assets subaccount) during the free look period. After the free look period, we will convert your contract value (your initial premium plus any earnings less any expenses) into accumulation units of the subaccounts you previously selected. The accumulation units will be allocated based on the accumulation unit value next computed for each subaccount. Initial premiums designated for Fixed Interest Allocations will be allocated to a Fixed Interest Allocation with the guaranteed interest period you have chosen; however, in the future we may allocate the premiums to the specially designated subaccount during the free look period. 22 Legends - 136958 We may also refuse to accept certain forms of premium payments or loan repayments, if applicable, (traveler's checks, for example) or restrict the amount of certain forms of premium payments or loan repayments (money orders totaling more than $500, for example). In addition, we may require information as to why a particular form of payment was used (third party checks, for example) and the source of the funds of such payment in order to determine whether or not we will accept it. Use of an unacceptable form of payment may result in us returning your premium payment and not issuing the contract. ADMINISTRATIVE PROCEDURES We may accept a request for Contract service in writing, by telephone, or other approved electronic means, subject to our administrative procedures, which vary depending on the type of service requested and may include proper completion of certain forms, providing appropriate identifying information, and/or other administrative requirements. We will process your request at the contract value next determined only after you have met all administrative requirements. Please be advised that with regard to withdrawal requests, the risk of a fraudulent transaction is increased by the use of a facsimile withdrawal request form, even if appropriate identifying information is provided. CONTRACT VALUE We determine your contract value on a daily basis beginning on the contract date. Your contract value is the sum of (i) the contract value in the Fixed Interest Allocations, and (ii) the contract value in each subaccount in which you are invested. CONTRACT VALUE IN FIXED INTEREST ALLOCATIONS. The contract value in your Fixed Interest Allocation is the sum of premium payments allocated to the Fixed Interest Allocation under the Contract, plus contract value transferred to the Fixed Interest Allocation, plus credited interest, minus any transfers and withdrawals from the Fixed Interest Allocation (including any Market Value Adjustment applied to such withdrawal), contract fees (including, in some cases, fees for optional benefit riders) and premium taxes. CONTRACT VALUE IN THE SUBACCOUNTS. On the contract date, the contract value in the subaccount in which you are invested is equal to the initial premium paid and designated to be allocated to the subaccount. On the contract date, we allocate your contract value to each subaccount and/or a Fixed Interest Allocation specified by you, unless the Contract is issued in a state that requires the return of premium payments during the free look period, in which case, the portion of your initial premium not allocated to a Fixed Interest Allocation may be allocated to a subaccount specially designated by the Company during the free look period for this purpose (currently, the Liquid Assets subaccount). On each business day after the contract date, we calculate the amount of contract value in each subaccount as follows: 1) We take the contract value in the subaccount at the end of the preceding business day. 2) We multiply (1) by the subaccount's Net Rate of Return since the preceding business day. 3) We add (1) and (2). 4) We add to (3) any additional premium payments, and then add or subtract any transfers to or from that subaccount. 5) We subtract from (4) any withdrawals and any related charges, and then subtract any contract fees and premium taxes. CASH SURRENDER VALUE The cash surrender value is the amount you receive when you surrender the Contract. The cash surrender value will fluctuate daily based on the investment results of the subaccounts in which you are invested and interest credited to Fixed Interest Allocations and any Market Value Adjustment. See Appendix C and the Fixed Account II prospectus for a description of the calculation of cash surrender value under any Fixed Interest Allocation. We do not guarantee any minimum cash surrender value. On any date during the accumulation phase, we calculate the cash surrender value as follows: we start with your contract value, adjust for any Market Value Adjustment, and then we deduct any surrender charge, any charge for premium taxes, the annual contract administrative fee (unless waived), any optional benefit rider charge, and any other charges incurred but not yet deducted. 23 Legends - 136958 SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE. You may surrender the Contract at any time while the annuitant is living and before the annuity start date. A surrender is effective on the date we receive your written request and the Contract at our Customer Service Center. After we receive all paperwork required for us to process your surrender, we will determine and pay the cash surrender value at the price next determined. Once paid, all benefits under the Contract will terminate. For administrative purposes, we will transfer your money to a specially designated subaccount (currently the Liquid Assets subaccount) prior to processing the surrender. This transfer will have no effect on your cash surrender value. You may receive the cash surrender value in a single sum payment or apply it under one or more annuity options. We will usually pay the cash surrender value within 7 days. Consult your tax adviser regarding the tax consequences associated with surrendering your Contract. A surrender made before you reach age 59 1/2 may result in a 10% tax penalty. See "Federal Tax Considerations" for more details. ADDITION, DELETION OR SUBSTITUTION OF SUBACCOUNTS AND OTHER CHARGES We may make additional subaccounts available to you under the Contract. These subaccounts will invest in investment portfolios we find suitable for your Contract. We may also withdraw or substitute investment portfolios, subject to the conditions in your Contract and compliance with regulatory requirements. We may amend the Contract to conform to applicable laws or governmental regulations. If we feel that investment in any of the investment portfolios has become inappropriate to the purposes of the Contract, we may, with approval of the SEC (and any other regulatory agency, if required) substitute another portfolio for existing and future investments. If you elected the dollar cost averaging, systematic withdrawals or automatic rebalancing programs, or if you have other outstanding instructions and we substitute or otherwise eliminate a portfolio subject to those instructions, we will execute your instructions using the substituted or proposed replacement portfolio, unless you request otherwise. The substitute or proposed replacement portfolio may have higher fees and charges than any portfolio it replaces. We will provide you with written notice before we make these changes. We reserve the right to: (i) deregister Separate Account B under the 1940 Act; (ii) operate Separate Account B as a management company under the 1940 Act if it is operating as a unit investment trust; (iii) operate Separate Account B as a unit investment trust under the 1940 Act if it is operating as a managed separate account; (iv) restrict or eliminate any voting rights as to Separate Account B; and (v) combine Separate Account B with other accounts. We will provide you with written notice before we make any of these changes. THE FIXED ACCOUNT The Fixed Account is a segregated asset account which contains the assets that support a contract owner's Fixed Interest Allocations. See Appendix C and the Fixed Account II prospectus for more information. OPTIONAL RIDERS Subject to state availability, you may elect one of the two optional benefit riders discussed below. YOU MAY ADD ONLY ONE OF THESE TWO RIDERS TO YOUR CONTRACT. EACH RIDER HAS A SEPARATE CHARGE. Once elected, the riders generally may not be cancelled. You may not remove the rider and charges will be assessed regardless of the performance of your Contract. Please see "Charges and Fees -- Optional Rider Charges" for information on rider charges. 24 Legends - 136958 THE OPTIONAL RIDERS MAY NOT BE AVAILABLE FOR ALL INVESTORS. YOU SHOULD ANALYZE EACH RIDER THOROUGHLY AND UNDERSTAND IT COMPLETELY BEFORE YOU SELECT ONE. THE OPTIONAL RIDERS DO NOT GUARANTEE ANY RETURN OF PRINCIPAL OR PREMIUM PAYMENTS AND DO NOT GUARANTEE PERFORMANCE OF ANY SPECIFIC INVESTMENT PORTFOLIO UNDER THE CONTRACT. YOU SHOULD CONSULT A QUALIFIED FINANCIAL ADVISER IN EVALUATING THE RIDERS. THE OPTIONAL RIDERS MAY NOT BE APPROVED IN ALL STATES. CHECK WITH OUR CUSTOMER SERVICE CENTER FOR AVAILABILITY IN YOUR STATE. THE TELEPHONE NUMBER IS (800) 366-0066. RIDER DATE. The rider date is the date the optional benefit rider becomes effective. The rider date is also the contract date if you purchase the rider when the Contract is issued. NO CANCELLATION. Once you purchase a rider, you may not cancel it unless you cancel the Contract during the Contract's free look period, surrender, annuitize or otherwise terminate the Contract. These events automatically cancel any rider. Once the Contract continues beyond the free look period, you may not cancel the rider. The Company may, at its discretion, cancel and/or replace a rider at your request in order to renew or reset a rider. TERMINATION. The optional riders are "living benefits," which means the guaranteed benefits offered by the riders are intended to be available to you while you are living and while your Contract is in the accumulation phase. The optional riders automatically terminate if you: o annuitize, surrender or otherwise terminate your Contract during the accumulation phase; or o die during the accumulation phase (first owner to die if there are multiple contract owners, or at death of annuitant if contract owner is not a natural person), unless your spouse beneficiary elects to continue the Contract. The optional riders will also terminate if there is a change in contract ownership (other than a spousal beneficiary continuation on your death). Other circumstances which may cause a particular optional rider to terminate automatically are discussed below with each rider. MINIMUM GUARANTEED INCOME BENEFIT RIDER (MGIB). The MGIB rider is an optional benefit which guarantees a minimum amount of annuity income will be available to you if you annuitize on the MGIB Date, regardless of fluctuating market conditions. The amount of the Minimum Guaranteed Income Benefit will depend on the amount of premiums you pay during the five contract years after you purchase the rider, the amount of contract value you allocate or transfer to Special Funds or Excluded Funds, the MGIB Rate, the adjustment for Special Fund or Excluded Fund transfers, and any withdrawals you take while the rider is in effect. Thus, investing in Special Funds or Excluded Funds may limit the MGIB benefit. The charge we deduct under the MGIB Rider is 0.75% of the MGIB Benefit Base. The calculation of the MGIB Benefit Base is described in "Determining the MGIB Annuity Income", below. Ordinarily, the amount of income that will be available to you on the annuity start date is based on your contract value, the annuity option you selected and the guaranteed or the income factors in effect on the date you annuitize. If you purchase the MGIB rider, the amount of income that will be available to you upon annuitization on the MGIB Date is the greatest of: 1) your annuity income based on your contract value on the MGIB Date adjusted for any Market Value Adjustment (see Appendix C and the Fixed Account II prospectus) applied to the guaranteed income factors specified in your Contract for the annuity option you selected; 2) your annuity income based on your contract value on the MGIB Date adjusted for any Market Value Adjustment (see Appendix C and the Fixed Account II prospectus) applied to the then-current income factors in effect for the annuity option you selected; or 25 Legends - 136958 3) the MGIB annuity income based on your MGIB Benefit Base on the MGIB Date applied to the MGIB income factors specified in your rider for the MGIB annuity option you selected. Prior to applying the MGIB income factors, we will adjust the MGIB Benefit Base for any premium tax recovery and Market Value Adjustment (see Appendix C and the Fixed Account II prospectus) that would otherwise apply at annuitization. The guaranteed factors contained in the MGIB rider generally provide lower payout per $1,000 of value applied than the guaranteed factors found in your Contract. Although the minimum income provided under the rider can be determined in advance, the contract value in the future is unknown, so the income provided under a contract with the MGIB rider attached may be greater or less than the income that would be provided under the Contract without the rider. Generally, the income calculated under the rider will be greater than the income provided under the Contract whenever the MGIB Benefit Base (greater of the Rollup and Ratchet Bases) is sufficiently in excess of the contract value to offset the additional conservatism reflected in the rider's income factors compared to those in the Contract. The income factors in the MGIB rider generally reflect a lower interest rate and more conservative mortality than the income factors in the Contract. The degree of relative excess that the income factors require to produce more income will vary for each individual circumstance. If the contract value exceeds the MGIB Benefit Base at time of annuitization, the Contract will always produce greater income than the rider. Please see Appendix G -- Examples of Minimum Guaranteed Income Benefit Calculation. The MGIB Benefit Base is only a calculation used to determine the MGIB annuity income. The MGIB Benefit Base does not represent a contract value, nor does it guarantee performance of the subaccounts in which you are invested. It is also not used in determining the amount of your cash surrender value and death benefits. Any reset of contract value under provisions of the Contract or other riders will not increase the MGIB Benefit Base or Maximum MGIB Base. The MGIB Benefit Base is tracked separately for Covered, Special and Excluded Funds, based on initial allocation of eligible premium (or contract value) if applicable, and subsequently allocated eligible premiums, withdrawals and transfers. Contract value (not eligible premium) is used as the initial value if the rider is added after the contract date. The following investment options are designated as Special Funds for purposes of calculating the MGIB Benefit Base: the ING Liquid Assets Portfolio, the ING PIMCO Core Bond Portfolio, ING VP Intermediate Bond Portfolio, TSA Special Fixed Account, the Fixed Account, the Fixed Interest Division and the ProFunds VP Rising Rates Opportunity Portfolio. Please see "The Trust and Funds -- Covered Funds and Special Funds." No investment options are currently designated as Excluded Funds. Prior to your latest annuity start date, you may choose to exercise your right to receive payments under the MGIB rider. Payments under the rider begin on the MGIB Date. We require a 10-year waiting period before you can annuitize the MGIB rider benefit. The MGIB must be exercised in the 30-day period prior to the end of the waiting period or any subsequent contract anniversary. At your request, the Company may in its discretion extend the latest contract annuity start date without extending the MGIB Date. DETERMINING THE MGIB ANNUITY INCOME. On the MGIB Date, we calculate your MGIB annuity income as follows: 1) WE FIRST DETERMINE YOUR MGIB BENEFIT BASE: The MGIB Benefit Base is equal to the greater of the MGIB Rollup Base and the MGIB Ratchet Base. 26 Legends - 136958 A) CALCULATION OF MGIB ROLLUP BASE The MGIB Rollup Base is equal to the lesser of the Maximum MGIB Base and the sum of (a), (b) and (c) where: (a) is the MGIB Rollup Base for Covered Funds; (b) is the MGIB Rollup Base for Special Funds; and (c) is the contract value of Excluded Funds. The Maximum MGIB Base applicable to the MGIB Rollup Base is 300% of eligible premiums adjusted pro-rata for withdrawals. This means that the Maximum MGIB Base is reduced for withdrawals by the same proportion that the withdrawal reduces the contract value. The Maximum MGIB Base is not allocated by Fund category. THE MGIB ROLLUP BASE ALLOCATED TO COVERED FUNDS equals the eligible premiums allocated to Covered Funds, adjusted for subsequent withdrawals and transfers taken or made while the MGIB rider is in effect, accumulated at the MGIB Rate to the earlier of the oldest owner reaching age 80 and the MGIB Rollup Base reaching the Maximum MGIB Base. The MGIB Rollup Base accumulates at 0% thereafter. The MGIB Rate is currently 7%. The MGIB Rate is an annual effective rate. We may, at our discretion, discontinue offering this rate. The MGIB Rate will not change for those contracts that have already purchased the MGIB rider. THE MGIB ROLLUP BASE ALLOCATED TO SPECIAL FUNDS equals the eligible premiums allocated to Special Funds, adjusted for subsequent withdrawals and transfers taken or made while the MGIB rider is in effect. The MGIB Rate does not apply to the MGIB Rollup Base allocated to Special Funds, so the MGIB Rollup Base allocated to Special Funds does not accumulate. THE MGIB ROLLUP BASE ALLOCATED TO EXCLUDED FUNDS equals the eligible premiums allocated to Excluded Funds, adjusted for subsequent withdrawals and transfers taken or made while the MGIB rider is in effect, accumulated at the MGIB rate to the earlier of the oldest owner reaching age 80 and the MGIB Rollup Base reaching the Maximum MGIB Base, and at 0% thereafter. THE MGIB ROLLUP BASE ALLOCATED TO EXCLUDED FUNDS IS USED ONLY FOR TRANSFER ADJUSTMENTS AND RIDER CHARGES. IT IS NOT INCLUDED IN THE MGIB ROLLUP BASE USED TO DETERMINE BENEFITS. Eligible premiums are those added more than 5 years before the earliest MGIB Date. This means that, generally, premiums must be paid within five years of purchasing the MGIB rider to be considered eligible premiums. Premiums paid after that are excluded from the MGIB Rollup Base. Withdrawals reduce the MGIB Rollup Base on a pro-rata basis. The percentage reduction in the MGIB Rollup Base for each Fund category (i.e. Covered, Special or Excluded) equals the percentage reduction in contract value in that Fund category resulting from the withdrawal. This means that the MGIB Rollup Base for Covered Funds, Special Funds or Excluded Funds is reduced for withdrawals by the same proportion that the withdrawal reduces the contract value allocated to Covered Funds, Special Funds or Excluded Funds. For example, if the contract value in Covered Funds is reduced by 25% as the result of a withdrawal, the MGIB Rollup Base allocated to Covered Funds is also reduced by 25% (rather than by the amount of the withdrawal). 27 Legends - 136958 Because the MGIB Rollup Base is tracked separately for Covered, Special and Excluded Funds, when you make transfers between Covered, Special Funds and Excluded Funds, there is an impact on the MGIB Rollup Base. Net transfers between Covered Funds and Special Funds will reduce the MGIB Rollup Base allocated to Covered Funds or Special Funds, as applicable, on a pro-rata basis. This means that the MGIB Rollup Base allocated to Covered Funds or Special Funds will be reduced by the same percentage as the transfer bears to the contract value allocated to Covered Funds or Special Funds. For example, if the contract value in Covered Funds is reduced by 25% as the result of the transfer, the MGIB Rollup Base allocated to Covered Funds is also reduced by 25% (rather than by the amount of the transfer). The resulting increase in the MGIB Rollup Base allocated to Special or Excluded Funds, as applicable, will equal the reduction in the MGIB Rollup Base allocated to Covered Funds. Transfers from Special Funds to Covered Funds are treated in the same way. Net transfers from Excluded Funds will reduce the MGIB Rollup Base allocated to Excluded Funds on a pro-rata basis. The resulting increase in the MGIB Rollup Base allocated to Covered or Special Funds, as applicable, will equal the lesser of the contract value transferred and the reduction in the MGIB Rollup Base allocated to Excluded Funds. B) CALCULATION OF MGIB RATCHET BENEFIT BASE The MGIB Ratchet Benefit Base is equal to the sum of (a) and (b) where: (a) is the MGIB Ratchet Base for Covered Funds and Special Funds; and (b) is the contract value for Excluded Funds. THE MGIB RATCHET BASE FOR COVERED FUNDS, SPECIAL FUNDS AND EXCLUDED FUNDS equals: o on the rider date, eligible premiums or the contract value, (if the rider is added after the contract date,) allocated to Covered Funds, Special Funds and Excluded Funds; o on each "quarterly anniversary date" prior to attainment of age 90, the MGIB Ratchet Base for Covered Funds, Special Funds and Excluded Funds is set equal to the greater of : 1) the current contract value allocated to Covered Funds, Special Funds and Excluded Funds (after any deductions occurring on that date); and 2) the MGIB Ratchet Base for Covered Funds, Special Funds and Excluded Funds from the most recent prior quarterly anniversary date, adjusted for any new eligible premiums and withdrawals attributable to Covered Funds, Special Funds or Excluded Funds and transfers. o at other times, the MGIB Ratchet Base for Covered Funds, Special Funds and Excluded Funds is the MGIB Ratchet Base from the prior quarterly anniversary date, adjusted for subsequent eligible premiums and withdrawals attributable to Covered Funds, Special Funds or Excluded Funds and transfers. THE MGIB RATCHET BASE ALLOCATED TO EXCLUDED FUNDS IS USED ONLY FOR TRANSFER ADJUSTMENTS AND RIDER CHARGES. IT IS NOT INCLUDED IN THE MGIB RATCHET BENEFIT BASE USED TO DETERMINE BENEFITS. 28 Legends - 136958 A "quarterly anniversary date" is the date three months from the contract date that falls on the same date in the month as the contract date. For example, if the contract date is February 12, the quarterly anniversary date is May 12. If there is no corresponding date in the month, the quarterly anniversary date will be the last date of such month. If the quarterly anniversary date falls on a weekend or holiday, we will use the value as of the subsequent business day. 2) THEN WE DETERMINE THE MGIB ANNUITY INCOME BY MULTIPLYING YOUR MGIB BENEFIT BASE (ADJUSTED FOR ANY SURRENDER CHARGE AND PREMIUM TAXES) BY THE INCOME FACTOR, AND THEN DIVIDE BY $1,000. MGIB INCOME OPTIONS The following are the MGIB Income Options available under the MGIB Rider: (i) Income for Life (Single Life or Joint with 100% Survivor) and 10-20 year certain. (ii) Income for 20-30 year certain. (iii) Any other income plan offered by the Company in conjunction with the MGIB rider on the MGIB Date. Once during the life of the Contract, you have the option to elect to apply up to 50% of the MGIB Benefit Base to one of the MGIB Income Options available under the Rider. This option may only be exercised on a contract anniversary at or after the end of the waiting period. The portion of the MGIB Benefit Base so applied will be used to determine the MGIB income, as is otherwise described in the prospectus. The contract value will be reduced on a pro-rata basis. Any subsequent exercise of your right to receive payments under the MGIB rider must be for 100% of the remaining value. The exercise of this partial annuitization of the MGIB Benefit Base does not affect your right to annuitize under the Contract without regard to the rider. The amount applied to the partial annuitization will be treated as a withdrawal for purposes of adjusting contract and rider values. PLEASE NOTE THAT IF YOU ELECT PARTIAL ANNUITIZATION, INCOME PAYMENTS RECEIVED WILL BE TAXED AS WITHDRAWALS. PLEASE CONSULT YOUR TAX ADVISER BEFORE MAKING THIS ELECTION, AS THE TAXATION OF PARTIAL ANNUITIZATION IS UNCERTAIN. PURCHASE. To purchase the MGIB rider, you must be age 75 or younger on the rider date and the ten-year waiting period must end at or prior to the latest annuity start date. Some broker dealers may limit availability of the rider to younger ages. The MGIB rider must be purchased (i) on the contract date, or (ii) within thirty days after the contract date. For contracts issued more than 30 days before the date this rider first became available in your state, the Company may in its discretion allow purchase of this rider during the 30-day period preceding the first contract anniversary after the date of this prospectus, or the date of state approval, whichever is later. There is a ten-year waiting period before you can annuitize under the MGIB rider. THE MGIB DATE. If you purchased the MGIB rider on the contract date or added the MGIB rider within 30 days following the contract date, the MGIB Date is the contract anniversary on or after the tenth contract anniversary when you decide to exercise your right to annuitize under the MGIB rider. If you added the MGIB rider at any other time, your MGIB Date is the contract anniversary at least 10 years after the rider date when you decide to exercise your right to annuitize under the MGIB rider. NO CHANGE OF ANNUITANT. Once you purchase the MGIB rider, the annuitant may not be changed except for the following exception. If an annuitant who is not a contract owner dies prior to annuitization, a new annuitant may be named in accordance with the provisions of your Contract. The MGIB Benefit Base is unaffected and continues to accumulate. 29 Legends - 136958 NOTIFICATION. On or about 30 days prior to the MGIB Date, we will provide you with notification which will include an estimate of the amount of MGIB annuity benefit available if you choose to exercise it. We will determine the actual amount of the MGIB annuity benefit as of the MGIB Date. THE MGIB RIDER DOES NOT RESTRICT OR LIMIT YOUR RIGHT TO ANNUITIZE THE CONTRACT AT ANY TIME PERMITTED UNDER THE CONTRACT. THE MGIB RIDER DOES NOT RESTRICT YOUR RIGHT TO ANNUITIZE THE CONTRACT USING CONTRACT VALUES THAT MAY BE HIGHER THAN THE MGIB ANNUITY BENEFIT. THE BENEFITS ASSOCIATED WITH THE MGIB RIDER ARE AVAILABLE ONLY IF YOU ANNUITIZE YOUR CONTRACT UNDER THE RIDER AND IN ACCORDANCE WITH THE PROVISIONS SET FORTH ABOVE. ANNUITIZING USING THE MGIB MAY RESULT IN A MORE FAVORABLE STREAM OF INCOME PAYMENTS, AND DIFFERENT TAX CONSEQUENCES, UNDER YOUR CONTRACT. BECAUSE THE MGIB RIDER IS BASED ON CONSERVATIVE ACTUARIAL FACTORS, THE LEVEL OF LIFETIME INCOME THAT IT GUARANTEES MAY BE LESS THAN THE LEVEL THAT MIGHT BE PROVIDED BY THE APPLICATION OF YOUR CONTRACT VALUE TO THE CONTRACT'S APPLICABLE ANNUITY FACTORS. YOU SHOULD CONSIDER ALL OF YOUR OPTIONS AT THE TIME YOU BEGIN THE INCOME PHASE OF YOUR CONTRACT. ING LIFEPAY MINIMUM GUARANTEED WITHDRAWAL BENEFIT ("ING LIFEPAY") RIDER. The ING LifePay rider is an optional benefit which guarantees that if your contract value is reduced to zero by a withdrawal equal to or less than the Maximum Annual Withdrawal ("MAW"), we will pay an amount equal to the MAW annually until the death of the annuitant. LIFETIME GUARANTEED WITHDRAWAL STATUS. This status begins on the date the rider is issued (the "effective date of the rider") and continues until the earliest of: 1) the annuity commencement date; 2) reduction of the contract value to zero by a withdrawal in excess of the MAW (see "Lifetime Automatic Periodic Benefit Status" below); 3) reduction of the contract value to zero by a withdrawal less than or equal to the MAW; 4) the surrender or annuitization of the Contract; or 5) the death of the owner, or first owner, in the case of joint owners. PURCHASE. In order to elect the ING LifePay rider, the annuitant must be the owner or one of the owners. The only exception is if the owner is a non-natural owner. The minimum issue age is 50 and the maximum issue age is 80. The applicable age is the age of the owner (if there are joint owners or the owner is non-natural, the annuitant) on the contract anniversary on which the rider is effective. Some broker dealers may limit availability of the rider to younger ages. The ING LifePay rider will not be issued if the initial allocation to investment options is not in accordance with the investment option restrictions described below. The Company in its discretion may allow the rider to be elected during the 30-day period preceding a contract anniversary. Such election must be received in good order, including compliance with the investment option restrictions described below. The rider will be effective as of that contract anniversary. The ING LifePay Withdrawal Benefit rider has two phases. The first phase, called the Growth Phase, begins on the effective date of the rider. The Growth Phase ends as of the business day before the first withdrawal is taken (or when the annuity commencement date is reached). The second phase is called the Withdrawal Phase. This phase begins as of the date of the first withdrawal or the annuity commencement date, whichever occurs first. The ING LifePay Base (referred to as the "MGWB Base" in the Contract) is used to determine the MAW, 1) If you purchased the ING LifePay rider on the contract date: the initial ING LifePay Base is equal to the initial premium. 30 Legends - 136958 2) If you purchased the ING LifePay rider after the contract date: the initial ING LifePay Base is equal to the contract value on the effective date of the rider. The ING LifePay Base is increased dollar-for-dollar by any additional eligible premiums. Eligible premiums are premiums received during the Growth Phase. The ING LifePay Base is also increased to equal the contract value, if the contract value is greater, on each contract quarterly anniversary after the effective date of the rider and during the Growth Phase. Any additional premiums paid during the Withdrawal Phase are not eligible premiums for purposes of determining the ING LifePay Base or the MAW. However, premiums received during the Withdrawal Phase increase the contract value used to determine the reset MAW if you choose to reset the ING LifePay rider (see "ING LifePay Reset Option", below). We reserve the right to discontinue allowing premium payments during the Withdrawal Phase. DETERMINATION OF THE MAW. The MAW is determined on the date the Withdrawal Phase begins. It equals a percentage of the greater of the contract value and the ING LifePay Base as of the last day of the Growth Phase. The first withdrawal after the effective date of the rider (which causes the end of the Growth Phase) is treated as occurring on the first day of the Withdrawal Phase, immediately after the MAW is determined. The MAW percentage, which varies by age of the annuitant on the date the Withdrawal Phase begins, is as follows: -------------------------------------------------------------------- Annuitant Age MAW % -------------------------------------------------------------------- 50-59 4% -------------------------------------------------------------------- 60-75 5% -------------------------------------------------------------------- 76-80 6% -------------------------------------------------------------------- 81+ 7% -------------------------------------------------------------------- Once determined, the MAW percentage never changes for the Contract, except as provided for under spousal continuation. See "Continuation After Death- Spouse" below. If the rider is in Lifetime Guaranteed Withdrawal Status, and the annuity commencement date is reached, the rider will enter the Withdrawal Phase and will be annuitized. If a lifetime only annuitization option is elected, we will pay the greater of the annuity payout from the Contract and annual payments equal to the MAW. If withdrawals in any contract year exceed the MAW, the MAW will be reduced on a pro-rata basis. This means that the MAW will be reduced by the same proportion that the withdrawal in excess of the MAW is of the contract value determined: 1) before the withdrawal for the amount in excess of the MAW; and 2) after the withdrawal for the amount withdrawn up to the MAW without regard to the excess withdrawal. Please see Appendix H, ING LifePay Partial Withdrawal Examples. Whenever a withdrawal is made, the total withdrawals taken in a contract year are compared with the current MAW. To the extent that the withdrawal taken causes the total withdrawals in that year to exceed the current MAW, that withdrawal is considered excess. For purposes of determining whether the MAW has been exceeded, any applicable Market Value Adjustment or surrender charges will not be applied to the withdrawal. However, for purposes of determining the MAW reduction after an excess withdrawal, any surrender charges and/or Market Value Adjustment are considered to be part of the withdrawal. REQUIRED MINIMUM DISTRIBUTIONS. Withdrawals taken from this Contract to satisfy the Required Minimum Distribution rules of the Internal Revenue Code of 1986, as amended ("RMD"), that exceed the MAW for a specific contract year, will not be deemed excess withdrawals in that contract year, subject to the following rules: 31 Legends - 136958 1. If your RMD for a calendar year (determined on a date on or before January 31 of that year, applicable to this Contract, is greater than the MAW on that date, an Additional Withdrawal Amount will be set equal to that portion of the RMD that exceeds the MAW. 2. You may withdraw the Additional Withdrawal Amount from this Contract without it being deemed an excess withdrawal. 3. Any withdrawals taken in a Contract Year will count first against the MAW for that contract year. 4. Once the MAW for the then current contract year has been taken, additional amounts withdrawn in excess of the MAW, other than RMD's will count against and reduce any Additional Withdrawal Amount. 5. Withdrawals that exceed the Additional Withdrawal Amount are excess withdrawals and will reduce the MAW on a pro-rata basis, as described above. 6. The Additional Withdrawal Amount is reset to zero at the end of each calendar year, and remains at zero until it is reset on January 31 of the following calendar year. 7. If the Contract is still in the Growth Phase on January 31, but enters the Withdrawal Phase later during that calendar year, the Additional Withdrawal Amount will be set equal to the excess, if any, of the RMD for that year over the MAW on the date the MAW is established. INVESTMENT ADVISORY FEES. Withdrawals taken pursuant to a program established by the owner for the payment of investment advisory fees to a named third party investment adviser for advice on management of this contract's values will not cause the Withdrawal Phase to begin. During the Growth Phase, such withdrawals reduce the ING LifePay Base on a pro-rata basis, and during the Withdrawal Phase, these withdrawals are treated as any other withdrawal. ING LIFEPAY RESET OPTION. Beginning one year after the Withdrawal Phase begins, you may choose to reset the MAW, if the MAW percentage times the contract value would be greater than your current MAW. You must elect to reset by a request in a form satisfactory to us. On the date the request is received (the "Reset Effective Date"), the MAW will increase to be equal to the MAW percentage times the contract value on the Reset Effective Date. After exercising the reset option, you must wait one year before electing to reset again. We will not accept a request to reset if the new MAW on the date the request is received would be less than your current MAW. If the reset option is exercised, the charge for the ING LifePay rider will be equal to the charge then in effect for a newly purchased rider but will not exceed the maximum annual charge of 1.20%. However, we guarantee that the rider charge will not increase for resets exercised within the first five contract years. INVESTMENT OPTION RESTRICTIONS. While the ING LifePay rider is in effect, there are limits on the portfolios to which your contract value may be allocated. To the extent your contract value is not allocated to Accepted Funds, your allocations will be rebalanced to maintain at least 20% of such contract value in Fixed Allocation Funds. See "Fixed Allocation Fund Automatic Rebalancing (`FAFAR')" below. ACCEPTED FUNDS. The Accepted Funds are as follows: ING MarkePro Portfolio, ING Liquid Assets Portfolio and Fixed Account II. We may change these designations at any time upon 30 days notice to you. If a change is made, the change will apply to contract value allocated to such portfolios after the date of the change. FIXED ALLOCATION FUNDS. The Fixed Allocation Fund is the ING VP Intermediate Bond Fund. While the rider is in effect, any allocation of contract value to a Fixed Allocation Fund will be considered a Covered Fund allocation for purposes of calculating any applicable death benefit guaranteed under the Contract. We may change these designations at any time upon 30 days notice to you. If a change is made, the change will apply to contract value allocated to such portfolios after the date of the change. 32 Legends - 136958 OTHER FUNDS. All portfolios available under the Contract that are not Accepted Funds or Fixed Allocation Funds are considered Other Funds. FIXED ALLOCATION FUND AUTOMATIC REBALANCING ("FAFAR"). If the contract value in Fixed Allocation Funds is less than 20% of the contract value not allocated to Accepted Funds on any ING LifePay Rebalancing Date, we will automatically rebalance the contract value allocated to Fixed Allocation Funds and Other Funds to restore the required allocation. Accepted Funds are excluded from FAFAR. Any rebalancing is done on a pro-rata basis among Fixed Allocation Funds and Other Funds and will be the last transaction processed on that date. The ING LifePay Rebalancing Dates occur on each contract anniversary and after the following transactions: 1. receipt of additional premiums; 2. transfer or reallocation among Fixed Allocation Funds or Other Funds, whether automatic or specifically directed by you; 3. withdrawals from a Fixed Allocation Fund or Other Fund. FAFAR is separate from any other automatic rebalancing under the Contract. However, if the other automatic rebalancing under the Contract causes the allocations to not be in accordance with the investment option restrictions, FAFAR will occur immediately after that to restore the required allocations. LIFETIME AUTOMATIC PERIODIC BENEFIT ("LAPB") STATUS. If the contract value is reduced to zero (other than by a withdrawal in excess of the MAW), while the rider is in Lifetime Guaranteed Withdrawal Status, the status of the rider changes to LAPB Status and you are entitled to receive periodic payments in an annual amount equal to the MAW. If the contract value is reduced to zero by a withdrawal in excess of the MAW, the Contract and the rider will terminate due to the pro-rata reduction described above. When the rider enters LAPB Status, 1) the Contract will provide no further benefits other than as provided in the ING LifePay rider; 2) no further premium payments will be accepted; 3) any other riders attached to the Contract will terminate, unless otherwise specified in the rider. During LAPB Status, we will pay you periodic payments equal to the MAW. These payments will cease upon the death of the annuitant at which time both the rider and the Contract will terminate. The rider will remain in LAPB Status until it terminates without value upon the annuitant's death. The periodic payments will begin on the last day of the first full contract year following the date the rider enters LAPB Status and will continue to be paid annually thereafter. If, at the time the rider enters LAPB Status, you are receiving systematic withdrawals under the Contract more frequently than annually, the periodic payments will be made at the same frequency in equal amounts such that the sum of the payments in each contract year will equal the annual MAW. Such payments will be made on the same payment dates as previously set up, if the payments were being made monthly or quarterly. If the payments were being made semi-annually or annually, the payments will be made at the end of the half-contract year or contract year, as applicable. DEATH OF OWNER OR ANNUITANT. The ING LifePay rider and charges terminate on the earlier of: 1) if the rider is in Lifetime Guaranteed Withdrawal status, the date of receipt of due proof of death ("claim date") of the owner or first owner, in the case of joint owners, or the annuitant if there is a non-natural owner; 2) date the rider enters LAPB status. Under 1), above, the rider terminates on the death of the first owner, even if the owner is not the annuitant. Thus, you should not purchase this rider with multiple owners, unless the owners are spouses. 33 Legends - 136958 CONTINUATION AFTER DEATH -- SPOUSE. If the surviving spouse of the deceased owner continues the contract (see, "Death Benefit Choices- Continuation After Death- Spouse"), this rider will also continue, provided the following conditions are met: 1) The spouse is at least 50 years old on the date the Contract is continued; and 2) The spouse becomes the annuitant and sole owner. If the rider is in the Growth Phase at the time of spousal continuation: 1) The rider will continue in the Growth Phase; 2) On the date the rider is continued, the ING LifePay Base will be reset to equal the then current contract value; 3) The ING LifePay charges will restart and be the same as were in effect prior to the claim date; and 4) The MAW percentage will be determined as of the date of the first withdrawal, whenever it occurs, and will be based on the spouse's age on that date. If the rider is in the Withdrawal Phase at the time of spousal continuation: 1) The rider will continue in the Withdrawal Phase; 2) On the contract anniversary following the date the rider is continued, a. If the surviving spouse had not been the annuitant before the owner's death, i. The MAW is recalculated as the MAW percentage based on the surviving spouse's age on that contract anniversary multiplied by the current contract value on that contract anniversary. ii. The MAW is considered to be zero from the claim date to that contract anniversary . Withdrawals are permitted pursuant to the other provisions of the Contract. Withdrawals causing the contract value to fall to zero will terminate the Contract and rider. b. If the surviving spouse had been the annuitant before the owner's death, i. The MAW is recalculated as the greater of the MAW on the claim date (adjusted for excess withdrawals thereafter) and the MAW resulting from multiplying the original MAW percentage by the current contract value on that contract anniversary. ii. The MAW does not go to zero on the claim date. Withdrawals may continue under the rider provisions. 3) The rider charges will restart on the contract anniversary following the date the rider is continued and will be the same as were in effect prior to the claim date; CHANGE OF OWNER OR ANNUITANT. Other than as provided above under "Continuation After Death- Spouse", you may not change the annuitant. The rider and rider charges will terminate upon change of owner, including adding an additional owner, except for the following ownership changes: 34 Legends - 136958 1) spousal continuation as described above; 2) change of owner from one custodian to another custodian; 3) change of owner from a custodian for the benefit of an individual to the same individual; 4) change of owner from an individual to a custodian for the benefit of the same individual; 5) collateral assignments; 6) change in trust as owner where the individual owner and the grantor of the trust are the same individual; 7) change of owner from an individual to a trust where the individual owner and the grantor of the trust are the same individual; and 8) change of owner from a trust to an individual where the individual owner and the grantor of the trust are the same individual. TERMINATION OF THE RIDER. The ING LifePay rider may not be cancelled unless the Contract is surrendered or annuitized, other than as described above under "Lifetime Guaranteed Withdrawal Status" and "Death of Owner or Annuitant". For a discussion of the charges we deduct under the ING LifePay rider, see "Charges and Fees -- Optional Rider Charges." Each payment you receive under the ING LifePay rider will be taxed as a withdrawal and may be subject to a penalty tax. See "Withdrawals" and "Federal Tax Considerations" for more information. OTHER CONTRACTS We and our affiliates offer various other products with different features and terms than the Contracts, and that may offer some or all of the same investment portfolios. These products have different benefits, fees and charges, and may or may not better match your needs. Please note that some of the Company's management personnel and certain other employees may receive a portion of their employment compensation based on the amount of Contract values allocated to investment portfolios of Trusts or Funds affiliated with ING. You should be aware that there are alternative options available, and, if you are interested in learning more about these other products, contact our Customer Service Center or your registered representative. - -------------------------------------------------------------------------------- WITHDRAWALS - -------------------------------------------------------------------------------- Except under certain qualified Contracts, you may withdraw all or part of your money any time during the accumulation phase and before the death of the contract owner. If you request a withdrawal for more than 90% of the cash surrender value, and the remaining cash surrender value after the withdrawal is less than $2,500, we will treat it as a request to surrender the Contract. If any single withdrawal or the sum of withdrawals exceeds the Free Withdrawal Amount, you will incur a surrender charge. The Free Withdrawal Amount is the greater of (i) any earnings less previous withdrawals, and (ii) 10% of premium payments paid within 4 years prior to the date of the withdrawal and not previously withdrawn, less any withdrawals taken in the same contract year. 35 Legends - 136958 If you have elected the ING LifePay rider, your withdrawals will be subject to surrender charges if they exceed the free withdrawal amount. However, once your contract value is zero, the periodic payments paid under the ING LifePay rider are not subject to surrender charges. You need to submit to us a written request specifying the Fixed Interest Allocations or subaccounts from which to withdraw amounts, otherwise we will make the withdrawal on a pro-rata basis from all of the subaccounts in which you are invested. If there is not enough contract value in the subaccounts, we will deduct the balance of the withdrawal from your Fixed Interest Allocations starting with the guaranteed interest periods nearest their maturity dates until we have honored your request. We will apply a Market Value Adjustment to any withdrawal from your Fixed Interest Allocation taken more than 30 days before its maturity date. Definitive guidance on the proper federal tax treatment of the Market Value Adjustment has not been issued. You may want to discuss the potential tax consequences of a Market Value Adjustment with your tax adviser. We will determine the contract value as of the close of business on the day we receive your withdrawal request at our Customer Service Center. The contract value may be more or less than the premium payments made. If the aggregate percentage cap on allocations to the Restricted Funds has been exceeded, any subsequent withdrawals must be taken so that the percentage of contract value in the Restricted Funds following the withdrawal would not be greater than the percentage of contract value in the Restricted Funds prior to the withdrawal. If a requested withdrawal would cause the percentage cap to be exceeded, the amount of the withdrawal in excess of the cap would be taken pro-rata from all variable subaccounts. For administrative purposes, we will transfer your money to a specially designated subaccount (currently, the Liquid Assets subaccount) prior to processing the withdrawal. This transfer will not affect the withdrawal amount you receive. Please be aware that the benefit we pay under certain optional benefit riders will be reduced by any withdrawals you take while the optional benefit rider is in effect. See "Optional Riders." We offer the following three withdrawal options: REGULAR WITHDRAWALS After the free look period, you may make regular withdrawals. Each withdrawal must be a minimum of $100. We will apply a Market Value Adjustment to any regular withdrawal you take from a Fixed Interest Allocation more than 30 days before its maturity date. See Appendix C and the Fixed Account II prospectus for more information on the application of the Market Value Adjustment. SYSTEMATIC WITHDRAWALS You may choose to receive automatic systematic withdrawal payments (i) from the contract value in the subaccounts in which you are invested, or (ii) from the interest earned in your Fixed Interest Allocations. You may not elect the systematic withdrawal option if you are taking IRA withdrawals. Systematic withdrawals may be taken monthly, quarterly or annually. If you have contract value allocated to one or more Restricted Funds, and you elect to receive systematic withdrawals from the subaccounts in which you are invested, the systematic withdrawals must be taken pro-rata from all subaccounts in which contract value is invested. If you do not have contract value allocated to a Restricted Fund and choose systematic withdrawals on a non pro-rata basis, we will monitor the withdrawals annually. If you subsequently allocate contract value to one or more Restricted Funds, we will require you to take your systematic withdrawals on a pro-rata basis from all subaccounts in which contract value is invested. There is no additional charge for this feature. You decide when you would like systematic payments to start as long as it is at least 28 days after your contract date. You also select the date on which the systematic withdrawals will be made, but this date cannot be later than the 28th day of the month. If you have elected to receive systematic withdrawals but have not chosen a date, we will make the withdrawals on the same calendar day of each month as your contract date. If your contract date is after the 28th day of the month, your systematic withdrawal will be made on the first day of each month. 36 Legends - 136958 Each systematic withdrawal amount must be a minimum of $100. The amount of your systematic withdrawal can either be (i) a fixed dollar amount or (ii) an amount based on a percentage of the premiums not previously withdrawn from the subaccounts in which you are invested. Both forms of systematic withdrawals are subject to the following maximum, which is calculated on each withdrawal date: -------------------------------------------------------------------- MAXIMUM PERCENTAGE FREQUENCY OF PREMIUMS NOT PREVIOUSLY WITHDRAWN -------------------------------------------------------------------- Monthly 0.84% Quarterly 2.50% Annually 10.00% -------------------------------------------------------------------- If your systematic withdrawal is a fixed dollar amount and the amount to be withdrawn would exceed the applicable maximum percentage of your premium payments not previously withdrawn on any withdrawal date, we will automatically reduce the amount withdrawn so that it equals such percentage. Thus, your fixed dollar systematic withdrawals will never exceed the maximum percentage. If you want fixed dollar systematic withdrawals to exceed the maximum percentage and are willing to incur associated surrender charges, consider the Fixed Dollar Systematic Withdrawal Feature discussed below which you may add to your regular fixed dollar systematic withdrawal program. If your systematic withdrawal is based on a percentage of the premiums not previously withdrawn from the subaccounts in which you are invested and the amount to be withdrawn based on that percentage would be less than $100, we will automatically increase the amount to $100 as long as it does not exceed the maximum percentage. If the systematic withdrawal would exceed the maximum percentage, we will send the amount, and then automatically cancel your systematic withdrawal option. We limit systematic withdrawals from Fixed Interest Allocations to interest earnings during the prior month, quarter, or year, depending on the frequency you chose. Systematic withdrawals are not subject to a Market Value Adjustment, unless you have added the Fixed Dollar Systematic Withdrawal Feature discussed below and the payments exceed interest earnings. Systematic withdrawals from Fixed Interest Allocations under the Fixed Dollar Systematic Withdrawal Feature are available only in connection with Section 72(q) and 72(t) distributions. A Fixed Interest Allocation may not participate in both the systematic withdrawal option and the dollar cost averaging program at the same time. You may change the amount or percentage of your systematic withdrawal once each contract year or cancel this option at any time by sending satisfactory notice to our Customer Service Center at least 7 days before the next scheduled withdrawal date. If you submit a subsequent premium payment after you have applied for systematic withdrawals, we will not adjust future withdrawals under the systematic withdrawal program unless you specifically request that we do so. The systematic withdrawal option may commence in a contract year where a regular withdrawal has been taken but you may not change the amount or percentage of your withdrawals in any contract year during which you have previously taken a regular withdrawal. Subject to availability, a spousal or non-spousal beneficiary may elect to receive death benefits as payments over the beneficiary's lifetime ("stretch"). Stretch payments will be subject to the same limitations as systematic withdrawals, and non-qualified stretch payments will be reported on the same basis as other systematic withdrawals. FIXED DOLLAR SYSTEMATIC WITHDRAWAL FEATURE. You may add the Fixed Dollar Systematic Withdrawal Feature to your regular fixed dollar systematic withdrawal program. This feature allows you to receive a systematic withdrawal in a fixed dollar amount in addition to your systematic withdrawal program regardless of any surrender charges or Market Value Adjustments. Systematic withdrawals from Fixed Interest Allocations under the Fixed Dollar Systematic Withdrawal Feature are available only in connection with Section 72(q) and 72(t) distributions. You choose the amount of the fixed systematic withdrawals, which may total up to an annual maximum of 10% of your premium payments not previously withdrawn as determined on the day we receive your election of this feature. We will not recalculate the maximum limit when you make additional premium payments, unless you instruct us to do so. We will assess a surrender charge on the withdrawal date if the withdrawal exceeds the maximum limit as calculated on the withdrawal date. We will assess a Market Value Adjustment on the withdrawal date if the withdrawal from a Fixed Interest Allocation exceeds your interest earnings on the withdrawal date. We will apply the surrender charge and any Market Value Adjustment directly to your contract value (rather than to the withdrawal) so that the amount of each systematic withdrawal remains fixed. 37 Legends - 136958 Flat dollar systematic withdrawals which are intended to satisfy the requirements of Section 72(q) or 72(t) of the Tax Code may exceed the maximum. Such withdrawals are subject to surrender charges and Market Value Adjustments when they exceed the applicable maximum percentage. IRA WITHDRAWALS If you have a non-Roth IRA Contract and will be at least age 70 1/2 during the current calendar year, you may elect to have distributions made to you to satisfy requirements imposed by federal tax law. IRA withdrawals provide payout of amounts required to be distributed by the Internal Revenue Service ("IRS") rules governing mandatory distributions under qualified plans. We will send you a notice before your distributions commence. You may elect to take IRA withdrawals at that time, or at a later date. You may not elect IRA withdrawals and participate in systematic withdrawals at the same time. If you do not elect to take IRA withdrawals, and distributions are required by federal tax law, distributions adequate to satisfy the requirements imposed by federal tax law may be made. Thus, if you are participating in systematic withdrawals, distributions under that option must be adequate to satisfy the mandatory distribution rules imposed by federal tax law. You may choose to receive IRA withdrawals on a monthly, quarterly or annual basis. You may elect payments to start as early as 28 days after the contract date. You select the day of the month when the withdrawals will be made, but it cannot be later than the 28th day of the month. If no date is selected, we will make the withdrawals on the same calendar day of the month as the contract date. If your contract date is after the 28th day of the month, your IRA withdrawal will be made on the first day of each month. You may request us to calculate the amount you are required to withdraw from your Contract each year based on the information you give us and various choices you make. For information regarding the calculation and choices you have, see the SAI. Or, we will accept your written instructions regarding the calculated amount required to be withdrawn from your Contract each year. The minimum dollar amount you can withdraw is $100. When we determine the required IRA withdrawal amount for a taxable year based on the frequency you select, if that amount is less than $100, we will pay $100. At any time where the IRA withdrawal amount is greater than the contract value, we will cancel the Contract and send you the amount of the cash surrender value. You may change the payment frequency of your IRA withdrawals once each contract year or cancel this option at any time by sending satisfactory notice to our Customer Service Center at least 7 days before the next scheduled withdrawal date. An IRA withdrawal from a Fixed Interest Allocation in excess of the amount allowed under systematic withdrawals will be subject to a Market Value Adjustment. CONSULT YOUR TAX ADVISER REGARDING THE TAX CONSEQUENCES ASSOCIATED WITH TAKING WITHDRAWALS. You are responsible for determining that withdrawals comply with applicable law. A withdrawal made before the taxpayer reaches age 59 1/2 may result in a 10% penalty tax. See "Federal Tax Considerations" for more details. 38 Legends - 136958 - -------------------------------------------------------------------------------- TRANSFERS AMONG YOUR INVESTMENTS - -------------------------------------------------------------------------------- Between the end of the free look period and the annuity start date, you may transfer your contract value among the subaccounts in which you are invested and your Fixed Interest Allocations. We currently do not charge you for transfers made during a contract year, but reserve the right to charge for each transfer after the twelfth transfer in a contract year. WE ALSO RESERVE THE RIGHT TO LIMIT THE NUMBER OF TRANSFERS YOU MAY MAKE AND MAY OTHERWISE MODIFY OR TERMINATE TRANSFER PRIVILEGES IF REQUIRED BY OUR BUSINESS JUDGMENT OR IN ACCORDANCE WITH APPLICABLE LAW. We will apply a Market Value Adjustment to transfers from a Fixed Interest Allocation taken more than 30 days before its maturity date, unless the transfer is made under the dollar cost averaging program. Keep in mind that transfers between Covered Funds, Special Funds and Excluded Funds and other investment portfolios may negatively impact your death benefit or rider benefits. If you allocate contract value to an investment option that has been designated as a Restricted Fund, your ability to transfer contract value to the Restricted Fund may be limited. A transfer to the Restricted Funds will not be permitted to the extent that it would increase the contract value in the Restricted Fund to more than the applicable limits following the transfer. We do not limit transfers from Restricted Funds. If the result of multiple reallocations is to lower the percentage of total contract value in the Restricted Fund, the reallocation will be permitted even if the percentage of contract value in the Restricted Fund is greater than the limit. Please be aware that the benefit we pay under an optional benefit rider may be affected by certain transfers you make while the rider is in effect. Transfers, including those involving Special Funds or Excluded Funds, may also affect your optional rider base. See "The Annuity Contract -- Optional Riders." The minimum amount that you may transfer is $100 or, if less, your entire contract value held in a subaccount or a Fixed Interest Allocation. To make a transfer, you must notify our Customer Service Center and all other administrative requirements must be met. We will determine transfer values at the end of the business day on which we receive the transfer request at our Customer Service Center. If we receive your transfer request after 4 p.m. eastern time or the close of regular trading of the New York Stock Exchange, we will make the transfer on the next business day. Separate Account B and the Company will not be liable for following instructions communicated by telephone or other approved electronic means that we reasonably believe to be genuine. We may require personal identifying information to process a request for transfer made over the telephone, over the internet or other approved electronic means. LIMITS IMPOSED BY UNDERLYING FUNDS. Orders for the purchase of fund shares may be subject to acceptance or rejection by the underlying fund. We reserve the right to reject, without prior notice, any allocation of a premium payment to a subaccount if the subaccount's investment in its corresponding fund is not accepted by the fund for any reason. LIMITS IMPOSED BY UNDERLYING FUNDS. Orders for the purchase of fund shares may be subject to acceptance or rejection by the underlying fund. We reserve the right to reject, without prior notice, any allocation of a premium payment to a subaccount if the subaccount's investment in its corresponding fund is not accepted by the fund for any reason. LIMITS ON FREQUENT OR DISRUPTIVE TRANSFERS. The Contract is not designed to serve as a vehicle for frequent trading. Frequent trading can disrupt management of a fund and raise its expenses through: 1) increased trading and transaction costs; 2) forced and unplanned portfolio turnover; 3) lost opportunity costs; and 4) large asset swings that decrease the fund's ability to provide maximum investment return to all contract owners. This in turn can have an adverse effect on fund performance. Accordingly, individuals or organizations that use market-timing investment strategies and make frequent transfers should not purchase the Contract. 39 Legends - 136958 We monitor transfer activity. With regard to frequent transfers, in the event that an individual's or organization's transfer activity: 1. exceeds our then-current monitoring standard for frequent trading; 2. is identified as problematic by an underlying fund even if the activity does not exceed our monitoring standard for frequent trading; or 3. if we determine in our sole discretion that such transfer activity may not be in the best interests of other contract owners, we will take the following actions to deter such activity. Upon the first violation, we will send a one time warning letter. A second violation will result in the suspension of trading privileges via facsimile, telephone, email and internet, and limit trading privileges to submission by regular U.S. mail for a period of six months. At the end of that period, trading privileges will be reinstated. If there is another violation after such rights are reinstated, we will suspend such privileges permanently. We will notify you in writing if we take any of these actions. With regard to transfers initiated by a market-timing organization or individual or other party authorized to give transfer instructions on behalf of multiple contract owners, we will also take the following actions, without prior notice: (1) not accepting transfer instructions from an agent acting on behalf of more than one contract owner; and (2) not accepting preauthorized transfer forms from market timers or other entities acting on behalf of more than one contract owner at a time. Our current definition of frequent trading is more than one purchase and sale of the same underlying fund within a 30-day period. We do not count transfers associated with scheduled dollar cost averaging or automatic rebalancing programs, transfers involving funds that affirmatively permit short-term trading in their fund shares, such as the ProFund portfolios, movement between such funds and the Liquid Assets Portfolio, and transfers involving certain de minimis amounts when determining whether trading activity is excessive. We reserve the right to modify our general standard, or the standard as it may apply to a particular fund, at any time without prior notice, depending on, among other factors, the needs of the underlying fund(s), the best interests of contract owners and fund investors and/or state or federal regulatory requirements. If we modify such standard, it will be applied uniformly to all contract owners or, as applicable, to all contract owners investing in the underlying fund. In addition, if, due to the excessive dollar amounts of trades, even though not within our then current definition of frequent trading, an individual's or organization's transfer activity is determined, in our sole discretion, to be disruptive, we will take the same actions as are described above to limit frequent transfers. The Company does not allow waivers to the above policy. Our excessive trading policy may not be completely successful in preventing market timing or excessive trading activity. We currently require that orders received via facsimile to effect transactions in subaccounts that invest in ProFund portfolios be received at our Customer Service Center no later than 3 p.m. eastern time. DOLLAR COST AVERAGING You may elect to participate in our dollar cost averaging program if you have at least $1,200 of contract value in (i) the Liquid Assets subaccount, or (ii) a Fixed Interest Allocation with either a 6-month or a 1-year guaranteed interest period. These subaccounts or Fixed Interest Allocations serve as the source accounts from which we will, on a monthly basis, automatically transfer a set dollar amount of money to other subaccounts selected by you. We also may offer DCA Fixed Interest Allocations, which are 6-month and 1-year Fixed Interest Allocations available exclusively for use with the dollar cost averaging program. The DCA Fixed Interest Allocations require a minimum premium payment of $1,200 directed into a DCA Fixed Interest Allocation. A Fixed Interest Allocation or DCA Fixed Interest Allocation may not participate in the dollar cost averaging program and in systematic withdrawals at the same time. There is no additional charge for this feature. 40 Legends - 136958 The dollar cost averaging program is designed to lessen the impact of market fluctuation on your investment. Since we transfer the same dollar amount to other subaccounts each month, more units of a subaccount are purchased if the value of its unit is low and fewer units are purchased if the value of its unit is high. Therefore, a lower than average value per unit may be achieved over the long term. However, we cannot guarantee this. When you elect the dollar cost averaging program, you are continuously investing in securities regardless of fluctuating price levels. You should consider your tolerance for investing through periods of fluctuating price levels. Unless you have a DCA Fixed Interest Allocation, you elect the dollar amount you want transferred under this program. Each monthly transfer must be at least $100. If your source account is the Liquid Assets subaccount or a 1-year Fixed Interest Allocation, the maximum amount that can be transferred each month is your contract value in such source account divided by 12. If your source account is a 6-month Fixed Interest Allocation, the maximum amount that can be transferred each month is your contract value in such source account divided by 6. You may change the transfer amount once each contract year. If you have a DCA Fixed Interest Allocation, there is no minimum or maximum transfer amount. We will transfer all your money allocated to that source account into the subaccount(s) in equal payments over the selected 6-month or 1-year period. The last payment will include earnings accrued over the course of the selected period. If you make an additional premium payment into a Fixed Interest Allocation subject to dollar cost averaging, the amount of your transfers under the dollar cost averaging program remains the same, unless you instruct us to increase the transfer amount. Transfers from a Fixed Interest Allocation or a DCA Fixed Interest Allocation under the dollar cost averaging program are not subject to a Market Value Adjustment. However, if you terminate the dollar cost averaging program for a DCA Fixed Interest Allocation and there is money remaining in the DCA Fixed Interest Allocation, we will transfer the remaining money to the Liquid Assets subaccount. Such transfer will trigger a Market Value Adjustment if the transfer is made more than 30 days before the maturity date of the DCA Fixed Interest Allocation. If you do not specify to which subaccounts you want to transfer the dollar amount of the source account, we will transfer the money to the subaccounts in which you are invested on a proportional basis. The transfer date is the same day each month as your contract date. If, on any transfer date, your contract value in a source account is equal or less than the amount you have elected to have transferred, the entire amount will be transferred and the program will end. You may terminate the dollar cost averaging program at any time by sending satisfactory notice to our Customer Service Center at least 7 days before the next transfer date. You are permitted to transfer contract value to a Restricted Fund, subject to the limitations described above in this section and in "Appendix B -- The Investment Portfolios." Compliance with the individual and aggregate Restricted Fund limits will be reviewed when the dollar cost averaging program is established. Transfers under the dollar cost averaging program must be within those limits. We will not review again your dollar cost averaging election for compliance with the individual and aggregate limits for investment in the Restricted Funds except in the case of the transactions described below. o Amount added to source account: If you add amounts to the source account which would increase the amount to be transferred under the dollar cost averaging program, we will review the amounts to be transferred to ensure that the individual and aggregate limits are not being exceeded. If such limits would be exceeded, we will require that the dollar cost averaging transfer amounts be changed to ensure that the transfers are within the limits based on the then-current allocation of contract value to the Restricted Fund(s) and the then-current value of the amount designated to be transferred to that Restricted Fund(s). 41 Legends - 136958 o Additional premium paid: Up to the individual Restricted Fund percentage limit may be allocated to a Restricted Fund. If you request more than the individual limit be allocated to a Restricted Fund, we will look at the aggregate limit, subtract the current allocation to Restricted Funds, and subtract the current value of amounts to be transferred under the dollar cost averaging program to Restricted Funds. The excess, if any, is the maximum that may be allocated pro-rata to the Restricted Funds. o Reallocation request is made while the dollar cost averaging program is active: If the reallocation would increase the amount allocated to Restricted Funds, the maximum that may be so allocated is the individual Restricted Fund percentage limit, less the current allocation to Restricted Funds and less the current value of any remaining amounts to be transferred under the dollar cost averaging program to the Restricted Funds. We may offer additional subaccounts or withdraw any subaccount or Fixed Interest Allocation to or from the dollar cost averaging program, stop offering DCA Fixed Interest Allocations or otherwise modify, suspend or terminate this program. Such change will not affect any dollar cost averaging programs in operation at the time. AUTOMATIC REBALANCING If you have at least $10,000 of contract value invested in the subaccounts of Separate Account B, you may elect to have your investments in the subaccounts automatically rebalanced. Automatic rebalancing is not available if you participate in dollar cost averaging. Automatic rebalancing will not take place during the free look period. Transfers made pursuant to automatic rebalancing do not count toward the 12-transfer limit on free transfers. There is no additional charge for this feature. You are permitted to reallocate between Restricted and non-Restricted Funds, subject to the limitations described above, in this section and in Appendix B -- The Investment Portfolios. If the reallocation would increase the amount allocated to the Restricted Funds, the maximum that may be so allocated is the individual Restricted Fund percentage limit, less the current allocation to all Restricted Funds. We will transfer funds under your Contract on a quarterly, semi-annual, or annual calendar basis among the subaccounts to maintain the investment blend of your selected subaccounts. The minimum size of any allocation must be in full percentage points. Rebalancing does not affect any amounts that you have allocated to the Fixed Account. The program may be used in conjunction with the systematic withdrawal option only if withdrawals are taken pro-rata. To participate in automatic rebalancing, send satisfactory notice to our Customer Service Center. We will begin the program on the last business day of the period in which we receive the notice. You may cancel the program at any time. The program will automatically terminate if you choose to reallocate your contract value among the subaccounts or if you make an additional premium payment or partial withdrawal on other than a pro-rata basis. Additional premium payments and partial withdrawals made on a pro-rata basis will not cause the automatic rebalancing program to terminate. - -------------------------------------------------------------------------------- DEATH BENEFIT CHOICES - -------------------------------------------------------------------------------- DEATH BENEFIT DURING THE ACCUMULATION PHASE During the accumulation phase, a death benefit (and earnings multiplier benefit, if elected) is payable when either the contract owner, or the first of joint owners or the annuitant (when a contract owner is not an individual) dies. Assuming you are the contract owner, your beneficiary will receive a death benefit unless the beneficiary is your surviving spouse and elects to continue the Contract. We calculate the death benefit value as of the close of the business day on which we receive written notice and due proof of death, as well as any required paperwork, at our Customer Service Center ("claim date"). If your beneficiary wants to receive the death benefit on a date later than this, it may affect the amount of the benefit payable in the future. The proceeds may be received in a single sum, applied to any of the annuity options, or, if available, paid over the beneficiary's lifetime. (See "Systematic Withdrawals" above). A beneficiary's right to elect an annuity option or receive a lump-sum payment may have been restricted by the contract owner. If so, such rights or options will not be available to the beneficiary. 42 Legends - 136958 If we do not receive a request to apply the death benefit proceeds to an annuity option, we will make a single sum distribution. Unless you elect otherwise, the distribution will be made into an interest bearing account, backed by our general account, that is accessed by the beneficiary through a checkbook feature. The beneficiary may access death benefit proceeds at any time without penalty. We will generally distribute death benefit proceeds within 7 days after our Customer Service Center has received sufficient information to make the payment. For information on required distributions under federal income tax laws, you should see "Required Distributions upon Contract Owner's Death." Interest earned on this account may be less than interest paid on other settlement options. Your death benefit and mortality and expense risk charge depend on the category of contract owners to which you belong and on the death benefit that you choose. You may choose one of the following Death Benefits: (i) the Standard Death Benefit, (ii) the Quarterly Ratchet Enhanced Death Benefit or (iii) the Max 7 Enhanced Death Benefit. The Quarterly Ratchet Enhanced Death Benefit and the Max 7 Enhanced Death Benefit are available only if the contract owner or the annuitant (if the contract owner is not an individual) is not more than 75 years old at the time of purchase. The Enhanced Death Benefits are available only at the time you purchase your Contract. The Enhanced Death Benefits are not available where a Contract is owned by joint owners. Not all death benefits are available in every state. If you do not choose a death benefit, your death benefit will be the Standard Death Benefit. ONCE YOU CHOOSE A DEATH BENEFIT, YOU CANNOT CHANGE IT. We may stop or suspend offering any of the Enhanced Death Benefit options to new Contracts. A change in ownership of the Contract may affect the amount of the death benefit and the Enhanced Death Benefit. The ING LifePay rider may also affect the death benefit. The death benefit may be subject to certain mandatory distribution rules required by federal tax law. We use the BASE DEATH BENEFIT to help determine the minimum death benefit payable under each of the death benefit options described below. You do not elect the Base Death Benefit. The Base Death Benefit is equal to the greater of: 1) the contract value; or 2) the cash surrender value. The STANDARD DEATH BENEFIT equals the GREATER of: 1) the Base Death Benefit; and 2) the Standard Minimum Guaranteed Death Benefit ("Standard MGDB") for amounts allocated to Covered Funds plus the contract value allocated to Excluded Funds. The Standard MGDB allocated to Covered Funds equals premiums allocated to Covered Funds less pro-rata adjustments for any withdrawals and transfers. The Standard MGDB allocated to Excluded Funds equals premiums allocated to Excluded Funds less pro-rata adjustments for any withdrawals and transfers. This calculation is not used for benefit purposes, but only to determine the impact of transfers to and from Excluded Funds. 43 Legends - 136958 Withdrawals reduce the Standard MGDB on a pro-rata basis. The percentage reduction in the Standard MGDB for each Fund category (i.e. Covered or Excluded) equals the percentage reduction in contract value in that Fund category resulting from the withdrawal. The pro-rata adjustment is based on the change in contract value resulting from the withdrawal, not the amount requested. Transfers among Fund categories do not reduce the overall Standard MGDB. o Net transfers from Covered Funds to Excluded Funds will reduce the Standard MGDB in the Covered Funds on a pro-rata basis. The increase in the Standard MGDB allocated to Excluded Funds will equal the decrease in the Standard MGDB in Covered Funds. o Net transfers from Excluded Funds to Covered Funds will reduce the Standard MGDB in Excluded Funds on a pro-rata basis. The increase in the Standard MGDB allocated to Covered Funds will equal the lesser of the net contract value transferred and the decrease in the Standard MGDB in Excluded Funds. ENHANCED DEATH BENEFIT OPTIONS. Under the Enhanced Death Benefit options, if you die before the annuity start date, your beneficiary will receive the greater of the Standard Death Benefit or the Enhanced Death Benefit option elected. We may, with 30 days notice to you, designate any investment portfolio as a Special Fund or Excluded Fund on existing Contracts with respect to new premiums added to such investment portfolio and also with respect to new transfers to such investment portfolio. Selecting a Special Fund or Excluded Fund may limit or reduce the Enhanced Death Benefit. For the period during which a portion of the contract value is allocated to a Special Fund or Excluded Fund, we may, at our discretion, reduce the mortality and expense risk charge attributable to that portion of the contract value. The reduced mortality and expense risk charge will be applicable only during that period. The QUARTERLY RATCHET ENHANCED DEATH BENEFIT equals the greater of: 1) the Standard Death Benefit; and 2) the Quarterly Ratchet Minimum Guaranteed Death Benefit ("Quarterly Ratchet MGDB") allocated to Covered Funds plus the contract value allocated to Excluded Funds. No funds are currently designated as Excluded Funds for purposes of the Quarterly Ratchet MGDB. The Quarterly Ratchet MGDB allocated to Covered Funds on the contract date equals the premium allocated to Covered Funds. On each quarterly anniversary (three months from the contract date and each three month anniversary of that date) that occurs on or prior to attainment of age 90, the Quarterly Ratchet MGDB in Covered Funds will be set to the greater of: 1) the current contract value in Covered Funds (after deductions occurring as of that date); or 2) the Quarterly Ratchet MGDB in Covered Funds from the prior quarterly anniversary (after deductions occurring on that date), adjusted for new premiums and partial withdrawals attributable to Covered Funds, and transfers. Other than on quarterly anniversaries, the Quarterly Ratchet MGDB in the Covered Funds is equal to the Quarterly Ratchet MGDB in the Covered Funds from the last quarterly anniversary, adjusted for new premiums and partial withdrawals attributable to Covered Funds, and transfers. 44 Legends - 136958 The Quarterly Ratchet MGDB allocated to Excluded Funds on the contract date equals the premium allocated to Excluded Funds. The calculation is not used for benefit purposes, but only to determine the impact of transfers to and from Excluded Funds. On each quarterly anniversary that occurs on or prior to attainment of age 90, the Quarterly Ratchet MGDB in Excluded Funds will be set to the greater of: 1) the current contract value in Excluded Funds (after deductions occurring as of that date); or 2) the Quarterly Ratchet MGDB in the Excluded Funds from the prior quarterly anniversary (after deductions occurring on that date), adjusted for new premiums and partial withdrawals attributable to Excluded Funds, and transfers. Other than on quarterly anniversaries, the Quarterly Ratchet MGDB in the Excluded Funds is equal to the Quarterly Ratchet MGDB in the Excluded Funds from the last quarterly anniversary, adjusted for new premiums and partial withdrawals attributable to Excluded Funds, and transfers. Withdrawals reduce the Quarterly Ratchet MGDB on a pro-rata basis. The pro-rata adjustment is based on the change in contract value resulting from the withdrawal, not the amount requested. Net transfers from Covered Funds to Special or Excluded Funds will reduce the Quarterly Ratchet MGDB in Covered Funds on a pro-rata basis. The increase in the Quarterly Ratchet MGDB allocated to Special or Excluded Funds, as applicable, will equal the decrease in the Quarterly Ratchet MGDB in Covered Funds. Net transfers from Excluded Funds to Covered Funds will reduce the Quarterly Ratchet MGDB in Excluded Funds on a pro-rata basis. The increase in the Quarterly Ratchet MGDB allocated to Covered Funds will equal the lesser of the net contract value transferred and the reduction in the Quarterly Ratchet MGDB in Excluded Funds. The MAX 7 ENHANCED DEATH BENEFIT equals the greater of the Quarterly Ratchet Enhanced Death Benefit and the 7% Solution Death Benefit Element. Each element of the Max 7 Enhanced Death Benefit is determined independently of the other at all times. The 7% SOLUTION DEATH BENEFIT ELEMENT is the greater of: 1) the Standard Death Benefit; and 2) the lesser of: a) 3 times all premium payments, adjusted for withdrawals (the "cap"); or b) the SUM OF the 7% Solution Minimum Guaranteed Death Benefit ("7% MGDB") allocated to Covered Funds, the 7% MGDB allocated to Special Funds, and the contract value allocated to Excluded Funds. For purposes of calculating the 7% Solution Death Benefit Element, the following investment options are designated as Special Funds: the ING Liquid Assets Portfolio, the ING VP Intermediate Bond Portfolio, the ING PIMCO Core Bond Portfolio, the ProFunds VP Rising Rates Opportunity Portfolio, the Fixed Account, the Fixed Interest Division, and the TSA Special Fixed Account. No investment options are currently designated as Excluded Funds. The 7% MGDB allocated to Covered Funds equals premiums allocated to Covered Funds, adjusted for withdrawals and transfers, accumulated at 7% until age 80 or the 7% MGDB reaches the cap. There is no accumulation once the cap is reached. Payment of additional premiums may cause the accumulation to resume, but there is no catch-up for any period where accumulation was suspended. The 7% MGDB allocated to Special Funds equals premiums allocated to Special Funds, adjusted for withdrawals and transfers. There is no accumulation of Minimum Guaranteed Death Benefit allocated to Special Funds. 45 Legends - 136958 The 7% MGDB allocated to Excluded Funds is determined in the same way as the 7% MGDB for Covered Funds, but the calculation is not used for benefit purposes, but only to determine the impact of transfers to and from Excluded Funds. Withdrawals reduce the 7% MGDB on a pro-rata basis. The percentage reduction in the 7% MGDB for each Fund category (i.e. Covered, Special or Excluded) equals the percentage reduction in contract value in that Fund category resulting from the withdrawal. The percentage reduction in the cap equals the percentage reduction in total contract value resulting from the withdrawal. The pro-rata adjustment is based on the change in contract value resulting from the withdrawal, not the amount requested. Transfers among Fund categories do not reduce the overall 7% MGDB, but do affect the amount of the 7% MGDB in a particular Fund category. Net transfers from among the Funds will reduce the 7% MGDB in the Funds on a pro-rata basis. Note: In all cases described above, the amount of the death benefit could be reduced by premium taxes owed and withdrawals not previously deducted. The enhanced death benefits may not be available in all states. EARNINGS MULTIPLIER BENEFIT RIDER. The earnings multiplier benefit rider is an optional rider that provides a separate death benefit in addition to the death benefit provided under the death benefit options described above. The rider is subject to state availability and is available only for issue ages 75 or under. You may add it at issue of the Contract or, if not yet available in your state, on the next contract anniversary following introduction of the rider in your state. The date on which the rider is added is referred to as the "rider effective date." If the rider is added at issue, the rider provides a benefit equal to a percentage of the gain under the Contract, up to a gain equal to 150% of premiums adjusted for withdrawals ("Maximum Base"). Currently, if added at issue, the earnings multiplier benefit is equal to 55% (30% for issue ages 70 and above) of the lesser of: i) the Maximum Base; and ii) the contract value on the claim date minus premiums adjusted for withdrawals. If added after issue, the earnings multiplier benefit is equal to 55% (30% for issue ages 70 and above) of the lesser of: i) 150% of the contract value on the rider effective date, plus subsequent premiums adjusted for subsequent withdrawals; and ii) the contract value on the claim date minus the contract value on the rider effective date, minus subsequent premiums adjusted for subsequent withdrawals. The adjustment to the benefit for withdrawals is pro-rata, meaning that the benefit will be reduced by the proportion that the withdrawal bears to the contract value at the time of the withdrawal. There is an extra charge for the earnings multiplier benefit rider and once selected, it may not be revoked. The rider does not provide a benefit if there is no gain under the Contract. As such, the Company would continue to assess a charge for the rider, even though no benefit would be payable at death under the rider if there are no gains under the Contract. Please see "Charges and Fees -- Earnings Multiplier Benefit Charge" for a description of the charge. The rider is available for both non-qualified and qualified contracts. Please see the discussions of possible tax consequences in "Federal Tax Considerations," "Individual Retirement Annuities," "Taxation of Qualified Contracts," and "Tax Consequences of Enhanced Death Benefit," in this prospectus. DEATH BENEFIT DURING THE INCOME PHASE If any contract owner or the annuitant dies after the annuity start date, we will pay the beneficiary any certain benefit remaining under the annuity in effect at the time. CONTINUATION AFTER DEATH -- SPOUSE If at the contract owner's death, the surviving spouse of the deceased contract owner is the beneficiary and such surviving spouse elects to continue the Contract as his or her own, the following will apply: 46 Legends - 136958 If the guaranteed death benefit as of the date we receive due proof of death, minus the contract value on that date is greater than zero, we will add such difference to the contract value. We will allocate such addition to the variable subaccounts in proportion to the contract value in the subaccounts, unless you direct otherwise. If there is no contract value in any subaccount, we will allocate the addition to the Liquid Assets subaccount, or its successor. Such addition to contract value will not affect the guaranteed death benefit or any living benefit rider values. Any addition to contract value is available only to the spouse of the owner as of the date of death of the owner if such spouse under the provisions of the Contract elects to continue the Contract as his or her own. The death benefits under each of the available options will continue, based on the surviving spouse's age on the date that ownership changes. At subsequent surrender, we will waive any surrender charge applicable to premiums paid prior to the date we receive due proof of death of the contract owner. Any premiums paid later will be subject to any applicable surrender charge. If you elected the earnings multiplier benefit rider, and the benefit would otherwise be payable, we will add the benefit to the contract value and allocate the benefit among the variable subaccounts in proportion to the contract value in the subaccounts, unless you direct otherwise. If there is no contract value in any subaccount, we will allocate the benefit to the Liquid Assets subaccount, or its successor. The earnings multiplier benefit rider will continue, if the surviving spouse is eligible based on his or her attained age. If the surviving spouse is older than the maximum rider issue age, the rider will terminate. The Maximum Base and the percentages will be reset based on the adjusted contract value. The calculation of the benefit going forward will be: (i) based on the attained age of the spouse at the time of the ownership change using current values as of that date; (ii) computed as if the rider were added to the Contract after issue and after the increase; and (iii) based on the Maximum Base and percentages in effect on the original rider date. However, we may permit the surviving spouse to elect to use the then-current Maximum Base and percentages in the benefit calculation. CONTINUATION AFTER DEATH -- NOT A SPOUSE If the beneficiary or surviving joint owner is not the spouse of the owner, the Contract may continue in force subject to the required distribution rules of the Code. See next section, "Required Distributions Upon Contract Owner's Death." If the guaranteed death benefit as of the date we receive due proof of death, minus the contract value also on that date, is greater than zero, we will add such difference to the contract value. Such addition will be allocated to the variable subaccounts in proportion to the contract value in the subaccounts, unless we are directed otherwise. If there is no contract value in any subaccount, the addition will be allocated to the Liquid Assets subaccount, or its successor. The death benefit will then terminate. At subsequent surrender, any surrender charge applicable to premiums paid prior to the date we receive due proof of death of the contract owner will be waived. No additional premium payments may be made. If you elected the earnings multiplier benefit rider, and the benefit would otherwise be payable, we will add the benefit to the contract value and allocate the benefit among the variable subaccounts in proportion to the contract value in the subaccounts, unless you direct otherwise. If there is no contract value in any subaccount, we will allocate the benefit to the Liquid Assets subaccount, or its successor. The earnings multiplier benefit rider then terminates, whether or not a benefit was payable under the terms of the rider. REQUIRED DISTRIBUTIONS UPON CONTRACT OWNER'S DEATH We will not allow any payment of benefits provided under a non-qualified Contract which does not satisfy the requirements of Section 72(s) of the Code. 47 Legends - 136958 If any contract owner of a non-qualified Contract dies before the annuity start date, we will distribute the death benefit payable to the beneficiary as follows: (a) the death benefit must be completely distributed within 5 years of the contract owner's date of death; or (b) the beneficiary may elect, within the 1-year period after the contract owner's date of death, to receive the death benefit in the form of an annuity from us, provided that (i) such annuity is distributed in substantially equal installments over the life of such beneficiary or over a period not extending beyond the life expectancy of such beneficiary; and (ii) such distributions begin not later than 1 year after the contract owner's date of death. Notwithstanding (a) and (b) above, if the sole contract owner's beneficiary is the deceased owner's surviving spouse, then such spouse may elect to continue the Contract under the same terms as before the contract owner's death. Upon receipt of such election from the spouse at our Customer Service Center: (i) all rights of the spouse as contract owner's beneficiary under the Contract in effect prior to such election will cease; (ii) the spouse will become the owner of the Contract and will also be treated as the contingent annuitant, if none has been named and only if the deceased owner was the annuitant; and (iii) all rights and privileges granted by the Contract or allowed by us will belong to the spouse as contract owner of the Contract. We deem the spouse to have made this election if such spouse makes a premium payment to the Contract or fails to make a timely election as described in this paragraph. If the owner's beneficiary is not a spouse, the distribution provisions described in subparagraphs (a) and (b) above, will apply even if the annuitant and/or contingent annuitant are alive at the time of the contract owner's death. Subject to availability, and our then current rules, a spousal or non-spousal beneficiary may elect to receive death benefits as payments over the life expectancy of the beneficiary ("stretch"). "Stretch" payments will be subject to the same limitations as systematic withdrawals, and non-qualified "stretch" payments will be reported on the same basis as other systematic withdrawals. If we do not receive an election from an owner's beneficiary who is not a spouse within the 1-year period after the contract owner's date of death, then we will pay the death benefit to the owner's beneficiary in a cash payment within five years from the date of death. We will determine the death benefit as of the date we receive proof of death. Such cash payment will be in full settlement of all our liability under the Contract. If a contract owner dies after the annuity start date, all of the contract owner's rights granted under the Contract or allowed by us will pass to the contract owner's beneficiary. If a Contract has joint owners we will consider the date of death of the first joint owner as the death of the contract owner, and the surviving joint owner will become the beneficiary of the Contract. If any contract owner is not an individual, the death of an annuitant shall be treated as the death of a contract owner. EFFECT OF ING LIFEPAY RIDER ON DEATH BENEFIT If you die before Lifetime Automatic Periodic Benefit Status under the ING LifePay rider, the death benefit is payable, but the rider terminates. However, if the beneficiary is the owner's spouse, and the spouse elects to continue the Contract, the death benefit is not payable until the spouse's death. Please see "ING LifePay Minimum Guaranteed Withdrawal Benefit Rider-Death or Change of Owner/Annuitant" for a description of the impact of the owner's death on the ING LifePay rider. If you die during Lifetime Automatic Periodic Benefit Status, we will continue to pay the periodic payments that you were receiving under the ING LifePay rider to the annuitant. No other death benefit is payable. Please see "ING LifePay Minimum Guaranteed Withdrawal Benefit Rider". - -------------------------------------------------------------------------------- THE ANNUITY OPTIONS - -------------------------------------------------------------------------------- ANNUITIZATION OF YOUR CONTRACT If the annuitant and contract owner are living on the annuity start date, we will begin making payments to the contract owner under an income plan. We will make these payments under the annuity option you chose. You may change an annuity option by making a written request to us at least 30 days before the annuity start date. The amount of the payments will be determined by applying your contract value, adjusted for any applicable Market Value Adjustment, on the annuity start date in accordance with the annuity option you chose. 48 Legends - 136958 You may also elect an annuity option on surrender of the Contract for its cash surrender value or you may choose one or more annuity options for the payment of death benefit proceeds while it is in effect and before the annuity start date. If, at the time of the contract owner's death or the annuitant's death (if the contract owner is not an individual), no option has been chosen for paying death benefit proceeds, the beneficiary may choose an annuity option within 60 days. In all events, payments of death benefit proceeds must comply with the distribution requirements of applicable federal tax law. The minimum monthly annuity income payment that we will make is $20. We may require that a single sum payment be made if the contract value is less than $2,000 or if the calculated monthly annuity income payment is less than $20. For each annuity option we will issue a separate written agreement putting the annuity option into effect. Before we pay any annuity benefits, we require the return of your Contract. If your Contract has been lost, we will require that you complete and return the applicable lost Contract form. Various factors will affect the level of annuity benefits, such as the annuity option chosen, the applicable payment rate used and the investment performance of the portfolios and interest credited to the Fixed Interest Allocations. Our current annuity options provide only for fixed payments. Fixed annuity payments are regular payments, the amount of which is fixed and guaranteed by us. Some fixed annuity options provide fixed payments either for a specified period of time or for the life of the annuitant. The amount of life income payments will depend on the form and duration of payments you chose, the age of the annuitant or beneficiary (and gender, where appropriate under applicable law), the total contract value applied to periodic income payments, and the applicable payment rate. Our approval is needed for any option where: 1) The person named to receive payment is other than the contract owner or beneficiary; 2) The person named is not a natural person, such as a corporation; or 3) Any income payment would be less than the minimum annuity income payment allowed. SELECTING THE ANNUITY START DATE You select the annuity start date, which is the date on which the annuity payments commence. Unless we consent, the annuity start date must be at least 5 years from the contract date but before the month immediately following the annuitant's 90th birthday, or 10 years from the contract date, if later. If, on the annuity start date, a surrender charge remains, the elected annuity option must include a period certain of at least 5 years. If you do not select an annuity start date, it will automatically begin in the month following the annuitant's 90th birthday, or 10 years from the contract date, if later. If the annuity start date occurs when the annuitant is at an advanced age, such as over age 85, it is possible that the Contract will not be considered an annuity for federal tax purposes. For more information, see "Federal Tax Considerations" and the SAI. For a Contract purchased in connection with a qualified plan, other than a Roth IRA, distributions must commence not later than April 1st of the calendar year following the calendar year in which you reach age 70 1/2 or, in some cases, retire. Distributions may be made through annuitization or withdrawals. You should consult a tax adviser for tax advice before investing. 49 Legends - 136958 FREQUENCY OF ANNUITY PAYMENTS You choose the frequency of the annuity payments. They may be monthly, quarterly, semi-annually or annually. If we do not receive written notice from you, we will make the payments monthly. There may be certain restrictions on minimum payments that we will allow. BENEFICIARY RIGHTS A beneficiary's right to elect an annuity option or receive a lump sum may have been restricted by the contract owner. If so, such options will not be available to the beneficiary. THE ANNUITY OPTIONS We offer the 4 annuity options shown below. Payments under Options 1, 2 and 3 are fixed. Payments under Option 4 may be fixed or variable, although only fixed payments are currently available. For a fixed annuity option, the contract value in the subaccounts is transferred to the Company's general account. OPTION 1. INCOME FOR A FIXED PERIOD. Under this option, we make monthly payments in equal installments for a fixed number of years based on the contract value on the annuity start date. We guarantee that each monthly payment will be at least the amount stated in your Contract. If you prefer, you may request that payments be made in annual, semi-annual or quarterly installments. We will provide you with illustrations if you ask for them. If the cash surrender value or contract value is applied under this option, a 10% penalty tax may apply to the taxable portion of each income payment until the contract owner reaches age 59 1/2. OPTION 2. INCOME FOR LIFE WITH A PERIOD CERTAIN. Under this option, we make payments for the life of the annuitant in equal monthly installments and guarantee the income for at least a period certain, such as 10 or 20 years. Other periods certain may be available to you on request. You may choose a refund period instead. Under this arrangement, income is guaranteed until payments equal the amount of your Contract. If the person named lives beyond the guaranteed period, we will continue payments until his or her death. We guarantee that each payment will be at least the amount specified in the Contract corresponding to the person's age on his or her last birthday before the annuity start date. Amounts for ages not shown in the Contract are available if you ask for them. OPTION 3. JOINT LIFE INCOME. This option is available when there are 2 persons named to determine annuity payments. At least one of the persons named must be either the contract owner or beneficiary of the Contract. We guarantee monthly payments will be made as long as at least one of the named persons is living. There is no minimum number of payments. Monthly payment amounts are available if you ask for them. OPTION 4. ANNUITY PLAN. Under this option, your contract value can be applied to any other annuitization plan that we choose to offer on the annuity start date. Annuity payments under Option 4 may be fixed or variable. If variable and subject to the 1940 Act, it will comply with the requirements of such Act. 50 Legends - 136958 PAYMENT WHEN NAMED PERSON DIES When the person named to receive payment dies, we will pay any amounts still due as provided in the annuity agreement between you and ING USA. The amounts we will pay are determined as follows: 1) For Option 1, or any remaining guaranteed payments under Option 2, we will continue payments. Under Options 1 and 2, the discounted values of the remaining guaranteed payments may be paid in a single sum. This means we deduct the amount of the interest each remaining guaranteed payment would have earned had it not been paid out early. We will base the discount interest rate on the interest rate used to calculate the payments for Options 1 and 2. 2) For Option 3, no amounts are payable after both named persons have died. 3) For Option 4, the annuity option agreement will state the amount we will pay, if any. - -------------------------------------------------------------------------------- OTHER CONTRACT PROVISIONS - -------------------------------------------------------------------------------- REPORTS TO CONTRACT OWNERS We will send you a quarterly report within 31 days after the end of each calendar quarter. The report will show the contract value, cash surrender value, and the death benefit as of the end of the calendar quarter. The report will also show the allocation of your contract value and reflects the amounts deducted from or added to the contract value since the last report. You have 30 days to notify our Customer Service Center of any errors or discrepancies contained in the report and in any confirmation notice. We will also send you copies of any shareholder reports of the investment portfolios in which Separate Account B invests, as well as any other reports, notices or documents we are required by law to furnish to you. SUSPENSION OF PAYMENTS The Company reserves the right to suspend or postpone the date of any payment or determination of values on any business day (i) when the New York Stock Exchange is closed; (ii) when trading on the New York Stock Exchange is restricted; (iii) when an emergency exists as determined by the SEC so that the sale of securities held in Separate Account B may not reasonably occur or so that the Company may not reasonably determine the value of Separate Account B's net assets; or (iv) during any other period when the SEC so permits for the protection of security holders. We have the right to delay payment of amounts from a Fixed Interest Allocation for up to 6 months. IN CASE OF ERRORS IN YOUR APPLICATION If an age or gender given in the application or enrollment form is misstated, the amounts payable or benefits provided by the Contract shall be those that the premium payment would have bought had the age or gender not been misstated. ASSIGNING THE CONTRACT AS COLLATERAL You may assign a non-qualified Contract as collateral security for a loan but you should understand that your rights and any beneficiary's rights may be subject to the terms of the assignment. An assignment likely has federal tax consequences. You should consult a tax adviser for tax advice. You must give us satisfactory written notice at our Customer Service Center in order to make or release an assignment. We are not responsible for the validity of any assignment. CONTRACT CHANGES -- APPLICABLE TAX LAW We have the right to make changes in the Contract to continue to qualify the Contract as an annuity under applicable federal tax law. We will give you advance notice of such changes. 51 Legends - 136958 FREE LOOK You may cancel your Contract within your 10-day free look period. We deem the free look period to expire 15 days after we mail the Contract to you. Some states may require a longer free look period. To cancel, you need to send your Contract to our Customer Service Center or to the agent from whom you purchased it. We will refund the contract value (which may be more or less than the premium payments you paid) or, if required by your state, the original amount of your premium payment. For purposes of the refund during the free look period, (i) we adjust your contract value for any market value adjustment (if you have invested in the Fixed Account), and (ii) then we include a refund of any charges deducted from your contract value. Because of the market risks associated with investing in the portfolios and the potential positive or negative effect of the market value adjustment, the contract value returned may be greater or less than the premium payment you paid. Some states require us to return to you the amount of the paid premium (rather than the contract value) in which case you will not be subject to investment risk during the free look period. In these states, your premiums designated for investment in the subaccounts may be allocated during the free look period to a subaccount specially designated by the Company for this purpose (currently, the Liquid Assets subaccount). We may, in our discretion, require that premiums designated for investment in the subaccounts from all other states as well as premiums designated for a Fixed Interest Allocation be allocated to the specially designated subaccount during the free look period. Your Contract is void as of the day we receive your Contract and cancellation request in good order. We determine your contract value at the close of business on the day we void your Contract. If you keep your Contract after the free look period and the investment is allocated to a subaccount specially designated by the Company, we will put your money in the subaccount(s) chosen by you, based on the accumulation unit value next computed for each subaccount, and/or in the Fixed Interest Allocation chosen by you. SPECIAL ARRANGEMENTS We may reduce or waive any Contract, rider, or benefit fees or charges for certain group or sponsored arrangements, under special programs, and for certain employees, agents, and related persons of our parent corporation and its affiliates. We reduce or waive these items based on expected economies, and the variations are based on differences in costs or services. SELLING THE CONTRACT Our affiliate, Directed Services, Inc. ("DSI"), 1475 Dunwoody Drive, West Chester, PA 19380 is the principal underwriter and distributor of the Contract as well as for other ING USA contracts. DSI, a New York corporation, is registered with the SEC as a broker/dealer under the Securities Exchange Act of 1934, and is a member of the National Association of Securities Dealers, Inc. ("NASD"). DSI does not retain any commissions or compensation paid to it by ING USA for Contract sales. DSI enters into selling agreements with affiliated and unaffiliated broker/dealers to sell the Contracts through their registered representatives who are licensed to sell securities and variable insurance products ("selling firms"). Selling firms are also registered with the SEC and are NASD member firms. DSI pays selling firms compensation for the promotion and sale of the Contracts. Registered representatives of the selling firms who solicit sales of the Contracts typically receive a portion of the compensation paid by DSI to the selling firm in the form of commissions or other compensation, depending on the agreement between the selling firm and the registered representative. This compensation, as well as other incentives or payments, is not paid directly by contract owners or the Separate Account. We intend to recoup this compensation and other sales expenses paid to selling firms through fees and charges imposed under the Contracts. DSI pays selling firms for Contract sales according to one or more schedules. This compensation is generally based on a percentage of premium payments. DSI has entered into a selling agreement with Morgan Stanley Dean Witter ("Morgan Stanley") to sell the Contracts through its registered representative. Morgan Stanley and other selling firms may receive commissions of up to 9.0% of premium payments. In addition, Morgan Stanley and other selling firms may receive ongoing annual compensation of up to 1.25% of all, or a portion, of values of Contracts sold through the firm. Individual representatives may receive all or a portion of compensation paid to their selling firm, depending on the firm's practices. Commissions and annual compensation, when combined, could exceed 9.0% of total premium payments. To the extent permitted by SEC and NASD rules and other applicable laws and regulations, DSI may pay or allow other promotional incentives or payments in the form of cash or other compensation to selling firms. 52 Legends - 136958 DSI may also enter into special compensation arrangements with certain selling firms based on those firms' aggregate or anticipated sales of the Contracts or other criteria. These special compensation arrangements will not be offered to all selling firms, and the terms of such arrangements may differ among selling firms based on various factors. Any such compensation payable to a selling firm will not result in any additional direct charge to you by us. In addition to the direct cash compensation for sales of contracts described above, DSI may also pay selling firms additional compensation or reimbursement for their efforts in selling Contracts to you and other customers, including for, among other things, training of sales personnel, marketing or other sales-related services they provide to us or our affiliates. This compensation or reimbursement is not reflected in the fees and expenses listed in the Fund Expense Table in this prospectus and may take the form of: o Marketing allowances; o Education and training allowances to facilitate our attendance at certain educational and training meetings to provide information and training about our products, including holding training programs at our expense; o Sponsorship payments to support attendance at meetings by registered representatives who sell our products; o Reimbursement for the cost of attendance by registered representatives at conventions that we sponsor. The following is a list of the top 25 selling firms that, during 2004, received the largest dollar amounts, in the aggregate, from DSI in connection with the sale of annuity contracts, ranked by total dollars received: 1. UBS Financial Services Inc 2. Morgan Stanley Dean Witter 3. Linsco Private Ledger 4. Merrill Lynch 5. Citigroup Global Markets 6. Wachovia Securities 7. ING Financial Partners 8. Planning Corporation of America 9. National Planning Corporation 10. PrimeVest 11. A.G. Edwards 12. ING Financial Advisers, LLC 13. Multi-Financial Securities Corp 14. Financial Network Investment Corp 15. McDonald & Company 16. RBC Dain Rauscher 17. Mutual Service Corporation 18. First Financial Planners, Inc 19. Securities America 20. Investors Capital 21. Wells Fargo Investments, LLC 22. Waterstone Financial 23. Commonwealth Financial Network 24. Quick & Reilly, Inc. 25. NFP Securities Inc DSI may also compensate wholesalers/distributors, and their sales management personnel, for Contract sales within the wholesale/distribution channel. This compensation may be based on a percentage of premium payments and/or a percentage of Contract values. Affiliated selling firms may include Bancnorth Investment Group, Inc. Baring Investment Services, Inc., Financial Network Investment Corporation, Guaranty Brokerage Services, Inc., ING America Equities, Inc., ING DIRECT Securities, Inc., ING Financial Advisers LLC, ING Financial Markets, LLC., ING Financial Partners, Inc., ING Funds Distributor, LLC, ING Investment Management Services, LLC, Multi-Financial Securities Corporation, PrimeVest Financial Services, Inc. and Systematized Benefits Administrators, Inc. 53 Legends - 136958 We do not pay any additional compensation on the sale or exercise of any of the Contract's optional benefit riders offered in this prospectus. This is a general discussion of the types and levels of compensation paid by us for sales of annuity contracts. It is important for you to know that the payment of volume-based compensation to a selling firm or registered representative may provide that registered representative a financial incentive to promote our contracts over those of another company. - -------------------------------------------------------------------------------- OTHER INFORMATION - -------------------------------------------------------------------------------- VOTING RIGHTS We will vote the shares of a Trust owned by Separate Account B according to your instructions. However, if the 1940 Act or any related regulations should change, or if interpretations of it or related regulations should change, and we decide that we are permitted to vote the shares of a Trust in our own right, we may decide to do so. We determine the number of shares that you have in a subaccount by dividing the Contract's contract value in that subaccount by the net asset value of one share of the portfolio in which a subaccount invests. We count fractional votes. We will determine the number of shares you can instruct us to vote 180 days or less before a Trust shareholder meeting. We will ask you for voting instructions by mail at least 10 days before the meeting. If we do not receive your instructions in time, we will vote the shares in the same proportion as the instructions received from all Contracts in that subaccount. We will also vote shares we hold in Separate Account B which are not attributable to contract owners in the same proportion. STATE REGULATION We are regulated by the Insurance Department of the State of Iowa. We are also subject to the insurance laws and regulations of all jurisdictions where we do business. The Contract offered by this prospectus has been approved where required by those jurisdictions. We are required to submit annual statements of our operations, including financial statements, to the Insurance Departments of the various jurisdictions in which we do business to determine solvency and compliance with state insurance laws and regulations. LEGAL PROCEEDINGS We are not aware of any pending legal proceedings which involve Separate Account B as a party. We are, or may be in the future, a defendant in various legal proceedings in connection with the normal conduct of our insurance operations. Some of these cases may seek class action status and may include a demand for punitive damages as well as for compensatory damages. In the opinion of management, the ultimate resolution of any existing legal proceeding is not likely to have a material adverse effect on our ability to meet our obligations under the contract. Directed Services, Inc., the principal underwriter and distributor of the contract, is not involved in any legal proceeding which, in the opinion of management, is likely to have a material adverse effect on its ability to distribute the contract. INDUSTRY DEVELOPMENTS - TRADING As with many financial services companies, the Company and affiliates of the Company have received requests for information from various governmental and self-regulatory agencies in connection with investigations related to trading in investment company shares. In each case, full cooperation and responses are being provided. The Company is also reviewing its policies and procedures in this area. EXPERTS The audited consolidated financial statements and schedules of the Company as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004, along with the statement of assets and liabilities of Separate Account B as of December 31, 2004 and the related statement of operations for the year then ended, and the statements of changes in net assets for each of the two years in the period then ended, included in the SAI and Registration Statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon included in the SAI and in the Registration Statement, and are included in reliance on such reports given on the authority of such firm as experts in accounting and auditing. 54 Legends - 136958 - -------------------------------------------------------------------------------- FEDERAL TAX CONSIDERATIONS - -------------------------------------------------------------------------------- INTRODUCTION This section discusses our understanding of current federal income tax laws affecting the contract. You should keep the following in mind when reading it: o Your tax position (or the tax position of the designated beneficiary, as applicable) determines federal taxation of amounts held or paid out under the contract; o Tax laws change. It is possible that a change in the future could affect contracts issued in the past; o This section addresses federal income tax rules and does not discuss federal estate and gift tax implications, state and local taxes, foreign taxes or any other tax provisions; and o We do not make any guarantee about the tax treatment of the contract or transactions involving the contract. We do not intend this information to be tax advice. For advice about the effect of federal income taxes or any other taxes on amounts held or paid out under the contract, consult a tax adviser. For more comprehensive information, contact the Internal Revenue Service (IRS). TYPES OF CONTRACTS: NON-QUALIFIED OR QUALIFIED The Contract may be purchased on a non-tax-qualified basis or purchased on a tax-qualified basis. Non-qualified contracts are purchased with after tax contributions and are not related to retirement plans that receive special income tax treatment under the Code. Qualified Contracts are designed for use by individuals whose premium payments are comprised solely of proceeds from and/or contributions under retirement plans that are intended to qualify as plans entitled to special income tax treatment under Sections 401(a), 403(a), 403(b), 408, 408A or 457 of the Code. The ultimate effect of federal income taxes on the amounts held under a Contract, or annuity payments, depends on the type of retirement plan, on the tax and employment status of the individual concerned, and on your tax status. In addition, certain requirements must be satisfied in purchasing a qualified Contract with proceeds from a tax-qualified plan in order to continue receiving favorable tax treatment. Some retirement plans are subject to additional distribution and other requirements that are not incorporated into our Contract. Because the Plan is not part of the Contract, we are not bound by any Plan's terms or conditions. Contract owners, participants and beneficiaries are responsible for determining that contributions, distributions and other transactions with respect to the Contract comply with applicable law. Therefore, you should seek competent legal and tax advice regarding the suitability of a Contract for your particular situation. The following discussion assumes that qualified Contracts are purchased with proceeds from and/or contributions under retirement plans that qualify for the intended special federal income tax treatment. 55 Legends - 136958 TAXATION OF NON-QUALIFIED CONTRACTS TAXATION PRIOR TO DISTRIBUTION We believe that if you are a natural person you will generally not be taxed on increases in the value of a non-qualified Contract until a distribution occurs or until annuity payments begin. This assumes that the Contract will qualify as an annuity contract for federal income tax purposes. For these purposes, the agreement to assign or pledge any portion of the contract value generally will be treated as a distribution. In order to receive deferral of taxation, the following requirements must be satisfied: DIVERSIFICATION. Internal Revenue Code Section 817(h) requires investments of a variable account be adequately diversified in order for a contract to be treated as an annuity contract for federal income tax purposes. The Treasury has issued regulations which set the standards for measuring the adequacy of any diversification. To be adequately diversified, each variable investment option must meet certain tests. Each sub-account's corresponding fund has represented that it will meet the diversification standards that apply to your policy. We therefore believe that Separate Account B, through the subaccounts, will satisfy these diversification requirements. INVESTOR CONTROL. Although earnings under non-qualified contracts are generally not taxed until withdrawn, the Internal Revenue Service (IRS) has stated in published rulings that a variable contract owner will be considered the owner of separate account assets if the contract owner possesses incidents of investment control over the assets. In these circumstances, income and gains from the separate account assets would be currently includible in the variable contract owner's gross income. Future guidance regarding the extent to which owners could direct their investments among subaccounts without being treated as owners of the underlying assets of the separate account may adversely affect the tax treatment of existing contracts. The Company therefore reserves the right to modify the contract as necessary to attempt to prevent the contract holder from being considered the federal tax owner of a pro rata share of the assets of the separate account. REQUIRED DISTRIBUTIONS. In order to be treated as an annuity contract for federal income tax purposes, the Code requires any non-qualified Contract to contain certain provisions specifying how your interest in the Contract will be distributed in the event of your death. The non-qualified Contracts contain provisions that are intended to comply with these Code requirements, although no regulations interpreting these requirements have yet been issued. We intend to review such distribution provisions and modify them if necessary to assure that they comply with the applicable requirements when such requirements are clarified by regulation or otherwise. See "Death Benefit Choices" for additional information on required distributions from non-qualified contracts. NON-NATURAL PERSONS. The owner of any annuity contract who is not a natural person generally must include in income any increase in the excess of the contract value over the "investment in the contract" (generally, the premiums or other consideration you paid for the contract less any nontaxable withdrawals) during the taxable year. There are some exceptions to this rule and a prospective contract owner that is not a natural person may wish to discuss these with a tax adviser. DELAYED ANNUITY STARTING DATE. If the Contract's annuity starting date occurs (or is scheduled to occur) at a time when the annuitant has reached an advanced age (e.g., age 85), it is possible that the Contract would not be treated as an annuity for federal income tax purposes. In that event, the income and gains under the Contract could be currently includible in your income. TAXATION OF DISTRIBUTIONS GENERAL. When a withdrawal from a non-qualified Contract occurs (including amounts paid to you under the ING LifePay rider), the amount received will be treated as ordinary income subject to tax up to an amount equal to the excess (if any) of the contract value (unreduced by the amount of any surrender charge) immediately before the distribution over the contract owner's investment in the contract at that time. Investment in the contract is generally equal to the amount of all contributions to the contract, plus amounts previously included in your gross income as the result of certain loans, assignments or gifts, less the aggregate amount of non-taxable distributions previously made. The contract value that applies for this purpose is unclear in some respects. For example, the living benefits provided under riders to the Contract, i.e., the ING LifePay and MGIB riders, as well as the market value adjustment could increase the contract value that applies. Thus, the income on the Contracts could be higher than the amount of income that would be determined without regard to such benefits. As a result, you could have higher amounts of income than will be reported to you. 56 Legends - 136958 In the case of a surrender under a non-qualified Contract, the amount received generally will be taxable only to the extent it exceeds the contract owner's cost basis in the contract. 10% PENALTY TAX. A distribution from a non-qualified Contract may be subject to a federal tax penalty equal to 10% of the amount treated as income. In general, however, there is no penalty on distributions: o made on or after the taxpayer reaches age 59 1/2; o made on or after the death of a contract owner; o attributable to the taxpayer's becoming disabled; or o made as part of a series of substantially equal periodic payments for the life (or life expectancy) of the taxpayer. Other exceptions may be applicable under certain circumstances and special rules may be applicable in connection with the exceptions enumerated above. A tax adviser should be consulted with regard to exceptions from the penalty tax. TAX-FREE EXCHANGES. Section 1035 of the Tax Code permits the exchange of a life insurance, endowment or annuity contract for an annuity contract on a tax-free basis. In such instance, the "investment in the contract" in the old contract will carry over to the new contract. You should consult with your tax advisor regarding procedures for making Section 1035 exchanges. If your Contract is purchased through a tax-free exchange of a life insurance, endowment or annuity contract that was purchased prior to August 14, 1982, then any distributions other than annuity payments will be treated, for tax purposes, as coming: o First, from any remaining "investment in the contract" made prior to August 14, 1982 and exchanged into the Contract; o Next, from any "income on the contract" attributable to the investment made prior to August 14, 1982; o Then, from any remaining "income on the contract"; and o Lastly, from any remaining "investment in the contract". The IRS has concluded that in certain instances, the partial exchange of a portion of one annuity contract for another contract will be tax-free. However, the IRS has reserved the right to treat transactions it considers abusive as ineligible for favorable partial 1035 tax-free exchange treatment. It is not certain whether the IRS would treat an immediate withdrawal or annuitization after a partial exchange as abusive. In addition, it is unclear how the IRS will treat a partial exchange from a life insurance, endowment, or annuity contract directly into an immediate annuity. Currently, we will accept a partial 1035 exchange from a non-qualified annuity into a deferred annuity or an immediate annuity as a tax-free transaction unless we believe that we would be expected to treat the transaction as abusive. We are not responsible for the manner in which any other insurance company, for tax reporting purposes, or the IRS, with respect to the ultimate tax treatment, recognizes or reports a partial exchange. We strongly advise you to discuss any proposed 1035 exchange with your tax advisor prior to proceeding with the transaction. 57 Legends - 136958 TAXATION OF ANNUITY PAYMENTS. Although tax consequences may vary depending on the payment option elected under an annuity contract, a portion of each annuity payment is generally not taxed and the remainder is taxed as ordinary income. The non-taxable portion of an annuity payment is generally determined in a manner that is designed to allow you to recover your investment in the contract ratably on a tax-free basis over the expected stream of annuity payments, as determined when annuity payments start. Once your investment in the contract has been fully recovered, however, the full amount of each annuity payment is subject to tax as ordinary income. The tax treatment of partial annuitizations is unclear. We currently treat any partial annuitizations, such as those associated with the MGIB benefit, as withdrawals rather than as annuity payments. Please consult your tax adviser before electing a partial annuitization. DEATH BENEFITS. Amounts may be distributed from a Contract because of your death or the death of the annuitant. Generally, such amounts are includible in the income of the recipient as follows: (i) if distributed in a lump sum, they are taxed in the same manner as a surrender of the Contract, or (ii) if distributed under a payment option, they are taxed in the same way as annuity payments. Special rules may apply to amounts distributed after a Beneficiary has elected to maintain Contract value and receive payments. The Contract offers a death benefit (including the benefit provided by the earnings multiplier benefit rider) that may exceed the greater of the premium payments and the contract value. Certain charges are imposed with respect to the death benefit. It is possible that these charges (or some portion thereof) could be treated for federal tax purposes as a distribution from the Contract. ASSIGNMENTS AND OTHER TRANSFERS. A transfer, pledge or assignment of ownership of a Contract, or the designation of an annuitant or payee other than an owner, may result in certain tax consequences to you that are not discussed herein. A contract owner contemplating any such transfer, pledge, assignment, or designation or exchange, should consult a tax adviser as to the tax consequences. IMMEDIATE ANNUITIES. Under section 72 of the Tax Code, an immediate annuity means an annuity (1) which is purchased with a single premium, (2) with annuity payments starting within one year from the date of purchase, and (3) which provides a series of substantially equal periodic payments made annually or more frequently. Treatment as an immediate annuity will have significance with respect to exceptions from the 10% early withdrawal penalty, to contracts owned by non-natural persons, and for certain policy exchanges. MULTIPLE CONTRACTS. The tax law requires that all non-qualified deferred annuity contracts that are issued by a company or its affiliates to the same contract owner during any calendar year be treated as one non-qualified deferred annuity contract for purposes of determining the amount includible in such contract owner's income when a taxable distribution occurs. WITHHOLDING. We will withhold and remit to the U.S. government a part of the taxable portion of each distribution made under a Contract unless the distributee notifies us at or before the time of the distribution that he or she elects not to have any amounts withheld. Withholding will be mandatory, however, if the distribute fails to provide a valid taxpayer identification number or if we are notified by the IRS that the taxpayer identification number we have on file is incorrect. The withholding rates applicable to the taxable portion of periodic annuity payments are the same as the withholding rates generally applicable to payments of wages. In addition, a 10% withholding rate applies to the taxable portion of non-periodic payments. Regardless of whether you elect not to have federal income tax withheld, you are still liable for payment of federal income tax on the taxable portion of the payment. 58 Legends - 136958 TAXATION OF QUALIFIED CONTRACTS GENERAL The Contracts are designed for use with several types of qualified plans. The tax rules applicable to participants in these qualified plans vary according to the type of plan and the terms and conditions of the plan itself. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from: contributions in excess of specified limits; distributions before age 59 1/2 (subject to certain exceptions); distributions that do not conform to specified commencement and minimum distribution rules; and in other specified circumstances. Therefore, no attempt is made to provide more than general information about the use of the Contracts with the various types of qualified retirement plans. Contract owners, annuitants, and beneficiaries are cautioned that the rights of any person to any benefits under these qualified retirement plans may be subject to the terms and conditions of the plans themselves, regardless of the terms and conditions of the Contract, but we shall not be bound by the terms and conditions of such plans to the extent such terms contradict the Contract, unless the Company consents. You will not generally pay taxes on earnings from the annuity contract described in this prospectus until they are withdrawn. When an annuity contract is used to fund one of these tax qualified retirement arrangements, you should know that the annuity contract does not provide any additional tax deferral of earnings beyond the tax deferral provided by the tax-qualified retirement arrangement. Tax-qualified retirement arrangements under Tax Code sections 401(a), 401(k), 403(a), 403(b) or governmental 457 plans also generally defer payment of taxes on earnings until they are withdrawn (or in the case of a non-governmental 457 plan, paid or made available to you or a designated beneficiary). However, annuities do provide other features and benefits which may be valuable to you. You should discuss your alternatives with your local representative. DISTRIBUTIONS - GENERAL For qualified plans under Section 401(a) and 403(b), the Code requires that distributions generally must commence no later than the later of April 1 of the calendar year following the calendar year in which the plan participant for whose benefit the contract is purchased (i) reaches age 70 1/2 or (ii) retires, and must be made in a specified form or manner. If the plan participant is a "5 percent owner" (as defined in the Code), distributions generally must begin no later than April 1 of the calendar year following the calendar year in which the plan participant reaches age 70 1/2. For IRAs described in Section 408, distributions generally must commence no later than by April 1 of the calendar year following the calendar year in which the individual contract owner reaches age 70 1/2. Roth IRAs under Section 408A do not require distributions at any time before the contract owner's death. Please note that required minimum distributions under qualified Contracts may be subject to surrender charges and/or market value adjustment, in accordance with the terms of the Contract. This could affect the amount that must be taken from the Contract in order to satisfy required minimum distributions. DIRECT ROLLOVERS If the Contract is used in connection with a pension, profit-sharing, or annuity plan qualified under sections 401(a) or 403(a) of the Code, or is a tax-sheltered annuity under section 403(b) of the Code, or is used with an eligible deferred compensation plan that has a government sponsor and that is qualified under section 457(b), any "eligible rollover distribution" from the Contract will be subject to the direct rollover and mandatory withholding requirements. An eligible rollover distribution generally is any taxable distribution from a qualified pension plan under section 401(a) of the Code, qualified annuity plan under section 403(a) of the Code, section 403(b) annuity or custodial account, or an eligible section 457(b) deferred compensation plan that has a government sponsor, excluding certain amounts (such as minimum distributions required under section 401(a)(9) of the Code, distributions which are part of a "series of substantially equal periodic payments" made for life or a specified period of 10 years or more, or hardship distributions as defined in the tax law). 59 Legends - 136958 Under these requirements, federal income tax equal to 20% of the eligible rollover distribution will be withheld from the amount of the distribution. Unlike withholding on certain other amounts distributed from the Contract, discussed below, you cannot elect out of withholding with respect to an eligible rollover distribution. However, this 20% withholding will not apply if, instead of receiving the eligible rollover distribution, you elect to have it directly transferred to certain qualified plans. Prior to receiving an eligible rollover distribution, you will receive a notice (from the plan administrator or us) explaining generally the direct rollover and mandatory withholding requirements and how to avoid the 20% withholding by electing a direct rollover. CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS Section 401(a) of the Code permits corporate employers to establish various types of retirement plans for employees, and permits self-employed individuals to establish these plans for themselves and their employees. These retirement plans may permit the purchase of the Contracts to accumulate retirement savings under the plans. Adverse tax or other legal consequences to the plan, to the participant, or to both may result if this Contract is assigned or transferred to any individual as a means to provide benefit payments, unless the plan complies with all legal requirements applicable to such benefits before transfer of the Contract. Employers intending to use the Contract with such plans should seek competent advice. INDIVIDUAL RETIREMENT ANNUITIES - GENERAL Section 408 of the Code permits eligible individuals to contribute to an individual retirement program known as an "Individual Retirement Annuity" or "IRA." These IRAs are subject to limits on the amount that can be contributed, the deductible amount of the contribution, the persons who may be eligible, and the time when distributions commence. Also, distributions from certain other types of qualified retirement plans may be "rolled over" on a tax-deferred basis into an IRA. Also, amounts in another IRA or individual retirement account can be rolled over or transferred tax-free to an IRA. There are significant restrictions on rollover or transfer contributions from Savings Incentive Match Plans for Employees (SIMPLE), under which certain employers may provide contributions to IRAs on behalf of their employees, subject to special restrictions. Employers may establish Simplified Employee Pension (SEP) Plans to provide IRA contributions on behalf of their employees. If you make a tax-free rollover of a distribution from any of these IRAs, you may not make another tax-free rollover from the IRA within a 1-year period. Sales of the Contract for use with IRAs may be subject to special requirements of the IRS. INDIVIDUAL RETIREMENT ANNUITIES - DISTRIBUTIONS All distributions from a traditional IRA are taxed as received unless either one of the following is true: o The distribution is rolled over to a plan eligible to receive rollovers or to another traditional IRA or certain qualified plans in accordance with the Tax Code; or o You made after-tax contributions to the IRA. In this case, the distribution will be taxed according to rules detailed in the Tax Code. To avoid certain tax penalties, you and any designated beneficiary must also meet the minimum distribution requirements imposed by the Tax Code. The requirements do not apply to Roth IRA contracts while the owner is living. These rules may dictate the following: o Start date for distributions; o The time period in which all amounts in your account(s) must be distributed; and o Distribution amounts. 60 Legends - 136958 Generally, you must begin receiving distributions from a traditional IRA by April 1 of the calendar year following the calendar year in which you attain age 70 1/2. We must pay out distributions from the contract over a period not extending beyond one of the following time periods: o Over your life or the joint lives of you and your designated beneficiary; or o Over a period not greater than your life expectancy or the joint life expectancies of you and your designated beneficiary. The amount of each periodic distribution must be calculated in accordance with IRS regulations. If you fail to receive the minimum required distribution for any tax year, a 50% excise tax may be imposed on the required amount that was not distributed. The following applies to the distribution of death proceeds under 408(b) and 408A (Roth IRA - See below) plans. Different distribution requirements apply after your death. If your death occurs on or after you begin receiving minimum distributions under the contract, distributions must be made at least as rapidly as under the method in effect at the time of your death. Code section 401(a)(9) provides specific rules for calculating the required minimum distributions at your death. The death benefit under the contract and also certain other contract benefits, such as living benefits, may affect the amount of the required minimum distribution that must be taken. If your death occurs before you begin receiving minimum distributions under the contract, your entire balance must be distributed by December 31 of the calendar year containing the fifth anniversary of the date of your death. For example, if you die on September 1, 2005, your entire balance must be distributed to the designated beneficiary by December 31, 2010. However, if distributions begin by December 31 of the calendar year following the calendar year of your death, and you have named a designated beneficiary, then payments may be made over either of the following time frames: o Over the life of the designated beneficiary; or o Over a period not extending beyond the life expectancy of the designated beneficiary. If the designated beneficiary is your spouse, distributions must begin on or before the later of the following: o December 31 of the calendar year following the calendar year of your death; or o December 31 of the calendar year in which you would have attained age 70 1/2. ROTH IRAS - GENERAL Section 408A of the Code permits certain eligible individuals to contribute to a Roth IRA. Contributions to a Roth IRA, which are subject to limits on the amount of the contributions and the persons who may be eligible to contribute, are not deductible, and must be made in cash or as a rollover or transfer from another Roth IRA or other IRA. Certain qualifying individuals may convert an IRA, SEP, or SIMPLE IRA, to a Roth IRA. Such rollovers and conversions are subject to tax, and other special rules may apply. If you make a tax-free rollover of a distribution from a Roth IRA to another Roth IRA, you may not make another tax-free rollover from the Roth IRA from which the rollover was made within a 1-year period. A 10% penalty may apply to amounts attributable to a conversion to a Roth IRA if the amounts are distributed during the five taxable years beginning with the year in which the conversion was made. 61 Legends - 136958 ROTH IRAS - DISTRIBUTIONS A qualified distribution from a Roth IRA is not taxed when it is received. A qualified distribution is a distribution: o Made after the five-taxable year period beginning with the first taxable year for which a contribution was made to a Roth IRA of the owner; and o Made after you attain age 59 1/2, die, become disabled as defined in the Tax Code, or for a qualified first-time home purchase. If a distribution is not qualified, it will be taxable to the extent of the accumulated earnings. Under special ordering rules, a partial distribution will first be treated generally as a return of contributions which is not taxable and then as taxable accumulated earnings. TAX SHELTERED ANNUITIES - GENERAL The Contracts may be used by individuals whose premium payments are comprised solely of proceeds from and/or contributions under retirement plans that are intended to qualify as plans entitled to special income tax treatment under Code section 403(b) plans. Section 403(b) of the Code allows employees of certain Section 501(c)(3) organizations and public schools to exclude from their gross income the premium payments made, within certain limits, to a Contract that will provide an annuity for the employee's retirement. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from: contributions in excess of specified limits; distributions before age 59 1/2 (subject to certain exceptions); distributions that do not conform to specified commencement and minimum distribution rules; and other specified circumstances. 403(b) plans may be subject to additional distribution and other requirements that are not incorporated into our Contract. In addition, the Treasury proposed 403(b) regulations in November, 2004 which, if finalized, do not take effect until after 2005. These proposed regulations may not be relied upon until they become final. The proposed regulations include rules governing the ability of a 403(b) plan to be terminated which would entitle a participant to a distribution, a revocation of IRS Revenue Ruling 90-204 which would increase restrictions on a participant's right to transfer his or her 403(b) account, the imposition of withdrawal restrictions on non-salary reduction amounts, as well as other changes. As a result, no attempt is made to provide more than general information about the use of the Contracts with 403(b) plans. Contract owners, annuitants, and beneficiaries are cautioned that the rights of any person to any benefits under these 403(b) plans may be subject to the terms and conditions of the plans themselves, regardless of the terms and conditions of the Contract, but we are not bound by the terms and conditions of such plans to the extent such terms contradict the Contract. Contract owners, participants and beneficiaries are responsible for determining that contributions, distributions and other transactions with respect to the Contract comply with applicable law. You should seek competent legal and tax advice regarding the suitability of a Contract for your particular situation. The following discussion assumes that Contracts are purchased with proceeds from and/or contributions under 403(b) plans that qualify for the intended special federal income tax treatment. TAX SHELTERED ANNUITIES - LOANS Loans may be available if you purchased your contract in connection with a non-ERISA plan qualified under Section 403(b) of the Code ("TSA"). We do not currently permit loans under Section 403(b) Contracts that are subject to ERISA. If your Contract was issued in connection with a TSA and the terms of your plan permit, you may take a loan from us, using your surrender value as collateral for the loan. Loans are subject to the terms of the Contract, your 403(b) plan, the Code and other federal and state regulations. The amount and number of loans outstanding at any one time under your TSA are limited, whether under our contracts or those of other carriers. We may modify the terms of a loan to comply with changes in applicable law. Various mandatory repayment requirements apply to loans, and failure to repay generally would result in income to you and the potential application of tax penalties. We urge you to consult with a qualified tax advisor prior to effecting a loan transaction under your Contract. We may apply additional restrictions or limitations on loans, and you must make loan requests in accordance with our administrative practices and loan request procedures in effect at the time you submit your request. Read the terms of the loan agreement before submitting any request. 62 Legends - 136958 Any outstanding loan balance impacts the following: o Withdrawals and Charges: We determine amounts available for maximum withdrawal amounts, free partial withdrawals, systematic withdrawals and waiver of administrative charges by reducing the otherwise applicable amounts by the amount of any outstanding loan balance. o Death Benefits, Annuitization and Surrenders: We deduct the outstanding loan balance from any amounts otherwise payable and in determining the amount available for annuitization. o Riders: - Minimum Guaranteed Income Benefit ("MGIB") Rider. If you exercise the MGIB rider, we reduce the MGIB Base by an amount equal to the ratio of the outstanding loan balance to the contract value multiplied by the MGIB Base. - ING LifePay Minimum Guaranteed Withdrawal Benefit ("ING LifePay") Rider. The portion of the contract value used to pay off the outstanding loan balance will reduce the ING LifePay Base or MAW as applicable. We do not recommend the ING LifePay rider if loans are contemplated. TAX SHELTERED ANNUITIES - DISTRIBUTIONS All distributions from Section 403(b) plans are taxed as received unless either of the following is true: o The distribution is rolled over to another plan eligible to receive rollovers or to a traditional individual retirement annuity/account (IRA) in accordance with the Tax Code; or o You made after-tax contributions to the plan. In this case, the amount will be taxed according to rules detailed in the Tax Code. Generally, you must begin receiving distributions by April 1 of the calendar year following the calendar year in which you attain age 70 1/2 or retire, whichever occurs later, unless you had amounts under the contract as of December 31, 1986. In this case, distribution of these amounts generally must begin by the end of the calendar year in which you attain age 75 or retire, if later. The death benefit under the contract and also certain other contract benefits, such as the living benefits, may affect the amount of the required minimum distribution that must be taken. If you take any distributions in excess of the required minimum amount, then special rules require that some or all of the December 31, 1986 balance be distributed earlier. TAX CONSEQUENCES OF ENHANCED DEATH BENEFIT The Contract offers a death benefit (including the benefit provided by the earnings multiplier benefit rider) that may exceed the greater of the premium payments and the contract value. It is possible that the IRS could characterize such a death benefit as an incidental death benefit. There are limitations on the amount of incidental benefits that may be provided under pension and profit sharing plans. In addition, the provision of such benefits may result in currently taxable income to participants. Also, as stated above, the presence of the death benefit, as well as certain other contract benefits, could affect the amount of required minimum distributions. 63 Legends - 136958 OTHER TAX CONSEQUENCES As noted above, the foregoing comments about the federal tax consequences under the Contracts are not exhaustive, and special rules are provided with respect to other tax situations not discussed in this prospectus. Further, the federal income tax consequences discussed herein reflect our understanding of current law, and the law may change. Federal estate and state and local estate, inheritance and other tax consequences of ownership or receipt of distributions under a Contract depend on the individual circumstances of each contract owner or recipient of the distribution. A competent tax adviser should be consulted for further information. POSSIBLE CHANGES IN TAXATION Although the likelihood of legislative change is uncertain, there is always the possibility that the tax treatment of the Contracts could change by legislation or other means. It is also possible that any change could be retroactive (that is, effective before the date of the change). You should consult a tax adviser with respect to legislative developments and their effect on the Contract. FEDERAL INCOME TAX WITHHOLDING We will withhold and remit to the U.S. government a part of the taxable portion of each distribution made under a Contract unless the distributee notifies us at or before the time of the distribution that he or she elects not to have any amounts withheld. In certain circumstances, we may be required to withhold tax, as explained above. The withholding rates applicable to the taxable portion of periodic annuity payments (other than eligible rollover distributions) are the same as the withholding rates generally applicable to payments of wages. In addition, a 10% withholding rate applies to the taxable portion of non-periodic payments (including withdrawals prior to the annuity starting date) and conversions of, and rollovers from, non-Roth IRAs to Roth IRAs. Regardless of whether you elect not to have federal income tax withheld, you are still liable for payment of federal income tax on the taxable portion of the payment. As discussed above, the withholding rate applicable to eligible rollover distributions is 20%. ASSIGNMENTS Adverse tax consequences to the plan and/or to you may result if your beneficial interest in the contract is assigned or transferred to persons other than: a plan participant as a means to provide benefit payments; an alternate payee under a qualified domestic relations order in accordance with code section 414(p); or to the Company as collateral for a loan. TAXATION OF COMPANY We are taxed as a life insurance company under the Tax Code. The Separate Account is not a separate entity from us. Therefore, it is not taxed separately as a "regulated investment company," but is taxed as part of the Company. We automatically apply investment income and capital gains attributable to the separate account to increase reserves under the contracts. Because of this, under existing federal tax law we believe that any such income and gains will not be taxed to the extent that such income and gains are applied to increase reserves under the contracts. In addition, any foreign tax credits attributable to the separate account will be first used to reduce any income taxes imposed on the separate account before being used by the Company. In summary, we do not expect that we will incur any federal income tax liability attributable to the separate account and we do not intend to make any provision for such taxes. However, changes in federal tax laws and/or their interpretation may result in our being taxed on income or gains attributable to the separate account. In this case, we may impose a charge against the separate account (with respect to some or all of the contracts) to set aside provisions to pay such taxes. We may deduct this amount from the separate account, including from your account value invested in the subaccounts. 64 Legends - 136958 - -------------------------------------------------------------------------------- STATEMENT OF ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- TABLE OF CONTENTS Item Introduction Description of ING USA Annuity and Life Insurance Company Safekeeping of Assets The Administrator Independent Registered Public Accounting Firm Distribution of Contracts Performance Information IRA Partial Withdrawal Option Other Information Financial Statements of ING USA Annuity and Life Insurance Company Financial Statements of ING USA Annuity and Life Insurance Company Separate Account B ________________________________________________________________________________ PLEASE TEAR OFF, COMPLETE AND RETURN THE FORM BELOW TO ORDER A FREE STATEMENT OF ADDITIONAL INFORMATION FOR THE CONTRACTS OFFERED UNDER THE PROSPECTUS. SEND THE FORM TO OUR CUSTOMER SERVICE CENTER AT THE ADDRESS SHOWN ON THE PROSPECTUS COVER. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - PLEASE SEND ME A FREE COPY OF THE STATEMENT OF ADDITIONAL INFORMATION FOR SEPARATE ACCOUNT B. Please Print or Type: __________________________________________________ NAME __________________________________________________ SOCIAL SECURITY NUMBER __________________________________________________ STREET ADDRESS __________________________________________________ CITY, STATE, ZIP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Legends -136958 11/01/2005 SAI-1 Legends - 136958 - -------------------------------------------------------------------------------- APPENDIX A - -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION Except for subaccounts which did not commence operations as of December 31, 2004, the following tables give (1) the accumulation unit value ("AUV") at the beginning of the period, (2) the AUV at the end of the period and (3) the total number of accumulation units outstanding at the end of the period for each subaccount of ING USA Separate Account B available under the Contract for the indicated periods. 2004 ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 1.65% AIM VI DENT DEMOGRAPHIC TRENDS (Fund first available during May 2004) $9.89 AUV at beginning of period $10.49 AUV at end of period 490,391 Number of accumulation units outstanding at end of period AIM VI FINANCIAL SERVICES FUND (Fund first available during May 2004) AUV at beginning of period $9.98 AUV at end of period $10.66 Number of accumulation units outstanding at end of period 348,574 AIM VI HEALTH SCIENCES FUND (Fund first available during May 2004) AUV at beginning of period $9.58 AUV at end of period $10.14 Number of accumulation units outstanding at end of period 573,077 AIM VI LEISURE FUND (Fund first available during May 2004) AUV at beginning of period $10.66 AUV at end of period $11.89 Number of accumulation units outstanding at end of period 542,920 AIM VI UTILITIES FUND (Fund first available during May 2004) AUV at beginning of period $7.33 AUV at end of period $8.91 Number of accumulation units outstanding at end of period 650,887 COLONIAL SMALL CAP VALUE (Fund first available during May 2004) AUV at beginning of period $13.83 AUV at end of period $16.67 Number of accumulation units outstanding at end of period 1,745,035 FIDELITY VIP EQUITY - INCOME (Fund first available during May 2004) AUV at beginning of period $9.98 AUV at end of period $10.92 Number of accumulation units outstanding at end of period 1,820,927 FIDELITY VIP GROWTH (Fund first available during May 2004) AUV at beginning of period $8.28 AUV at end of period $8.39 Number of accumulation units outstanding at end of period 2,221,606 ING AIM MID CAP GROWTH (Fund first available during May 2004) AUV at beginning of period $13.63 AUV at end of period $14.40 Number of accumulation units outstanding at end of period 45,120 ING ALLIANCE MID CAP GROWTH (Fund first available during May 2004) AUV at beginning of period $17.15 AUV at end of period $20.13 Number of accumulation units outstanding at end of period 44,723 A1 Legends - 136958 2004 ---- ING AMERICAN FUNDS GROWTH (Fund first available during May 2004) AUV at beginning of period $10.76 AUV at end of period $11.85 Number of accumulation units outstanding at end of period 7,574,705 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available during May 2004) AUV at beginning of period $10.98 AUV at end of period $11.86 Number of accumulation units outstanding at end of period 5,275,914 ING AMERICAN FUNDS INTERNATIONAL (Fund first available during May 2004) AUV at beginning of period $11.61 AUV at end of period $13.54 Number of accumulation units outstanding at end of period 2,513,020 ING CAPITAL GUARDIAN LARGE CAP VALUE (Fund first available during May 2004) AUV at beginning of period $13.76 AUV at end of period $14.76 Number of accumulation units outstanding at end of period 41,137 ING CAPITAL GUARDIAN MANAGED GLOBAL (Fund first available during May 2004) AUV at beginning of period $13.72 AUV at end of period $14.93 Number of accumulation units outstanding at end of period 21,795 ING CAPITAL GUARDIAN SMALL CAP (Fund first available during May 2004) AUV at beginning of period $13.40 AUV at end of period $14.14 Number of accumulation units outstanding at end of period 60,826 ING DEVELOPING WORLD (Fund first available during May 2004) AUV at beginning of period $13.96 AUV at end of period $16.15 Number of accumulation units outstanding at end of period 40,817 ING EAGLE ASSET CAPITAL APPRECIATION (Fund first available during May 2004) AUV at beginning of period $11.83 AUV at end of period $13.35 Number of accumulation units outstanding at end of period 3,261 ING EVERGREEN HEALTH SCIENCES (Fund first available during May 2004) AUV at beginning of period $9.95 AUV at end of period $9.88 Number of accumulation units outstanding at end of period 27,444 ING EVERGREEN OMEGA (Fund first available during May 2004) AUV at beginning of period $10.00 AUV at end of period $10.46 Number of accumulation units outstanding at end of period 3,039 ING FMRSM DIVERSIFIED MID-CAP (Fund first available during May 200) AUV at beginning of period $12.42 AUV at end of period $15.12 Number of accumulation units outstanding at end of period 70,293 ING GOLDMAN SACHS TOLLKEEPER (Fund first available during May 2004) AUV at beginning of period $14.41 AUV at end of period $15.78 Number of accumulation units outstanding at end of period 22,952 ING HARD ASSETS (Fund first available during May 2004) AUV at beginning of period $14.70 AUV at end of period $15.35 Number of accumulation units outstanding at end of period 59,042 A2 Legends - 136958 2004 ---- ING INTERNATIONAL (Fund first available during May 2004) AUV at beginning of period $12.43 AUV at end of period $14.24 Number of accumulation units outstanding at end of period 54,647 ING JANUS SPECIAL EQUITY (Fund first available during May 2004) AUV at beginning of period $14.22 AUV at end of period $16.36 Number of accumulation units outstanding at end of period 28,831 ING JENNISON EQUITY OPPORTUNITIES (Fund first available during May 2004) AUV at beginning of period $12.55 AUV at end of period $13.88 Number of accumulation units outstanding at end of period 15,648 ING JPMORGAN INTERNATIONAL (Fund first available during May 2004) AUV at beginning of period $11.86 AUV at end of period $13.85 Number of accumulation units outstanding at end of period 566,780 ING JPMORGAN SMALL CAP EQUITY (Fund first available during May 2004) AUV at beginning of period $12.48 AUV at end of period $15.44 Number of accumulation units outstanding at end of period 182,314 ING JULIUS BAER FOREIGN (Fund first available during May 2004) AUV at beginning of period $12.55 AUV at end of period $14.54 Number of accumulation units outstanding at end of period 124,513 ING LEGG MASON VALUE (Fund first available during May 2004) AUV at beginning of period $11.69 AUV at end of period $13.07 Number of accumulation units outstanding at end of period 129,180 ING LIQUID ASSETS (Fund first available during September 2002) AUV at beginning of period $9.88 AUV at end of period $9.79 Number of accumulation units outstanding at end of period 125,735 ING MARSICO GROWTH (Fund first available during May 2004) AUV at beginning of period $12.74 AUV at end of period $14.08 Number of accumulation units outstanding at end of period 98,569 ING MERCURY FOCUS VALUE (Fund first available during May 2004) AUV at beginning of period $13.10 AUV at end of period $14.36 Number of accumulation units outstanding at end of period 37,780 ING MERCURY LARGE CAP GROWTH (Fund first available during May 2004) AUV at beginning of period $11.77 AUV at end of period $12.84 Number of accumulation units outstanding at end of period 26,411 ING MFS MID CAP GROWTH (Fund first available during May 2004) AUV at beginning of period $13.34 AUV at end of period $15.07 Number of accumulation units outstanding at end of period 81,087 ING MFS TOTAL RETURN (Fund first available during May 2004) AUV at beginning of period $11.49 AUV at end of period $12.55 Number of accumulation units outstanding at end of period 302,039 A3 Legends - 136958 2004 ---- ING OPPENHEIMER MAIN STREET (Fund first available during May 2004) AUV at beginning of period $11.88 AUV at end of period $13.16 Number of accumulation units outstanding at end of period 7,016 ING PIMCO CORE BOND (Fund first available during May 2004) AUV at beginning of period $10.53 AUV at end of period $10.86 Number of accumulation units outstanding at end of period 276,747 ING SALOMON BROTHERS ALL CAP (Fund first available during May 2004) AUV at beginning of period $13.00 AUV at end of period $13.76 Number of accumulation units outstanding at end of period 130,300 ING SALOMON BROTHERS INVESTORS (Fund first available during May 2004) AUV at beginning of period $12.57 AUV at end of period $13.57 Number of accumulation units outstanding at end of period 33,816 ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available during May 2004) AUV at beginning of period $12.29 AUV at end of period $14.08 Number of accumulation units outstanding at end of period 331,091 ING T. ROWE PRICE EQUITY INCOME (Fund first available during May 2004) AUV at beginning of period $12.08 AUV at end of period $13.62 Number of accumulation units outstanding at end of period 178,104 ING UBS U.S. BALANCED (Fund first available during May 2004) AUV at beginning of period $11.35 AUV at end of period $12.37 Number of accumulation units outstanding at end of period 16,904 ING VAN KAMPEN COMSTOCK (Fund first available during May 2004) AUV at beginning of period $10.57 AUV at end of period $12.13 Number of accumulation units outstanding at end of period 668,782 ING VAN KAMPEN EQUITY GROWTH (Fund first available during May 2004) AUV at beginning of period $11.71 AUV at end of period $12.33 Number of accumulation units outstanding at end of period 87,239 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available during May 2004) $11.78 AUV at beginning of period $13.04 AUV at end of period 380,491 Number of accumulation units outstanding at end of period ING VAN KAMPEN GROWTH & INCOME (Fund first available during May 2004) AUV at beginning of period $12.29 AUV at end of period $13.77 Number of accumulation units outstanding at end of period 291,624 ING VAN KAMPEN REAL ESTATE (Fund first available during May 2004) AUV at beginning of period $12.99 AUV at end of period $17.58 Number of accumulation units outstanding at end of period 93,479 ING VP FINANCIAL SERVICES (Fund first available during May 2004)) AUV at beginning of period $10.03 AUV at end of period $11.08 Number of accumulation units outstanding at end of period 120,279 A4 Legends - 136958 2004 ---- ING VP INDEX PLUS LARGECAP (Fund first available during May 2004) AUV at beginning of period $8.92 AUV at end of period $9.67 Number of accumulation units outstanding at end of period 1,211,622 ING VP INDEX PLUS MIDCAP (Fund first available during May 2004) AUV at beginning of period $9.49 AUV at end of period $10.92 Number of accumulation units outstanding at end of period 505,878 ING VP INDEX PLUS SMALLCAP (Fund first available during May 2004) AUV at beginning of period $9.39 AUV at end of period $11.33 Number of accumulation units outstanding at end of period 456,418 ING VP INTERMEDIATE BOND PORTFOLIO (Fund first available during May 2004) AUV at beginning of period $11.08 AUV at end of period $11.40 Number of accumulation units outstanding at end of period 1,881,640 ING VP MAGNACAP (Fund first available during May 2004) AUV at beginning of period $9.09 AUV at end of period $9.74 Number of accumulation units outstanding at end of period 247,085 ING VP MIDCAP OPPORTUNITIES (Fund first available during May 2004) AUV at beginning of period $7.09 AUV at end of period $7.45 Number of accumulation units outstanding at end of period 316,589 ING VP SMALLCAP OPPORTUNITIES (Fund first available during May 2004) AUV at beginning of period $6.26 AUV at end of period $6.77 Number of accumulation units outstanding at end of period 1,295,970 ING VP WORLDWIDE GROWTH (Fund first available during May 2004) AUV at beginning of period $6.57 AUV at end of period $7.07 Number of accumulation units outstanding at end of period 521,142 PIONEER FUND VCT (Fund first available during May 2004) AUV at beginning of period $9.04 AUV at end of period $9.86 Number of accumulation units outstanding at end of period 867,657 PIONEER MID-CAP VALUE VCT (Fund first available during May 2004) AUV at beginning of period $12.59 AUV at end of period $15.07 Number of accumulation units outstanding at end of period 3,544,567 PROFUND VP BULL (Fund first available during May 2004) AUV at beginning of period $8.20 AUV at end of period $8.78 Number of accumulation units outstanding at end of period 391,752 PROFUND VP EUROPE 30 (Fund first available during May 2004) AUV at beginning of period $8.22 AUV at end of period $9.24 Number of accumulation units outstanding at end of period 236,069 PROFUND VP RISING RATES OPPORTUNITY (Fund first available during May 2004) AUV at beginning of period $9.36 AUV at end of period $8.20 Number of accumulation units outstanding at end of period 737,507 A5 Legends - 136958 2004 ---- PROFUND VP SMALL CAP (Fund first available during May 2004) AUV at beginning of period $10.08 AUV at end of period $11.58 Number of accumulation units outstanding at end of period 702,471 PRUDENTIAL JENNISON PORTFOLIO (Fund first available during May 2004) AUV at beginning of period $5.41 AUV at end of period $5.81 Number of accumulation units outstanding at end of period 823,183 SP WILLIAM BLAIR INTERNATIONAL GROWTH (Fund first available during May 2004) AUV at beginning of period $5.60 AUV at end of period $6.40 Number of accumulation units outstanding at end of period 1,316,700 2004 ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 1.90% AIM VI DENT DEMOGRAPHIC TRENDS (Fund first available during May 2004) $9.83 AUV at beginning of period $10.40 AUV at end of period 1,250,785 Number of accumulation units outstanding at end of period AIM VI FINANCIAL SERVICES FUND (Fund first available during May 2004) AUV at beginning of period $9.92 AUV at end of period $10.57 Number of accumulation units outstanding at end of period 828,642 AIM VI HEALTH SCIENCES FUND (Fund first available during May 2004) AUV at beginning of period $9.52 AUV at end of period $10.05 Number of accumulation units outstanding at end of period 1,521,283 AIM VI LEISURE FUND (Fund first available during May 2004) AUV at beginning of period $10.62 AUV at end of period $11.81 Number of accumulation units outstanding at end of period 668,459 AIM VIUTILITIES FUND (Fund first available during May 2004) AUV at beginning of period $7.29 AUV at end of period $8.83 Number of accumulation units outstanding at end of period 1,554,208 COLONIAL SMALL CAP VALUE (Fund first available during May 2004) AUV at beginning of period $13.80 AUV at end of period $16.60 Number of accumulation units outstanding at end of period 2,732,107 FIDELITY VIP EQUITY - INCOME (Fund first available during May 2004) AUV at beginning of period $9.92 AUV at end of period $10.82 Number of accumulation units outstanding at end of period 3,034,707 FIDELITY VIP GROWTH (Fund first available during May 2004) AUV at beginning of period $8.22 AUV at end of period $8.32 Number of accumulation units outstanding at end of period 4,872,159 A6 Legends - 136958 2004 ---- ING AIM MID CAP GROWTH (Fund first available during May 2004) AUV at beginning of period $9.45 AUV at end of period $10.33 Number of accumulation units outstanding at end of period 2,521 ING ALLIANCE MID CAP GROWTH (Fund first available during May 2004) AUV at beginning of period $8.95 AUV at end of period $10.80 Number of accumulation units outstanding at end of period 43,094 ING AMERICAN FUNDS GROWTH (Fund first available during May 2004) AUV at beginning of period $10.75 AUV at end of period $11.81 Number of accumulation units outstanding at end of period 12,085,363 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available during May 2004) AUV at beginning of period $10.97 AUV at end of period $11.82 Number of accumulation units outstanding at end of period 9,395,072 ING AMERICAN FUNDS INTERNATIONAL (Fund first available during May 2004) AUV at beginning of period $11.60 AUV at end of period $13.50 Number of accumulation units outstanding at end of period 3,432,847 ING CAPITAL GUARDIAN LARGE CAP VALUE (Fund first available during May 2004) AUV at beginning of period $9.71 AUV at end of period $10.49 Number of accumulation units outstanding at end of period 1,061 ING CAPITAL GUARDIAN MANAGED GLOBAL (Fund first available during May 2004) AUV at beginning of period $9.92 AUV at end of period $10.72 Number of accumulation units outstanding at end of period 6,885 ING CAPITAL GUARDIAN SMALL CAP (Fund first available during May 2004) AUV at beginning of period $8.86 AUV at end of period $10.23 Number of accumulation units outstanding at end of period 4,446 ING DEVELOPING WORLD (Fund first available during May 2004) AUV at beginning of period $8.74 AUV at end of period $11.12 Number of accumulation units outstanding at end of period 24,589 ING EVERGREEN HEALTH SCIENCES (Fund first available during May 2004) AUV at beginning of period $9.65 AUV at end of period $9.86 Number of accumulation units outstanding at end of period 8,274 ING FMRSM DIVERSIFIED MID-CAP (Fund first available during May 200) AUV at beginning of period $9.19 AUV at end of period $11.84 Number of accumulation units outstanding at end of period 12,827 ING GOLDMAN SACHS TOLLKEEPER (Fund first available during May 2004) AUV at beginning of period $9.95 AUV at end of period $11.18 Number of accumulation units outstanding at end of period 2,538 ING HARD ASSETS (Fund first available during May 2004) AUV at beginning of period $9.14 AUV at end of period $10.56 Number of accumulation units outstanding at end of period 9,382 A7 Legends - 136958 2004 ---- ING INTERNATIONAL (Fund first available during May 2004) AUV at beginning of period $10.10 AUV at end of period $11.39 Number of accumulation units outstanding at end of period 11,250 ING JANUS SPECIAL EQUITY (Fund first available during May 2004) AUV at beginning of period $9.71 AUV at end of period $11.33 Number of accumulation units outstanding at end of period 1,106 ING JENNISON EQUITY OPPORTUNITIES (Fund first available during May 2004) AUV at beginning of period $9.95 AUV at end of period $10.89 Number of accumulation units outstanding at end of period 1,954 ING JPMORGAN INTERNATIONAL (Fund first available during May 2004) AUV at beginning of period $11.85 AUV at end of period $13.80 Number of accumulation units outstanding at end of period 725,812 ING JPMORGAN SMALL CAP EQUITY (Fund first available during May 2004) AUV at beginning of period $10.05 AUV at end of period $11.95 Number of accumulation units outstanding at end of period 63,710 ING JULIUS BAER FOREIGN (Fund first available during May 2004) AUV at beginning of period $10.02 AUV at end of period $11.48 Number of accumulation units outstanding at end of period 26,484 ING LEGG MASON VALUE (Fund first available during May 2004) AUV at beginning of period $9.68 AUV at end of period $11.17 Number of accumulation units outstanding at end of period 15,238 ING LIQUID ASSETS (Fund first available during September 2002) AUV at beginning of period $9.97 AUV at end of period $9.91 Number of accumulation units outstanding at end of period 18,806 ING MARSICO GROWTH (Fund first available during May 2004) AUV at beginning of period $9.42 AUV at end of period $11.00 Number of accumulation units outstanding at end of period 15,759 ING MERCURY FOCUS VALUE (Fund first available during May 2004) AUV at beginning of period $10.28 AUV at end of period $10.65 Number of accumulation units outstanding at end of period 812 ING MERCURY LARGE CAP GROWTH (Fund first available during May 2004) AUV at beginning of period $10.02 AUV at end of period $10.97 Number of accumulation units outstanding at end of period 2,793 ING MFS MID CAP GROWTH (Fund first available during May 2004) AUV at beginning of period $9.72 AUV at end of period $10.82 Number of accumulation units outstanding at end of period 36,305 ING MFS TOTAL RETURN (Fund first available during May 2004) AUV at beginning of period $9.66 AUV at end of period $10.71 Number of accumulation units outstanding at end of period 31,002 A8 Legends - 136958 2004 ---- ING OPPENHEIMER MAIN STREET (Fund first available during May 2004) AUV at beginning of period $9.81 AUV at end of period $10.74 Number of accumulation units outstanding at end of period 3,946 ING PIMCO CORE BOND (Fund first available during May 2004) AUV at beginning of period $9.64 AUV at end of period $10.05 Number of accumulation units outstanding at end of period 39,407 ING SALOMON BROTHERS ALL CAP (Fund first available during May 2004) AUV at beginning of period $9.84 AUV at end of period $10.32 Number of accumulation units outstanding at end of period 19,300 ING SALOMON BROTHERS INVESTORS (Fund first available during May 2004) AUV at beginning of period $9.45 AUV at end of period $10.48 Number of accumulation units outstanding at end of period 3,057 ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available during May 2004) AUV at beginning of period $10.04 AUV at end of period $11.26 Number of accumulation units outstanding at end of period 82,031 ING T. ROWE PRICE EQUITY INCOME (Fund first available during May 2004) AUV at beginning of period $9.86 AUV at end of period $11.14 Number of accumulation units outstanding at end of period 19,512 ING UBS U.S. BALANCED (Fund first available during May 2004) AUV at beginning of period $8.31 AUV at end of period $9.05 Number of accumulation units outstanding at end of period 2,049,551 ING VAN KAMPEN COMSTOCK (Fund first available during May 2004) AUV at beginning of period $9.73 AUV at end of period $11.22 Number of accumulation units outstanding at end of period 177,317 ING VAN KAMPEN EQUITY GROWTH (Fund first available during May 2004) AUV at beginning of period $9.86 AUV at end of period $10.57 Number of accumulation units outstanding at end of period 8,019 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available during May 2004) $10.31 AUV at beginning of period $10.90 AUV at end of period 37,282 Number of accumulation units outstanding at end of period ING VAN KAMPEN GROWTH & INCOME (Fund first available during May 2004) AUV at beginning of period $9.91 AUV at end of period $11.03 Number of accumulation units outstanding at end of period 24,891 ING VAN KAMPEN REAL ESTATE (Fund first available during May 2004) AUV at beginning of period $9.17 AUV at end of period $12.62 Number of accumulation units outstanding at end of period 17,421 ING VP FINANCIAL SERVICES (Fund first available during May 2004)) AUV at beginning of period $10.03 AUV at end of period $11.06 Number of accumulation units outstanding at end of period 212,751 A9 Legends - 136958 2004 ---- ING VP INDEX PLUS LARGECAP (Fund first available during May 2004) AUV at beginning of period $8.87 AUV at end of period $9.59 Number of accumulation units outstanding at end of period 1,954,792 ING VP INDEX PLUS MIDCAP (Fund first available during May 2004) AUV at beginning of period $9.66 AUV at end of period $11.23 Number of accumulation units outstanding at end of period 770,708 ING VP INDEX PLUS SMALLCAP (Fund first available during May 2004) AUV at beginning of period $9.52 AUV at end of period $11.68 Number of accumulation units outstanding at end of period 711,336 ING VP INTERMEDIATE BOND PORTFOLIO (Fund first available during May 2004) AUV at beginning of period $11.04 AUV at end of period $11.32 Number of accumulation units outstanding at end of period 2,895,223 ING VP MAGNACAP (Fund first available during May 2004) AUV at beginning of period $9.03 AUV at end of period $9.65 Number of accumulation units outstanding at end of period 375,601 ING VP MIDCAP OPPORTUNITIES (Fund first available during May 2004) AUV at beginning of period $7.04 AUV at end of period $7.38 Number of accumulation units outstanding at end of period 814,033 ING VP SMALLCAP OPPORTUNITIES (Fund first available during May 2004) AUV at beginning of period $6.22 AUV at end of period $6.71 Number of accumulation units outstanding at end of period 2,585,684 ING VP WORLDWIDE GROWTH (Fund first available during May 2004) AUV at beginning of period $6.51 AUV at end of period $6.99 Number of accumulation units outstanding at end of period 1,550,262 PIONEER FUND VCT (Fund first available during May 2004) AUV at beginning of period $8.98 AUV at end of period $9.77 Number of accumulation units outstanding at end of period 1,448,434 PIONEER MID-CAP VALUE VCT (Fund first available during May 2004) AUV at beginning of period $12.52 AUV at end of period $14.95 Number of accumulation units outstanding at end of period 5,608,449 PROFUND VP BULL (Fund first available during May 2004) AUV at beginning of period $8.15 AUV at end of period $8.70 Number of accumulation units outstanding at end of period 1,940,698 PROFUND VP EUROPE 30 (Fund first available during May 2004) AUV at beginning of period $8.17 AUV at end of period $9.16 Number of accumulation units outstanding at end of period 557,626 PROFUND VP RISING RATES OPPORTUNITY (Fund first available during May 2004) AUV at beginning of period $9.35 AUV at end of period $8.17 Number of accumulation units outstanding at end of period 1,007,799 A10 Legends - 136958 2004 ---- PROFUND VP SMALL CAP (Fund first available during May 2004) AUV at beginning of period $10.01 AUV at end of period $11.47 Number of accumulation units outstanding at end of period 1,815,670 PRUDENTIAL JENNISON PORTFOLIO (Fund first available during May 2004) AUV at beginning of period $5.36 AUV at end of period $5.74 Number of accumulation units outstanding at end of period 2,308,768 SP WILLIAM BLAIR INTERNATIONAL GROWTH (Fund first available during May 2004) AUV at beginning of period $5.55 AUV at end of period $6.33 Number of accumulation units outstanding at end of period 2,653,603 2004 ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 1.95% AIM VI DENT DEMOGRAPHIC TRENDS (Fund first available during May 2004) AUV at beginning of period $9.82 AUV at end of period $10.39 Number of accumulation units outstanding at end of period 19,830 AIM VI FINANCIAL SERVICES FUND (Fund first available during May 2004) AUV at beginning of period $9.90 AUV at end of period $10.55 Number of accumulation units outstanding at end of period 11,508 AIM VI HEALTH SCIENCES FUND (Fund first available during May 2004) AUV at beginning of period $9.51 AUV at end of period $10.03 Number of accumulation units outstanding at end of period 16,308 AIM VI LEISURE FUND (Fund first available during May 2004) AUV at beginning of period $10.61 AUV at end of period $11.79 Number of accumulation units outstanding at end of period 5,645 AIM VI UTILITIES FUND (Fund first available during May 2004) AUV at beginning of period $7.28 AUV at end of period $8.82 Number of accumulation units outstanding at end of period 30,615 COLONIAL SMALL CAP VALUE (Fund first available during May 2004) AUV at beginning of period $13.80 AUV at end of period $16.58 Number of accumulation units outstanding at end of period 23,095 FIDELITY VIP EQUITY - INCOME (Fund first available during May 2004) AUV at beginning of period $9.91 AUV at end of period $10.80 Number of accumulation units outstanding at end of period 125,507 FIDELITY VIP GROWTH (Fund first available during May 2004) AUV at beginning of period $8.21 AUV at end of period $8.31 Number of accumulation units outstanding at end of period 97,366 A11 Legends - 136958 2004 ---- ING AMERICAN FUNDS GROWTH (Fund first available during May 2004) AUV at beginning of period $10.75 AUV at end of period $11.80 Number of accumulation units outstanding at end of period 362,211 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available during May 2004) AUV at beginning of period $10.97 AUV at end of period $11.81 Number of accumulation units outstanding at end of period 348,070 ING AMERICAN FUNDS INTERNATIONAL (Fund first available during May 2004) AUV at beginning of period $11.60 AUV at end of period $13.49 Number of accumulation units outstanding at end of period 161,298 ING JPMORGAN INTERNATIONAL (Fund first available during May 2004) AUV at beginning of period $11.85 AUV at end of period $13.79 Number of accumulation units outstanding at end of period 24,195 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available during May 2004) AUV at beginning of period $10.79 AUV at end of period $11.58 Number of accumulation units outstanding at end of period 59,803 ING VAN KAMPEN COMSTOCK (Fund first available during May 2004) AUV at beginning of period $10.51 AUV at end of period $12.03 Number of accumulation units outstanding at end of period 95,582 ING VP FINANCIAL SERVICES (Fund first available during May 2004)) AUV at beginning of period $10.08 AUV at end of period $11.06 Number of accumulation units outstanding at end of period 9,493 ING VP INDEX PLUS LARGECAP (Fund first available during May 2004) AUV at beginning of period $8.86 AUV at end of period $9.57 Number of accumulation units outstanding at end of period 156,482 ING VP INDEX PLUS MIDCAP (Fund first available during May 2004) AUV at beginning of period $10.99 AUV at end of period $12.54 Number of accumulation units outstanding at end of period 128,177 ING VP INDEX PLUS SMALLCAP (Fund first available during May 2004) AUV at beginning of period $11.38 AUV at end of period $13.59 Number of accumulation units outstanding at end of period 105,870 ING VP INTERMEDIATE BOND PORTFOLIO (Fund first available during May 2004) AUV at beginning of period $11.15 AUV at end of period $11.31 Number of accumulation units outstanding at end of period 9,453 ING VP MAGNACAP (Fund first available during May 2004) $9.02 AUV at beginning of period $9.63 AUV at end of period 37,654 Number of accumulation units outstanding at end of period ING VP MIDCAP OPPORTUNITIES (Fund first available during May 2004) AUV at beginning of period $7.03 AUV at end of period $7.36 Number of accumulation units outstanding at end of period 12,026 A12 Legends - 136958 2004 ---- ING VP SMALLCAP OPPORTUNITIES (Fund first available during May 2004) AUV at beginning of period $6.21 AUV at end of period $6.70 Number of accumulation units outstanding at end of period 15,222 ING VP WORLDWIDE GROWTH (Fund first available during May 2004) AUV at beginning of period $6.50 AUV at end of period $6.97 Number of accumulation units outstanding at end of period 8,288 PIONEER FUND VCT (Fund first available during May 2004) AUV at beginning of period $8.97 AUV at end of period $9.76 Number of accumulation units outstanding at end of period 24,566 PIONEER MID-CAP VALUE VCT (Fund first available during May 2004) AUV at beginning of period $12.50 AUV at end of period $14.93 Number of accumulation units outstanding at end of period 44,996 PROFUND VP BULL (Fund first available during May 2004) AUV at beginning of period $8.13 AUV at end of period $8.68 Number of accumulation units outstanding at end of period 3,195 PROFUND VP EUROPE 30 (Fund first available during May 2004) AUV at beginning of period $8.15 AUV at end of period $9.14 Number of accumulation units outstanding at end of period 25,549 PROFUND VP RISING RATES OPPORTUNITY (Fund first available during May 2004) AUV at beginning of period $9.35 AUV at end of period $8.17 Number of accumulation units outstanding at end of period 28,211 PROFUND VP SMALL CAP (Fund first available during May 2004) AUV at beginning of period $10.00 AUV at end of period $11.45 Number of accumulation units outstanding at end of period 45,553 PRUDENTIAL JENNISON PORTFOLIO (Fund first available during May 2004) AUV at beginning of period $5.35 AUV at end of period $5.73 Number of accumulation units outstanding at end of period 14,269 SP WILLIAM BLAIR INTERNATIONAL GROWTH (Fund first available during May 2004) AUV at beginning of period $5.54 AUV at end of period $6.31 Number of accumulation units outstanding at end of period 18,926 2004 ---- SEPARATE ACCOUNT ANNUAL CHARGES OF 2.10% AIM VI DENT DEMOGRAPHIC TRENDS (Fund first available during May 2004) $9.79 AUV at beginning of period $10.34 AUV at end of period 306,802 Number of accumulation units outstanding at end of period A13 Legends - 136958 2004 ---- AIM VI FINANCIAL SERVICES FUND (Fund first available during May 2004) AUV at beginning of period $9.87 AUV at end of period $10.50 Number of accumulation units outstanding at end of period 166,716 AIM VI HEALTH SCIENCES FUND (Fund first available during May 2004) AUV at beginning of period $9.47 AUV at end of period $9.98 Number of accumulation units outstanding at end of period 366,144 AIM VI LEISURE FUND (Fund first available during May 2004) AUV at beginning of period $10.58 AUV at end of period $11.74 Number of accumulation units outstanding at end of period 277,954 AIM VI UTILITIES FUND (Fund first available during May 2004) AUV at beginning of period $7.25 AUV at end of period $8.77 Number of accumulation units outstanding at end of period 457,831 COLONIAL SMALL CAP VALUE (Fund first available during May 2004) AUV at beginning of period $13.79 AUV at end of period $16.54 Number of accumulation units outstanding at end of period 1,261,075 FIDELITY VIP EQUITY - INCOME (Fund first available during May 2004) AUV at beginning of period $9.87 AUV at end of period $10.75 Number of accumulation units outstanding at end of period 1,289,231 FIDELITY VIP GROWTH (Fund first available during May 2004) AUV at beginning of period $8.18 AUV at end of period $8.26 Number of accumulation units outstanding at end of period 1,683,849 ING AIM MID CAP GROWTH (Fund first available during May 2004) AUV at beginning of period $9.74 AUV at end of period $10.31 Number of accumulation units outstanding at end of period 41,304 ING ALLIANCE MID CAP GROWTH (Fund first available during May 2004) AUV at beginning of period $9.38 AUV at end of period $10.78 Number of accumulation units outstanding at end of period 47,199 ING AMERICAN FUNDS GROWTH (Fund first available during May 2004) AUV at beginning of period $10.75 AUV at end of period $11.77 Number of accumulation units outstanding at end of period 6,721,770 ING AMERICAN FUNDS GROWTH - INCOME (Fund first available during May 2004) AUV at beginning of period $10.96 AUV at end of period $11.78 Number of accumulation units outstanding at end of period 5,253,841 ING AMERICAN FUNDS INTERNATIONAL (Fund first available during May 2004) AUV at beginning of period $11.59 AUV at end of period $13.46 Number of accumulation units outstanding at end of period 2,085,943 ING CAPITAL GUARDIAN LARGE CAP VALUE (Fund first available during May 2004) AUV at beginning of period $9.83 AUV at end of period $10.48 Number of accumulation units outstanding at end of period 37,767 A14 Legends - 136958 2004 ---- ING CAPITAL GUARDIAN MANAGED GLOBAL (Fund first available during May 2004) AUV at beginning of period $9.58 AUV at end of period $10.71 Number of accumulation units outstanding at end of period 19,545 ING CAPITAL GUARDIAN SMALL CAP (Fund first available during May 2004) AUV at beginning of period $9.19 AUV at end of period $10.22 Number of accumulation units outstanding at end of period 68,769 ING DEVELOPING WORLD (Fund first available during May 2004) AUV at beginning of period $9.54 AUV at end of period $11.10 Number of accumulation units outstanding at end of period 39,083 ING EVERGREEN HEALTH SCIENCES (Fund first available during May 2004) $9.95 AUV at beginning of period $9.85 AUV at end of period 76,627 Number of accumulation units outstanding at end of period ING EVERGREEN OMEGA (Fund first available during May 2004) $9.77 AUV at beginning of period $10.43 AUV at end of period 9,147 Number of accumulation units outstanding at end of period ING FMRSM DIVERSIFIED MID-CAP (Fund first available during May 200) AUV at beginning of period $9.74 AUV at end of period $11.82 Number of accumulation units outstanding at end of period 82,046 ING GOLDMAN SACHS TOLLKEEPER (Fund first available during May 2004) AUV at beginning of period $9.83 AUV at end of period $11.16 Number of accumulation units outstanding at end of period 22,610 ING HARD ASSETS (Fund first available during May 2004) AUV at beginning of period $9.32 AUV at end of period $10.54 Number of accumulation units outstanding at end of period 65,206 ING INTERNATIONAL (Fund first available during May 2004) AUV at beginning of period $9.59 AUV at end of period $11.37 Number of accumulation units outstanding at end of period 39,469 ING JANUS SPECIAL EQUITY (Fund first available during May 2004) AUV at beginning of period $9.98 AUV at end of period $11.31 Number of accumulation units outstanding at end of period 6,621 ING JENNISON EQUITY OPPORTUNITIES (Fund first available during May 2004) AUV at beginning of period $10.03 AUV at end of period $10.87 Number of accumulation units outstanding at end of period 15,424 ING JPMORGAN INTERNATIONAL (Fund first available during May 2004) AUV at beginning of period $11.85 AUV at end of period $13.76 Number of accumulation units outstanding at end of period 333,308 ING JPMORGAN SMALL CAP EQUITY (Fund first available during May 2004) AUV at beginning of period $10.05 AUV at end of period $11.93 Number of accumulation units outstanding at end of period 236,815 A15 Legends - 136958 2004 ---- ING JULIUS BAER FOREIGN (Fund first available during May 2004) AUV at beginning of period $10.02 AUV at end of period $11.47 Number of accumulation units outstanding at end of period 154,023 ING LEGG MASON VALUE (Fund first available during May 2004) AUV at beginning of period $9.95 AUV at end of period $11.15 Number of accumulation units outstanding at end of period 123,329 ING LIQUID ASSETS (Fund first available during September 2002) AUV at beginning of period $9.98 AUV at end of period $9.90 Number of accumulation units outstanding at end of period 66,142 ING MARSICO GROWTH (Fund first available during May 2004) AUV at beginning of period $9.83 AUV at end of period $10.98 Number of accumulation units outstanding at end of period 47,683 ING MERCURY FOCUS VALUE (Fund first available during May 2004) AUV at beginning of period $9.66 AUV at end of period $10.63 Number of accumulation units outstanding at end of period 5,738 ING MERCURY LARGE CAP GROWTH (Fund first available during May 2004) AUV at beginning of period $9.11 AUV at end of period $10.95 Number of accumulation units outstanding at end of period 9,126 ING MFS MID CAP GROWTH (Fund first available during May 2004) AUV at beginning of period $10.13 AUV at end of period $10.80 Number of accumulation units outstanding at end of period 85,997 ING MFS TOTAL RETURN (Fund first available during May 2004) AUV at beginning of period $9.85 AUV at end of period $10.70 Number of accumulation units outstanding at end of period 217,818 ING OPPENHEIMER MAIN STREET (Fund first available during May 2004) AUV at beginning of period $9.93 AUV at end of period $10.73 Number of accumulation units outstanding at end of period 6,280 ING PIMCO CORE BOND (Fund first available during May 2004) AUV at beginning of period $9.69 AUV at end of period $10.03 Number of accumulation units outstanding at end of period 208,861 ING SALOMON BROTHERS AGGRESSIVE GROWTH (Fund first available during May 2004) AUV at beginning of period $10.79 AUV at end of period $11.56 Number of accumulation units outstanding at end of period 974,672 ING SALOMON BROTHERS ALL CAP (Fund first available during May 2004) AUV at beginning of period $9.75 AUV at end of period $10.30 Number of accumulation units outstanding at end of period 135,761 ING SALOMON BROTHERS INVESTORS (Fund first available during May 2004) AUV at beginning of period $9.79 AUV at end of period $10.46 Number of accumulation units outstanding at end of period 6,173 A16 Legends - 136958 2004 ---- ING T. ROWE PRICE CAPITAL APPRECIATION (Fund first available during May 2004) AUV at beginning of period $10.03 AUV at end of period $11.24 Number of accumulation units outstanding at end of period 340,181 ING T. ROWE PRICE EQUITY INCOME (Fund first available during May 2004) AUV at beginning of period $10.05 AUV at end of period $11.12 Number of accumulation units outstanding at end of period 143,423 ING UBS U.S. BALANCED (Fund first available during May 2004) AUV at beginning of period $9.72 AUV at end of period $10.73 Number of accumulation units outstanding at end of period 63,725 ING VAN KAMPEN COMSTOCK (Fund first available during May 2004) AUV at beginning of period $10.05 AUV at end of period $11.20 Number of accumulation units outstanding at end of period 569,053 ING VAN KAMPEN EQUITY GROWTH (Fund first available during May 2004) AUV at beginning of period $9.97 AUV at end of period $10.55 Number of accumulation units outstanding at end of period 68,583 ING VAN KAMPEN GLOBAL FRANCHISE (Fund first available during May 2004) AUV at beginning of period $10.30 AUV at end of period $10.89 Number of accumulation units outstanding at end of period 316,736 ING VAN KAMPEN GROWTH & INCOME (Fund first available during May 2004) AUV at beginning of period $9.91 AUV at end of period $11.01 Number of accumulation units outstanding at end of period 380,711 ING VAN KAMPEN REAL ESTATE (Fund first available during May 2004) AUV at beginning of period $9.23 AUV at end of period $12.60 Number of accumulation units outstanding at end of period 84,882 ING VP FINANCIAL SERVICES (Fund first available during May 2004)) AUV at beginning of period $10.03 AUV at end of period $11.04 Number of accumulation units outstanding at end of period 172,681 ING VP INDEX PLUS LARGECAP (Fund first available during May 2004) AUV at beginning of period $8.82 AUV at end of period $9.52 Number of accumulation units outstanding at end of period 689,799 ING VP INDEX PLUS MIDCAP (Fund first available during May 2004) $9.66 AUV at beginning of period $11.21 AUV at end of period 340,018 Number of accumulation units outstanding at end of period ING VP INDEX PLUS SMALLCAP (Fund first available during May 2004) AUV at beginning of period $9.61 AUV at end of period $11.66 Number of accumulation units outstanding at end of period 333,675 ING VP INTERMEDIATE BOND PORTFOLIO (Fund first available during May 2004) AUV at beginning of period $11.00 AUV at end of period $11.26 Number of accumulation units outstanding at end of period 1,029,703 A17 Legends - 136958 2004 ---- ING VP MAGNACAP (Fund first available during May 2004) AUV at beginning of period $8.98 AUV at end of period $9.58 Number of accumulation units outstanding at end of period 100,899 ING VP MIDCAP OPPORTUNITIES (Fund first available during May 2004) AUV at beginning of period $7.00 AUV at end of period $7.32 Number of accumulation units outstanding at end of period 215,454 ING VP SMALLCAP OPPORTUNITIES (Fund first available during May 2004) AUV at beginning of period $6.19 AUV at end of period $6.66 Number of accumulation units outstanding at end of period 823,490 ING VP WORLDWIDE GROWTH (Fund first available during May 2004) AUV at beginning of period $6.46 AUV at end of period $6.92 Number of accumulation units outstanding at end of period 312,656 PIONEER FUND VCT (Fund first available during May 2004) AUV at beginning of period $8.94 AUV at end of period $9.70 Number of accumulation units outstanding at end of period 501,864 PIONEER MID-CAP VALUE VCT (Fund first available during May 2004) AUV at beginning of period $12.46 AUV at end of period $14,86 Number of accumulation units outstanding at end of period 2,314,602 PROFUND VP BULL (Fund first available during May 2004) AUV at beginning of period $8.10 AUV at end of period $8.63 Number of accumulation units outstanding at end of period 278,604 PROFUND VP EUROPE 30 (Fund first available during May 2004) AUV at beginning of period $8.12 AUV at end of period $9.09 Number of accumulation units outstanding at end of period 160,013 PROFUND VP RISING RATES OPPORTUNITY (Fund first available during May 2004) AUV at beginning of period $9.34 AUV at end of period $8.15 Number of accumulation units outstanding at end of period 307,589 PROFUND VP SMALL CAP (Fund first available during May 2004) AUV at beginning of period $9.96 AUV at end of period $11.38 Number of accumulation units outstanding at end of period 453,800 PRUDENTIAL JENNISON PORTFOLIO (Fund first available during May 2004) AUV at beginning of period $5.32 AUV at end of period $5.69 Number of accumulation units outstanding at end of period 509,298 SP WILLIAM BLAIR INTERNATIONAL GROWTH (Fund first available during May 2004) AUV at beginning of period $5.52 AUV at end of period $6.27 Number of accumulation units outstanding at end of period 1,021,161 A18 Legends - 136958 - -------------------------------------------------------------------------------- APPENDIX B - -------------------------------------------------------------------------------- THE INVESTMENT PORTFOLIOS During the accumulation phase, you may allocate your premium payments and contract value to any of the investment portfolios available under this Contract. They are listed in this appendix. You bear the entire investment risk for amounts you allocate to any investment portfolio, and you may lose your principal. The investment results of the mutual funds (funds) are likely to differ significantly and there is no assurance that any of the funds will achieve their respective investment objectives. You should consider the investment objectives, risks and charges and expenses of the funds carefully before investing. Please refer to the fund prospectuses for this and additional information. Shares of the funds will rise and fall in value and you could lose money by investing in the funds. Shares of the funds are not bank deposits and are not guaranteed, endorsed or insured by any financial institution, the Federal Deposit Insurance Corporation or any other government agency. Except as noted, all funds are diversified, as defined under the Investment Company Act of 1940. Fund prospectuses may be obtained free of charge, from our Customer Service Center at the address and telephone number listed in the prospectus, by accessing the SEC's web site or by contacting the SEC Public Reference Room. Certain funds offered under the contracts have investment objectives and policies similar to other funds managed by the fund's investment adviser. The investment results of a fund may be higher or lower than those of other funds managed by the same adviser. There is no assurance and no representation is made that the investment results of any fund will be comparable to those of another fund managed by the same investment adviser. Certain funds are designated as "Master-Feeder" or "MarketPro" Funds. Funds offered in a Master-Feeder structure (such as the American Funds) or fund of funds structure (such as the MarketPro Funds) may have higher fees and expenses than a fund that invests directly in debt and equity securities.
- -------------------------------------------------------------------------------------------------------- LIST OF FUND NAME CHANGES - -------------------------------------------------------------------------------------------------------- FORMER FUND NAME CURRENT FUND NAME - -------------------------------------------------------------------------------------------------------- ING Alliance Mid Cap Growth Portfolio ING AllianceBernstein Mid Cap Growth Portfolio ING Capital Guardian Large Cap Value Portfolio ING Capital Guardian U.S. Equities Portfolio - -------------------------------------------------------------------------------------------------------- ING Capital Guardian Managed Global Portfolio ING Templeton Global Growth Portfolio ING Capital Guardian Small Cap Portfolio ING Capital Guardian Small/Mid Cap Portfolio - -------------------------------------------------------------------------------------------------------- ING Developing World Portfolio ING JPMorgan Emerging Markets Equity Portfolio - -------------------------------------------------------------------------------------------------------- ING Goldman Sachs Internet Tollkeeper Portfolio ING Goldman Sachs Tollkeeper Portfolio - -------------------------------------------------------------------------------------------------------- ING Hard Assets Portfolio ING Global Resources Portfolio - -------------------------------------------------------------------------------------------------------- ING Janus Special Equity Portfolio ING Janus Contrarian Portfolio - -------------------------------------------------------------------------------------------------------- ING Jennison Equity Opportunities Portfolio ING Wells Fargo Mid Cap Disciplined Portfolio - -------------------------------------------------------------------------------------------------------- ING Mercury Focus Value Portfolio ING Mercury Large Cap Value Portfolio - -------------------------------------------------------------------------------------------------------- ING MFS Research Portfolio ING Oppenheimer Main Street Portfolio ING Salomon Brothers Investors Portfolio ING Lord Abbett Affiliated Portfolio - -------------------------------------------------------------------------------------------------------- ING UBS U.S. Balanced Portfolio ING UBS U.S. Allocation Portfolio - -------------------------------------------------------------------------------------------------------- ING VP Bond Portfolio ING VP Intermediate Bond Portfolio - -------------------------------------------------------------------------------------------------------- ING VP Worldwide Growth Portfolio ING VP Global Equity Dividend Portfolio - -------------------------------------------------------------------------------------------------------- INVESCO VIF - Leisure Fund AIM V.I. Leisure Fund - --------------------------------------------------------------------------------------------------------
B1 Legends - 136958
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING INVESTORS TRUST 7337 E. Doubletree Ranch Road, Scottsdale, AZ 85258 - ------------------------------------------------------------------------------------------------------------------------------- ING ALLIANCEBERNSTEIN MID CAP GROWTH PORTFOLIO (Service 2) Seeks long-term total return. Invests in common stocks of (formerly ING Alliance Mid Cap Growth Portfolio) middle capitalization companies. Normally invests INVESTMENT ADVISER: Directed Services, Inc. substantially all of its assets in high-quality common INVESTMENT SUBADVISER: Alliance Capital Management, L.P. stocks that the subadviser expects to increase in value. * NAME CHANGE EFFECTIVE 12/05/05 - ------------------------------------------------------------------------------------------------------------------------------- ING AMERICAN FUNDS GROWTH PORTFOLIO Seeks to make your investment grow. The Portfolio operates INVESTMENT ADVISER: ING Investments, LLC as a "feeder fund" which invests all of its assets in the INVESTMENT SUBADVISER: Capital Research and Management "master fund" which is Class 2 shares of the Growth Fund, a Company series of American Funds Insurance Series(R), a registered open-end investment company. The master fund invests primarily in common stocks of companies that appear to offer superior opportunities for growth of capital. The Growth Fund is designed for investors seeking long-term capital appreciation through stocks. - ------------------------------------------------------------------------------------------------------------------------------- ING AMERICAN FUNDS GROWTH-INCOME PORTFOLIO Seeks to make your investment grow and provide you with INVESTMENT ADVISER: ING Investments, LLC income over time. The Portfolio operates as a "feeder INVESTMENT SUBADVISER: Capital Research and Management fund" which invests all of its assets in the "master fund" Company which is Class 2 shares of the Growth-Income Fund, a series of American Funds Insurance Series(R), a registered open-end investment company. The master fund invests primarily in common stocks or other securities which demonstrate the potential for appreciation and/or dividends. The Growth-Income Fund is designed for investors seeking both capital appreciation and income. - ------------------------------------------------------------------------------------------------------------------------------- ING AMERICAN FUNDS INTERNATIONAL PORTFOLIO Seeks to make your investment grow over time. The Portfolio INVESTMENT ADVISER: ING Investments, LLC operates as a "feeder fund" which invests all of its assets INVESTMENT SUBADVISER: Capital Research and Management in the "master fund" which is Class 2 shares of the Company International Fund, a series of American Funds Insurance Series(R), a registered open-end investment company. The master fund invests primarily in common stocks of companies located outside the United States. The International Fund is designed for investors seeking capital appreciation through stocks. - -------------------------------------------------------------------------------------------------------------------------------
B2 Legends - 136958
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING CAPITAL GUARDIAN SMALL/MID CAP PORTFOLIO Seeks long-term capital appreciation. Invests at least 80% (Service 2) of its assets in equity securities of small/mid (formerly ING Capital Guardian Small Cap Portfolio) capitalization ("small/mid-cap") companies. INVESTMENT ADVISER: Directed Services, Inc. INVESTMENT SUBADVISER: Capital Guardian Trust Company - ------------------------------------------------------------------------------------------------------------------------------- ING CAPITAL GUARDIAN U.S. EQUITIES PORTFOLIO Seeks long-term growth of capital and income. Invests, (Service 2) under normal market conditions, at least 80% of its assets (formerly ING Capital Guardian Large Cap Value Portfolio) in equity and equity-related securities of issuers located INVESTMENT ADVISER: Directed Services, Inc. in the United States. INVESTMENT SUBADVISER: Capital Guardian Trust Company - ------------------------------------------------------------------------------------------------------------------------------- ING EAGLE ASSET CAPITAL APPRECIATION PORTFOLIO Seeks capital appreciation. Dividend income is a secondary (Service 2) objective. Normally invests at least 80% of its assets in INVESTMENT ADVISER: Directed Services, Inc. equity securities of domestic and foreign issuers that meet INVESTMENT SUBADVISER: Eagle Asset Management, Inc. quantitative standards relating to financial soundness and high intrinsic value relative to price. - ------------------------------------------------------------------------------------------------------------------------------- ING EVERGREEN OMEGA PORTFOLIO (Service 2) Seeks long-term capital growth. Invests primarily in INVESTMENT ADVISER: Directed Services, Inc. common stocks and securities convertible into common stocks INVESTMENT SUBADVISER: Evergreen Investment Management of U.S. companies across all market capitalizations. May Company, LLC invest up to 25% of its assets in foreign securities. - ------------------------------------------------------------------------------------------------------------------------------- ING FMR(SM) DIVERSIFIED MID CAP PORTFOLIO Seeks long-term growth of capital. Normally invests (Service 2) primarily in common stocks and normally invests at least INVESTMENT ADVISER: Directed Services, Inc. 80% of assets in securities of companies with medium market INVESTMENT SUBADVISER: Fidelity Management & Research Co. capitalizations. - ------------------------------------------------------------------------------------------------------------------------------- ING FMR(SM) EARNINGS GROWTH PORTFOLIO (Service 2) Seeks growth of capital over the long term. Normally INVESTMENT ADVISER: Directed Services, Inc. invests primarily in common stocks. Invests the assets in INVESTMENT SUBADVISER: Fidelity Management & Research Co. companies it believes have above-average growth potential. Growth may be measured by factors such as earnings or revenue. Companies with high growth potential tend to be companies with higher than average price/earnings (P/E) or price/book (P/B) ratios. - ------------------------------------------------------------------------------------------------------------------------------- ING GLOBAL RESOURCES PORTFOLIO (Service 2) A non-diversified Portfolio that seeks long-term capital (formerly ING Hard Assets Portfolio) appreciation. Normally invests at least 80% of its assets INVESTMENT ADVISER: Directed Services, Inc. in the equities of producers of commodities. INVESTMENT SUBADVISER: Baring International Investment Limited - -------------------------------------------------------------------------------------------------------------------------------
B3 Legends - 136958
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING GOLDMAN SACHS TOLLKEEPER(SM) PORTFOLIO* (Service 2) Seeks long-term growth of capital. Invests, under normal (formerly ING Goldman Sachs Internet Tollkeeper Portfolio) circumstances, at least 80% of its net assets plus any INVESTMENT ADVISER: Directed Services, Inc. borrowings for investment purposes (measured at time of INVESTMENT SUBADVISER: Goldman Sachs Asset Management, L.P. purchase) in equity investments in "Tollkeeper" companies, which are high-quality technology, media, or service * Goldman Sachs Tollkeeper(SM) is a service mark of Goldman companies that adopt or use technology to improve cost Sachs & Co. structure, revenue opportunities, and/or competitive advantage. - ------------------------------------------------------------------------------------------------------------------------------- ING JANUS CONTRARIAN PORTFOLIO (Service 2) A non-diversified Portfolio that seeks capital (formerly ING Janus Special Equity Portfolio) appreciation. Invests, under normal circumstances, at least INVESTMENT ADVISER: Directed Services, Inc. 80% of its net assets (plus borrowings for investment INVESTMENT SUBADVISER: Janus Capital Management, LLC purposes) in equity securities with the potential for long-term growth of capital. - ------------------------------------------------------------------------------------------------------------------------------- ING JPMORGAN EMERGING MARKETS EQUITY PORTFOLIO (Service 2) Seeks capital appreciation. Normally invests at least 80% (formerly ING Developing World Portfolio) of its assets in securities of issuers located in at least INVESTMENT ADVISER: Directed Services, Inc. three countries with emerging securities markets. May also INVESTMENT SUBADVISER: JPMorgan Investment Management Inc. invest to a lesser extent in debt securities of issuers in countries with emerging markets. May also invest in high-quality, short-term money market instruments and repurchase agreements. - ------------------------------------------------------------------------------------------------------------------------------- ING JPMORGAN SMALL CAP EQUITY PORTFOLIO Seeks capital growth over the long term. Under normal (Service 2) market conditions, invests at least 80% of its total assets INVESTMENT ADVISER: Directed Services, Inc. in equity securities of small-cap companies. May invest up INVESTMENT SUBADVISER: J.P. Morgan Investment Management to 20% of its assets in foreign securities, convertible Inc. securities and high quality money market instruments and repurchase agreements. May invest in REITs and derivatives. - ------------------------------------------------------------------------------------------------------------------------------- ING JPMORGAN VALUE OPPORTUNITIES PORTFOLIO Seeks to provide long-term capital appreciation. Under (Service 2) normal market conditions, the Portfolio invests at least INVESTMENT ADVISER: Directed Services, Inc. 80% of its assets in equity securities of mid and INVESTMENT SUBADVISER: J.P. Morgan Investment Management large-capitalization companies at the time of purchase. Inc. - ------------------------------------------------------------------------------------------------------------------------------- ING JULIUS BAER FOREIGN PORTFOLIO (Service 2) Seeks long-term growth of capital. Under normal INVESTMENT ADVISER: Directed Services, Inc. conditions, invests in a wide variety of international INVESTMENT SUBADVISER: Julius Baer Investment Management LLC equity securities issued through the world, normally excluding the United States. Normally invests at least 80% of its assets in equity securities tied economically to countries outside the United States. - ------------------------------------------------------------------------------------------------------------------------------- ING LEGG MASON VALUE PORTFOLIO (Service 2) A non-diversified portfolio that seeks long-term growth of (formerly ING Janus Growth and Income Portfolio) capital. Normally invests in equity securities, including INVESTMENT ADVISER: Directed Services, Inc. foreign securities, that offer the potential for capital INVESTMENT SUBADVISER: Legg Mason Funds Management, Inc. growth. May also invest in companies with market capitalizations greater than $5 billion, but may invest in companies of any size. May also invest up to 25% of its total assets in long-term debt securities. - -------------------------------------------------------------------------------------------------------------------------------
B4 Legends - 136958
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING LIQUID ASSETS PORTFOLIO (Service 2) Seeks high level of current income consistent with the INVESTMENT ADVISER: Directed Services, Inc. preservation of capital and liquidity. Strives to maintain INVESTMENT SUBADVISER: ING Investment Management Co. a stable $1 per share net asset value and its investment strategy focuses on safety of principal, liquidity and yield, in order of importance, to achieve this goal. - ------------------------------------------------------------------------------------------------------------------------------- ING LORD ABBETT AFFILIATED PORTFOLIO (Service 2)* Seeks long-term growth of capital. Secondarily seeks (formerly ING Salomon Brothers Investors Portfolio) current income. Invests primarily in equity securities of INVESTMENT ADVISER: Directed Services, Inc. U.S. companies. May also invest in other securities. To a INVESTMENT SUBADVISER: Lord Abbett & Co., LLC* lesser degree, invests in income producing securities such as debt securities, and may also invest in securities of *NAME CHANGE AND SUBADVISER CHANGE EFFECTIVE 12/0505 foreign issuers. - ------------------------------------------------------------------------------------------------------------------------------- ING MARKETPRO PORTFOLIO (Service 2)* Seeks capital appreciation. Income is a secondary INVESTMENT ADVISER: ING Investments, LLC consideration. Seeks to obtain its investment objective by investing in a combination of underlying funds according to PORTFOLIO AVAILABLE 12/05/05 fixed percentages that reflect an allocation of approximately 70% in equity securities and 30% in fixed income securities. - ------------------------------------------------------------------------------------------------------------------------------- ING MARSICO GROWTH PORTFOLIO (Service 2) Seeks capital appreciation. Invests primarily in equity INVESTMENT ADVISER: Directed Services, Inc. securities selected for their growth potential. May invest INVESTMENT SUBADVISER: Marsico Capital Management, LLC in companies of any size, from larger, well-established companies to smaller, emerging growth companies. - ------------------------------------------------------------------------------------------------------------------------------- ING MARSICO INTERNATIONAL OPPORTUNITIES PORTFOLIO Seeks long-term growth of capital. Invests primarily (no (Service Class) less than 65% of its total assets) in common stocks of INVESTMENT ADVISER: Directed Services, Inc. foreign companies that are selected for their long-term INVESTMENT SUBADVISER: Marsico Capital Management, LLC growth potential. May invest in companies of any size throughout the world. Normally invests in issuers from at least three different countries not including the United States and generally maintains a core position of between 35 and 50 common stocks. May invest in common stocks of companies operating in emerging markets. - ------------------------------------------------------------------------------------------------------------------------------- ING MERCURY LARGE CAP VALUE PORTFOLIO (Service 2) Seeks long-term growth of capital. Invests at least 80% of (FORMERLY ING MERCURY FOCUS VALUE PORTFOLIO) its assets in a diversified portfolio of equity securities INVESTMENT ADVISER: Directed Services, Inc. of large capitalization companies that the Portfolio INVESTMENT SUBADVISER: Mercury Advisors Manager believes are undervalued. - ------------------------------------------------------------------------------------------------------------------------------- ING MFS MID CAP GROWTH PORTFOLIO (Service 2) Seeks long-term growth of capital. Normally invests at INVESTMENT ADVISER: Directed Services, Inc. least 80% of its net assets in common stocks and related INVESTMENT SUBADVISER: Massachusetts Financial Services securities (such as preferred stocks, convertible Company securities and depositary receipts) of companies with medium market capitalizations (or "mid-cap companies") which it believes have above-average growth potential. - ------------------------------------------------------------------------------------------------------------------------------- ING MFS TOTAL RETURN PORTFOLIO (Service 2) Seeks above-average income (compared to a portfolio INVESTMENT ADVISER: Directed Services, Inc. entirely invested in equity securities) consistent with the INVESTMENT SUBADVISER: Massachusetts Financial Services prudent employment of capital. Secondarily seeks reasonable Company opportunity for growth of capital and income. Invests in a combination of equity and fixed income securities. - -------------------------------------------------------------------------------------------------------------------------------
B5 Legends - 136958
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING OPPENHEIMER MAIN STREET PORTFOLIO (Service 2) Seeks long-term growth of capital and future income. (formerly ING MFS Research Portfolio) Normally invests mainly in common stocks of U.S. companies INVESTMENT ADVISER: Directed Services, Inc. of different capitalization ranges, presently focusing on INVESTMENT SUBADVISER: OppenheimerFunds, Inc. large-capitalization issuers. May also invest in debt securities, such as bonds and debentures, but does not currently emphasize these investments. - ------------------------------------------------------------------------------------------------------------------------------- ING PIMCO CORE BOND PORTFOLIO (Service 2) Seeks maximum total return, consistent with preservation of INVESTMENT ADVISER: Directed Services, Inc. capital and prudent investment management. Invests, under INVESTMENT SUBADVISER: Pacific Investment Management normal circumstances, at least 80% of its net assets (plus Company LLC borrowings for investment purposes) in a diversified portfolio of fixed income instruments of varying maturities. - ------------------------------------------------------------------------------------------------------------------------------- ING PIMCO HIGH YIELD PORTFOLIO (Service Class) Seeks maximum total return, consistent with preservation of INVESTMENT ADVISER: Directed Services, Inc. capital and prudent investment management. Normally INVESTMENT SUBADVISER: Pacific Investment Management invests at least 80% of its net assets (plus borrowings for Company LLC investment purposes) in a diversified portfolio of high yield securities ("junk bonds") rated below investment grade but rated at least CCC/Caa by Moody's Investors Service, Inc., Standard and Poor's Rating Service, or Fitch, or if unrated, determined by PIMCO to be of comparable quality, subject to a maximum of 5% of total assets in CCC/Caa securities, determined at the time of investment. - ------------------------------------------------------------------------------------------------------------------------------- ING PIONEER FUND PORTFOLIO (Service Class) Seeks reasonable income and capital growth. Invests in a INVESTMENT ADVISER: Directed Services, Inc. broad list of carefully selected securities believed to be INVESTMENT SUBADVISER: Pioneer Investment Management, Inc. reasonably priced, rather than in securities whose prices reflect a premium resulting from their current market popularity. Invests the major portion of its assets in equity securities, primarily of U.S. issuers. - ------------------------------------------------------------------------------------------------------------------------------- ING PIONEER MID CAP VALUE PORTFOLIO (Service Class) Seeks capital appreciation. Normally invests at least 80% INVESTMENT ADVISER: Directed Services, Inc. of its total assets in equity securities of mid-size INVESTMENT SUBADVISER: Pioneer Investment Management, Inc. companies, that is companies with market values within the range of market values of companies included in the Russell Midcap Value Index. - ------------------------------------------------------------------------------------------------------------------------------- ING SALOMON BROTHERS ALL CAP PORTFOLIO (Service 2) A non-diversified Portfolio that seeks capital appreciation INVESTMENT ADVISER: Directed Services, Inc. through investment in securities which it believes have INVESTMENT SUBADVISER: Salomon Brothers Asset Management, above-average capital appreciation potential. Invests Inc. primarily in common stocks and common stock equivalents, such as preferred stocks and securities convertible into common stocks, of companies it believes are undervalued in the marketplace. - ------------------------------------------------------------------------------------------------------------------------------- ING T. ROWE PRICE CAPITAL APPRECIATION PORTFOLIO Seeks, over the long-term, a high total investment return, (Service 2) consistent with the preservation of capital and prudent INVESTMENT ADVISER: Directed Services, Inc. investment risk. Pursues an active asset allocation INVESTMENT SUBADVISER: T. Rowe Price Associates, Inc. strategy whereby investments are allocated among three asset classes - equity securities, debt securities and money market instruments. May invest up to 25% of its net assets in foreign equity securities. - -------------------------------------------------------------------------------------------------------------------------------
B6 Legends - 136958
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING T. ROWE PRICE EQUITY INCOME PORTFOLIO Seeks substantial dividend income as well as long-term (Service 2) growth of capital. Normally invests at least 80% of its INVESTMENT ADVISER: Directed Services, Inc. assets in common stocks, with 65% in the common stocks of INVESTMENT SUBADVISER: T. Rowe Price Associates, Inc. well-established companies paying above-average dividends. May also invest in convertible securities, warrants and preferred stocks, foreign securities, debt securities including high-yield debt securities and future and options. - ------------------------------------------------------------------------------------------------------------------------------- ING TEMPLETON GLOBAL GROWTH PORTFOLIO (Service 2)* Seeks capital appreciation. Current income is only an (formerly ING Capital Guardian Managed Global Portfolio) incidental consideration. Invests primarily in common INVESTMENT ADVISER: Directed Services, Inc. stocks traded in securities markets throughout the world. INVESTMENT SUBADVISER: Templeton Global Advisors Limited* May invest up to 100% of its total assets in securities traded in securities markets outside the United States. * NAME CHANGE AND SUBADVISER CHANGE EFFECTIVE 12/05/05 Generally invests at least 65% of its total assets in at least three different countries, one of which may be the United States. - ------------------------------------------------------------------------------------------------------------------------------- ING UBS U.S. ALLOCATION PORTFOLIO (Service 2) Seeks to maximize total return over the long term by (formerly ING UBS U.S. Balanced Portfolio) allocating its assets among stocks, bonds, short-term INVESTMENT ADVISER: Directed Services, Inc. instruments and other investments. Allocates its assets INVESTMENT SUBADVISER: UBS Global Asset Management among the following classes, or types, of investments: (Americas) Inc. stocks, bonds, and short-term money market debt obligations. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN EQUITY GROWTH PORTFOLIO Seeks long-term capital appreciation. Under normal (Service 2) circumstances, at least 80% of the net assets of the INVESTMENT ADVISER: Directed Services, Inc. Portfolio will be invested in equity securities (plus INVESTMENT SUBADVISER: Van Kampen borrowings for investment purposes). Invests primarily in growth-oriented companies. May invest, to a limited extent, in foreign companies that are listed on U.S. exchanges or traded in U.S. markets. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN GLOBAL FRANCHISE PORTFOLIO A non-diversified Portfolio that seeks long-term capital (Service 2) appreciation. Invests primarily in equity securities of INVESTMENT ADVISER: Directed Services, Inc. issuers located throughout the world that it believes have, INVESTMENT SUBADVISER: Van Kampen among other things, resilient business franchises and growth potential. Under normal market conditions, invests at least 65% of its total assets in securities of issuers from at least three different countries, which may include the United States. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN GROWTH AND INCOME PORTFOLIO Seeks long-term growth of capital and income. Under normal (Service 2) market conditions, investing primarily in what it believes INVESTMENT ADVISER: Directed Services, Inc. to be income-producing equity securities, including common INVESTMENT SUBADVISER: Van Kampen stocks and convertible securities; although investments are also made in non-convertible preferred stocks and debt securities rated "investment grade," which are securities rated within the four highest grades assigned by Standard & Poor's or by Moody's Investors Service, Inc. - -------------------------------------------------------------------------------------------------------------------------------
B7 Legends - 136958
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN REAL ESTATE PORTFOLIO (Service 2) A non-diversified Portfolio that seeks capital appreciation INVESTMENT ADVISER: Directed Services, Inc. and secondarily seeks current income. Invests at least 80% INVESTMENT SUBADVISER: Van Kampen of its assets in equity securities of companies in the U.S. real estate industry that are listed on national exchanges or the National Association of Securities Dealers Automated Quotation System ("NASDAQ"). - ------------------------------------------------------------------------------------------------------------------------------- ING VP INDEX PLUS INTERNATIONAL EQUITY PORTFOLIO (Service 2)* Seeks to out perform the total return performance of the INVESTMENT ADVISER: ING Investments, LLC Standard & Poor's 500 Composite Stock Price Index (S&P 500 INVESTMENT SUBADVISER: ING Investment Management Advisors, Index), while maintaining a market level of risk. B.V. * PORTFOLIO AVAILABLE 12/05/05 - ------------------------------------------------------------------------------------------------------------------------------- ING WELLS FARGO MID CAP DISCIPLINED PORTFOLIO Seeks long-term capital growth. Normally invests at least (Service 2) 80% of its net assets (plus any borrowings for investment (formerly ING Jennison Equity Opportunities Portfolio) purposes) in securities of mid-capitalization companies. INVESTMENT ADVISER: Directed Services, Inc. The Portfolio manager defines mid-capitalization companies INVESTMENT SUBADVISER: Wells Capital Management, Inc. as those with market capitalizations within the range of companies comprising the Russell Midcap (R) Value Index at the time of purchase. - ------------------------------------------------------------------------------------------------------------------------------- ING WELLS FARGO SMALL CAP DISCIPLINED PORTFOLIO (Service 2)* A non-diversified Portfolio that seeks capital appreciation INVESTMENT ADVISER: Directed Services, Inc. and secondarily seeks current income. Invests at least 80% INVESTMENT SUBADVISER: Wells Fargo Funds Management, LLC of its assets in equity securities of companies in the U.S. real estate industry that are listed on national exchanges * PORTFOLIO AVAILABLE 12/05/05 or the National Association of Securities Dealers Automated Quotation System ("NASDAQ"). - ------------------------------------------------------------------------------------------------------------------------------- ING PARTNERS, INC. 151 Farmington Avenue, Hartford, CT 06156-8962 - ------------------------------------------------------------------------------------------------------------------------------- ING BARON SMALL CAP GROWTH PORTFOLIO (Service Class) Seeks capital appreciation. Invests primarily (at least 80% INVESTMENT ADVISER: ING Life Insurance and Annuity Company of total assets under normal circumstances) in securities INVESTMENT SUBADVISER: Bamco, Inc. of smaller companies with market values under $2.5 billion as measured at the time of purchase. - ------------------------------------------------------------------------------------------------------------------------------- ING DAVIS VENTURE VALUE PORTFOLIO (Service Class)* Seeks long-term growth of capital. Under normal INVESTMENT ADVISER: Directed Services, Inc. circumstances, invests majority of assets in equity INVESTMENT SUBADVISER: Davis Selected Advisers L.P securities issued by large companies with market capitalizations of at least 10 billion. May invest a *PORTFOLIO AVAILABLE 12/05/05 limited portion of its assets in companies of any size in foreign securities and may invest in non-equity securities. - -------------------------------------------------------------------------------------------------------------------------------
B8 Legends - 136958
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING FUNDAMENTAL RESEARCH PORTFOLIO (Service Class) Seeks to maximize total return through investments in a INVESTMENT ADVISER: ING Life Insurance and Annuity Company diversified portfolio of common stocks and securities INVESTMENT SUBADVISER: ING Investment Management Co. convertible into common stock. Prior to July 5, 2005, invests at least 80% of assets in stocks included in the S&P 500 Index. Effective July 5, 2005, will invest at least 65% of total assets in common stocks and securities convertible into common stocks. May invest principally in common stocks having significant potential for capital appreciation emphasizing stocks of larger companies. May also invest a portion of assets in stocks of mid-sized companies, and up to 25% of assets in stocks of foreign issuers, depending upon market conditions. May also invest in derivative instruments. - ------------------------------------------------------------------------------------------------------------------------------- ING JPMORGAN FLEMING INTERNATIONAL PORTFOLIO Seeks long-term growth of capital. Invests primarily (at (Service Class) least 65% of total assets) in the equity securities of INVESTMENT ADVISER: ING Life Insurance and Annuity Company foreign companies that the subadviser believes have high INVESTMENT SUBADVISER: J.P. Morgan Fleming Asset Management growth potential. Will normally invest in securities of at (London) Ltd. least three different countries other than the U.S. and will invest in both developed and developing markets. - ------------------------------------------------------------------------------------------------------------------------------- ING OPPENHEIMER GLOBAL PORTFOLIO (Service Class) Seeks capital appreciation. Invests mainly in common stocks INVESTMENT ADVISER: of companies in the U.S. and foreign countries. Can invest INVESTMENT SUBADVISER: OppenheimerFund, Inc. without limit in foreign securities in any country, including countries with emerging markets. Currently emphasizes investments in developed markets such as the United States, Western European countries and Japan. May invest in companies of any size, but currently focuses its investments in mid- and large-cap companies. Normally will invest in at least three countries (one of which may be the United States). - ------------------------------------------------------------------------------------------------------------------------------- ING SALOMON BROTHERS AGGRESSIVE GROWTH PORTFOLIO Seeks long-term growth of capital. Invests primarily (at (Service Class) least 80% of net assets under normal circumstances) in INVESTMENT ADVISER: ING Life Insurance and Annuity Company common stocks and related securities, such as preferred INVESTMENT SUBADVISER: Salomon Brothers Asset Management stock, convertible securities and depositary receipts, of Inc. emerging growth companies. May invest in foreign securities (including emerging market securities). - ------------------------------------------------------------------------------------------------------------------------------- ING UBS U.S. LARGE CAP EQUITY PORTFOLIO Seeks long-term growth of capital and future income. Under (Service Class) normal circumstances, invests at least 80% of net assets INVESTMENT ADVISER: ING Life Insurance and Annuity Company (plus borrowings for investment purposes, if any) in equity INVESTMENT SUBADVISER: UBS Global Asset Management securities of U.S. large capitalization companies. (Americas) Inc. Investments in equity securities may include dividend-paying securities, common stock and preferred stock. - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN COMSTOCK PORTFOLIO (Service Class) Seeks capital growth and income. Invests in a portfolio of INVESTMENT ADVISER: ING Life Insurance and Annuity Company equity securities, including common stocks, preferred INVESTMENT SUBADVISER: Van Kampen stocks and securities convertible into common and preferred stocks. May invest up to 25% of total assets in securities of foreign issuers and may purchase and sell certain derivative instruments, such as options, futures and options on futures, for various portfolio management purposes. - -------------------------------------------------------------------------------------------------------------------------------
B9 Legends - 136958
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING VAN KAMPEN EQUITY AND INCOME PORTFOLIO (Service Class) Seeks total return, consisting of long-term capital INVESTMENT ADVISER: ING Life Insurance and Annuity Company appreciation and current income. Normally invests at least INVESTMENT SUBADVISER: Van Kampen 80% of net assets (plus any borrowings for investment purposes) in equity and income securities at the time of investment. Normally invests at least 65% of assets in income producing equity instruments (including common stocks, preferred stocks and convertible securities) and investment grade quality debt securities. May invest up to 25% of total assets in securities of foreign issuers. May purchase and sell certain derivative instruments, such as options, futures contracts, and options on futures contracts, for various portfolio management purposes, including to earn income, to facilitate portfolio management and to mitigate risks. - ------------------------------------------------------------------------------------------------------------------------------- ING VARIABLE INSURANCE TRUST 7337 E. Doubletree Ranch Road, Scottsdale, AZ 85258 - ------------------------------------------------------------------------------------------------------------------------------- ING VP GLOBAL EQUITY DIVIDEND PORTFOLIO Seeks growth of capital with dividend income as a secondary (formerly ING VP Worldwide Growth Portfolio) consideration. Normally invests at least 80% of assets in INVESTMENT ADVISER: ING Investments, LLC equity securities of dividend paying companies. At least INVESTMENT SUBADVISER: ING Investment Management Co. 65% of assets will be invested in equity securities of issuers in at least three countries, one of which may be the U.S., with at least 75% of total assets in common and preferred stocks, warrants and convertible securities. May invest in companies located in countries with emerging securities markets when the fund's subadviser believes they present attractive investment opportunities. - ------------------------------------------------------------------------------------------------------------------------------- ING VARIABLE PORTFOLIOS, INC. 7337 E. Doubletree Ranch Road, Scottsdale, AZ 85258 - ------------------------------------------------------------------------------------------------------------------------------- ING VP INDEX PLUS LARGECAP PORTFOLIO (Class S) Seeks to outperform the total return performance of the INVESTMENT ADVISER: ING Investments, LLC Standard & Poor's 500 Composite Stock Price Index (S&P 500 INVESTMENT SUBADVISER: ING Investment Index), while maintaining a market level of risk. Invests Management Co., at least 80% of assets in stocks included in the S&P 500 Index. The subadviser's objective is to overweight those stocks in the S&P 500 Index that it believes will outperform the index and underweight (or avoid altogether) those stocks it believes will underperform the index. May invest in derivatives. - ------------------------------------------------------------------------------------------------------------------------------- ING VP INDEX PLUS MIDCAP PORTFOLIO (Class S) Seeks to outperform the total return performance of the INVESTMENT ADVISOR: ING Investments, LLC Standard & Poor's MidCap 400 Index (S&P MidCap 400 Index), INVESTMENT SUBADVISER: ING Investment Management Co. while maintaining a market level of risk. Invests at least 80% of assets in stocks included in the S&P MidCap 400 Index. The subadviser's objective is to overweight those stocks in the S&P MidCap 400 Index that it believes will outperform the index and underweight (or avoid altogether) those stocks that it believes will underperform the index. May invest in derivatives. - -------------------------------------------------------------------------------------------------------------------------------
B10 Legends - 136958
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING VP INDEX PLUS SMALLCAP PORTFOLIO (Class S) Seeks to outperform the total return performance of the INVESTMENT ADVISOR: ING Investments, LLC Standard & Poor's SmallCap 600 Index (S&P 600 Index), while INVESTMENT SUBADVISER: ING Investment Management Co. maintaining a market level of risk. Invests at least 80% of assets in stocks included in the S&P 600 Index. The subadviser's objective is to overweight those stocks in the S&P 600 Index that it believes will outperform the index and underweight (or avoid altogether) those stocks that it believes will underperform the index. May invest in derivatives. - ------------------------------------------------------------------------------------------------------------------------------- ING VARIABLE PRODUCTS TRUST 7337 E. Doubletree Ranch Road, Scottsdale, AZ 85258 - ------------------------------------------------------------------------------------------------------------------------------- ING VP FINANCIAL SERVICES PORTFOLIO (Class S) Seeks long-term capital appreciation. Under normal INVESTMENT ADVISER: ING Investments, LLC conditions, invests at least 80% of assets in equity INVESTMENT SUBADVISER: ING Investment Management Co. securities and equity equivalent securities of companies principally engaged in the financial services industry. Equity securities in which the Portfolio invests are normally common stocks, but may also include preferred stocks, warrants and convertible securities. May invest in initial public offerings. - ------------------------------------------------------------------------------------------------------------------------------- ING VP SMALLCAP OPPORTUNITIES PORTFOLIO (Class S) Seeks long-term capital appreciation. Normally invests at INVESTMENT ADVISER: ING Investments, LLC least 80% of assets in the common stock of smaller, INVESTMENT SUBADVISER: ING Investment Management Co. lesser-known U.S. companies that the sub-adviser believes have above average prospects for growth. For this Portfolio, smaller companies are those with market capitalizations that fall within the range of companies in the Russell 2000 Growth Index. - -------------------------------------------------------------------------------------------------------------------------------
B11 Legends - 136958
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- ING VP INTERMEDIATE BOND PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------------- ING VP INTERMEDIATE BOND PORTFOLIO (Service 2) Seeks to maximize total return consistent with reasonable (formerly ING VP Bond Portfolio) risk, through investment in a diversified portfolio INVESTMENT ADVISER: ING Investments, LLC consisting primarily of debt securities. It is anticipated INVESTMENT SUBADVISER: ING Investment that capital appreciation and investment income will both Management Co., be major factors in achieving total return. Under normal market conditions, the Portfolio invests at least 80% of its assets in a portfolio of bonds, including but not limited to corporate, government and mortgage bonds, which, at the time of investment, are rated investment grade or have an equivalent rating by a nationally recognized statistical rating organization, or of comparable quality if unrated. May also invest in: preferred stocks; high quality money market instruments; municipal bonds; debt securities of foreign issuers; mortgage- and asset-backed securities; and options and futures contracts involving securities, securities indices and interest rates. Although the portfolio may invest in high yield debt securities rated below investment grade, it seeks to maintain a minimum average portfolio quality of at least investment grade. - ------------------------------------------------------------------------------------------------------------------------------- AIM VARIABLE INSURANCE FUNDS 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173 - ------------------------------------------------------------------------------------------------------------------------------- AIM V.I. LEISURE FUND (Series I) Seeks capital growth. Normally invests at least 80% of net (formerly INVESCO VIF - Leisure Fund) assets in the equity securities and equity-related INVESTMENT ADVISER: A I M Advisors, Inc. instruments of companies engaged in the design, production, and distribution of products related to the leisure activities. - ------------------------------------------------------------------------------------------------------------------------------- FIDELITY(R) VARIABLE INSURANCE PRODUCTS 82 Devonshire Street, Boston, MA 02109 - ------------------------------------------------------------------------------------------------------------------------------- FIDELITY(R) VIP CONTRAFUND PORTFOLIO (Service 2) Seeks long-term capital appreciation. Normally invests INVESTMENT ADVISER: Fidelity Management & Research Co. primarily in common stocks of companies whose value the INVESTMENT SUBADVISER: FMR Co., Inc. Portfolio's investment adviser believes is not fully recognized by the public. - ------------------------------------------------------------------------------------------------------------------------------- FIDELITY(R) VIP EQUITY-INCOME PORTFOLIO Seeks reasonable income. Also considers the potential for (Service 2) capital appreciation. Seeks to achieve a yield which INVESTMENT ADVISER: Fidelity Management & Research Co. exceeds the composite yield on the securities comprising INVESTMENT SUBADVISER: FMR Co., Inc. the Standard & Poor's 500(SM) Index. Normally invests at least 80% of total assets in income-producing equity securities (which tends to lead to investments in large cap "value" stocks). - -------------------------------------------------------------------------------------------------------------------------------
B12 Legends - 136958
- ------------------------------------------------------------------------------------------------------------------------------- FUND NAME AND INVESTMENT ADVISER/SUBADVISER INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------------------------------------------------------- LIBERTY VARIABLE INSURANCE TRUST 600 Atlantic Avenue, Boston, MA 02210 - ------------------------------------------------------------------------------------------------------------------------------- COLONIAL SMALL CAP VALUE FUND (Class B) The Fund seeks long-term growth by investing primarily in INVESTMENT ADVISER: Columbia Management Advisers, Inc. smaller capitalization (small-cap) equities. - ------------------------------------------------------------------------------------------------------------------------------- PROFUNDS VP 3435 Stelzer Road, Suite 1000, P.O. Box 182100, Columbus, OH 43218-2000 - ------------------------------------------------------------------------------------------------------------------------------- PROFUND VP BULL Seeks daily investment results, before fees and expenses, INVESTMENT ADVISER: ProFund Advisors LLC that correspond to the daily performance of the S&P 500 Index. - ------------------------------------------------------------------------------------------------------------------------------- PROFUND VP EUROPE 30 Seeks daily investment results, before fees and expenses, INVESTMENT ADVISER: ProFund Advisors LLC that correspond to the daily performance of the ProFunds Europe 30 Index. - ------------------------------------------------------------------------------------------------------------------------------- PROFUND VP RISING RATES OPPORTUNITY Seeks daily investment results, before fees and expenses, INVESTMENT ADVISER: ProFund Advisors LLC that correspond to one and one-quarter times (125%) the inverse (opposite) of the daily price movement of the most recently issued 30-year U.S. Treasury Bond ("Long Bond"). - ------------------------------------------------------------------------------------------------------------------------------- PROFUND VP SMALL-CAP Seeks daily investment results, before fees and expenses, INVESTMENT ADVISER: ProFund Advisors LLC that correspond to the daily performance of the Russell 2000 Index. - -------------------------------------------------------------------------------------------------------------------------------
THE FOLLOWING PORTFOLIOS ARE INCLUDED IN ONE OR MORE OF THE MARKETPRO PORTFOLIOS: ING FMR Diversified MidCap Portfolio ING JPMorgan Fleming International Equity Portfolio ING Legg Mason Value Portfolio ING Marsico Growth ING Mercury Large Cap Value Portfolio ING Salomon Brothers Aggressive Growth Portfolio ING T. Rowe Price Capital Appreciation Portfolio ING Van Kampen Equity and Income Portfolio ING VP Intermediate Bond Portfolio The prospectus for the ING MarketPro Portfolio contains additional information about the underlying portfolios included in the ING MarketPro Portfolio. B13 Legends - 136958 - -------------------------------------------------------------------------------- APPENDIX C - -------------------------------------------------------------------------------- FIXED ACCOUNT II Fixed Account II ("Fixed Account") is an optional fixed interest allocation offered during the accumulation phase of your variable annuity contract between you and ING USA Annuity and Life Insurance Company ("ING USA," the "Company," "we" or "our"). The Fixed Account, which is a segregated asset account of ING USA, provides a means for you to invest on a tax-deferred basis and earn a guaranteed interest for guaranteed interest periods (Fixed Interest Allocation(s)). We will credit your Fixed Interest Allocation(s) with a fixed rate of interest. We currently offer Fixed Interest Allocations with guaranteed interest periods that may vary by maturity, state of issue and rate. In addition, we may offer DCA Fixed Interest Allocations, which are 6-month and 1-year Fixed Interest Allocations available exclusively in connection with our dollar cost averaging program. We may offer additional guaranteed interest periods in some or all states, may not offer all guaranteed interest periods on all contracts or in all states and the rates for a given guaranteed interest period may vary among contracts. We set the interest rates periodically. We may credit a different interest rate for each interest period. The interest you earn in the Fixed Account as well as your principal is guaranteed by ING USA, as long as you do not take your money out before the maturity date for the applicable interest period. If you take your money out from a Fixed Interest Allocation more than 30 days before the applicable maturity date, we will apply a market value adjustment ("Market Value Adjustment"). A Market Value Adjustment could increase or decrease your contract value and/or the amount you take out. A surrender charge may also apply to withdrawals from your contract. You bear the risk that you may receive less than your principal because of the Market Value Adjustment. For contracts sold in some states, not all Fixed Interest Allocations are available. You have a right to return a contract for a refund as described in the prospectus. THE FIXED ACCOUNT You may allocate premium payments and transfer your Contract value to the guaranteed interest periods of the Fixed Account during the accumulation period as described in the prospectus. Every time you allocate money to the Fixed Account, we set up a Fixed Interest Allocation for the guaranteed interest period you select. We will credit your Fixed Interest Allocation with a guaranteed interest rate for the interest period you select, so long as you do not withdraw money from that Fixed Interest Allocation before the end of the guaranteed interest period. Each guaranteed interest period ends on its maturity date which is the last day of the month in which the interest period is scheduled to expire. Your Contract value in the Fixed Account is the sum of your Fixed Interest Allocations and the interest credited as adjusted for any withdrawals, transfers or other charges we may impose, including any Market Value Adjustment. Your Fixed Interest Allocation will be credited with the guaranteed interest rate in effect for the guaranteed interest period you selected when we receive and accept your premium or reallocation of Contract value. We will credit interest daily at a rate that yields the quoted guaranteed interest rate. If you surrender, withdraw, transfer or annuitize your investment in a Fixed Interest Allocation more than 30 days before the end of the guaranteed interest period, we will apply a Market Value Adjustment to the transaction. A Market Value Adjustment could increase or decrease the amount you surrender, withdraw, transfer or annuitize, depending on current interest rates at the time of the transaction. You bear the risk that you may receive less than your principal because of the Market Value Adjustment. GUARANTEED INTEREST RATES Each Fixed Interest Allocation will have an interest rate that is guaranteed as long as you do not take your money out until its maturity date. We do not have a specific formula for establishing the guaranteed interest rates for the different guaranteed interest periods. We determine guaranteed interest rates at our sole discretion. We cannot predict the level of future interest rates. For more information see the prospectus for Fixed Account II C1 Legends - 136958 TRANSFERS FROM A FIXED INTEREST ALLOCATION You may transfer your Contract value in a Fixed Interest Allocation to one or more new Fixed Interest Allocations with new guaranteed interest periods, or to any of the subaccounts of ING USA's Separate Account B as described in the prospectus on the maturity date of a guaranteed interest period. The minimum amount that you can transfer to or from any Fixed Interest Allocation is $100. Transfers from a Fixed Interest Allocation may be subject to a Market Value Adjustment. If you have a special Fixed Interest Allocation that was offered exclusively with our dollar cost averaging program, canceling dollar cost averaging will cause a transfer of the entire Contract value in such Fixed Interest Allocation to the Liquid Assets subaccount, and such a transfer will be subject to a Market Value Adjustment. Please be aware that the benefit we pay under certain optional benefit riders will be adjusted by any transfers you make to and from the Fixed Interest Allocations during specified periods while the rider is in effect. See "Optional Riders" in the prospectus. WITHDRAWALS FROM A FIXED INTEREST ALLOCATION During the accumulation phase, you may withdraw a portion of your Contract value in any Fixed Interest Allocation. You may make systematic withdrawals of only the interest earned during the prior month, quarter or year, depending on the frequency chosen, from a Fixed Interest Allocation under our systematic withdrawal option. A withdrawal from a Fixed Interest Allocation may be subject to a Market Value Adjustment and a contract surrender charge. Be aware that withdrawals may have federal income tax consequences, including a 10% penalty tax, as well as state income tax consequences. Please be aware that the benefit we pay under any of the optional benefit riders will be reduced by any withdrawals you made from the Fixed Interest Allocations during the period while the rider is in effect. See "Optional Riders" in the prospectus. MARKET VALUE ADJUSTMENT A Market Value Adjustment may decrease, increase or have no effect on your Contract value. We will apply a Market Value Adjustment (i) whenever you withdraw or transfer money from a Fixed Interest Allocation (unless made within 30 days before the maturity date of the applicable guaranteed interest period, or under the systematic withdrawal or dollar cost averaging program) and (ii) if on the annuity start date a guaranteed interest period for any Fixed Interest Allocation does not end on or within 30 days of the annuity start date. A Market Value Adjustment may be positive, negative or result in no change. In general, if interest rates are rising, you bear the risk that any Market Value Adjustment will likely be negative and reduce your Contract value. On the other hand, if interest rates are falling, it is more likely that you will receive a positive Market Value Adjustment that increases your Contract value. In the event of a full surrender, transfer or annuitization from a Fixed Interest Allocation, we will add or subtract any Market Value Adjustment from the amount surrendered, transferred or annuitized. In the event of a partial withdrawal, transfer or annuitization, we will add or subtract any Market Value Adjustment from the total amount withdrawn, transferred or annuitized in order to provide the amount requested. If a negative Market Value Adjustment exceeds your Contract value in the Fixed Interest Allocation, we will consider your request to be a full surrender, transfer or annuitization of the Fixed Interest Allocation. CONTRACT VALUE IN THE FIXED INTEREST ALLOCATIONS On the contract date, the Contract value in any Fixed Interest Allocation in which you are invested is equal to the portion of the initial premium paid and designated for allocation to the Fixed Interest Allocation. On each business day after the contract date, we calculate the amount of Contract value in each Fixed Interest Allocation as follows: (1) We take the Contract value in the Fixed Interest Allocation at the end of the preceding business day. (2) We credit a daily rate of interest on (1) at the guaranteed rate since the preceding business day. C2 Legends - 136958 (3) We add (1) and (2). (4) We subtract from (3) any transfers from that Fixed Interest Allocation. (5) We subtract from (4) any withdrawals, and then subtract any contract fees (including any rider charges) and premium taxes. Additional premium payments and transfers allocated to the Fixed Account will be placed in a new Fixed Interest Allocation. The Contract value on the date of allocation will be the amount allocated. Several examples which illustrate how the Market Value Adjustment works are included in the prospectus for the Fixed Account. CASH SURRENDER VALUE The cash surrender value is the amount you receive when you surrender the Contract. The cash surrender value of amounts allocated to the Fixed Account will fluctuate daily based on the interest credited to Fixed Interest Allocations, any Market Value Adjustment, and any surrender charge. We do not guarantee any minimum cash surrender value. On any date during the accumulation phase, we calculate the cash surrender value as follows: we start with your Contract value, then we adjust for any Market Value Adjustment, and then we deduct any surrender charge, any charge for premium taxes, the annual contract administrative fee (unless waived), and any optional benefit rider charge, and any other charges incurred but not yet deducted. DOLLAR COST AVERAGING FROM FIXED INTEREST ALLOCATIONS You may elect to participate in our dollar cost averaging program if you have at least $1,200 of Contract value in Fixed Account Interest Allocations with a guaranteed interest period of 1 year or less. The Fixed Interest Allocations serve as the source accounts, from which we will, on a monthly basis, automatically transfer a set dollar amount of money to other Fixed Interest Allocations or contract investment portfolio subaccounts selected by you. The dollar cost averaging program is designed to lessen the impact of market fluctuation on your investment. Since we transfer the same dollar amount to subaccounts each month, more units of a subaccount are purchased if the value of its unit is low and fewer units are purchased if the value of its unit is high. Therefore, a lower than average value per unit may be achieved over the long term. However, we cannot guarantee this. When you elect the dollar cost averaging program, you are continuously investing in securities regardless of fluctuating price levels. You should consider your tolerance for investing through periods of fluctuating price levels. You elect the dollar amount you want transferred under this program. Each monthly transfer must be at least $100. You may change the transfer amount once each contract year. Transfers from a Fixed Interest Allocation under the dollar cost averaging program are not subject to a Market Value Adjustment. We may in the future offer additional subaccounts or withdraw any subaccount or Fixed Interest Allocation to or from the dollar cost averaging program or otherwise modify, suspend or terminate this program. Of course, such change will not affect any dollar cost averaging programs in operation at the time. SUSPENSION OF PAYMENTS We have the right to delay payment of amounts from a Fixed Interest Allocation for up to 6 months. MORE INFORMATION See the prospectus for Fixed Account II. C3 Legends - 136958 - -------------------------------------------------------------------------------- APPENDIX D - -------------------------------------------------------------------------------- FIXED INTEREST DIVISION A Fixed Interest Division option is available through the group and individual deferred variable annuity contracts offered by ING USA Annuity and Life Insurance Company. The Fixed Interest Division is part of the ING USA General Account. Interests in the Fixed Interest Division have not been registered under the Securities Act of 1933, and neither the Fixed Interest Division nor the General Account is registered under the Investment Company Act of 1940. Interests in the Fixed Interest Division are offered in certain states through an Offering Brochure, dated April 29, 2005. The Fixed Interest Division is different from the Fixed Account which is described in the prospectus but which is not available in your state. If you are unsure whether the Fixed Account is available in your state, please contact our Customer Service Center at (800) 366-0066. When reading through the Prospectus, the Fixed Interest Division should be counted among the various investment options available for the allocation of your premiums, in lieu of the Fixed Account. The Fixed Interest Division may not be available in some states. Some restrictions may apply. You will find more complete information relating to the Fixed Interest Division in the Offering Brochure. Please read the Offering Brochure carefully before you invest in the Fixed Interest Division. D1 Legends - 136958 - -------------------------------------------------------------------------------- APPENDIX E - -------------------------------------------------------------------------------- SURRENDER CHARGE FOR EXCESS WITHDRAWALS EXAMPLE The following assumes you made an initial premium payment of $25,000 and additional premium payments of $25,000 in each of the second and third contract years, for total premium payments under the Contract of $75,000. It also assumes a withdrawal at the beginning of the third contract year of 30% of the contract value of $90,000. In this example, $13,500 (15% of $90,000) is maximum free withdrawal amount that you may withdraw during the contract year without a surrender charge. The total withdrawal would be $27,000 ($90,000 x .30). Therefore, $13,500 ($27,000 - $13,500) is considered an excess withdrawal and would be subject to a 4% surrender charge of $540 ($13,500 x .04). This example does not take into account any Market Value Adjustment or deduction of any premium taxes. E1 Legends - 136958 - -------------------------------------------------------------------------------- APPENDIX F - -------------------------------------------------------------------------------- SPECIAL FUNDS AND EXCLUDED FUNDS EXAMPLES EXAMPLE #1: The following examples are intended to demonstrate the impact on your 7% Solution Death Benefit Element ("7% MGDB") of allocating your Contract Value to Special Funds.
- ----------------------------------------- --------------------------------------- -------------------------------------- 7% MGDB IF 50% INVESTED 7% MGDB IF 0% INVESTED 7% MGDB IF 100% INVESTED IN SPECIAL FUNDS IN SPECIAL FUNDS IN SPECIAL FUNDS - ----------------------------------------- --------------------------------------- -------------------------------------- END OF YR COVERED SPECIAL TOTAL END OF YR COVERED SPECIAL TOTAL END OF YR COVERED SPECIAL TOTAL 0 500 500 1,000 0 1,000 -- 1,000 0 0 1,000 1,000 1 535 500 1,035 1 1,070 -- 1,070 1 0 1,000 1,000 2 572 500 1,072 2 1,145 -- 1,145 2 0 1,000 1,000 3 613 500 1,113 3 1,225 -- 1,225 3 0 1,000 1,000 4 655 500 1,155 4 1,311 -- 1,311 4 0 1,000 1,000 5 701 500 1,201 5 1,403 -- 1,403 5 0 1,000 1,000 6 750 500 1,250 6 1,501 -- 1,501 6 0 1,000 1,000 7 803 500 1,303 7 1,606 -- 1,606 7 0 1,000 1,000 8 859 500 1,359 8 1,718 -- 1,718 8 0 1,000 1,000 9 919 500 1,419 9 1,838 -- 1,838 9 0 1,000 1,000 10 984 500 1,484 10 1,967 -- 1,967 10 0 1,000 1,000 - ----------------------------------------- --------------------------------------- --------------------------------------
- ----------------------------------------- --------------------------------------- 7% MGDB IF TRANSFERRED TO 7% MGDB IF TRANSFERRED TO SPECIAL FUNDS COVERED FUNDS AT THE BEGINNING OF YEAR 6 AT THE BEGINNING OF YEAR 6 - ----------------------------------------- --------------------------------------- END OF YR COVERED SPECIAL TOTAL END OF YR COVERED SPECIAL TOTAL 0 1,000 -- 1,000 0 -- 1,000 1,000 1 1,070 -- 1,070 1 -- 1,000 1,000 2 1,145 -- 1,145 2 -- 1,000 1,000 3 1,225 -- 1,225 3 -- 1,000 1,000 4 1,311 -- 1,311 4 -- 1,000 1,000 5 1,403 -- 1,403 5 -- 1,000 1,000 6 -- 1,403 1,403 6 1,070 -- 1,070 7 -- 1,403 1,403 7 1,145 -- 1,145 8 -- 1,403 1,403 8 1,225 -- 1,225 9 -- 1,403 1,403 9 1,311 -- 1,311 10 -- 1,403 1,403 10 1,403 -- 1,403 - ----------------------------------------- ---------------------------------------
F1 Legends - 136958 EXAMPLE #2: The following examples are intended to demonstrate the impact on your 7% Solution Death Benefit Element ("7% MGDB") of allocating your Contract Value to Excluded Funds. ----------------------------------------------------------------------------- 7% MGDB IF 50% INVESTED IN EXCLUDED FUNDS ----------------------------------------------------------------------------- Covered Excluded Total ------------------------------------------------------- Death End of yr 7% MGDB AV "7% MGDB" AV 7% MGDB AV Benefit 0 500 500 500 500 1,000 1,000 1,000 1 535 510 535 510 1,045 1,020 1,045 2 572 490 572 490 1,062 980 1,062 3 613 520 613 520 1,133 1,040 1,133 4 655 550 655 550 1,205 1,100 1,205 5 701 450 701 450 1,151 900 1,151 6 750 525 750 525 1,275 1,050 1,275 7 803 600 803 600 1,403 1,200 1,403 8 859 750 859 750 1,609 1,500 1,609 9 919 500 919 500 1,419 1,000 1,419 10 984 300 984 300 1,284 600 1,284 ----------------------------------------------------------------------------- - ----------------------------------------- -------------------------------------- 7% MGDB IF 0% INVESTED 7% MGDB IF 100% INVESTED IN EXCLUDED FUNDS IN EXCLUDED FUNDS - ----------------------------------------- -------------------------------------- Covered Excluded -------------------- --------------------- End of Death End of Death yr 7% MGDB AV Benefit yr "7% MGDB" AV Benefit 0 1,000 1,000 1,000 0 1,000 1,000 1,000 1 1,070 1,020 1,070 1 1,070 1,020 1,020 2 1,145 980 1,145 2 1,145 980 980 3 1,225 1,040 1,225 3 1,225 1,040 1,040 4 1,311 1,100 1,311 4 1,311 1,100 1,100 5 1,403 900 1,403 5 1,403 900 900 6 1,501 1,050 1,501 6 1,501 1,050 1,050 7 1,606 1,200 1,606 7 1,606 1,200 1,200 8 1,718 1,500 1,718 8 1,718 1,500 1,500 9 1,838 1,000 1,838 9 1,838 1,000 1,000 10 1,967 600 1,967 10 1,967 600 600 - ----------------------------------------- -------------------------------------- Note: AV are hypothetical illustrative values. Not a projection. "7% MGDB" for Excluded funds is notional. Not payable as a benefit. Death Benefit for Excluded Funds equals Accumulation Value (AV) F2 Legends - 136958 ----------------------------------------------------------------------------- TRANSFER FROM COVERED FUNDS TO EXCLUDED FUNDS AT THE BEGINNING OF YEAR 6 ----------------------------------------------------------------------------- Covered Excluded Total --------------------------------------------------------- Death End of Yr 7% MGDB AV "7% MGDB" AV 7% MGDB AV Benefit -- 1,000 1,000 -- -- 1,000 1,000 1,000 1 1,050 1,020 -- -- 1,050 1,020 1,050 2 1,103 980 -- -- 1,103 980 1,103 3 1,158 1,040 -- -- 1,158 1,040 1,158 4 1,216 1,100 -- -- 1,216 1,100 1,216 5 1,276 900 -- -- 1,276 900 1,276 6 -- -- 1,340 1,050 1,050 1,050 1,050 7 -- -- 1,407 1,200 1,200 1,200 1,200 8 -- -- 1,477 1,500 1,500 1,500 1,500 9 -- -- 1,551 1,000 1,000 1,000 1,000 10 -- -- 1,629 600 600 600 600 ----------------------------------------------------------------------------- Note: 7% MGDB transferred to Excluded Funds equals the 7% MGDB in Covered Funds (or pro-rata portion thereof for partial transfer). Transfers from Special Funds to Excluded Funds work the same as Covered to Excluded (except 7% MGDB in Special Funds does not accumulate). ----------------------------------------------------------------------------- TRANSFER FROM EXCLUDED FUNDS TO COVERED FUNDS AT THE BEGINNING OF YEAR 6 ----------------------------------------------------------------------------- Covered Excluded Total --------------------------------------------------------- Death End of Yr 7% MGDB AV "7% MGDB" AV 7% MGDB AV Benefit -- -- -- 1,000 1,000 1,000 1,000 1,000 1 -- -- 1,050 1,020 1,020 1,020 1,020 2 -- -- 1,103 980 980 980 980 3 -- -- 1,158 1,040 1,040 1,040 1,040 4 -- -- 1,216 1,100 1,100 1,100 1,100 5 -- -- 1,276 900 900 900 900 6 945 1,050 -- -- 945 1,050 1,050 7 992 1,200 -- -- 992 1,200 1,200 8 1,042 1,500 -- -- 1,042 1,500 1,500 9 1,094 1,000 -- -- 1,094 1,000 1,094 10 1,149 600 -- -- 1,149 600 1,149 ----------------------------------------------------------------------------- Note: 7% MGDB transferred to Covered Funds is the lesser of 7% MGDB in Excluded Funds (or portion thereof for partial transfer) and AV transferred to Covered Funds. Transfers from Excluded Funds to Special Funds work the same as Excluded to Covered (except 7% MGDB in Special Funds does not accumulate). F3 Legends - 136958 - -------------------------------------------------------------------------------- APPENDIX G - -------------------------------------------------------------------------------- EXAMPLES OF MINIMUM GUARANTEED INCOME BENEFIT CALCULATION EXAMPLE 1 CONTRACT WITHOUT CONTRACT WITH AGE THE MGIB RIDER THE MGIB RIDER - --- -------------- -------------- 55 Initial Value $100,000 $100,000 Accumulation Rate 0.0% 0.00% Rider Charge 0.0% 0.75% 65 Contract Value $100,000 $89,167 Contract Annuity Factor 4.71 4.71 Monthly Income $471.00 $419.98 MGIB Rollup n/a $196,715 MGIB Ratchet n/a $100,000 MGIB Annuity Factor n/a 4.43 MGIB Income N/A $871.44 Income $471.00 $ 871.44 EXAMPLE 2 CONTRACT WITHOUT CONTRACT WITH AGE THE MGIB RIDER THE MGIB RIDER - --- -------------- -------------- 55 Initial Value $100,000 $100,000 Accumulation Rate 3.0% 3.0% Rider Charge 0.0% 0.75% 65 Contract Value $134,392 $122,019 Contract Annuity Factor 4.71 4.71 Monthly Income $632.98 $574.70 MGIB Rollup n/a $196,715 MGIB Ratchet n/a $122,019 MGIB Annuity Factor n/a 4.43 MGIB Income N/A $871.44 Income $632.98 $871.44 G1 Legends - 136958 EXAMPLE 3 CONTRACT WITHOUT CONTRACT WITH AGE THE MGIB RIDER THE MGIB RIDER - --- -------------- -------------- 55 Initial Value $100,000 $100,000 Accumulation Rate 8.0% 8.0% Rider Charge 0.0% 0.75% 65 Contract Value $215,892 $200,423 Contract Annuity Factor 4.71 4.71 Monthly Income $1,016.85 $943.99 MGIB Rollup n/a $196,715 MGIB Ratchet n/a $200,423 MGIB Annuity Factor n/a 4.43 MGIB Income N/A $887.87 Income $1,016.85 $943.99 The Accumulation Rates shown under "Contract" are hypothetical and intended to illustrate various market conditions. These rates are assumed to be net of all fees and charges. Fees and charges are not assessed against the MGIB Rollup Rate. G2 Legends - 136958 - -------------------------------------------------------------------------------- APPENDIX H - -------------------------------------------------------------------------------- ING LIFEPAY PARTIAL WITHDRAWAL AMOUNT EXAMPLES The following are examples of adjustments to the Maximum Annual Withdrawal ("MAW") amount for withdrawals in excess of the MAW: ILLUSTRATION 1: ADJUSTMENT TO THE MAXIMUM ANNUAL WITHDRAWAL ("MAW") AMOUNT FOR A WITHDRAWAL IN EXCESS OF THE MAW, INCLUDING SURRENDER AND/OR MVA CHARGES. Assume the MAW is $5,000. The first withdrawal taken during the contract year is $3,000 net, with $500 of surrender and/or MVA charges. The MAW is not exceeded. The next withdrawal taken during the contract year is $1,500 net, with $300 of surrender and/or MVA charges. The MAW is not exceeded because total net withdrawals, $4,500, do not exceed the MAW, $5,000. The next withdrawal taken during the contract year is $1,500 net, with $200 of surrender and/or MVA charges. Because total net withdrawals taken, $6,000, exceed the MAW, $5,000, then there is an adjustment to the MAW. Total gross withdrawals during the contract year are $7,000 ($3,000 + $500 + $1,500 + $300 + $1,500 + $200). The adjustment is the lesser of the amount by which the total gross withdrawals for the year exceed the MAW, $2,000, and the amount of the current gross withdrawal, $1,700. If the Account Value before this withdrawal is $50,000, then the MAW is reduced by 3.40% ($1,700 / $50,000) to $4,830 ((1 - 3.40%) * $5,000) ILLUSTRATION 2: ADJUSTMENT TO THE MAW AMOUNT FOR A WITHDRAWAL IN EXCESS OF THE MAW. Assume the MAW is $5,000. The first withdrawal taken during the contract year is $3,000 net, with $0 of surrender and/or MVA charges. The MAW is not exceeded. The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. The MAW is not exceeded because total net withdrawals, $4,500, do not exceed the MAW, $5,000. The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. Because total net withdrawals taken, $6,000, exceed the MAW, $5,000, there is an adjustment to the MAW. Total gross withdrawals during the contract year are $6,000 ($3,000 + $1,500 + $1,500). The adjustment is the lesser of the amount by which the total gross withdrawals for the year exceed the MAW, $1,000, and the amount of the current gross withdrawal, $1,500. If the Account Value after the part of the gross withdrawal that was within the MAW, $500, is $49,500, then the MAW is reduced by 2.02% ($1,000 / $49,500) to $4,899 ((1 - 2.02%) * $5,000) H1 Legends - 136958 ILLUSTRATION 3: A WITHDRAWAL EXCEEDS THE MAW AMOUNT BUT DOES NOT EXCEED THE ADDITIONAL WITHDRAWAL AMOUNT ("AWA"). Assume the MAW is $5,000. On January 31, the RMD for the current calendar year applicable to this contract is determined to be $6,000. The AWA is set equal to the excess of this amount above the MAW, $1,000 ($6,000 - $5,000). The first withdrawal taken during the contract year is $3,000 net, with $0 of surrender and/or MVA charges. The MAW is not exceeded. The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. The MAW is not exceeded because total net withdrawals, $4,500, do not exceed the MAW, $5,000. The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. Total net withdrawals taken, $6,000, exceed the MAW, $5,000, however, the MAW is not adjusted until the AWA is exhausted. The amount by which total net withdrawals taken exceed the MAW, $1,000 ($6,000 - $5,000), is the same as the AWA, so no adjustment to the MAW is made. If total net withdrawals taken had exceeded the sum of the MAW and the AWA, then an adjustment would be made to the MAW. ILLUSTRATION 4: THE RESET OPTION IS UTILIZED. Assume the MAW is $5,000 and the MAW percentage is 5%. One year after the first withdrawal is taken, the contract value has increased to $120,000, and the Reset Option is utilized. The MAW is now $6,000 ($120,000 * 5%). One year after the Reset Option was first utilized, the contract value has increased further to $130,000. The Reset Option is utilized again, and the MAW is now $6,500 ($130,000 * 5%). H2 Legends - 136958 - -------------------------------------------------------------------------------- APPENDIX I - -------------------------------------------------------------------------------- MINIMUM GUARANTEED WITHDRAWAL BENEFIT (APPLICABLE TO CONTRACTS ISSUED IN STATES WHERE ING LIFEPAY IS NOT AVAILABLE) MINIMUM GUARANTEED WITHDRAWAL BENEFIT RIDER (MGWB). The MGWB rider, marketed under the name, ING PrincipalGuard Withdrawal Benefit, is an optional benefit which guarantees that if your contract value is reduced to zero, you will receive periodic payments. The amount of the periodic payments is based on the amount in the MGWB Withdrawal Account. ONLY PREMIUMS ADDED TO YOUR CONTRACT DURING THE FIRST TWO-YEAR PERIOD AFTER YOUR RIDER DATE ARE INCLUDED IN THE MGWB WITHDRAWAL ACCOUNT. Any additional premium payments added after the second rider anniversary are not included in the MGWB Withdrawal Account. Thus, the MGWB rider may not be appropriate for you if you plan to add substantial premium payments after your second rider anniversary. The guarantee provides that, subject to the conditions described below, the amount you will receive in periodic payments is equal to your Eligible Payment Amount adjusted for any prior withdrawals. Your Eligible Payment Amount depends on when you purchase the MGWB rider and equals: 1) if you purchased the MGWB rider on the contract date: your premium payments received during the first two contract years; 2) if you purchased the MGWB rider after the contract date: your contract value on the Rider Date, including any premiums received that day, and any subsequent premium payments received during the two-year period commencing on the Rider Date. To maintain the guarantee, withdrawals in any contract year may not exceed 7% of your Eligible Payment Amount adjusted, as defined below. If your contract value is reduced to zero, your periodic payments will be 7% of your Eligible Payment Amount every year. Payments continue until your MGWB Withdrawal Account is reduced to zero. Please note that before Automatic Periodic Benefit status is reached, withdrawals in excess of the free withdrawal amount will be subject to surrender charges. Once your contract reaches Automatic Period Benefit Status, the periodic payments paid under the MGWB rider are not subject to surrender charges. The MGWB Withdrawal Account is equal to the Eligible Payment Amount adjusted for any withdrawals and transfers between Covered and Excluded Funds. The MGWB Withdrawal Account is tracked separately for Covered and Excluded Funds. The MGWB Withdrawal Account equals the sum of (a) the MGWB Withdrawal Account allocated to Covered Funds, and (b) the lesser of (i) the MGWB Withdrawal Account allocated to Excluded Funds and (ii) the contract value in Excluded Funds. Thus, investing in the Excluded Funds may limit the MGWB Withdrawal Account. No investment options are currently designated as Excluded Funds for the Minimum Guaranteed Withdrawal Benefit. The Maximum Annual Withdrawal Amount (or "MAW") is equal to 7% of the Eligible Payment Amount. Withdrawals from Covered Funds of up to the MAW will reduce the value of your MGWB Withdrawal Account by the dollar amount of the withdrawal. Any withdrawals from Covered Funds greater than the MAW will cause a reduction in the MGWB Withdrawal Account allocated to Covered Funds by the proportion that the excess withdrawal bears to the remaining contract value in Covered Funds after the withdrawal of the MAW. All withdrawals from Excluded Funds will reduce the value of the MGWB Withdrawal Account allocated to Excluded Funds on a pro-rata basis. If a single withdrawal involves both Covered and Excluded Funds and exceeds 7%, the withdrawal will be treated as taken first from Covered Funds. Any withdrawals greater than the MAW will also cause a reduction in the Eligible Payment Amount by the proportion that the excess portion of the withdrawal bears to the contract value remaining after withdrawal of the MAW at the time of the withdrawal. Please see Appendix J, MGWB Excess Withdrawal Amount Examples. I1 Legends - 136958 Once your contract value is zero, any periodic payments paid under the MGWB rider also reduce the MGWB Withdrawal Account by the dollar amount of the payments. If a withdrawal reduces the MGWB Withdrawal Account to zero, the MGWB rider terminates and no further benefits are payable under the rider. Net transfers from Covered Funds to Excluded Funds will reduce the MGWB Withdrawal Account allocated to Covered Funds on a pro-rata basis. The resulting increase in the MGWB Withdrawal Account allocated to Excluded Funds equals the reduction in the MGWB Withdrawal Account for Covered Funds. Net transfers from Excluded Funds to Covered Funds will reduce the MGWB Withdrawal Account allocated to Excluded Funds on a pro-rata basis. The resulting increase in the MGWB Withdrawal Account allocated to Covered Funds will equal the lesser of the reduction in the MGWB Withdrawal Account for Excluded Funds and the net contract value transferred. YOU SHOULD NOT MAKE ANY WITHDRAWALS IF YOU WISH TO RETAIN THE OPTION TO ELECT THE STEP-UP BENEFIT (SEE BELOW). The MGWB Withdrawal Account is only a calculation which represents the remaining amount available for periodic payments. It does not represent a contract value, nor does it guarantee performance of the subaccounts in which you are invested. It will not affect your annuitization, surrender and death benefits. GUARANTEED WITHDRAWAL STATUS. You may continue to make withdrawals in any amount permitted under your Contract so long as your contract value is greater than zero. See "Withdrawals." However, making any withdrawals in any year greater than the MAW will reduce the Eligible Payment Amount and payments under the MGWB rider by the proportion that the withdrawal bears to the contract value at the time of the withdrawal. The MGWB rider will remain in force and you may continue to make withdrawals each year so long as: 1) your contract value is greater than zero; 2) your MGWB Withdrawal Account is greater than zero; 3) you have not reached your latest allowable annuity start date; 4) you have not elected to annuitize your Contract; and 5) you have not died (unless your spouse has elected to continue the Contract), changed the ownership of the Contract or surrendered the Contract. The standard Contract provision limiting withdrawals to no more than 90% of the cash surrender value is not applicable under the MGWB rider. AUTOMATIC PERIODIC BENEFIT STATUS. Under the MGWB rider, in the event your contract value is reduced to zero, your Contract is given Automatic Periodic Benefit Status, if: 1) your MGWB Withdrawal Account is greater than zero; 2) you have not reached your latest allowable annuity start date; 3) you have not elected to annuitize your Contract; and 4) you have not died, changed the ownership of the Contract or surrendered the Contract. Once your Contract is given Automatic Periodic Benefit Status, we will pay you the annual MGWB periodic payments, beginning on the next contract anniversary until the earliest of (i) your Contract's latest annuity start date, (ii) the death of the owner; or (iii) your MGWB Withdrawal Account is exhausted. These payments are equal to the lesser of the remaining MGWB Withdrawal Account or the MAW. We will reduce the MGWB Withdrawal Account by the amount of each payment. Once your Contract is given Automatic Periodic Benefit Status, we will not accept any additional premium payments in your Contract, and the Contract will not provide any benefits except those provided by the MGWB rider. Any other rider terminates. Your Contract will remain in Automatic Periodic Benefit Status until the earliest of (i) payment of all MGWB periodic payments, (ii) payment of the Commuted Value (defined below) or (iii) the owner's death. I2 Legends - 136958 On the Contract's latest annuity start date, in lieu of making the remaining MGWB periodic payments, we will pay you the Commuted Value of your MGWB periodic payments remaining. We may, at our option, extend your annuity start date in order to continue the MGWB periodic payments. The Commuted Value is the present value of any then-remaining MGWB periodic payments at the current interest rate plus 0.50%. The current interest rate will be determined by the average of the Ask Yields for U.S. Treasury STRIPS as quoted by a national quoting service for period(s) applicable to the remaining payments. Once we pay you the last MGWB periodic payment or the Commuted Value, your Contract and the MGWB rider terminate. RESET OPTION. Beginning on the fifth contract anniversary following the Rider Date, if the contract value is greater than the MGWB Withdrawal Account, you may choose to reset the MGWB Rider. The effect will be to terminate the existing MGWB Rider and add a new MGWB Rider ("New Rider"). The MGWB Withdrawal Account under the New Rider will equal the contract value on the date the New Rider is effective. The charge for the MGWB under the New Rider and any right to reset again will be based on the terms of the New Rider when it is issued. We reserve the right to limit the reset election to contract anniversaries only. If you elect the Reset Option, the Step-Up benefit is not available. STEP-UP BENEFIT. If the Rider Date is the same as the Contract Date, beginning on the fifth contract anniversary following the Rider Date, if you have not made any previous withdrawals, you may elect to increase the MGWB Withdrawal Account, the adjusted Eligible Payment Amount and the MAW by a factor of 20%. This option is available whether or not the contract value is greater than the MGWB Withdrawal Account. If you elect the Step-Up Benefit: 1) we reserve the right to increase the charge for the MGWB Rider up to a maximum annual charge of 1.00% of contract value; 2) you must wait at least five years from the Step-Up date to elect the Reset Option. The Step-Up Benefit may be elected only one time under the MGWB Rider. We reserve the right to limit the election of the Step-Up Benefit to contract anniversaries only. Please note that if you have a third party investment advisor who charges a separate advisory fee, and you have chosen to use withdrawals from your contract to pay this fee, these will be treated as any other withdrawals, and the Step-Up Benefit will not be available. DEATH OF OWNER. BEFORE AUTOMATIC PERIODIC BENEFIT STATUS. The MGWB rider terminates on the first owner's date of death (death of annuitant, if there is a non-natural owner), but the death benefit is payable. However, if the beneficiary is the owner's spouse, the spouse elects to continue the Contract, and the contract value steps up to the minimum guaranteed death benefit, the MGWB Withdrawal Account and MAW are also reset. The MGWB charge will continue at the existing rate. Reset upon spousal continuation does not affect any then existing Reset Option. DURING AUTOMATIC PERIODIC BENEFIT STATUS. The death benefit payable during Automatic Periodic Benefit Status is your MGWB Withdrawal Account which equals the sum of the remaining MGWB periodic payments. PURCHASE. To purchase the MGWB rider, you must be age 80 or younger on the Rider Date. The MGWB rider must be purchased on the contract date. If the rider is not yet available in your state, the Company may in its discretion allow purchase of this rider during the 30-day period preceding the first contract anniversary after the date of this prospectus, or the date of state approval, whichever is later. I3 Legends - 136958 MINIMUM GUARANTEED WITHDRAWAL BENEFIT RIDER(8):
----------------------------------------------------------------------------------------------------------- MAXIMUM ANNUAL CHARGE IF STEP-UP AS AN ANNUAL CHARGE AS A QUARTERLY CHARGE BENEFIT ELECTED(8) ----------------------------------------------------------------------------------------------------------- 0.45% of contract value 0.12% of contract value 1.00% of contract value -----------------------------------------------------------------------------------------------------------
(6) We deduct optional rider charges from the subaccounts in which you are invested on each quarterly contract anniversary and pro-rata on termination of the Contract; if the value in the subaccounts is insufficient, the optional rider charges will be deducted from the Fixed Interest Allocation(s) nearest maturity, and the amount deducted may be subject to a Market Value Adjustment. (7) Please see "Charges and Fees - Optional Rider Charges" and "Optional Riders" in the prospectus. (8) If you elect the Step-Up Benefit, we reserve the right to increase the charge for the MGWB to a maximum annual charge of 1.00% of contract value. Please see "Minimum Guarantee Withdrawal Benefit Step-Up Benefit, above." I4 Legends - 136958 - -------------------------------------------------------------------------------- APPENDIX J - -------------------------------------------------------------------------------- MGWB EXCESS WITHDRAWAL AMOUNT EXAMPLES The following are examples of adjustments to the MGWB Withdrawal Account and the Maximum Annual Withdrawal Amount for Transfers and Withdrawals in Excess of the Maximum Annual Withdrawal Amount ("Excess Withdrawals Amount"): EXAMPLE #1: OWNER HAS INVESTED ONLY IN COVERED FUNDS Assume the Contract Value (CV) before the withdrawal is $100,000 and is invested in Covered Funds only, the Eligible Payment Amount (EPA) is $100,000, the Maximum Annual Withdrawal Amount (MAW) is $7,000, the MGWB Withdrawal Account allocated to Covered Funds ("Covered Withdrawal Account") is $120,000, and a withdrawal of $10,000 is made. The effect of the withdrawal is calculated as follows: The new CV is $90,000 ($100,000 - $10,000). The Excess Withdrawal Amount is $3,000 ($10,000 - $7,000). The Covered Withdrawal Account is first reduced dollar-for-dollar by the portion of the withdrawal up to the MAW to $113,000 ($120,000 - $7,000), and is then reduced pro-rata based on the ratio of the Excess Withdrawal Amount to the CV (after being reduced for the withdrawal up to the MAW) to $109,354.84 ($113,000 * (1 - $3,000 / $93,000)). The EPA is reduced pro-rata based on the ratio of the Excess Withdrawal Amount to the CV (after being reduced for the withdrawal up to the MAW) to $96,774.19 ($100,000 * (1 - $3,000 / $93,000)). The reduction to the EPA for withdrawals of Excess Withdrawal Amount is applied pro-rata regardless of whether CV is allocated to Covered or Excluded Funds. The MAW is then recalculated to be 7% of the new EPA, $6,774.19 ($96,774.19 * 7%). EXAMPLE #2: OWNER HAS INVESTED ONLY IN EXCLUDED FUNDS Assume the Contract Value (CV) before the withdrawal is $100,000 and is invested in Excluded Funds only, the Eligible Payment Amount (EPA) is $100,000, the Maximum Annual Withdrawal Amount (MAW) is $7,000, the MGWB Withdrawal Account allocated to Excluded Funds ("Excluded Withdrawal Account") is $120,000, and a withdrawal of $10,000 is made. The effect of the withdrawal is calculated as follows: The new CV is $90,000 ($100,000 - $10,000). The Excess Withdrawal Amount is $3,000 ($10,000 - $7.000). The Excluded Withdrawal Account is reduced pro-rata based on the ratio of the entire amount withdrawn to the CV (before the withdrawal) to $108,000 ($120,000 * (1 - $10,000 / $100,000)). The EPA is reduced pro-rata based on the ratio of the Excess Withdrawal Amount to the CV (after being reduced for the withdrawal up to the MAW) to $96,774.19 ($100,000 * (1 - $3,000/$93,000)). The reduction to the EPA for withdrawals of Excess Withdrawal Amount is applied pro-rata regardless of whether CV is allocated to Covered or Excluded Funds. The MAW is then recalculated to be 7% of the new EPA, $6,774.19 ($96,774.19 * 7%). J1 Legends - 136958 EXAMPLE #3: OWNER HAS INVESTED IN BOTH COVERED AND EXCLUDED FUNDS Assume the Contract Value (CV) before the withdrawal is $100,000 and is invested $60,000 in Covered Funds and $40,000 in Excluded Funds. Further assume that the Eligible Payment Amount (EPA) is $100,000, the Maximum Annual Withdrawal Amount (MAW) is $7,000, the MGWB Withdrawal Account allocated to Covered Funds ("Covered Withdrawal Account") is $75,000, the MGWB Withdrawal Account allocated to Excluded Funds ("Excluded Withdrawal Account") is $45,000, and a withdrawal is made of $10,000 ($8,000 from Covered Funds and $2,000 from Excluded Funds). The new CV for Covered Funds is $52,000 ($60,000 - $8,000), and the new CV for Excluded Funds is $38,000 ($40,000 - $2,000). The Covered Withdrawal Account is first reduced dollar-for-dollar by the lesser of the MAW ($7,000) and the amount withdrawn from Covered Funds ($8,000) to $68,000 ($75,000 - $7,000), and is then reduced pro-rata based on the ratio of any Excess Withdrawal Amount from Covered Funds to the CV in Covered Funds (after being reduced for the withdrawal up to the MAW) to $66,716.98 ($68,000 * (1 - $1,000 / $53,000). The Excluded Withdrawal Account is reduced pro-rata based on the ratio of the amount withdrawn from Excluded Funds to the CV in Excluded Funds (prior to the withdrawal) to $42,750 ($45,000 * (1 - $2,000 / $40,000)). The EPA is reduced pro-rata based on the ratio of the Excess Withdrawal Amount to the CV (after being reduced for the withdrawal up to the MAW) to $96,774.19 ($100,000 * (1 - $3,000 / $93,000)). The reduction to the EPA for withdrawals of Excess Withdrawal Amount is applied pro-rata regardless of whether CV is allocated to Covered or Excluded Funds. The MAW is then recalculated to be 7% of the new EPA, $6,774.19 ($96,774.19 * 7%). EXAMPLE #4: OWNER TRANSFERS FUNDS FROM EXCLUDED FUNDS TO COVERED FUNDS Assume the Contract Value (CV) before the transfer is $100,000 and is invested $60,000 in Covered Funds and $40,000 in Excluded Funds. Further assume that the MGWB Withdrawal Account allocated to Covered Funds ("Covered Withdrawal Account") is $75,000, the MGWB Withdrawal Account allocated to Excluded Funds ("Excluded Withdrawal Account") is $45,000, and a transfer is made of $10,000 from Excluded Funds to Covered Funds. The new CV for Covered Funds is $70,000 ($60,000 + $10,000), and the new CV for Excluded Funds is $30,000 ($40,000 - $10,000). The Excluded Withdrawal Account is reduced pro-rata based on the ratio of the amount transferred from Excluded Funds to the CV in Excluded Funds (prior to the transfer) to $33,750 ($45,000 * (1 - $10,000 / $40,000)). The Covered Withdrawal Account is increased by the lesser of the reduction of the Excluded Withdrawal Account of $11,250 ($45,000 - $33,750) and the actual amount transferred of $10,000. Thus, the Covered Withdrawal Account is increased to $85,000 ($75,000 + $10,000). J2 Legends - 136958 EXAMPLE #5: OWNER TRANSFERS FUNDS FROM COVERED FUNDS TO EXCLUDED FUNDS Assume the Contract Value (CV) before the transfer is $100,000 and is invested $60,000 in Covered Funds and $40,000 in Excluded Funds. Further assume that the MGWB Withdrawal Account allocated to Covered Funds ("Covered Withdrawal Account") is $75,000, the MGWB Withdrawal Account allocated to Excluded Funds ("Excluded Withdrawal Account") is $45,000, and a transfer is made of $10,000 from Covered Funds to Excluded Funds. The new CV for Covered Funds is $50,000 ($60,000 - $10,000), and the new CV for Excluded Funds is $50,000 ($40,000 + $10,000). The Covered Withdrawal Account is reduced pro-rata based on the ratio of the amount transferred from Covered Funds to the CV in Covered Funds (prior to the transfer) to $62,500 ($75,000 * (1 - $10,000 / $60,000)). The Excluded Withdrawal Account is increased by the reduction of the Covered Withdrawal Account of $12,500 ($75,000 - $62,500) to $57,500 ($45,000 + $12,500). J3 Legends - 136958 ING USA ANNUITY AND LIFE INSURANCE COMPANY ING USA Annuity and Life Insurance Company is a stock company domiciled in Iowa. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Legends - 136958 11/01/2005 PART B The Statements of Additional Information, dated April 29, 2005, are incorporated into Part B of this Post-Effective Amendment No. 25 by reference to Post- Effective Amendment No. 22 to Registration Statement on Form N-4 (File No. 333-30180), as filed on April 20, 2005. PART C - OTHER INFORMATION ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS FINANCIAL STATEMENTS (a) (1) All financial statements are included in the Prospectus or the Statement of Additional Information as indicated therein (2) Schedules I and IV follow. All other schedules to the consolidated financial statements required by Article 7 of Regulation S-X are omitted because they are not applicable or because the information is included elsewhere in the consolidated financial statements or notes thereto. ING USA ANNUITY AND LIFE INSURANCE COMPANY, (A WHOLLY-OWNED SUBSIDIARY OF LION CONNECTICUT HOLDINGS INC.) Schedule I Summary of Investments - Other than Investments in Affiliates As of December 31, 2004 (In Millions)
AMOUNT SHOWN ON TYPE OF INVESTMENTS COST VALUE* BALANCE SHEET ---------------- ----------------- ---------------- Fixed maturities: U.S. government and government agencies and authorities $464.0 $ 464.7 $ 464.7 State, municipalities and political subdivisions 20.7 19.9 19.9 Public utilities securities 1,796.9 1,866.4 1,866.4 Other U.S. corporate securities 6,292.4 6,513.2 6,513.2 Foreign securities (1) 3,090.1 3,198.3 3,198.3 Residential mortgage-backed securities 3,440.3 3,461.8 3,461.8 Commercial mortgage-backed securities 1,107.8 1,139.7 1,139.7 Other asset-backed securities 1,934.2 1,933.8 1,933.8 ---------------- ----------------- ---------------- Total fixed maturities, including fixed maturities $ 18,146.4 $18,597.8 $18,597.8 pledged ================ ================= ================ Total equity securities $ 34.8 $ 35.3 $ 35.3 =============== ================= ================ Mortgage loans $ 3,851.8 $ 3,969.4 $ 3,851.8 Policy loans 169.0 169.0 169.0 Other investments 228.8 229.0 228.8 ---------------- ----------------- ---------------- Total investments $ 22,430.8 $ 23,000.5 $ 22,882.7 ================ ================= ================
* See Notes 2 and 3 of Notes to Financial Statements. (1)The term "foreign" includes foreign governments, foreign political subdivisions, foreign public utilities and all other bonds of foreign issuers. Substantially all of the Company's foreign securities are denominated in U.S. dollars. ING USA ANNUITY AND LIFE INSURANCE COMPANY, (A WHOLLY-OWNED SUBSIDIARY OF LION CONNECTICUT HOLDINGS INC.) Schedule IV Reinsurance Information As of and for the years ended December 31, 2004, 2003 and 2002 (In Millions)
PERCENTAGE OF GROSS CEDED ASSUMED NET ASSUMED TO NET -------------- ------------- ------------- -------------- ----------------- YEAR ENDED DECEMBER 31, 2004 Life insurance in force $ 7,405.6 $ 906.0 $ - $ 6,449.6 $ 0.0% Premiums: Life insurance 25.0 2.2 - 22.8 Accident and health insurance 0.4 0.4 - - -------------- ------------- ------------- -------------- Total premiums $ 25.4 $ 2.6 $ - $ 22.8 ============== ============= ============= ============== YEAR ENDED DECEMBER 31, 2003 Life insurance in force $ 8,001.4 $ 1,209.4 $ - $ 6,792.0 0.0% Premiums: Life insurance 27.4 1.4 - 26.0 Accident and health insurance 0.2 0.2 - - -------------- ------------- ------------- -------------- Total premiums $ 27.6 1.6 - 26.0 ============== ============= ============= ============== YEAR ENDED DECEMBER 31, 2002 Life insurance in force $ 8,722.9 $ 1,370.5 $ - $ 7,352.4 0.0% Premiums: Life insurance 38.4 1.6 - 36.8 Accident and health insurance 0.2 0.2 - - -------------- ------------- ------------- -------------- Total premiums $ 38.6 $ 1.8 $ - $ 36.8 ============== ============= ============= ==============
EXHIBITS (b) 1 Resolution of the Board of Directors of Depositor authorizing the establishment of the Registrant (1) 2 Not Applicable 3 (a) Distribution Agreement between the Depositor and Directed Services, Inc. (1) (b) Form of Dealers Agreement (1) (c) Organizational Agreement (1) (d) Form of Assignment Agreement for Organizational Agreement (1) (e) Amendment to the Distribution Agreement between ING USA and DSI. (11) 4 (a) Deferred Combination Variable and Fixed Annuity Group Master Contract (2) (b) Flexible Premium Individual Deferred Combination Variable and Fixed Annuity Contract (2) (c) Flexible Premium Deferred Combination Variable and Fixed Annuity Certificate (2) (d) Flexible Premium Individual Deferred Variable Annuity Contract (2) (e) Individual Retirement Annuity Rider (6) (f) ROTH Individual Retirement Annuity Rider (6) (g) Minimum Guaranteed Income Benefit Rider (01/05). (5) (h) Minimum Guaranteed Withdrawal Benefit Rider (9) (i) Death Benefit Endorsement No.1 (7% Solution Enhanced) (10) (j) Death Benefit Endorsement No.2 (Ratchet Enhanced) (10) (k) Death Benefit Endorsement No.3 (Standard) (9) (l) Death Benefit Endorsement No.4 (Max 7 Enhanced) (10) (m) Death Benefit Endorsement No.5 (Base Death Benefit) (9) (n) Earnings Enhancement Death Benefit Rider (3) (o) Simple Retirement Account Rider (6) (p) 403(b) Rider (6) (q) Company Address and Name Change Endorsement (9) (r) Minimum Guaranteed Withdrawal Benefit Rider with Reset (LifePay) (13) 5 (a) Deferred Variable Annuity Application (8) (b) Group Deferred Combination Variable and Fixed Annuity Enrollment Form (2) 6 (a) Amended and Restated Articles of Incorporation of ING USA Annuity and Life Insurance Company, dated (01/01/04) (9) (b) Amended and Restated By-Laws of ING USA annuity and Life Insurance Company, dated (01/01/04) (9) (c) Resolution of the board of directors for Powers of Attorney, dated (04/23/99) (1) (d) Articles of Merger and Agreement and Plan of Merger of USGALC, ULAIC, ELICI into GALIC and renamed ING USA Annuity and Life Insurance Company, dated (06/25/03) (9) 7 Not applicable 8 (a) Participation Agreement between ING USA Annuity and Life Insurance Co. and ING Variable Insurance Trust (2) (b) Form of Participation Agreement between ING USA Annuity and Life Insurance Co. and ProFunds (3) (c) Participation Agreement between ING USA Annuity and Life Insurance Co. and ING Variable Products Trust (4) (d) Participation Agreement between ING USA Annuity and Life Insurance Co. and Fidelity Distributors Corporation (4) (e) Participation Agreement between ING USA Annuity and Life Insurance Co. and ING Variable Insurance Trust (4) (f) Participation Agreement between ING USA Annuity and Life Insurance Co. and AIM Variable Insurance Funds, Inc. (4) (g) Form of Participation Agreement between ING USA Annuity and Life Insurance Co., American Funds Insurance Series and Capital Research and Management Company (7) 9 Opinion and Consent of James A. Shuchart, Esq. 10 (a) Consent of Independent Registered Public Accounting Firm. (b) Consent of James A. Shuchart, Esquire incorporated in Item 9 of this Part C, together with the opinion of James A. Shuchart, Esq. 11 Not applicable 12 Not applicable 13 Powers of Attorney (12) - --------------------------------- (1) Incorporated herein by reference to the initial filing of a Registration Statement on Form N-4 for Golden American Life Insurance Company Separate Account B filed with the Securities and Exchange Commission on February 11, 2000 (File Nos. 333-30180, 811-5626). (2) Incorporated herein by reference to Post-Effective Amendment No. 2 to a Registration Statement on Form N-4 for Golden American Life Insurance Company Separate Account B filed with the Securities and Exchange Commission on February 26, 2001 (File Nos. 333-30180, 811-5626). (3) Incorporated herein by reference to Post-Effective Amendment No. 3 to a Registration Statement on Form N-4 for Golden American Life Insurance Company Separate Account B filed with the Securities and Exchange Commission on or about April 23, 2001 (File Nos. 333-30180, 811-5626). (4) Incorporated herein by reference to Post-Effective Amendment No. 32 to a Registration Statement on Form N-4 for Golden American Life Insurance Company Separate Account B filed with the Securities and Exchange Commission on or about April 29, 2002 (File Nos. 033-23351, 811-5626). (5) Incorporated herein by reference to Post-Effective Amendment No. 31 to a Registration Statement on Form N-4 for ING USA Annuity and Life Insurance Company Separate Account B filed with the Securities and Exchange Commission on April 20, 2005 (File Nos. 333-28755, 811-05626). (6) Incorporated herein by reference to Post-Effective Amendment No. 34 to a Registration Statement on Form N-4 for Golden American Life Insurance Company Separate Account B filed with the Securities and Exchange Commission on April 15, 2003 (File Nos. 033-23351, 811-5626). (7) Incorporated herein by Reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-6, for ReliaStar Life Insurance Company Select * Life Variable Account filed with the Securities and Exchange Commission on July 17, 2003 (File Number 333-105319) (8) Incorporated herein by reference to Post-Effective Amendment No. 34 to a Registration Statement on Form N-4 for ING USA Annuity and Life Insurance Company Separate Account B filed with the Securities and Exchange Commission on or about October 26, 2005 (File Nos. 333-28755, 811-5626). (9) Incorporated herein by reference to Post-Effective Amendment No. 15 to a Registration Statement on Form N-4 for ING USA Annuity and Life Insurance Company Separate Account B filed with the Securities and Exchange Commission on February 13, 2004 (File Nos. 333-30180, 811-5626). (10) Incorporated herein by reference to Post-Effective Amendment No. 25 to a Registration Statement on Form N-4 for ING USA Annuity and Life Insurance Company Separate Account B filed with the Securities and Exchange Commission on February 13, 2004 (File Nos. 333-28679, 811-5626). (11) Incorporated herein by reference to Post-Effective Amendment No. 26 to a Registration Statement on Form N-4 for ING USA Annuity and Life Insurance Company Separate Account B filed with the Securities and Exchange Commission on April 13, 2004 (File Nos. 333-28755, 811-5626). (12) Incorporated herein by reference to Post-Effective Amendment No. 5 to Registration Statement on Form N-4 for Variable Annuity Account C of ING Life Insurance and Annuity Company as filed with the Securities and Exchange Commission on July 20, 2005 (File No. 333-109860). (13) Incorporated herein by reference to Post-Effective Amendment No. 32 to a Registration Statement on Form N-4 for ING USA Annuity and Life Insurance Company Separate Account B filed with the Securities and Exchange Commission on August 5, 2005 (File Nos. 333-28755, 811-5626). ITEM 25: DIRECTORS AND OFFICERS OF THE DEPOSITOR Principal Position(s) Name Business Address with Depositor - ---- ---------------- -------------- Harry N. Stout 1475 Dunwoody Drive President West Chester, PA 19380 Jacques de Vaucleroy 5780 Powers Ferry Road Director Atlanta, GA 30327-4390 Catherine H. Smith 151 Farmington Avenue Director Hartford, CT 06156 Boyd G. Combs 5780 Powers Ferry Road Senior Vice President Atlanta, GA 30327-4390 Shaun P. Mathews 151 Farmington Avenue Senior Vice President Hartford, CT 06156 James R. Gelder 20 Washington Avenue South Senior Vice President Minneapolis, MN 55402 James R. McInnis 1475 Dunwoody Drive Senior Vice President West Chester, PA 19380 Stephen J. Preston 1475 Dunwoody Drive Senior Vice President West Chester, PA 19380 Kathleen A. Murphy 5780 Powers Ferry Road Director Atlanta, GA 30327-4390 Thomas J. McInerney 5780 Powers Ferry Road Director and Chairman Atlanta, GA 30327-4390 Andrew D. Chua 1290 Broadway President, ING Denver, CO 80203 Institutional Markets David A. Wheat 5780 Powers Ferry Road CFO, Director and Atlanta, GA 30327-4390 Senior Vice President Roger W. Fisher 5780 Powers Ferry Road Vice President and Chief Atlanta, GA 30327-4390 Accounting Officer David S. Pendergrass 5780 Powers Ferry Road Vice President and Atlanta, GA 30327-4390 Treasurer Paula Cludray-Engelke 20 Washington Avenue South Secretary Minneapolis, MN 55402 ITEM 26: PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR REGISTRANT The following persons control or are under common control with the Depositor: DIRECTED SERVICES, INC. ("DSI") - This corporation is a general business corporation organized under the laws of the State of New York, and is wholly owned by ING Groep, N.V. ("ING"). The primary purpose of DSI is to act as a broker-dealer in securities. It acts as the principal underwriter and distributor of variable insurance products including variable annuities as required by the SEC. The contracts are issued by the Depositor. DSI also has the power to carry on a general financial, securities, distribution, advisory or investment advisory business; to act as a general agent or broker for insurance companies and to render advisory, managerial, research and consulting services for maintaining and improving managerial efficiency and operation. DSI is also registered with the SEC as an investment adviser. The Depositor is under common control with a New York company, ReliaStar Life Insurance Company of New York ("RLNY"). The primary purpose of RLNY is to offer variable products in the state of New York. The registrant is a segregated asset account of the Company and is therefore owned and controlled by the Company. All of the Company's outstanding stock is owned and controlled by ING. Various companies and other entities controlled by ING may therefore be considered to be under common control with the registrant or the Company. Such other companies and entities, together with the identity of their controlling persons (where applicable), are set forth on the following organizational chart. Subsidiaries of ING Groep N.V. incorporated herein by reference to Item 28 in Post-Effective Amendment No. 9 to Registration Statement on Form N-6 for ReliaStar Life Insurance Company of New York Variable Life Separate Account I of ReliaStar Life Insurance Company of New York (File No. 333-47527), as filed on April 7, 2005. ITEM 27: NUMBER OF CONTRACT OWNERS As of September 30, 2005, there are 245,014 qualified contract owners and 202,636 non-qualified contract owners in ING USA's Separate Account B. ITEM 28: INDEMNIFICATION ING USA shall indemnify (including therein the prepayment of expenses) any person who is or was a director, officer or employee, or who is or was serving at the request of ING USA as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise for expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him with respect to any threatened, pending or completed action, suit or proceedings against him by reason of the fact that he is or was such a director, officer or employee to the extent and in the manner permitted by law. ING USA may also, to the extent permitted by law, indemnify any other person who is or was serving ING USA in any capacity. The Board of Directors shall have the power and authority to determine who may be indemnified under this paragraph and to what extent (not to exceed the extent provided in the above paragraph) any such person may be indemnified. ING USA or its parents may purchase and maintain insurance on behalf of any such person or persons to be indemnified under the provision in the above paragraphs, against any such liability to the extent permitted by law. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the Registrant, as provided above or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification by the Depositor is against public policy, as expressed in the Securities Act of 1933, and therefore may be unenforceable. In the event that a claim of such indemnification (except insofar as it provides for the payment by the Depositor of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted against the Depositor by such director, officer or controlling person and the SEC is still of the same opinion, the Depositor or Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by the Depositor is against public policy as expressed by the Securities Act of 1933 and will be governed by the final adjudication of such issue. ITEM 29: PRINCIPAL UNDERWRITER (a) At present, Directed Services, Inc. ("DSI"), the Registrant's Distributor, serves as principal underwriter for all contracts issued by ING USA Annuity and Life Insurance Company. DSI is the principal underwriter for Separate Account A, Separate Account B, ING USA Separate Account EQ (formerly known as Equitable Life Insurance Company of Iowa Separate Account A), ReliaStar Life Insurance Company of New York Separate Account NY-B, Alger Separate Account A of ING USA and the ING Investors Trust. (b) The following information is furnished with respect to the principal officers and directors of Directed Services, Inc., the Registrant's Distributor. The principal business address for each officer and director following is 1475 Dunwoody Drive, West Chester, PA 19380-1478, unless otherwise noted. Name and Principal Positions and Offices Business Address with Underwriter - -------------------- --------------------- James R. McInnis Director and President Robert J. Hughes Director Matthew J. Rider Director Anita F. Woods Chief Financial Officer 5780 Powers Ferry Road Atlanta, GA 30327-4390 Beth G. Shanker Chief Compliance Officer 1290 Broadway Denver, CO 80203 Alyce L. Shaw Vice President 1290 Broadway Denver, CO 80203 James A. Shuchart Secretary and General Counsel (c) 2004 Net Name of Underwriting Compensation Principal Discounts and on Brokerage Underwriter Commissions Redemption Commissions Compensation - ----------- ------------ ------------- ----------- ------------ DSI $374,955,000 $0 $0 $0 ITEM 30: LOCATION OF ACCOUNTS AND RECORDS All accounts, books and other documents required to be maintained by Section 31(a) of the 1940 Act and the rules under it relating to the securities described in and issued under this Registration Statement are maintained by the Depositor and located at: 909 Locust Street, Des Moines, Iowa 50309, 1475 Dunwoody Drive, West Chester, PA 19380 and at 5780 Powers Ferry Road, N.W., Atlanta, GA 30327-4390. ITEM 31: MANAGEMENT SERVICES None. ITEM 32: UNDERTAKINGS (a) Registrant hereby undertakes to file a post-effective amendment to this registration statement as frequently as it is necessary to ensure that the audited financial statements in the registration statement are never more than 16 months old so long as payments under the variable annuity contracts may be accepted. (b) Registrant hereby undertakes to include either (1) as part of any application to purchase a contract offered by the prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a post card or similar written communication affixed to or included in the prospectus that the applicant can remove to send for a Statement of Additional Information; and, (c) Registrant hereby undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under this Form promptly upon written or oral request. REPRESENTATIONS 1. The account meets the definition of a "separate account" under federal securities laws. 2. ING USA Annuity and Life Insurance Company hereby represents that the fees and charges deducted under the Contract described in the Prospectus, in the aggregate, are reasonable in relation to the services rendered, the expenses to be incurred and the risks assumed by the Company. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment to its Registration Statement on Form N-4 and has caused this Post-Effective Amendment to be signed on its behalf in the City of West Chester and Commonwealth of Pennsylvania on the 26th day of October, 2005. SEPARATE ACCOUNT B (Registrant) By: ING USA ANNUITY AND LIFE INSURANCE COMPANY (Depositor) By: -------------------- Harry Stout* President (principle executive officer) By: /s/ Linda E. Senker ------------------- Linda E. Senker Counsel of Depositor As required by the Securities Act of 1933, this Post-Effective Amendment to Registration Statement has been signed by the following persons in the capacities indicated on October 26, 2005. Signature Title - --------- ----- President - -------------------- (principle executive officer) Harry Stout* - -------------------- Chief Accounting Officer Roger W. Fisher* DIRECTORS - ---------------------- Chief Financial Officer David A. Wheat* - -------------------- Jacques de Vaucleroy* - -------------------- Thomas J. McInerney* - -------------------- Kathleen A. Murphy* - -------------------- Catherine H. Smith* By: /s/ Linda E. Senker -------------------- Linda E. Senker Counsel of Depositor *Executed by Linda E. Senker on behalf of those indicated pursuant to Power of Attorney. EXHIBIT INDEX ITEM EXHIBIT PAGE # - ---- ------- ------ 9 Opinion and Consent of James A. Shuchart, Esq. EX-99.B9 10(a) Consent of Independent Registered Public Accounting Firm EX-99.B10A EX-99.B9 2 opinionltr.txt LEGAL OPINION ING JAMES A. SHUCHART Counsel October 26, 2005 Members of the Board of Directors ING USA Annuity and Life Insurance Company 1475 Dunwoody Drive West Chester, PA 19380-1478 Gentlemen: In my capacity as Counsel for ING USA Annuity and Life Insurance Company (the "Company"), I have examined the form of Registration Statement on Form N-4 to be filed by you with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of an indefinite number of units of interest in Separate Account B of the Company (the "Account"). I am familiar with the proceedings taken and proposed to be taken in connection with the authorization, issuance and sale of units. Based upon my examination and upon my knowledge of the corporate activities relating to the Account, it is my opinion that: (1) The Company was organized in accordance with the laws of the State of Iowa and is a duly authorized stock life insurance company under the laws of Iowa and the laws of those states in which the Company is admitted to do business; (2) The Account is a validly established separate investment account of the Company; (3) Under Iowa law, the portion of the assets to be held in the Account equals the reserve and other liabilities for variable benefits under variable annuity contracts to be issued by the Account, and such assets are not chargeable with liabilities arising out of any other business the Company conducts; (4) The units and the variable annuity contracts will, when issued and sold in the manner described in the registration statement, be legal and binding obligations of the Company and will be legally and validly issued, fully paid, and non-assessable. I hereby consent to the filing of this opinion as an exhibit to the registration statement and to the reference to my name under the heading "Legal Matters" in the prospectus contained in said registration statement. In giving this consent I do not thereby admit that I come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the Rules and Regulations of the Securities and Exchange Commission thereunder. Sincerely, /s/James A. Shuchart - -------------------- 1475 Dunwoody Drive Tel: 610-425-3563 West Chester, PA 19380-1478 Fax: 610-425-3520 EX-99.B10A 3 eyconsent.txt AUDITOR CONSENT EX-99.B10A - Consent of Ernst and Young LLP, Independent Registered Public Accounting Firm We consent to the reference to our firm under the captions "Experts" and "Independent Registered Public Accounting Firm" and to the use of our report dated March 18, 2005 with respect to the consolidated financial statements of ING USA Annuity and Life Insurance Company as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004, and to the use of our report dated March 15, 2005 with respect to the statement of assets and liabilities of Separate Account B of ING USA Annuity and Life Insurance Company as of December 31, 2004, and the related statement of operations for the year then ended, and the statements of changes in net assets for each of the two years in the period then ended, included and/or incorporated by reference into Post-Effective Amendment No. 25 (Form N-4 333-30180), and the related Prospectuses and Statements of Additional Information of Separate Account B of ING USA Annuity and Life Insurance Company. Our audits (to which the date of our report is March 18, 2005) also included the financial statement schedules of ING USA Annuity and Life Insurance Company included in item 24(a)(2). These schedules are the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedules referred to above, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. /s/ Ernst & Young LLP Atlanta, Georgia October 24, 2005 -----END PRIVACY-ENHANCED MESSAGE-----