Stagecoach Flex - Prudential Annuities

such guidelines may have on transfers between the investment options of the Annuity offered pursuant to this Prospectus. We willtake any action, including modifications to your Annuity or the Sub-accounts, required to comply with such guidelines if promulgated.Federal Income Tax Withholding: Section 3405 of the Code provides for Federal income tax withholding on the portion of adistribution which is includible in the gross income of the recipient. Amounts to be withheld depend upon the nature of thedistribution. However, under most circumstances a recipient may elect not to have income taxes withheld or have income taxeswithheld at a different rate by filing a completed election form with us.Certain distributions, known as eligible rollover distributions, from Qualified Contracts, are subject to automatic 20% withholding forFederal income taxes. The following distributions are not eligible rollover distributions and not subject to 20% withholding:• any portion of a distribution paid as a Minimum Distribution;• direct transfers to the trustee of another retirement plan;• distributions from an individual retirement account or individual retirement annuity;• distributions made as substantially equal periodic payments for the life or life expectancy of the participant in the retirement planor the life or life expectancy of such participant and his or her designated beneficiary under such plan;• distributions that are part of a series of substantial periodic payments pursuant to Section 72(q) or 72(t) of the Code; and• certain other distributions where automatic 20% withholding may not apply.Loans, Assignments and Pledges: Any amount received directly or indirectly as a loan from, or any assignment or pledge of anyportion of the value of, an annuity before annuity payments have begun is treated as a distribution subject to taxation under thedistribution rules set forth above. Any gain in an annuity on or after the assignment or pledge of an entire annuity and while suchassignment or pledge remains in effect is treated as "income on the contract" in the year in which it is earned. For annuities not issuedas Qualified Contracts, the cost basis of the annuity is increased by the amount of any assignment or pledge includible in grossincome. The cost basis is not affected by any repayment of any loan for which the annuity is collateral or by payment of any interestthereon.Gifts: The gift of an annuity to someone other than the spouse of the owner (or former spouse incident to a divorce) is treated, forincome tax purposes, as a distribution.Estate and Gift Tax Considerations: You should obtain competent tax advice with respect to possible federal and state estate andgift tax consequences flowing from the ownership and transfer of annuities.Generation-Skipping Transfers: Under the Code certain taxes may be due when all or part of an annuity is transferred to, or a deathbenefit is paid to, an individual two or more generations younger than the contract holder. These generation-skipping transfersgenerally include those subject to federal estate or gift tax rules. There is an aggregate $1.1 million exemption from taxes for all suchtransfers. We may be required to determine whether a transaction is a direct skip as defined in the Code and the amount of theresulting tax. We will deduct from your Annuity or from any applicable payment treated as a direct skip any amount of tax we arerequired to pay.Considerations for Contingent Annuitants: There may be adverse tax consequences if a contingent annuitant succeeds an annuitantwhen the Annuity is owned by a trust that is neither tax exempt nor qualifies for preferred treatment under certain sections of theCode. In general, the Code is designed to prevent indefinite deferral of tax. Continuing the benefit of tax deferral by naming one ormore contingent annuitants when the Annuity is owned by a non-qualified trust might be deemed an attempt to extend the tax deferralfor an indefinite period. Therefore, adverse tax treatment may depend on the terms of the trust, who is named as contingent annuitant,as well as the particular facts and circumstances. You should consult your tax advisor before naming a contingent annuitant if youexpect to use an Annuity in such a fashion.GENERAL INFORMATIONContract described herein is no longer available for sale.HOW WILL I RECEIVE STATEMENTS AND REPORTS?We send any statements and reports required by applicable law or regulation to you at your last known address of record. You shouldtherefore give us prompt notice of any address change. We reserve the right, to the extent permitted by law and subject to your priorconsent, to provide any prospectus, prospectus supplements, confirmations, statements and reports required by applicable law orregulation to you through our Internet Website at http://www.americanskandia.com or any other electronic means, including diskettesor CD ROMs. We send a confirmation statement to you each time a transaction is made affecting Account Value, such as makingadditional Purchase Payments, transfers, exchanges or withdrawals. We also send quarterly statements detailing the activity affectingyour Annuity during the calendar quarter. We may confirm regularly scheduled transactions, such as the Annual Maintenance Fee,systematic withdrawals (including 72(t) payments and required minimum distributions), bank drafting, dollar cost averaging, andstatic rebalancing, in quarterly statements instead of confirming them immediately. You should review the information in thesestatements carefully. You may request additional reports. We reserve the right to charge up to $50 for each such additional report.39