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. 4 (File No. 333-00519) [X]
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 8 (File No. 811-07511) [X]
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(Check appropriate box or boxes)
ACL VARIABLE ANNUITY ACCOUNT 2
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(Exact Name of Registrant)
American Centurion Life Assurance Company
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(Name of Depositor)
20 Madison Avenue Extension, P.O. Box 5555, Albany NY 12205-0555
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(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (612) 671-7981
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Mary Ellyn Minenko, IDS Tower 10, Minneapolis, MN 55440-0010
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[x] on April 30, 1999 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.
<PAGE>
<PAGE>
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PROSPECTUS
APRIL 30, 1999
ACL PERSONAL PORTFOLIO PLUS(2)/ACL PERSONAL PORTFOLIO-SM-
Individual flexible premium deferred combination fixed/variable annuity.
ACL VARIABLE ANNUITY ACCOUNT 2
Issued by: American Centurion Life Assurance Company
20 Madison Avenue Extension
P.O. Box 5555
Albany, NY 12205-0555
Telephone: 800-504-0469
This prospectus contains information that you should know before investing. You
also will receive the following prospectuses:
For ACL PERSONAL PORTFOLIO PLUS(2):
- -AIM Variable Insurance Funds, Inc.;
- -American Century Variable Portfolios, Inc.;
- -IDS Life Retirement Annuity Mutual Funds;
- -Janus Aspen Series;
- -OCC Accumulation Trust;
- -Oppenheimer Variable Account Funds; and
- -Putnam Variable Trust
For ACL PERSONAL PORTFOLIO-SM-:
- -GT Global Variable Investment Series;
- -IDS Life Retirement Annuity Mutual Funds;
- -OCC Accumulation Trust; and
- -Putnam Variable Trust
Please read the prospectuses carefully and keep them for future reference. This
contract is available for qualified and nonqualified retirement plans.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
AN INVESTMENT IN THIS CONTRACT IS NOT A DEPOSIT OF A BANK OR FINANCIAL
INSTITUTION AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THIS CONTRACT
INVOLVES INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
A Statement of Additional Information (SAI), dated the same date as this
prospectus, is incorporated by reference into this prospectus. It is filed with
the Securities and Exchange Commission (SEC), and is available without charge by
contacting American Centurion Life at the telephone number above or by
completing and sending the order form on the last page of this prospectus. The
table of contents of the SAI is on the last page of this prospectus.
1
<PAGE>
TABLE OF CONTENTS
KEY TERMS 3
THE CONTRACT IN BRIEF 4
EXPENSE SUMMARY 6
CONDENSED FINANCIAL INFORMATION (UNAUDITED) 10
FINANCIAL STATEMENTS 16
PERFORMANCE INFORMATION 16
THE VARIABLE ACCOUNT 18
THE FUNDS 20
THE FIXED ACCOUNT 24
BUYING YOUR CONTRACT 25
CHARGES 27
VALUING YOUR INVESTMENT 30
MAKING THE MOST OF YOUR CONTRACT 32
WITHDRAWALS 36
CHANGING OWNERSHIP 37
BENEFITS IN CASE OF DEATH 38
THE ANNUITY PAYOUT PERIOD 40
TAXES 42
VOTING RIGHTS 44
SUBSTITUTION OF INVESTMENTS 45
ABOUT THE SERVICE PROVIDERS 46
YEAR 2000 47
TABLE OF CONTENTS OF THE STATEMENT OF
ADDITIONAL INFORMATION 48
2
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KEY TERMS
These terms can help you understand details about your contract.
ACCUMULATION
UNIT A measure of the value of each variable subaccount before annuity
payouts begin.
ANNUITANT The person on whose life or life expectancy the annuity payouts are
based.
ANNUITY PAYOUTS
An amount paid at regular intervals under one of several plans.
BENEFICIARY The person you designate to receive benefits in case of the owner's
or annuitant's death while the contract is in force and before
annuity payouts begin.
CLOSE OF BUSINESS
When the New York Stock Exchange (NYSE) closes, normally 4 p.m.
Eastern time.
CONTRACT VALUE
The total value of your contract before we deduct any applicable
charges.
CONTRACT
YEAR A period of 12 months, starting on the effective date of your
contract and on each anniversary of the effective date.
FIXED
ACCOUNT An account to which you may allocate purchase payments. Amounts you
allocate to this account earn interest at rates that we declare
periodically.
FUNDS Mutual funds and/or portfolios that are investment options under
your contract, each with a different investment objective. You may
allocate your purchase payments into variable subaccounts investing
in shares of any or all of these funds.
OWNER (YOU, YOUR)
The person who controls the contract (decides on investment
allocations, transfers, payout options, etc.). Usually, but not
always, the owner is also the annuitant. The owner is responsible
for taxes, regardless of whether he or she controls the contract.
QUALIFIED ANNUITY
A contract that you purchase for one of the following retirement
plans that is subject to applicable federal law and any rules of
the plan itself:
- Individual Retirement Annuities (IRAs)
- Roth IRAs
- Simplified Employee Pension (SEP) plans
All other contracts are considered NONQUALIFIED ANNUITIES.
RETIREMENT DATE
The date when annuity payouts are scheduled to begin.
VALUATION DATE
Any normal business day, Monday through Friday, that the NYSE is
open. Each valuation date ends at the close of business. We
calculate the value of each subaccount at the close of business on
each valuation date.
VARIABLE ACCOUNT
Consists of separate subaccounts to which you may allocate purchase
payments; each invests in shares of one fund. The value of your
investment in each subaccount changes with the performance of the
particular fund.
WITHDRAWAL VALUE
The amount you are entitled to receive if you make a full
withdrawal from your contract. It is the contract value minus any
applicable charges.
3
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THE CONTRACT IN BRIEF
PURPOSE: The purpose of the contract is to allow you to accumulate money for
retirement. You do this by making one or more investments (purchase payments)
that may earn returns that increase the value of the contract. The contract
provides lifetime or other forms of payouts beginning at a specified date (the
retirement date). As in the case of other annuities, it may not be advantageous
for you to purchase this contract as a replacement for, or in addition to an
existing annuity.
FREE LOOK PERIOD: You may return your contract to your agent or to our office
within 10 days after it is delivered to you and receive a full refund of all
your purchase payments.
ACCOUNTS: Currently, you may allocate your purchase payments among any or all
of:
- the subaccounts, each of which invests in a fund with a particular
investment objective. The value of each subaccount varies with the
performance of the particular fund in which it invests. We cannot
guarantee that the value at the retirement date will equal or exceed
the total purchase payments you allocate to the subaccounts. (p. 18)
- the fixed account, which earns interest at a rate that we adjust
periodically. (p. 24)
BUYING YOUR CONTRACT: Your agent will help you complete and submit an
application. Applications are subject to acceptance at our office. You may buy a
nonqualified annuity or a qualified annuity. You must make an initial lump-sum
purchase payment. You have the option of making additional purchase payments in
the future. (p. 26)
- Minimum initial purchase payment -- $2,000 (without prior approval)
- Minimum additional purchase payment -- $50
- Maximum total purchase payments -- $1,000,000 (without prior
approval)
TRANSFERS: Subject to certain restrictions you currently may redistribute your
money among the subaccounts and the fixed account without charge at any time
until annuity payouts begin, and once per contract year among the subaccounts
after annuity payouts begin. You may establish automated transfers among the
fixed account and subaccounts. Fixed account transfers are subject to special
restrictions. (p. 33)
WITHDRAWALS: You may withdraw all or part of your contract value at any time
before the retirement date. You also may establish automated partial
withdrawals. Withdrawals may be subject to charges and tax penalties (including
a 10% IRS penalty if withdrawals are made prior to your reaching age 59 1/2) and
may have other tax consequences; also, certain restrictions apply. (p. 34)
CHANGING OWNERSHIP: You may change ownership of a nonqualified annuity by
written instruction, but this may have federal income tax consequences.
Restrictions apply to changing ownership of a qualified annuity. (p. 37)
BENEFITS IN CASE OF DEATH: If you or the annuitant die before annuity payouts
begin, we will pay the beneficiary an amount at least equal to the contract
value. (p. 38)
ANNUITY PAYOUTS: You can apply your contract value to an annuity payout plan
that begins on the retirement date. You may choose from a variety of plans to
make sure that payouts continue as long as you like. If you purchased a
qualified annuity, the payout schedule must meet the requirements of the
qualified plan. We can make payouts on a fixed or variable basis, or both. Total
monthly payouts may include amounts from each subaccount and the fixed account.
(p. 40)
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<PAGE>
TAXES: Generally, your contract grows tax-deferred until you make withdrawals
from it or begin to receive payouts. (Under certain circumstances, IRS penalty
taxes may apply.) Even if you direct payouts to someone else, you will be taxed
on the income if you are the owner. Roth IRAs, however, may grow and be
distributed tax-free, if you meet certain distribution requirements. (p. 42)
CHARGES:
- $30 annual contract administrative charge;
- 0.15% variable account administrative charge;
- 1.25% mortality and expense risk fee;
- withdrawal charge; and
- the operating expenses of the funds.
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EXPENSE SUMMARY
The purpose of this table is to help you understand the various costs and
expenses associated with your contract.
You pay no sales charge when you purchase your contract. We show all costs that
you bear directly or indirectly for the subaccounts and funds below. Some
expenses may vary as we explained under "Charges."
ANNUAL CONTRACT OWNER EXPENSES:
WITHDRAWAL CHARGE (contingent deferred sales charge as a percentage of
purchase payment)
<TABLE>
<CAPTION>
CONTRACT YEARS FROM WITHDRAWAL CHARGE
PAYMENT RECEIPT PERCENTAGE
<S> <C>
1 7%
2 6
3 5
4 4
5 3
6 2
7 1
Thereafter 0
</TABLE>
CONTRACT ADMINISTRATIVE CHARGE $30
ANNUAL SUBACCOUNT EXPENSES
(as a percentage of average daily net assets of the subaccounts):
VARIABLE ACCOUNT ADMINISTRATIVE CHARGE 0.15%
MORTALITY AND EXPENSE RISK FEE 1.25%
TOTAL ANNUAL SUBACCOUNT EXPENSES 1.40%
ANNUAL OPERATING EXPENSES OF THE FUNDS
(as a percentage of average daily net assets):
<TABLE>
<CAPTION>
GT GLOBAL GT GLOBAL
AIM V.I AIM V.I AMERICAN VARIABLE LATIN VARIABLE NEW
GROWTH AND INTERNATIONAL AIM V.I CENTURY VP AMERICAN AMERICA FUND PACIFIC FUND IDS LIFE
INCOME EQUITY VALUE INCOME AND CENTURY VP (AFTER EXPENSE (AFTER EXPENSE AGGRESSIVE
FUND FUND FUND GROWTH VALUE REIMBURSEMENT) REIMBURSEMENT) GROWTH
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Management
fees .61% .75% .61% .70% 1.00% 1.00% 1.00% .59%
12b-1 fees -- -- -- -- -- -- -- --
Other expenses .04 .16 .05 -- -- .39 .28 .09
Total .65%(1) .91%(1) .66%(1) .70%(1) 1.00%(1) 1.39%(6) 1.28%(6) .68%(2)
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
JANUS ASPEN
JANUS ASPEN SERIES
SERIES WORLDWIDE
IDS LIFE IDS LIFE IDS LIFE IDS LIFE BALANCED GROWTH
CAPITAL GROWTH INTERNATIONAL IDS LIFE IDS LIFE SPECIAL (AFTER FEE (AFTER FEE
RESOURCE DIMENSION EQUITY MANAGED MONEYSHARE INCOME REDUCTIONS) REDUCTIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Management
fees .59% .61% .83% .59% .50% .60% .72% .65%
12b-1 fees -- -- -- -- -- -- -- --
Other expenses .07 .06 .15 .04 .06 .07 .02 .07
Total .66%(2) .67%(2) .98%(2) .63%(2) .56%(2) .67%(2) .74%(4) .72%(4)
</TABLE>
<TABLE>
<CAPTION>
OCC OCC OCC
OCC ACCUMULATION ACCUMULATION ACCUMULATION
ACCUMULATION TRUST TRUST SMALL TRUST U.S. PUTNAM VT PUTNAM VT
TRUST EQUITY MANAGED CAP GOV- OPPENHEIMER DIVERSIFIED DIVERSIFIED
(AFTER (AFTER (AFTER ERNMENT INCOME CAPITAL OPPENHEIMER INCOME INCOME
EXPENSE EXPENSE EXPENSE (AFTER EXPENSE APPRECIATION HIGH INCOME FUND -- FUND --
LIMITATIONS) LIMITATIONS) LIMITATIONS) LIMITATIONS) FUND/VA FUND/VA CLASS IA CLASS IB
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Management
fees .80% .78% .80% .60% .72% .74% .67% .67%
12b-1 fees -- -- -- -- -- -- -- .15
Other
expenses .14 .04 .08 .40 .03 .04 .11 .11
Total .94%(3) .82%(3) .88%(3) 1.00%(3) .75%(1) .78%(1) .78%(1) .93%(5)
</TABLE>
<TABLE>
<CAPTION>
PUTNAM VT PUTNAM VT PUTNAM VT
GROWTH AND GROWTH AND PUTNAM VT PUTNAM VT NEW PUTNAM VT
INCOME INCOME HIGH YIELD HIGH YIELD OPPORTUNITIES VOYAGER
FUND -- FUND -- FUND -- FUND -- FUND -- FUND --
CLASS IA CLASS IB CLASS IA CLASS IB CLASS IA CLASS IB
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Management
fees .46% .46% .64% .64% .56% .54%
12b-1 fees -- .15 -- .15 -- .15
Other expenses .04 .04 .07 .07 .05 .04
Total .50%(1) .65%(5) .71%(1) .86%(5) .61%(1) .73%(5)
</TABLE>
(1) Operating expenses of the underlying funds at Dec. 31, 1998.
(2) Annualized operating expenses of underlying mutual funds at Dec. 31, 1998.
(3) Total Portfolio Expenses of the OCC Accumulation Trust Portfolios are
limited by OpCap Advisors so that their respective annualized operating
expenses (net of any expense offsets) do not exceed 1.00% of average daily
net assets for the Equity, Managed, Small Cap and U.S. Government Income
Portfolios. Without such limitation and without giving effect to any
expense offsets, the Management Fees, Other expenses and Total Portfolio
Expenses for U.S. Government Income Portfolio would have been: .60%, .60%,
and 1.20%, respectively.
(4) The figures given above are based on gross expenses before expense offset
arrangements, for the year ended Dec. 31, 1998, for these funds. As of the
date of this prospectus, certain fees are being reduced by the respective
investment managers or service providers for certain of the underlying
funds, in each case on a voluntary basis. Without such reductions, the
"Management fees", "Other expenses" and "Total" that would have been
incurred for the last completed fiscal year would be: 0.72%, 0.02%, and
0.74%, respectively, for Janus Aspen Series Balanced Portfolio, and 0.67%,
0.07% and 0.74%, respectively for Janus Aspen Series Worldwide Growth
Portfolio. See the Portfolio' prospectus for a discussion of fee
reductions.
(5) Based on estimated expenses.
(6) Figures in the "Other Expenses" and "Total" columns are restated from the
amounts you would have incurred in 1998 to reflect fees and reimbursement
or waiver arrangements. If there had been no reimbursement of expenses by
A I M Advisors, Inc. and no expense reductions, the actual expenses of each
fund, expressed as a percentage of net assets, with "Management fees"stated
first, the "Other expenses" followed by "Total," would have been as
follows: GT Global Variable Latin America Fund, 1.00%, 0.66%, 1.66%, and GT
Global Variable New Pacific Fund, 1.00%, 0.78%, 1.75%.
7
<PAGE>
EXPENSE SUMMARY
EXAMPLE:*
<TABLE>
<CAPTION>
AIM V.I AIM V.I AMERICAN
GROWTH AND INTERNATIONAL AIM V.I CENTURY VP AMERICAN GT GLOBAL GT GLOBAL IDS LIFE
INCOME EQUITY VALUE INCOME AND CENTURY VP VARIABLE LATIN VARIABLE NEW AGGRESSIVE
FUND FUND FUND GROWTH VALUE AMERICA FUND PACIFIC FUND GROWTH
<S> <C> <C> <C> <C> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming 5% annual return and full withdrawal
at the end of each time period.
1 Year $ 92.31 $ 94.98 $ 92.42 $ 92.83 $ 95.90 $ 98.46 $ 98.26 $ 92.62
3 Years 118.81 126.83 119.12 120.36 129.59 137.24 136.63 119.74
5 Years 147.92 161.30 148.44 150.51 165.90 178.58 177.58 149.47
10 Years 253.10 279.88 254.14 258.30 288.99 313.87 311.90 256.22
You would pay the following expenses on the same investment assuming no withdrawal or selection of an
annuity payout plan at the end of each time period:
1 Year $ 22.31 $ 24.98 $ 22.42 $ 22.83 $ 25.90 $ 28.46 $ 28.26 $ 22.62
3 Years 68.81 76.83 69.12 70.36 79.59 87.24 86.63 69.74
5 Years 117.92 131.30 118.44 120.51 135.90 148.58 147.58 119.47
10 Years 253.10 279.88 254.14 258.30 288.99 313.87 311.90 256.22
</TABLE>
<TABLE>
<CAPTION>
JANUS ASPEN
IDS LIFE IDS LIFE IDS LIFE IDS LIFE JANUS ASPEN SERIES
CAPITAL GROWTH INTERNATIONAL IDS LIFE IDS LIFE SPECIAL SERIES WORLDWIDE
RESOURCE DIMENSION EQUITY MANAGED MONEYSHARE INCOME BALANCED GROWTH
<S> <C> <C> <C> <C> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming 5% annual return and full
withdrawal at the end of each time period:
1 Year $ 92.42 $ 92.52 $ 95.70 $ 92.11 $ 91.39 $ 92.52 $ 93.24 $ 93.03
3 Years 119.12 119.43 128.98 118.19 116.03 119.43 121.59 120.98
5 Years 148.44 148.96 164.88 146.89 143.26 148.96 152.57 151.54
10 Years 254.14 255.18 286.97 251.01 243.67 255.18 262.45 260.38
You would pay the following expenses on the same investment assuming no withdrawal or selection of
an annuity payout plan at the end of each time period:
1 Year $ 22.42 $ 22.52 $ 25.70 $ 22.11 $ 21.39 $ 22.52 $ 23.24 $ 23.03
3 Years 69.12 69.43 78.98 68.19 66.03 69.43 71.59 70.98
5 Years 118.44 118.96 134.88 116.89 113.26 118.96 122.57 121.54
10 Years 254.14 255.18 286.97 251.01 243.67 255.18 262.45 260.38
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
PUTNAM VT PUTNAM VT
OCC OCC OCC OPPENHEIMER DIVERSIFIED DIVERSIFIED
ACCUMULATION OCC ACCUMULATION ACCUMULATION CAPITAL OPPENHEIMER INCOME INCOME
TRUST ACCUMULATION TRUST SMALL TRUST U.S. GOV- APPRECIATION HIGH INCOME FUND -- FUND --
EQUITY TRUST MANAGED CAP ERNMENT INCOME FUND/VA FUND/VA CLASS IA CLASS IB
<S> <C> <C> <C> <C> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming 5% annual return and full withdrawal at the
end of each time period:
1 Year $ 95.29 $ 94.06 $ 94.67 $ 95.90 $ 93.34 $ 93.65 $ 93.65 $ 95.18
3 Years 127.75 124.06 125.91 129.59 121.90 122.83 122.83 127.44
5 Years 162.84 156.69 159.77 165.90 153.09 154.63 154.63 162.33
10 Years 282.92 270.69 276.82 288.99 263.48 266.57 266.57 281.91
You would pay the following expenses on the same investment assuming no withdrawal or selection of an annuity payout
plan at the end of each time period:
1 Year $ 25.29 $ 24.06 $ 24.67 $ 25.90 $ 23.34 $ 23.65 $ 23.65 $ 25.18
3 Years 77.75 74.06 75.91 79.59 71.90 72.83 72.83 77.44
5 Years 132.84 126.69 129.77 135.90 123.09 124.63 124.63 132.33
10 Years 282.92 270.69 276.82 288.99 263.48 266.57 266.57 281.91
</TABLE>
<TABLE>
<CAPTION>
PUTNAM VT PUTNAM VT PUTNAM VT
GROWTH AND GROWTH AND PUTNAM VT PUTNAM VT NEW PUTNAM VT
INCOME INCOME HIGH YIELD HIGH YIELD OPPORTUNITIES VOYAGER
FUND -- FUND -- FUND -- FUND -- FUND -- FUND --
CLASS IA CLASS IB CLASS IA CLASS IB CLASS IA CLASS IB
<S> <C> <C> <C> <C> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming 5% annual return and full withdrawal at the
end of each time period:
1 Year $ 90.78 $ 92.31 $ 92.93 $ 94.47 $ 91.90 $ 93.13
3 Years 114.17 118.81 120.67 125.29 117.58 121.28
5 Years 140.14 147.92 151.02 158.74 145.85 152.06
10 Years 237.33 253.10 259.34 274.78 248.92 261.41
You would pay the following expenses on the same investment assuming no withdrawal or selection of an annuity
payout plan at the end of each time period:
1 Year $ 20.78 $ 22.31 $ 22.93 $ 24.47 $ 21.90 $ 23.13
3 Years 64.17 68.81 70.67 75.29 67.58 71.28
5 Years 110.14 117.92 121.02 128.74 115.85 122.06
10 Years 237.33 253.10 259.34 274.78 248.92 261.41
</TABLE>
* In this example, the $30 annual contract administrative charge is approximated
as a 0.127% charge based on our average contract size. We entered into certain
arrangements under which we are compensated by the funds' advisers and/or
distributors for the administrative services we provide to the funds.
YOU SHOULD NOT CONSIDER THIS EXAMPLE AS A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
9
<PAGE>
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CONDENSED FINANCIAL INFORMATION (UNAUDITED)
The following tables give per-unit information about the financial
history of each subaccount.
YEAR ENDED DEC. 31,
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
SUBACCOUNT IGN(3) (INVESTING IN SHARES OF AIM V.I. GROWTH AND INCOME FUND)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.15 --
Number of accumulation units outstanding at end of period (000 omitted) 6 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IIN(3) (INVESTING IN SHARES OF AIM V.I. INTERNATIONAL EQUITY
FUND)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.04 --
Number of accumulation units outstanding at end of period (000 omitted) 4 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IVA(3) (INVESTING IN SHARES OF AIM V.I. VALUE FUND)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.16 --
Number of accumulation units outstanding at end of period (000 omitted) 8 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IIG(3) (INVESTING IN SHARES OF AMERICAN CENTURY VP INCOME AND
GROWTH FUND)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.10 --
Number of accumulation units outstanding at end of period (000 omitted) 8 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IVL(3) (INVESTING IN SHARES OF AMERICAN CENTURY VP VALUE FUND)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.00 --
Number of accumulation units outstanding at end of period (000 omitted) 3 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT ILA(2) (INVESTING IN SHARES OF GT GLOBAL VARIABLE LATIN AMERICA
FUND)
Accumulation unit value at beginning of period $1.11 $ 1.00
Accumulation unit value at end of period $0.64 $ 1.11
Number of accumulation units outstanding at end of period (000 omitted) 71 --
Ratio of operating expense to average net assets 1.40% --
</TABLE>
10
<PAGE>
YEAR ENDED DEC. 31,
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
SUBACCOUNT IPA(2) (INVESTING IN SHARES OF GT GLOBAL VARIABLE NEW PACIFIC
FUND)
Accumulation unit value at beginning of period $0.97 $ 1.00
Accumulation unit value at end of period $0.82 $ 0.97
Number of accumulation units outstanding at end of period (000 omitted) 80 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IAG(1) (INVESTING IN SHARES OF IDS LIFE AGGRESSIVE GROWTH FUND)
Accumulation unit value at beginning of period $0.92 $ 1.00
Accumulation unit value at end of period $0.93 $ 0.92
Number of accumulation units outstanding at end of period (000 omitted) 269 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT ICR(1) (INVESTING IN SHARES OF IDS LIFE CAPITAL RESOURCE FUND)
Accumulation unit value at beginning of period $1.01 $ 1.00
Accumulation unit value at end of period $1.24 $ 1.01
Number of accumulation units outstanding at end of period (000 omitted) 753 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IGD(3) (INVESTING IN SHARES OF IDS LIFE GROWTH DIMENSION FUND)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.15 --
Number of accumulation units outstanding at end of period (000 omitted) 4 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IIE(1) (INVESTING IN SHARES OF IDS LIFE INTERNATIONAL EQUITY
FUND)
Accumulation unit value at beginning of period $0.97 $ 1.00
Accumulation unit value at end of period $1.11 $ 0.97
Number of accumulation units outstanding at end of period (000 omitted) 56 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IMG(1) (INVESTING IN SHARES OF IDS LIFE MANAGED FUND, INC.)
Accumulation unit value at beginning of period $0.97 $ 1.00
Accumulation unit value at end of period $1.07 $ 0.97
Number of accumulation units outstanding at end of period (000 omitted) 1,650 --
Ratio of operating expense to average net assets 1.40% --
</TABLE>
11
<PAGE>
CONDENSED FINANCIAL INFORMATION (UNAUDITED)
YEAR ENDED DEC. 31,
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
SUBACCOUNT IMS(1) (INVESTING IN SHARES OF IDS LIFE MONEYSHARE FUND, INC.)
Accumulation unit value at beginning $1.00 $ 1.00
Accumulation unit value at end of period $1.01 $ 1.00
Number of accumulation units outstanding at end of period (000 omitted) 13 --
Ratio of operating expense to average net assets 1.40% --
Simple yield(4) 3.29% --
Compound yield(4) 3.34% --
SUBACCOUNT ISI(1) (INVESTING IN SHARES OF IDS LIFE SPECIAL INCOME FUND)
Accumulation unit value at beginning of period $0.97 $ 1.00
Accumulation unit value at end of period $0.97 $ 0.97
Number of accumulation units outstanding at end of period (000 omitted) 566 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT ISB(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES BALANCED
PORTFOLIO)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.15 --
Number of accumulation units outstanding at end of period (000 omitted) 37 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IWG(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES WORLDWIDE
GROWTH PORTFOLIO)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.12 --
Number of accumulation units outstanding at end of period (000 omitted) 11 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IEQ(3) (INVESTING IN SHARES OF OCC ACCUMULATION TRUST EQUITY
PORTFOLIO)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.03 --
Number of accumulation units outstanding at end of period (000 omitted) 3 --
Ratio of operating expense to average net assets 1.40% --
</TABLE>
12
<PAGE>
YEAR ENDED DEC. 31,
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
SUBACCOUNT IMD(2) (INVESTING IN SHARES OF OCC ACCUMULATION TRUST MANAGED
PORTFOLIO)
Accumulation unit value at beginning of period $1.03 $ 1.00
Accumulation unit value at end of period $1.09 $ 1.03
Number of accumulation units outstanding at end of period (000 omitted) 1,274 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT ISC(3) (INVESTING IN SHARES OF OCC ACCUMULATION TRUST SMALL CAP
PORTFOLIO)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.02 --
Number of accumulation units outstanding at end of period (000 omitted) 8 --
Ratio of operating expenses to average net assets 1.40% --
SUBACCOUNT IUS(1) (INVESTING IN SHARES OF OCC ACCUMULATION TRUST U.S. GOVERNMENT INCOME
PORTFOLIO)
Accumulation unit value at beginning of period $1.01 $ 1.00
Accumulation unit value at end of period $1.08 $ 1.01
Number of accumulation units outstanding at end of period (000 omitted) 1,042 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IGR(3) (INVESTING IN SHARES OF OPPENHEIMER CAPITAL APPRECIATION
FUND/VA)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.14 --
Number of accumulation units outstanding at end of period (000 omitted) 12 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IHI(3) (INVESTING IN SHARES OF OPPENHEIMER HIGH INCOME FUND/VA)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.04 --
Number of accumulation units outstanding at end of period (000 omitted) 6 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IDI(2) (INVESTING IN SHARES OF PUTNAM VT DIVERSIFIED INCOME
FUND--CLASS IA SHARES)
Accumulation unit value at beginning of period $1.01 $ 1.00
Accumulation unit value at end of period $0.99 $ 1.01
Number of accumulation units outstanding at end of period (000 omitted) 662 --
Ratio of operating expense to average net assets 1.40% --
</TABLE>
13
<PAGE>
CONDENSED FINANCIAL INFORMATION (UNAUDITED)
YEAR ENDED DEC. 31,
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
SUBACCOUNT IPD(3) (INVESTING IN SHARES OF PUTNAM VT DIVERSIFIED INCOME
FUND--CLASS IB SHARES)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.02 --
Number of accumulation units outstanding at end of period (000 omitted) 14 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IGI(2) (INVESTING IN SHARES OF PUTNAM VT GROWTH AND INCOME
FUND--CLASS IA SHARES)
Accumulation unit value at beginning of period $1.07 $ 1.00
Accumulation unit value at end of period $1.21 $ 1.07
Number of accumulation units outstanding at end of period (000 omitted) 1,538 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IPG(3) (INVESTING IN SHARES OF PUTNAM VT GROWTH AND INCOME
FUND--CLASS IB SHARES)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.06 --
Number of accumulation units outstanding at end of period (000 omitted) 17 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IHY(2) (INVESTING IN SHARES OF PUTNAM VT HIGH YIELD FUND--CLASS
IA SHARES)
Accumulation unit value at beginning of period $1.02 $ 1.00
Accumulation unit value at end of period $0.94 $ 1.02
Number of accumulation units outstanding at end of period (000 omitted) 1,150 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT IPH(3) (INVESTING IN SHARES OF PUTNAM VT HIGH YIELD FUND--CLASS
IB SHARES)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.04 --
Number of accumulation units outstanding at end of period (000 omitted) 14 --
Ratio of operating expense to average net assets 1.40% --
SUBACCOUNT INO(2) (INVESTING IN SHARES OF PUTNAM VT NEW OPPORTUNITIES
FUND--CLASS IA SHARES)
Accumulation unit value at beginning of period $1.05 $ 1.00
Accumulation unit value at end of period $1.29 $ 1.05
Number of accumulation units outstanding at end of period (000 omitted) 411 --
Ratio of operating expense to average net assets 1.40% --
</TABLE>
14
<PAGE>
YEAR ENDED DEC. 31,
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
SUBACCOUNT IPV(3) (INVESTING IN SHARES OF PUTNAM VT VOYAGER FUND--CLASS IB
SHARES)
Accumulation unit value at beginning of period $1.00 --
Accumulation unit value at end of period $1.17 --
Number of accumulation units outstanding at end of period (000 omitted) 14 --
Ratio of operating expense to average net assets 1.40% --
</TABLE>
(1) Operations commenced on Oct. 24, 1997. These Subaccounts had no activity in
1997.
(2) Operations commenced on Oct. 27, 1997. These Subaccounts had no activity in
1997.
(3) Operations commenced on Nov. 4, 1998.
(4) Net of annual contract administrative charge and mortality and expense risk
fee.
15
<PAGE>
- -------------------------------
FINANCIAL STATEMENTS
You can find our audited financial statements and the audited financial
statements of the subaccounts in the SAI.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
Performance information for the subaccounts may appear from time to time in
advertisements or sales literature. This information reflects the performance of
a hypothetical investment in a particular subaccount during a specified time
period. We show actual performance from the date the subaccounts began investing
in funds. We also show performance from the commencement date of the funds as if
the contract existed at that time. Although we base performance figures on
historical earnings, past performance does not guarantee future results.
We include non-recurring charges (such as withdrawal charges) in total return
figures, but not in yield quotations. Excluding non-recurring charges in yield
calculations increases the reported value.
Total return figures reflect deduction of all applicable charges, including:
- -the contract administrative charge,
- -variable account administrative charge,
- -mortality and expense risk fee, and
- -withdrawal charge (assuming a full withdrawal at the end of the illustrated
period).
We also may make optional total return quotations that do not reflect a
withdrawal charge deduction (assuming no withdrawal). Total return quotations
may be shown by means of schedules, charts or graphs.
AVERAGE ANNUAL TOTAL RETURN is the average annual compounded rate of return of
the investment over a period of one, five and 10 years (or up to the life of the
variable subaccount if it is less than ten years old).
CUMULATIVE TOTAL RETURN is the cumulative change in the value of an investment
over a specified time period. We assume that income earned by the investment is
reinvested. Cumulative total return will be higher than average annual total
return because it is not averaged.
ANNUALIZED SIMPLE YIELD (FOR SUBACCOUNTS INVESTING IN MONEY MARKET FUNDS)
"annualizes" the income generated by the investment over a given seven-day
period. That is, we assume the amount of income generated by the investment
during the period will be generated each seven-day period for a year. We show
this as a percentage of the investment.
ANNUALIZED COMPOUND YIELD (FOR SUBACCOUNTS INVESTING IN MONEY MARKET FUNDS) is
calculated like simple yield except that we assume the income is reinvested when
we annualize it. Compound yield will be higher than the simple yield because of
the compounding effect of the assumed reinvestment.
16
<PAGE>
ANNUALIZED YIELD (FOR SUBACCOUNTS INVESTING IN INCOME FUNDS) divides the net
investment income (income less expenses) for each accumulation unit during a
given 30-day period by the value of the unit on the last day of the period. We
then convert the result to an annual percentage.
You should consider performance information in light of the investment
objectives, policies, characteristics and quality of the fund in which the
subaccount invests and the market conditions during the specified time period.
Advertised yields and total return figures include charges that reduce
advertised performance. Therefore, you should not compare subaccount performance
to that of mutual funds that sell their shares directly to the public. (See the
SAI for a further description of methods used to determine total return and
yield.)
If you would like additional information about actual performance, please
contact us at the address or telephone number on the page 1 of this prospectus.
17
<PAGE>
- -------------------------------
THE VARIABLE ACCOUNT
You may allocate payments to any or all the subaccounts of the variable account
that invest in shares of the following funds:
<TABLE>
<CAPTION>
AVAILABLE UNDER CONTRACT
ACL PERSONAL
PORTFOLIO ACL PERSONAL
SUBACCOUNT INVESTING IN: PLUS(2) PORTFOLIO-SM-
<S> <C> <C> <C>
IGN AIM V.I. Growth and Income Fund Yes No
IIN AIM V.I. International Equity Fund Yes No
IVA AIM V.I. Value Fund Yes No
IIG American Century VP Income and Growth Yes No
IVL American Century VP Value Yes No
ILA GT Global Variable Latin America Fund No Yes
IPA GT Global Variable New Pacific Fund No Yes
IAG IDS Life Aggressive Growth Fund Yes Yes
ICR IDS Life Capital Resource Fund Yes Yes
IGD IDS Life Growth Dimensions Fund Yes No
IIE IDS Life International Equity Fund Yes Yes
IMG IDS Life Managed Fund Yes Yes
IMS IDS Life Moneyshare Fund Yes Yes
ISI IDS Life Special Income Fund Yes Yes
ISB Janus Aspen Series Balanced Portfolio Yes No
IWG Janus Aspen Series Worldwide Growth Portfolio Yes No
IEQ OCC Accumulation Trust Equity Portfolio Yes No
IMD OCC Accumulation Trust Managed Portfolio Yes Yes
ISC OCC Accumulation Trust Small Cap Portfolio Yes No
IUS OCC Accumulation Trust U.S. Government Income Portfolio Yes Yes
IGR Oppenheimer Capital Appreciation Fund/VA Yes No
IHI Oppenheimer High Income Fund/VA Yes No
IPD Putnam VT Diversified Income Fund -- Class IB Shares Yes No
IPG Putnam VT Growth and Income Fund -- Class IB Shares Yes No
IPH Putnam VT High Yield Fund -- Class IB Shares Yes No
IPV Putnam VT Voyager Fund -- Class IB Shares Yes No
IDI Putnam VT Diversified Income Fund -- Class IA Shares No Yes
IGI Putnam VT Growth and Income Fund -- Class IA Shares No Yes
IHY Putnam VT High Yield Fund -- Class IA Shares No Yes
INO Putnam VT New Opportunities Fund -- Class IA Shares No Yes
</TABLE>
18
<PAGE>
The variable account meets the definition of a separate account under federal
securities laws. We credit or charge income, capital gains and capital losses of
each subaccount only to that subaccount. State insurance law prohibits us from
charging a subaccount with liabilities of any other subaccount or of our general
business.
The U.S. Treasury and the Internal Revenue Service (IRS) indicated that they may
provide additional guidance on investment control. This concerns how many
variable subaccounts an insurance company may offer and how many exchanges among
subaccounts it may allow before the contract owner would be currently taxed on
income earned within subaccount assets. At this time, we do not know what the
additional guidance will be or when action will be taken. We reserve the right
to modify the contract, as necessary, so that the owner will not be subject to
current taxation as the owner of the subaccount assets.
We intend to comply with all federal tax laws so that each contract continues to
qualify as an annuity for federal income tax purposes. We reserve the right to
modify the contract as necessary to comply with any new tax laws.
The variable account was established under New York law on Oct. 12, 1995 and the
subaccounts are registered together as a single unit investment trust under the
Investment Company Act of 1940 (the 1940 Act). This registration does not
involve any supervision of our management or investment practices and policies
by the SEC. All obligations arising under the contracts are general obligations
of American Centurion Life.
19
<PAGE>
- -------------------------------
THE FUNDS
AIM V.I. GROWTH AND INCOME FUND
Objective: growth of capital with a secondary objective of current income.
Invests at least 65% of its net assets in income-producing securities, including
dividend-paying common stocks and convertible securities.
AIM V.I. INTERNATIONAL EQUITY FUND
Objective: long-term growth of capital. Invests in a diversified portfolio of
international equity securities whose issuers are considered to have strong
earnings momentum.
AIM V.I. VALUE FUND
Objective: long-term growth of capital. Invests primarily in equity securities
judged by the funds investment advisor to be undervalued relative to the
investment advisors appraisal of the current or projected earnings of the
companies issuing the securities, or relative to current market value of assets
owned by the companies issuing the securities or relative to the equity markets
generally. Income is a secondary objective.
AMERICAN CENTURY VP INCOME AND GROWTH
Objective: dividend growth, current income and capital appreciation. Invests
primarily in common stocks.
AMERICAN CENTURY VP VALUE
Objective: long-term capital growth, with income as a secondary objective.
Invests primarily in securities that management believes to be undervalued at
the time of purchase.
GT GLOBAL VARIABLE LATIN AMERICA FUND
Objective: capital appreciation. Invests at least 65% of its total assets in the
securities of a broad range of Latin American issuers.
GT GLOBAL VARIABLE NEW PACIFIC FUND
Objective: long-term growth of capital. Normally invests at least 65% of its
total assets in equity securities of issuers domiciled in Australia, Hong Kong,
India, Indonesia, Malaysia, New Zealand, Pakistan, the Philippines, Singapore,
South Korea, Taiwan and Thailand.
IDS LIFE AGGRESSIVE GROWTH FUND
Objective: capital appreciation. Invests primarily in common stocks of small-
and medium-size companies.
IDS LIFE CAPITAL RESOURCE FUND
Objective: capital appreciation. Invests primarily in U.S. common stocks.
IDS LIFE GROWTH DIMENSIONS FUND
Objective: long-term growth of capital. Invests primarily in common stocks of
U.S. and foreign companies showing potential for significant growth.
IDS LIFE INTERNATIONAL EQUITY FUND
Objective: capital appreciation. Invests primarily in common stock of foreign
issuers.
20
<PAGE>
IDS LIFE MANAGED FUND
Objective: maximum total investment return through a combination of capital
growth and current income. Invests primarily in stocks, convertible securities,
bonds and money market instruments.
IDS LIFE MONEYSHARE FUND
Objective: maximum current income consistent with liquidity and conservation of
capital. Invests in money market securities.
IDS LIFE SPECIAL INCOME FUND
Objective: high level of current income while conserving the value of the
investment for the longest time period. Invests primarily in investment-grade
bonds.
JANUS ASPEN SERIES BALANCED PORTFOLIO
Objective: long-term growth of capital, balanced by current income. The
Portfolio normally invests 40-60% of its assets in securities selected primarily
for their growth potential and 40-60% of its assets in securities selected
primarily for their income potential.
JANUS ASPEN SERIES WORLDWIDE GROWTH PORTFOLIO
Objective: long-term growth of capital in a manner consistent with the
preservation of capital. Invests primarily in common stocks of foreign and
domestic issuers.
OCC ACCUMULATION TRUST EQUITY PORTFOLIO
Objective: long term capital appreciation. Invests in a diversified portfolio of
equity securities selected on the basis of a value-oriented approach to
investing.
OCC ACCUMULATION TRUST MANAGED PORTFOLIO
Objective: growth of capital over time. Invests primarily in common stocks,
bonds and money market and cash equivalent securities, the percentages of which
will vary based on management's assessment of relative investment values.
OCC ACCUMULATION TRUST SMALL CAP PORTFOLIO
Objective: capital appreciation. Invests in a diversified portfolio of equity
securities of companies with market capitalizations of under $1 billion.
OCC ACCUMULATION TRUST U.S. GOVERNMENT INCOME PORTFOLIO
Objective: high level of current income together with protection of capital.
Invests exclusively in debt obligations, including mortgage-backed securities,
issued or guaranteed by the United States government, its agencies or
instrumentalities.
OPPENHEIMER CAPITAL APPRECIATION FUND/VA
Objective: capital appreciation. Invests in securities of well-known,
established companies.
OPPENHEIMER HIGH INCOME FUND/VA
Objective: high level of current income. Invests in high-yield, fixed-income
securities, including unrated securities or high-risk securities in the lower
rating categories, commonly known as "junk bonds". These securities are subject
to a greater risk of loss of principal and nonpayment of interest than
higher-rated securities.
21
<PAGE>
THE FUNDS
PUTNAM VT DIVERSIFIED INCOME FUND - CLASS IA AND IB SHARES
Objective: high current income consistent with capital preservation by investing
in the following three sectors of the fixed income securities markets: a U.S.
Government and Investment Grade Sector, a High Yield Sector (which invests
primarily in lower rated, higher risk securities commonly known as "junk
bonds"), and an International Sector. See the special considerations for
investments in high yield securities described in the fund prospectus.
PUTNAM VT GROWTH AND INCOME FUND - CLASS IA AND IB SHARES
Objective: capital growth and current income by investing primarily in common
stocks that offer potential for capital growth, current income or both.
PUTNAM VT HIGH YIELD FUND - CLASS IA AND IB SHARES
Objective: high current income and, when consistent with this objective, a
secondary objective of capital growth, by investing primarily in high-yielding,
lower-rated fixed income securities constituting a portfolio which Putnam
Investment Management, Inc. ("Putnam Management") believes does not involve
undue risk to income or principal. See the special considerations for
investments in high yield securities described in the fund prospectus.
PUTNAM VT NEW OPPORTUNITIES FUND - CLASS IA SHARES
Objective: long-term capital appreciation by investing principally in common
stocks of companies in sectors of the economy that Putnam Management believes
possess above average long-term growth potential.
PUTNAM VT VOYAGER FUND - CLASS IB SHARES
Objective: capital appreciation by investing primarily in common stocks of
companies that Putnam Management believes have potential for capital
appreciation that is significantly greater than that of market averages.
The investment objectives and policies of some of the funds are similar to the
investment objectives and policies of other mutual funds that the investment
advisor or its affiliates manage. Although the objectives and policies may be
similar, each fund will have its own portfolio holdings and its own fees and
expenses. Accordingly, each fund will have its own investment results.
All funds are available to serve as the underlying investments for variable
annuities. Some funds also are available to serve as investment options for
variable life insurance policies and qualified plans. It is possible that in the
future, it may be disadvantageous for variable annuity accounts and variable
life insurance accounts and/or qualified plans to invest in the available funds
simultaneously.
Although the insurance company and the funds do not currently foresee any such
disadvantages, the boards of directors or trustees of the appropriate funds will
monitor events in order to identify any material conflicts between annuity
owners, policy owners and qualified plans and to determine what action, if any,
should be taken in response to a conflict. If a board were to conclude that it
should establish separate funds for the variable annuity, variable life
insurance and qualified plan accounts, you would not bear any expenses
associated with establishing separate funds. Please refer to the fund
prospectuses for risk disclosure regarding simultaneous investments by variable
annuity, variable life insurance and qualified plan accounts.
22
<PAGE>
The IRS issued final regulations relating to the diversification requirements
under Section 817(h) of the Internal Revenue Code of 1986, as amended (the
Code). Each fund intends to comply with these requirements.
The investment advisors or managers for the funds are as follows:
- -AIM Variable Insurance Funds, Inc. -- A I M Advisors, Inc.
- -American Century Variable Portfolios, Inc. -- American Century Investment
Management, Inc.
- -GT Global Variable Investment Series -- A I M Advisors, Inc.
- -IDS Life Retirement Annuity Mutual Funds -- IDS Life. AEFC is the investment
advisor for the IDS Life Retirement Annuity Mutual Funds. American Express
Asset Management International, Inc., a wholly-owned subsidiary of AEFC, is the
sub-investment advisor for IDS Life International Equity Fund.
- -Janus Aspen Series Portfolios -- Janus Capital Corporation.
- -OCC Accumulation Trust Portfolios -- OpCap Advisors.
- -Oppenheimer Variable Account Funds -- OppenheimerFunds, Inc.
- -Putnam Variable Trust -- Putnam Investment Management, Inc.
The investment managers and advisors cannot guarantee that the funds will meet
their investment objectives. Please read the funds' prospectuses for facts you
should know before investing. These prospectuses are available by contacting us
at the address or telephone number on page 1 of this prospectus.
23
<PAGE>
- -------------------------------
THE FIXED ACCOUNT
You also may allocate purchase payments to the fixed account. We back the
principal and interest guarantees relating to the fixed account. The value of
the fixed account increases as we credit interest to the account. Purchase
payments and transfers to the fixed account become part of our general account,
the company's main portfolio of investments. We credit and compound interest
daily to produce an effective annual interest rate. We will change the interest
rate from time to time at our discretion.
Interests in the fixed account are not required to be registered with the SEC.
The SEC staff does not review the disclosures in this prospectus on the fixed
account. Disclosures regarding the fixed account, however, may be subject to
certain generally applicable provisions of the federal securities laws relating
to the accuracy and completeness of statements made in prospectuses. (See
"Making the Most of Your Contract -- Transfer Policies" for restrictions on
transfers involving the fixed account.)
24
<PAGE>
- -------------------------------
BUYING YOUR CONTRACT
Your agent will help you prepare and submit your application, and send it along
with your initial purchase payment to our office. As the owner, you have all
rights and may receive all benefits under the contract. You can buy a
nonqualified annuity or become an annuitant if you are 85 or younger (age 75 or
younger for qualified annuities).
When you apply, you may select:
- -the fixed account and/or subaccounts in which you want to invest;
- -how you want to make purchase payments;
- -the date you want to start receiving annuity payouts (the retirement date); and
- -a beneficiary.
If your application is complete, we will process it and apply your purchase
payment to the fixed account and subaccounts you selected within two business
days after we receive it at our office. If we accept your application, we will
send you a contract. If we cannot accept your application within five business
days, we will decline it and return your payment. We will credit the additional
purchase payments you make to your accounts on the valuation date we receive
them. We will value the additional payments at the next accumulation unit value
calculated after we receive your payments at our office. You may make additional
purchase payments to nonqualified and qualified annuities until the retirement
date.
THE RETIREMENT DATE
Annuity payouts are to begin on the retirement date. You can align this date
with your actual retirement from a job, or it can be a different future date,
depending on your needs and goals and on certain restrictions. You also can
change the date, provided you send us written instructions at least 30 days
before annuity payouts begin.
FOR NONQUALIFIED ANNUITIES AND ROTH IRAS, the retirement date must be:
- -no earlier than the 60th day after the contract's effective date; and
- -no later than the annuitant's 90th birthday.
FOR QUALIFIED ANNUITIES EXCEPT ROTH IRAS, to avoid IRS penalty taxes, the
retirement date generally must be:
- -on or after the annuitant reaches age 59 1/2; and
- -by April 1 of the year following the calendar year when the annuitant reaches
age 70 1/2.
If you take the minimum IRA distribution as required by the Code from another
tax-qualified investment, or in the form of partial withdrawals from this
contract, annuity payouts can start as late as the annuitant's 90th birthday.
BENEFICIARY
If death benefits become payable before the retirement date (while the contract
is in force and before annuity payouts begin), we will pay your named
beneficiary all or part of the contract value. If there is no named beneficiary,
then you or your estate will be the beneficiary. (See "Benefits in Case of
Death" for more about beneficiaries.)
25
<PAGE>
BUYING YOUR CONTRACT
PURCHASE PAYMENTS AMOUNTS
MINIMUM PURCHASE PAYMENTS
Initial purchase payment: $2,000 (We reserve the right to decrease the minimum
payment.)
Minimum additional purchase payments: $50
MAXIMUM PURCHASE PAYMENTS: $1,000,000 of cumulative payments (We reserve the
right to increase the maximum payment.)
HOW TO MAKE PURCHASE PAYMENTS
BY LETTER
Send your check along with your name and contract number to:
REGULAR MAIL:
American Centurion Life Assurance Company
P.O. Box 5555
Albany, NY 12205-0555
EXPRESS MAIL:
American Centurion Life Assurance Company
20 Madison Avenue Extension
Albany, NY 12203
26
<PAGE>
- -------------------------------
CHARGES
CONTRACT ADMINISTRATIVE CHARGE
We charge this fee for establishing and maintaining your records. We deduct $30
from the contract value on your contract anniversary at the end of each contract
year. We prorate this charge among the subaccounts and the fixed account in the
same proportion your interest in each account bears to your total contract
value. We will waive this charge when your contract value is $50,000 or more on
the current contract anniversary. If you take a full withdrawal from your
contract, we will deduct the $30 annual charge at the time of withdrawal
regardless of contract value. We cannot increase the annual contract
administrative charge and it does not apply after annuity payouts begin or when
we pay death benefits.
VARIABLE ACCOUNT ADMINISTRATIVE CHARGE
We charge this fee daily to the subaccounts. The unit values of your subaccounts
reflect this fee and it totals 0.15% of their average daily net assets on an
annual basis. It covers certain administrative and operating expenses of the
subaccounts such as accounting, legal and data processing fees and expenses
involved in the preparation and distribution of reports and prospectuses. We
cannot increase the variable account administrative charge.
MORTALITY AND EXPENSE RISK FEE
We charge this fee daily to the subaccounts. The unit values of your subaccounts
reflect this fee and it totals 1.25% of their average daily net assets on an
annual basis. This fee covers the mortality and expense risk that we assume.
Approximately two-thirds of this amount is for our assumption of mortality risk,
and one-third is for our assumption of expense risk. This fee does not apply to
the fixed account.
Mortality risk arises because of our guarantee to pay a death benefit and our
guarantee to make annuity payouts according to the terms of the contract, no
matter how long a specific annuitant lives and no matter how long our entire
group of annuitants live. If, as a group, annuitants outlive the life expectancy
we assumed in our actuarial tables, then we must take money from our general
assets to meet our obligations. If, as a group, annuitants do not live as long
as expected, we could profit from the mortality risk fee.
Expense risk arises because we cannot increase the contract administrative
charge or variable account administrative charge and these charges may not cover
our expenses. We would have to make up any deficit from our general assets.
The subaccounts pay us the mortality and expense risk fee they accrued as
follows:
- -first, to the extent possible, the subaccounts pay this fee from any dividends
distributed from the funds in which they invest;
- -then, if necessary, the funds redeem shares to cover any remaining fees
payable.
We may use any profits we realize from the subaccounts' payment to us of the
mortality and expense risk fee for any proper corporate purpose, including,
among others, payment of distribution (selling) expenses. We do not expect that
the withdrawal charge, discussed in the following paragraphs, will cover sales
and distribution expenses.
27
<PAGE>
CHARGES
WITHDRAWAL CHARGE
If you withdraw part or all of your contract, you may be subject to a withdrawal
charge. We calculate the withdrawal charge by drawing from your total contract
value in the following order:
- -First, we withdraw up to 10% of your prior anniversary contract value not yet
withdrawn this contract year. There is no withdrawal charge on withdrawals
totaling up to 10% of your prior anniversary contract value each contract year.
- -Next, we withdraw any contract earnings (contract value minus all purchase
payments received and not previously withdrawn) in excess of the annual 10%
free withdrawal amount. There is no withdrawal charge on contract earnings.
- -Next, we withdraw purchase payments received eight or more contract years
before the withdrawal and not previously withdrawn. There is no withdrawal
charge on purchase payments received eight or more contract years before
withdrawal.
- -Finally, if necessary, we withdraw purchase payments received in the seven
contract years before the withdrawal on a "first-in, first-out" (FIFO) basis.
There is a withdrawal charge on these payments. We determine your withdrawal
charges by multiplying each of these payments by the applicable withdrawal
charge percentage, and then totaling the withdrawal charges.
The withdrawal charge percentage depends on the number of contract years since
you made the purchase payments.
<TABLE>
<CAPTION>
CONTRACT YEARS FROM WITHDRAWAL CHARGE
PAYMENT RECEIPT PERCENTAGE
<S> <C>
1 7%
2 6
3 5
4 4
5 3
6 2
7 1
Thereafter 0
</TABLE>
WITHDRAWAL CHARGE CALCULATION EXAMPLE
Here is an example of the calculation we make to determine the withdrawal charge
on a contract with this history:
- -The contract date is July 1, 1998 with a contract year of July 1 through June
30 and with an anniversary date of July 1 each year; and
- -We received these payments - $10,000 July 1, 1998; $8,000 Dec. 31, 2004; and
$6,000 Feb. 20, 2006; and
- -The owner withdraws the contract for its total withdrawal value of $38,101 on
Aug. 5, 2008 and had not made any other withdrawals during that contract year;
and
28
<PAGE>
- -The prior anniversary July 1, 2008 contract value was $38,488.
<TABLE>
<CAPTION>
WITHDRAWAL CHARGE EXPLANATION
<C> <S>
$ 0 $3,848.80 is 10% of the prior anniversary contract
value withdrawn without withdrawal charge; and
0 $10,252.20 is contract earnings in excess of the
10% free withdrawal amount withdrawn without
withdrawal charge; and
0 $10,000 July 1, 1998 payment was received eight or
more contract years before withdrawal and is
withdrawn without withdrawal charge; and
240 $8,000 Dec. 31, 2004 payment is in its fifth
contract year from receipt, withdrawn with a 3%
withdrawal charge; and
240 $6,000 Feb. 20, 2006 payment is in its fourth
contract year from receipt, withdrawn with a 4%
withdrawal charge.
$480
</TABLE>
For a partial withdrawal that is subject to a withdrawal charge, the amount we
actually withdraw from your contract will be the amount you request plus any
applicable withdrawal charge. We apply the withdrawal charge to this total
amount. We pay you the amount you requested. If you make a full withdrawal of
your contract, we also will deduct the $30 contract administrative charge.
WAIVER OF WITHDRAWAL CHARGE
There are no withdrawal charges for:
- -withdrawals during the year totaling up to 10% of your prior contract
anniversary contract value;
- -contract earnings -- if any -- in excess of the annual 10% free withdrawal
amount;
- -required minimum distributions from a qualified annuity (for those amounts
required to be distributed from the contract described in this prospectus);
- -contracts settled using an annuity payout plan; and
- -death benefits.
POSSIBLE GROUP REDUCTIONS: In some cases, we may incur lower sales and
administrative expenses due to the size of the group, the average contribution
and the use of group enrollment procedures. In such cases, we may be able to
reduce or eliminate the contract administrative and withdrawal charges. However,
we expect this to occur infrequently.
29
<PAGE>
- -------------------------------
VALUING YOUR INVESTMENT
We value your fixed account and subaccounts as follows:
FIXED ACCOUNT: We value the amounts you allocated to the fixed account directly
in dollars. The fixed account value equals:
- -the sum of your purchase payments and transfer amounts allocated to the fixed
account;
- -plus interest credited;
- -minus the sum of amounts withdrawn (including any applicable withdrawal
charges) and amounts transferred out; and
- -minus any prorated contract administrative charge.
SUBACCOUNTS: We convert amounts you allocated to the subaccounts into
accumulation units. Each time you make a purchase payment or transfer amounts
into one of the subaccounts, we credit a certain number of accumulation units to
your contract for that subaccount. Conversely, each time you take a partial
withdrawal, transfer amounts out of a subaccount or we assess a contract
administrative charge, we subtract a certain number of accumulation units from
your contract.
The accumulation units are the true measure of investment value in each
subaccount during the accumulation period. They are related to, but not the same
as, the net asset value of the fund in which the subaccount invests.
The dollar value of each accumulation unit can rise or fall daily depending on
the subaccount expenses, performance of the fund and on certain fund expenses.
Here is how we calculate accumulation unit values:
NUMBER OF UNITS
To calculate the number of accumulation units for a particular subaccount, we
divide your investment by the current accumulation unit value.
ACCUMULATION UNIT VALUE
The current accumulation unit value for each subaccount equals the last value
times the subaccount's current net investment factor.
NET INVESTMENT FACTOR
We determine the net investment factor by:
- -adding the fund's current net asset value per share plus the per-share amount
of any accrued income or capital gain dividends to obtain a current adjusted
net asset value per share; then
- -dividing that sum by the previous adjusted net asset value per share; and
- -subtracting the percentage factor representing the mortality and expense risk
fee and the variable account administrative charge from the result.
Because the net asset value of the fund may fluctuate, the accumulation unit
value may increase or decrease. You bear all the investment risk in a
subaccount.
FACTORS THAT AFFECT SUBACCOUNT ACCUMULATION UNITS
Accumulation units may change in two ways: in number and in value. Here are the
factors that influence those changes:
The number of accumulation units you own may fluctuate due to:
30
<PAGE>
- -additional purchase payments you allocated to the subaccounts;
- -transfers into or out of the subaccounts;
- -partial withdrawals;
- -withdrawal charges; and/or
- -prorated portions of contract administrative charge.
Accumulation unit values will fluctuate due to:
- -changes in funds' net asset value;
- -dividends distributed to the subaccounts;
- -capital gains or losses of funds;
- -fund operating expenses;
- -mortality and expense risk fees; and/or
- -variable account administrative charges.
31
<PAGE>
- -------------------------------
MAKING THE MOST OF YOUR CONTRACT
AUTOMATED DOLLAR-COST AVERAGING
Currently, you can use automated transfers to take advantage of dollar-cost
averaging (investing a fixed amount at regular intervals). For example, you
might transfer a set amount monthly from a relatively conservative subaccount to
a more aggressive one, or to several others, or from the fixed account to one or
more subaccounts. There is no charge for dollar-cost averaging.
This systematic approach can help you benefit from fluctuations in accumulation
unit values caused by fluctuations in the market values of the funds. Since you
invest the same amount each period, you automatically acquire more units when
the market value falls and fewer units when it rises. The potential effect is to
lower your average cost per unit.
HOW DOLLAR-COST AVERAGING WORKS
<TABLE>
<CAPTION>
AMOUNT ACCUMULATION NUMBER OF UNITS
MONTH INVESTED UNIT VALUE PURCHASED
<S> <C> <C> <C> <C>
Jan $100 $20 5.00
By investing an
equal number of
dollars each month... Feb 100 18 5.56
you automatically -->
buy more units Mar 100 17 5.88
when the per unit Apr 100 15 6.67
market price is low... May 100 16 6.25
Jun 100 18 5.56
Jul 100 17 5.88
and fewer units -->
when the per unit Aug 100 19 5.26
market price is high. Sept 100 21 4.76
Oct 100 20 5.00
</TABLE>
You paid an average price of only $17.91 per unit over the 10 months, while the
average market price actually was $18.10.
Dollar-cost averaging does not guarantee that any subaccount will gain in value
nor will it protect against a decline in value if market prices fall. Because
dollar-cost averaging involves continuous investing, your success with this
strategy will depend upon your willingness to continue to invest regularly
through periods of low price levels. Dollar-cost averaging can be an effective
way to help meet your long-term goals. For specific features contact your agent.
Some restrictions may apply.
32
<PAGE>
TRANSFERRING MONEY BETWEEN ACCOUNTS
You may transfer money from any one subaccount, or the fixed account, to another
subaccount before annuity payouts begin. (Certain restrictions apply to
transfers involving the fixed account.) We will process your transfer on the
valuation date we receive your request. We will value your transfer at the next
accumulation unit value calculated after we receive your request. There is no
charge for transfers. Before making a transfer, you should consider the risks
involved in switching investments.
We may suspend or modify transfer privileges at any time as follows:
- -limit the number of transfers to 12 per contract year,
- -require up to 10 valuation dates between each transfer,
- -limit the maximum transfer amount on any valuation date to $2,000,000, or
- -upon 30 days written notice, only accept transfer instructions from you and not
from your representative, agent or any person acting under a power of attorney
from you.
We may make these transfer privilege modifications on a uniform basis for all
contractholders in a class if we determine, in our sole discretion, that the
exercise of transfer rights by one or more contract owners is, or would be, to
the disadvantage of other contract owners. (For information on transfers after
annuity payouts begin, see "Transfer policies.")
TRANSFER POLICIES
- -You may transfer contract values between the subaccounts or from the
subaccounts to the fixed account at any time. However, if you made a transfer
from the fixed account to the subaccounts, you may not make a transfer from any
subaccount back to the fixed account for six months following that transfer.
- -You may transfer contract values from the fixed account to the subaccounts on
or within 30 days before or after the contract anniversary (except for
automated transfers, which can be set up for certain transfer periods subject
to certain minimums).
- -If we receive your request on or within 30 days before or after the contract
anniversary date, the transfer from the fixed account to the subaccounts will
be effective on the valuation date we receive it.
- -We will not accept requests for transfers from the fixed account at any other
time.
- -Once annuity payouts begin, you may not make transfers to or from the fixed
account, but you may make transfers once per contract year among the
subaccounts.
33
<PAGE>
MAKING THE MOST OF YOUR CONTRACT
HOW TO REQUEST A TRANSFER OR WITHDRAWAL
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------
Send your name, contract number, Social Security number or Taxpayer
1 Identification Number and signed request for a transfer or withdrawal to:
BY LETTER
REGULAR MAIL:
American Centurion Life Assurance Company
P.O. Box 5555
Albany, NY 12205-0555
EXPRESS MAIL:
American Centurion Life Assurance Company
20 Madison Avenue Extension
Albany, NY 12203
MINIMUM AMOUNT
Transfers or withdrawals: $500 or entire subaccount or fixed account balance
MAXIMUM AMOUNT
Transfers or withdrawals: Contract value or the entire variable subaccount or
fixed account balance
- -------------------------------------------------------------------------------------------------
Your sales representative can help you set up automated transfers among your
2 subaccounts or fixed account or partial withdrawals from the accounts.
BY AUTOMATED You can start or stop this service by written request or other method
TRANSFERS AND acceptable to us. You must allow 30 days for us to change any instructions that
AUTOMATED are currently in place.
PARTIAL
WITHDRAWALS
-Automated transfers may not exceed an amount that, if continued, would deplete
the fixed account or subaccounts from which you are transferring within 12
months.
-Automated transfers and automated partial withdrawals are subject to all of
the contract provisions and terms, including transfer of contract values
between accounts. Automated withdrawals may be restricted by applicable law
under some contracts.
-Automated partial withdrawals may result in IRS taxes and penalties on all or
part of the amount withdrawn.
MINIMUM AMOUNT
Automated transfers or withdrawals: $100 monthly/$250 quarterly, semiannually
or annually
MAXIMUM AMOUNT
Automated transfers or withdrawals: Contract value (except for automated
transfers from the fixed account)
</TABLE>
34
<PAGE>
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------
Call between 8 a.m. and 4:30 p.m. Eastern time:
3 1-800-504-0469
BY PHONE
MINIMUM AMOUNT
For transfers or withdrawals: $500 or entire subaccount or fixed account
balance
MAXIMUM AMOUNT
For transfers: Contract value or the entire subaccount or fixed
account balance
For withdrawals: $25,000
We answer telephone requests promptly, but you may experience delays when the
call volume is unusually high. If you are unable to get through, use the mail
procedure as an alternative.
We will honor any telephone transfer or withdrawal requests that we believe are
authentic and we will use reasonable procedures to confirm that they are. This
includes asking identifying questions and tape recording calls. We will not
allow a telephone surrender within 30 days of an address change. As long as we
follow the procedures, we (and our affiliates) will not be liable for any loss
resulting from fraudulent requests.
Telephone transfers and withdrawals are automatically available. You may
request that telephone transfers and withdrawals NOT be authorized from your
account by writing to us.
</TABLE>
35
<PAGE>
- -------------------------------
WITHDRAWALS
You may withdraw all or part of your contract value at any time before annuity
payouts begin by sending us a written request or calling us. We will process
your withdrawal request on the valuation date we receive it. For total
withdrawals, we will compute the value of the contract at the next accumulation
unit value calculated after we receive your request. We may ask you to return
the contract. You may have to pay withdrawal charges (see "Charges") and IRS
taxes and penalties (see "Taxes"). You cannot make withdrawals after annuity
payouts begin.
WITHDRAWAL POLICIES
If you have a balance in more than one account and you request a partial
withdrawal, we will withdraw money from all your subaccounts and/or the fixed
account in the same proportion as your value in each correlates to your total
contract value, unless you request otherwise.
RECEIVING PAYMENT
By regular or express mail:
- -payable to you.
- -mailed to address of record within seven days after receiving your request.
However, we may postpone the payment if:
- -- the withdrawal amount includes a purchase payment check that has not cleared;
- -- the NYSE is closed, except for normal holiday and weekend closings;
- -- trading on the NYSE is restricted, according to SEC rules;
- -- an emergency, as defined by SEC rules, makes it impractical to sell
securities or value the net assets of the accounts; or
- -- the SEC permits us to delay payment for the protection of security holders.
NOTE: We will charge you a fee if you request express mail delivery.
36
<PAGE>
- -------------------------------
CHANGING OWNERSHIP
You may change ownership of your nonqualified annuity at any time by completing
a change of ownership form we approve and sending it to our office. The change
will become binding upon us when we receive and record it. We will honor any
change of ownership request that we believe is authentic and we will use
reasonable procedures to confirm authenticity. If we follow these procedures, we
will not take any responsibility for the validity of the change.
If you have a nonqualified annuity, you may incur income tax liability by
transferring, assigning or pledging any part of it. (See "Taxes.")
If you have a qualified annuity, you may not sell, assign, transfer, discount or
pledge your contract as collateral for a loan, or as security for the
performance of an obligation or for any other purpose except as required or
permitted by the Code.
37
<PAGE>
- -------------------------------
BENEFITS IN CASE OF DEATH
THE ACL PERSONAL PORTFOLIO PLUS(2) CONTRACT INCLUDES THE DEATH
BENEFIT DESCRIBED BELOW.
If you or the annuitant die before annuity payouts begin while this contract is
in force, we will pay the beneficiary as follows:
If either you or the annuitant are age 81 or older on the date of death, we will
pay the beneficiary the contract value. If both you and the annuitant are age 80
or younger on the date of death, we will pay the beneficiary the greatest of:
- -the contract value;
- -the total purchase payments less any "death benefit adjustment"; or
- -the highest contract value on any prior contract anniversary, plus any purchase
payments and less any "death benefit adjustment" since the contract
anniversary.
If a contract has more than one person as owner, we will pay benefits upon the
first to die of any owner or the annuitant.
We calculate the "death benefit adjustment" for any and each partial withdrawals
by multiplying (a) times (b) where:
(a) = the ratio of the partial withdrawal to the contract value on the date of
(but prior to) the partial withdrawal; and
(b) = the death benefit on the date of (but prior to) the partial withdrawal.
The result is subtracted from the death benefit that would have been paid had
there not been a partial withdrawal.
EXAMPLE:
- -You purchase a contract for $20,000 on January 1, 1999.
- -On January 1, 2000 (the first contract anniversary) the contract value reaches
$24,000.
- -On March 1, 2000 the contract value falls to $22,000. You then take a $1,500
partial withdrawal, leaving a contract value of $20,500.
We calculate the death benefit on March 1, 2000 as follows:
<TABLE>
<S> <C>
The highest contract value on any prior contract anniversary: $24,000.00
plus any purchase payments since that anniversary: +0.00
less any "death benefit adjustment" taken since that anniversary:
$1,500 X $24,000 = - 1,636.36
$22,000
----------
resulting in a benefit of: $22,363.64
</TABLE>
THE ACL PERSONAL PORTFOLIO-SM- CONTRACT INCLUDES THE DEATH BENEFIT DESCRIBED
BELOW.
If you or the annuitant die before annuity payouts begin while this contract is
in force, we will pay the beneficiary as follows:
For contracts where both you and the annuitant were 75 or younger on the date we
issued the contract and you made withdrawals subject to withdrawal charges, we
will pay the beneficiary the contract value.
For annuities where either you or the annuitant were 76 or older on the date we
issue the contract, we will pay the beneficiary the contract value.
38
<PAGE>
If both you and the annuitant were age 75 or younger on the date the contract
was issued and if all withdrawals from this contract have been without
withdrawal charges, we will pay the beneficiary the greatest of:
- -the contract value;
- -the total purchase payments less any amounts withdrawn; or
- -on or after the fifth contract anniversary, the death benefit as of the most
recent fifth contract anniversary adjusted by:
- -adding any purchase payments made since that most recent fifth contract
anniversary, and
- -subtracting any amounts withdrawn since that most recent fifth contract
anniversary.
EXAMPLE:
- -You purchase contract for $20,000 on January 1, 1999.
- -On June 1, 2004 the contract value reaches $33,000.
- -On June 1, 2004 you take a $1,500 partial withdrawal, leaving a contract value
of $31,500.
- -On July 15, 2004 you make an additional payment of $1,000.
- -On March 1, 2005 the contract value falls to $31,000.
We calculate the death benefit on March 1, 2005 as follows:
<TABLE>
<S> <C>
The closest fifth anniversary contract value: $33,000.00
plus any purchase payments since that anniversary + 1,000.00
less any partial withdrawals taken since that anniversary: - 1,500.00
----------
resulting in a death benefit of: $32,500.00
</TABLE>
IF YOUR SPOUSE IS SOLE BENEFICIARY under a nonqualified annuity and you die
before the retirement date, your spouse may keep the contract as owner. To do
this your spouse must, within 60 days after we receive proof of death, give us
written instructions to keep the contract in force.
Under a qualified annuity, if the annuitant dies before the Code requires
distributions to begin, and the spouse is the only beneficiary, the spouse may
keep the annuity as owner until the date on which the annuitant would have
reached 70 1/2 or any other date permitted by the Code. To do this, the spouse
must give us written instructions within 60 days after we receive proof of
death.
PAYMENTS: Under a nonqualified annuity we will pay the beneficiary in a single
sum unless you give us other written instructions. We must fully distribute the
death benefit within five years of your death. However, the beneficiary may
receive payouts under any annuity payout plan available under this contract if:
- -the beneficiary asks us in writing within 60 days after we receive proof of
death; and
- -payouts begin no later than one year after your death, or other date as
permitted by the Code; and
- -the payout period does not extend beyond the beneficiary's life or life
expectancy.
When paying the beneficiary, we will process the death claim on the valuation
date that our death claim requirements are fulfilled. We would determine the
contract's value at the next accumulation unit value calculated after our death
claim requirements are fulfilled. We will pay interest, if any, from the date of
death at a rate no less than required by law. We will mail payment to the
beneficiary within seven days after our death claim requirements are fulfilled.
Other rules may apply to qualified annuities (See "Taxes").
39
<PAGE>
- -------------------------------
THE ANNUITY PAYOUT PERIOD
As owner of the contract, you have the right to decide how and to whom annuity
payouts will be made starting at the retirement date. You may select one of the
annuity payout plans outlined below, or we may mutually agree on other payout
arrangements.
The amount available to purchase payouts under the plan you select is the
contract value on your retirement date. We do not deduct any withdrawal charges
under the payout plans listed below.
You also decide whether we will make annuity payouts on a fixed or variable
basis, or a combination of fixed and variable. The amounts available to purchase
payouts under the plan you select is the contract value on your retirement date.
You may reallocate this contract value to the fixed account to provide fixed
dollar payouts and/or among the subaccounts to provide variable annuity payouts.
Amounts of fixed and variable payouts depend on:
- -the annuity payout plan you select;
- -the annuitant's age and, in most cases, sex;
- -the annuity table in the contract; and
- -the amounts you allocated to the accounts at settlement.
In addition, for variable payouts only, amounts depend on the investment
performance of the subaccounts you select. These payouts will vary from month to
month because the performance of the funds will fluctuate. (In the case of fixed
annuities, payouts remain the same from month to month.)
For information with respect to transfers between accounts after annuity payouts
begin, see "Making the Most of Your Contract -- Transfer Policies."
ANNUITY TABLE
The annuity table in your contract shows the amount of the first monthly payment
for each $1,000 of contract value according to the age and, when applicable, the
sex of the annuitant. (Where required by law, we will use a unisex table of
settlement rates.) The table assumes that the contract value is invested at the
beginning of the annuity payout period and earns a 5% rate of return, which is
reinvested and helps to support future payouts.
SUBSTITUTION OF 3.5% TABLE
If you ask us at least 30 days before the retirement date, we will substitute an
annuity table based on an assumed 3.5% investment rate for the 5% table in the
contract. The assumed investment rate affects both the amount of the first
payout and the extent to which subsequent payouts increase or decrease. Using
the 5% table results in a higher initial payment, but later payouts will
increase more slowly when annuity unit values rise and decrease more rapidly
when they decline.
ANNUITY PAYOUT PLANS
You may choose any one of these annuity payout plans by giving us written
instructions at least 30 days before contract values are used to purchase the
payout plan:
- -PLAN A -- LIFE ANNUITY -- NO REFUND: We make monthly payouts until the
annuitant's death. Payouts end with the last payout before the annuitant's
death. We will not make any further payouts. This means that if the annuitant
dies after we have made only one monthly payout, we will not make any more
payouts.
- -PLAN B -- LIFE ANNUITY WITH FIVE, 10 OR 15 YEARS CERTAIN: We make monthly
payouts for a guaranteed payout period of five, 10 or 15 years that you elect.
This election will determine the
40
<PAGE>
length of the payout period to the beneficiary if the annuitant should die
before the elected period expires. We calculate the guaranteed payout period
from the retirement date. If the annuitant outlives the elected guaranteed
payout period, we will continue to make payouts until the annuitant's death.
- -PLAN C -- LIFE ANNUITY -- INSTALLMENT REFUND: We make monthly payouts until the
annuitant's death, with our guarantee that payouts will continue for some
period of time. We will make payouts for at least the number of months
determined by dividing the amount applied under this option by the first
monthly payout, whether or not the annuitant is living.
- -PLAN D -- JOINT AND LAST SURVIVOR LIFE ANNUITY -- NO REFUND: We make monthly
payouts while both the annuitant and a joint annuitant are living. If either
annuitant dies, we will continue to make monthly payouts at the full amount
until the death of the surviving annuitant. Payouts end with the death of the
second annuitant.
- -PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD (AVAILABLE AS A FIXED PAYOUT ONLY): We
make monthly payouts for a specific payout period of 10 to 30 years that you
elect. We will make payouts only for the number of years specified whether the
annuitant is living or not. Depending on the selected time period, it is
foreseeable that an annuitant can outlive the payout period selected. In
addition, a 10% IRS penalty tax could apply under this payout plan. (See
"Taxes.")
RESTRICTIONS FOR SOME QUALIFIED PLANS: If you purchased a qualified annuity, you
may be required to select a payout plan that provides for payouts:
- -over the life of the annuitant;
- -over the joint lives of the annuitant and a designated beneficiary;
- -for a period not exceeding the life expectancy of the annuitant; or
- -for a period not exceeding the joint life expectancies of the annuitant and a
designated beneficiary.
You have the responsibility for electing a payout plan that complies with your
contract and with applicable law.
IF WE DO NOT RECEIVE INSTRUCTIONS: You must give us written instructions for the
annuity payouts at least 30 days before the annuitant's retirement date. If you
do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed.
Contract values that you allocated to the fixed account will provide fixed
dollar payouts and contract values that you allocated among the subaccounts will
provide variable annuity payouts.
IF MONTHLY PAYOUTS WOULD BE LESS THAN $20: We will calculate the amount of
monthly payouts at the time the contract value is used to purchase a payout
plan. If the calculations show that monthly payouts would be less than $20, we
have the right to pay the contract value to the owner in a lump sum or to change
the frequency of the payouts.
DEATH AFTER ANNUITY PAYOUTS BEGIN
If you or the annuitant die after annuity payouts begin, we will pay any amount
payable to the beneficiary as provided in the annuity payout plan in effect.
41
<PAGE>
- -------------------------------
TAXES
Generally, under current law, any increase in your contract value is taxable to
you only when you receive a payout or withdrawal (see detailed discussion
below.) Any portion of the annuity payouts and any withdrawals you request that
represent ordinary income are normally taxable. We will send you a tax
information reporting form for any year in which we made a taxable distribution
according to our records. Roth IRAs may grow tax-free if you meet certain
distribution requirements.
QUALIFIED ANNUITIES: We designed this contract for use with qualified retirement
plans. Special rules apply to these retirement plans. Your rights to benefits
may be subject to the terms and conditions of these retirement plans regardless
of the terms of the contract.
Adverse tax consequences may result if you do not ensure that contributions,
distributions and other transactions under the contract comply with the law.
Qualified annuities have minimum distribution rules that govern the timing and
amount of distributions during your life (except for Roth IRA's) and after your
death. You should refer to your retirement plan or adoption agreement, or
consult a tax advisor for more information about these distribution rules.
ANNUITY PAYOUTS UNDER NONQUALIFIED ANNUITIES: A portion of each payout will be
ordinary income and subject to tax, and a portion of each payout will be
considered a return of part of your investment and will not be taxed. All
amounts you receive after your investment in the contract is fully recovered
will be subject to tax.
Tax law requires that all nonqualified deferred annuity contracts issued by the
same company (and possibly its affiliates) to the same owner during a calendar
year be taxed as a single, unified contract when you take distributions from any
one of those contracts.
ANNUITY PAYOUTS UNDER QUALIFIED ANNUITIES (EXCEPT ROTH IRAS): Under a qualified
annuity, the entire payout generally is includable as ordinary income and is
subject to tax except to the extent that contributions were made with after-tax
dollars. If you or your employer invested in your contract with deductible or
pre-tax dollars as part of a qualified retirement plan, such amounts are not
considered to be part of your investment in the contract and will be taxed when
paid to you.
WITHDRAWALS: If you withdraw part or all of your contract before your annuity
payouts begin, your withdrawal payment will be taxed to the extent that the
value of your contract immediately before the withdrawal exceeds your
investment. You also may have to pay a 10% IRS penalty for withdrawals you make
before reaching age 59 1/2 unless certain exceptions apply. For qualified
annuities, other penalties may apply if you make withdrawals from your contract
before your plan specifies that you can receive payouts.
DEATH BENEFITS TO BENEFICIARIES: The death benefit under a contract (except a
Roth IRA) is not tax exempt. Any amount your beneficiary receives that
represents previously deferred earnings within the contract is taxable as
ordinary income to the beneficiary in the years he or she receives the payments.
The death benefit under a Roth IRA generally is not taxable as ordinary income
to the beneficiary if certain distribution requirements are met.
ANNUITIES OWNED BY CORPORATIONS, PARTNERSHIPS OR TRUSTS: For nonqualified
annuities any annual increase in the value of annuities held by such entities
generally will be treated as ordinary income received during that year. This
provision is effective for purchase payments made after Feb. 28, 1986. However,
if the trust was set up for the benefit of a natural person only, the income
will remain tax deferred.
PENALTIES: If you receive amounts from your contract before reaching age 59 1/2,
you may have to pay a 10% IRS penalty on the amount includable in your ordinary
income. However, this penalty will not apply to any amount received by you or
your beneficiary:
- -because of your death;
42
<PAGE>
- -because you become disabled (as defined in the Code);
- -if the distribution is part of a series of substantially equal periodic
payments, made at least annually, over your life or life expectancy (or joint
lives or life expectancies of you and your beneficiary); or
- -if it is allocable to an investment before Aug. 14, 1982 (except for qualified
annuities).
For a qualified annuity, other penalties or exceptions may apply if you make
withdrawals from your contract before your plan specifies that payouts can be
made.
WITHHOLDING, GENERALLY: If you receive all or part of the contract value, we may
deduct withholding against the taxable income portion of the payment. Any
withholding represents a prepayment of your tax due for the year. You take
credit for these amounts on your annual tax return.
If the payment is part of an annuity payout plan, we generally compute the
amount of withholding using payroll tables. You may provide us with a statement
of how many exemptions to use in calculating the withholding. As long as you've
provided us with a valid Social Security Number or Taxpayer Identification
Number, you can elect not to have any withholding occur.
If the distribution is any other type of payment (such as a partial or full
withdrawal) we compute withholding using 10% of the taxable portion. Similar to
above, as long as you have provided us with a valid Social Security Number or
Taxpayer Identification Number, you can elect not to have this withholding
occur.
Some states also may impose withholding requirements similar to the federal
withholding described above. If this should be the case, we may deduct state
withholding from any payment from which we deduct federal withholding. The
withholding requirements may differ if we are making payment to a non-U.S.
citizen or if we deliver the payment outside the United States.
TRANSFER OF OWNERSHIP OF A NONQUALIFIED ANNUITY: If you transfer a nonqualified
annuity without receiving adequate consideration, the transfer is a gift and
also may be a withdrawal for federal income tax purposes. If the gift is a
currently taxable event for income tax purposes, the original owner will be
taxed on the amount of deferred earnings at the time of the transfer and also
may be subject to the 10% IRS penalty discussed earlier. In this case, the new
owner's investment in the contract will be the value of the contract at the time
of the transfer.
COLLATERAL ASSIGNMENT OF A NONQUALIFIED ANNUITY: If you collaterally assign or
pledge your contract, earnings on purchase payments you made after Aug. 13, 1982
will be taxed to you like a withdrawal.
IMPORTANT: Our discussion of federal tax laws is based upon our understanding of
current interpretations of these laws. Federal tax laws or current
interpretations of them may change. For this reason and because tax consequences
are complex and highly individual and cannot always be anticipated, you should
consult a tax advisor if you have any questions about taxation of your contract.
TAX QUALIFICATION: We intend that the contract qualify as an annuity for federal
income tax purposes. To that end, the provisions of the contract are to be
interpreted to ensure or maintain such tax qualification, in spite of any other
provisions of the contract. We reserve the right to amend the contract to
reflect any clarifications that may be needed or are appropriate to maintain
such qualification or to conform the contract to any applicable changes in the
tax qualification requirements. We will send you a copy of any such amendments.
43
<PAGE>
- -------------------------------
VOTING RIGHTS
As a contract owner with investments in the subaccounts, you may vote on
important fund policies until annuity payouts begin. Once they begin, the person
receiving them has voting rights. We will vote fund shares according to the
instructions of the person with voting rights.
Before annuity payouts begin, the number of votes you have is determined by
applying your percentage interest in each subaccount to the total number of
votes allowed to the subaccount.
After annuity payouts begin, the number of votes you have is equal to:
- -the reserve held in each subaccount for your contract; divided by
- -the net asset value of one share of the applicable fund.
As we make annuity payouts, the reserve for the contract decreases; therefore,
the number of votes also will decrease.
We calculate votes separately for each subaccount. We will send notice of
shareholders' meetings, proxy materials and a statement of the number of votes
to which the voter is entitled. We will vote shares for which we have not
received instructions in the same proportion as the votes for which we received
instructions. We also will vote the shares for which we have voting rights in
the same proportion as the votes for which we received instructions.
44
<PAGE>
- -------------------------------
SUBSTITUTION OF INVESTMENTS
We may substitute the funds in which the subaccounts invest if:
- -laws or regulations change,
- -existing funds become unavailable, or
- -in our judgment, the funds no longer are suitable for the subaccounts.
If any of these situations occur and if we believe it is in the best interest of
persons having voting rights under the contract, we have the right to substitute
funds other than those currently listed in this prospectus.
We may also:
- -change the funds in which the subaccounts invest, and
- -add additional subaccounts investing in other funds.
In the event of substitution of any of these changes, we may amend the contract
and take whatever action is necessary and appropriate without your consent or
approval. However, we will not make any substitution or change without the
necessary approval of the SEC and state insurance departments. We will notify
you of any substitution or change.
45
<PAGE>
- -------------------------------
ABOUT THE SERVICE PROVIDERS
PRINCIPAL UNDERWRITER
American Express Financial Advisors Inc. (AEFA) is the principal underwriter for
the contracts. Its offices are located at IDS Tower 10, Minneapolis, MN
55440-0010. AEFA is a wholly-owned subsidiary of AEFC. The contracts are
distributed either directly or through third party marketers by insurance
agencies and broker-dealers who may also be associated with financial
institutions such as banks. ACL will pay commission for the sales of contracts
to the insurance agencies who have entered into distribution agreements with ACL
and AEFA. These commissions will not be more than 7.5% of purchase payments it
receives on the contracts. From time to time, we will pay or permit other
promotional incentives, in cash or credit or other compensation.
The AEFC family of companies offers not only insurance and annuities, but also
mutual funds, investment certificates and a broad range of financial management
services.
ISSUER
American Centurion Life issues the contracts. American Centurion Life is a
wholly-owned subsidiary of IDS Life, which is a wholly-owned subsidiary of AEFC.
AEFC is a wholly-owned subsidiary of American Express Company, a financial
services company headquartered in New York City.
American Centurion Life is a stock life insurance company organized in 1969
under the laws of the State of New York and is located at 20 Madison Avenue
Extension, P.O. Box 5555, Albany, NY 12205-0555. American Centurion Life
conducts a conventional life insurance business in New York.
LEGAL PROCEEDINGS
A number of lawsuits have been filed against life and health insurers in
jurisdictions in which we do business involving insurers' sales practices,
alleged agent misconduct, failure to properly supervise agents, and other
matters. We, like other life and health insurers, from time to time are involved
in such litigation. On October 13, 1998, an action entitled Richard W. And
Elizabeth J. Thoresen vs. American Express Financial Corporation, American
Centurion Life Assurance Company, American Enterprise Life Insurance Company,
American Partners Life Insurance Company, IDS Life Insurance Company and IDS
Life Insurance Company of New York was commenced in Minnesota state court. The
action was brought by individuals who purchased an annuity in a qualified plan.
They allege that the sale of annuities in tax-deferred contributory retirement
investment plans (E.G., IRAs) is never appropriate. The plaintiffs purport to
represent a class consisting of all persons who made similar purchases. The
plaintiffs seek damages in an unspecified amount. We also are defendants in
various other lawsuits. In our opinion, none of these lawsuits will have a
material adverse effect on our financial condition.
46
<PAGE>
- -------------------------------
YEAR 2000
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of ACL and the variable
account. ACL and the variable account have no computer systems of their own but
are dependent upon the systems of AEFC and certain other third parties.
A comprehensive review of AEFC's computer systems and business processes has
been conducted to identify the major systems that could be affected by the Year
2000 issue. Steps are being taken to resolve any potential problems including
modification to existing software and the purchase of new software. These
measures are scheduled to be completed and tested on a timely basis. AEFC's
target date for substantially completing corrective measures on business
critical systems was Dec. 31, 1998. Substantial testing of these systems was
targeted for completion early in 1999. AEFC currently is on track with this
schedule and also is on track to finish the work on non-critical systems by June
30, 1999. The Year 2000 readiness of unaffiliated investment managers and other
third parties whose system failures could have an impact on ACL's and the
variable account's operations continues to be evaluated. The potential
materiality of any such impact is not known at this time.
AEFC's Year 2000 project includes establishing Year 2000 contingency plans for
all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. These plans are being amended to include specific Year 2000
considerations and will continue to be refined throughout 1999 as additional
information related to potential Year 2000 exposure is gathered.
47
<PAGE>
- -------------------------------
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<S> <C>
Performance Information...........................................................3
Calculating Annuity Payouts.......................................................7
Rating Agencies...................................................................9
Principal Underwriter.............................................................9
Independent Auditors..............................................................9
Financial Statements
</TABLE>
48
<PAGE>
Please check the box to receive a copy of the Statement of Additional
Information for:
<TABLE>
<S> <C>
/ / ACL Personal Portfolio Plus(2)/ACL Personal Portfolio-SM-
/ / AIM Variable Insurance Funds, Inc.
/ / American Century Variable Portfolios, Inc.
/ / GT Global Variable Investment Funds
/ / IDS Life Retirement Annuity Mutual Funds
/ / Janus Aspen Series Portfolios
/ / OCC Accumulation Trust Portfolios
/ / Oppenheimer Variable Account Funds
/ / Putnam Variable Trust -- Class IA Shares
/ / Putnam Variable Trust -- Class IB Shares
</TABLE>
MAIL YOUR REQUEST TO:
American Centurion Life Assurance Company
20 Madison Avenue Extension
PO Box 5555
Albany, NY 12205-0555
WE WILL MAIL YOUR REQUEST TO:
Your name ______________________________________________________________________
Address ________________________________________________________________________
City __________________________________ State ______________ Zip _______________
49
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
ACL PERSONAL PORTFOLIO PLUS2
and
ACL PERSONAL PORTFOLIOSM
ACL VARIABLE ANNUITY ACCOUNT 2
April 30, 1999
ACL Variable Annuity Account 2 is a separate account established and maintained
by American Centurion Life Assurance Company (American Centurion Life).
This Statement of Additional Information (SAI) is not a prospectus. It should be
read together with the prospectus dated the same date as this SAI, which may be
obtained from your agent, or by writing or calling us at the address and
telephone number below. The prospectus is incorporated in this SAI by reference.
American Centurion Life Assurance Company
20 Madison Avenue Extension
P.O. Box 5555
Albany, NY 12205-0555
800-504-0469
<PAGE>
ACL Personal Portfolio Plus 2/ACL Personal PortfolioSM
Sec-spec\life\acl-pp\99stmt.doc 9
TABLE OF CONTENTS
Performance Information..................................................p.3
Calculating Annuity Payouts..............................................p.7
Rating Agencies..........................................................p.9
Principal Underwriter....................................................p.9
Independent Auditors.....................................................p.9
Financial Statements
<PAGE>
PERFORMANCE INFORMATION
- -------------------------------------------------------------------------------
The variable subaccounts may quote various performance figures to illustrate
past performance. We base total return and current yield quotations (if
applicable) on standardized methods of computing performance as required by the
Securities and Exchange Commission (SEC). An explanation of the methods used to
compute performance follows below.
Average Annual Total Return
We will express quotations of average annual total return for the variable
subaccounts in terms of the average annual compounded rate of return of a
hypothetical investment in the contract over a period of one, five and 10 years
(or, if less, up to the life of the variable subaccounts), calculated according
to the following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1,000 payment
made at the beginning of the period, at the end of the
period (or fractional portion thereof)
We calculated the following performance figures on the basis of historical
performance of each fund. We show actual performance from the date the
subaccounts began investing in the funds. We also show performance from the
commencement date of the funds as if the contract existed at that time. Past
performance does not guarantee future results.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return With Withdrawal For Periods Ending Dec. 31, 1998
<S> <C> <C> <C>
Performance since
commencement of the Performance since
subaccount commencement of the Fund**
Since Since
Subaccount ----------------------------------------- 1 Year commencement --------- -------- -------- commencement
Investing in: 1 Year 5 Years 10 Years
-----------------------------------------
AIM V.I.
IGN Growth and Income Fund (11/98; 5/94)* --% 7.64% 18.80% --% --% 20.36%
IIN International Equity Fund (11/98; 5/93) -- -2.99 6.77 9.26 -- 11.46
IVA Value Fund (11/98; 5/93) -- 8.56 23.45 19.62 19.94
-----------------------------------------
AMERICAN CENTURY
IIG VP Income and Growth (11/98; 10/97) -- 2.76 17.70 -- -- 23.57
IVL VP Value (11/98; 5/96) -- -7.02 -3.29 -- -- 12.89
GT GLOBAL
ILA Variable Latin America Fund (10/97; -45.95 -36.04 -45.95 -9.42 -- -2.18
2/93)
IPA Variable New Pacific Fund (10/97; 2/93) -21.04 -22.32 -21.04 -12.34 -- -7.08%
IDS LIFE
IAG Aggressive Growth Fund (10/97; 1/92) -5.29 -6.21 -5.29 8.56 -- 9.09
ICR Capital Resource Fund (10/97; 10/81) 15.28 14.01 15.28 14.48 14.10 --
IGD Growth Dimensions Fund (11/98; 4/96) -- 7.97 19.74 -- -- 21.07
IIE International Equity Fund (10/97; 1/92) 7.10 3.92 7.10 5.27 -- 7.66
IMG Managed Fund (10/97; 4/86) 7.07 6.94 7.07 11.86 12.86 --
IMS Moneyshare Fund (10/97; 10/81) -2.99 -1.17 -2.99 2.80 3.74 --
ISI Special Income Fund (10/97; 10/81) -6.20 -4.52 -6.20 4.72 7.32 --
JANUS ASPEN SERIES
ISB Balanced Portfolio (11/98; 9/93) -- 8.19 25.31 17.03 -- 17.54
IWG Worldwide Growth Portfolio (11/98; -- 5.07 20.02 19.23 -- 22.03
9/93)
OCC ACCUMULATION TRUST
IEQ Equity Portfolio (11/98; 8/88) -- -3.89 3.19 18.21 15.81 --
IMD Managed Portfolio (10/97; 8/88) -1.17 4.33 -1.17 17.07 17.58 --
ISC Small Cap Portfolio (11/98; 8/88) -- -4.43 -15.98 6.46 11.53 --
IUS U.S. Government Income Portfolio -0.23 1.77 -0.23 -- -- 5.27
(10/97; 1/95)
OPPENHEIMER VARIABLE ACCOUNT
IGR Capital Appreciation Fund/VA (11/98; -- 6.63 15.16 20.01 15.12 --
4/85)
IHI High Income Fund/VA (11/98; 4/86) -- -2.38 -7.42 6.55 11.04 --
PUTNAM VT
IDI Diversified Income Fund Class IA -8.95 -6.98 -8.95 3.53 -- 3.86
(10/97; 9/93)
IGI Growth and Income Fund Class IA 6.70 8.09 6.70 17.02 14.31 --
(10/97; 2/88)
IHY High Yield Fund Class IA (10/97; 2/88) -13.07 -10.64 -13.07 5.23 8.26 --
INO New Opportunities Fund Class IA 15.54 14.49 15.54 -- -- 21.05
(10/97; 5/94)
PUTNAM VT
IPD Diversified Income Fund Class IB -- -4.15 -9.16 3.35 -- 3.68
(11/98; 9/93)
IPG Growth and Income Fund Class IB -- -0.89 6.58 16.85 14.14 --
(11/98; 2/88)
IPH High Yield Fund Class IB (11/98; 2/88) -- -3.07 -13.11 5.08 8.11 --
IPV Voyager Fund Class IB (11/98; 2/88) -- 9.40 15.35 18.10 18.19 --
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 1.25% mortality and expense fee, a 0.15%
variable account administrative charge and applicable withdrawal charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return Without Withdrawal For Periods Ending Dec. 31, 1998
<S> <C> <C> <C>
Performance since
commencement of the Performance since
subaccount commencement of the Fund**
Since Since
Subaccount ----------------------------------------- 1 Year commencement --------- -------- -------- commencement
Investing in: 1 Year 5 Years 10 Years
-----------------------------------------
AIM V.I.
IGN Growth and Income Fund (11/98; 5/94)* --% 14.64% 25.80% --% --% 20.68%
IIN International Equity Fund (11/98; 5/93) -- 3.56 13.77 9.67 -- 11.68
IVA Value Fund (11/98; 5/93) -- 15.56 30.45 19.91 -- 20.09
-----------------------------------------
AMERICAN CENTURY
IIG VP Income and Growth (11/98; 10/97) -- 9.74 24.70 -- -- 28.50
IVL VP Value (11/98; 5/96) -- -0.78 3.24 -- -- 14.40
GT GLOBAL
ILA Variable Latin America Fund (10/97; -42.63 -32.94 -42.63 -8.95 -- -1.88
2/93)
IPA Variable New Pacific Fund (10/97; 2/93) -15.85 -18.54 -15.85 -11.86 -- -6.79
IDS LIFE
IAG Aggressive Growth Fund (10/97; 1/92) 1.08 -1.64 1.08 8.99 -- 9.17
ICR Capital Resource Fund (10/97; 10/81) 22.28 18.93 22.28 14.83 14.10 --
IGD Growth Dimensions Fund (11/98; 4/96) -- 14.97 26.74 -- -- 22.42
IIE International Equity Fund (10/97; 1/92) 14.10 8.92 14.10 5.75 -- 7.75
IMG Managed Fund (10/97; 4/86) 14.07 11.91 14.07 12.24 12.86 --
IMS Moneyshare Fund (10/97; 10/81) 3.56 3.59 3.56 3.33 3.74 --
ISI Special Income Fund (10/97; 10/81) 0.11 0.08 0.11 5.21 7.32 --
JANUS ASPEN SERIES
ISB Balanced Portfolio (11/98; 9/93) -- 15.19 32.31 17.35 -- 17.72
IWG Worldwide Growth Portfolio (11/98; -- 12.07 27.02 19.53 -- 22.19
9/93)
OCC ACCUMULATION TRUST
IEQ Equity Portfolio (11/98; 8/88) -- 2.59 10.19 18.52 15.81 --
IMD Managed Portfolio (10/97; 8/88) 5.52 9.36 5.52 17.39 17.58 --
ISC Small Cap Portfolio (11/98; 8/88) -- 2.01 -10.41 6.92 11.53 --
IUS U.S. Government Income Portfolio 6.53 6.66 6.53 -- -- 6.12
(10/97; 1/95)
OPPENHEIMER VARIABLE ACCOUNT
IGR Capital Appreciation Fund/VA (11/98; -- 13.63 22.16 20.30 15.12 --
4/85)
IHI High Income Fund/VA (11/98; 4/86) -- 4.21 -1.20 7.01 11.04 --
PUTNAM VT
IDI Diversified Income Fund Class IA -2.85 -2.50 -2.85 4.04 -- 4.18
(10/97; 9/93)
IGI Growth and Income Fund Class IA 13.70 13.06 13.70 17.33 14.31 --
(10/97; 2/88)
IHY High Yield Fund Class IA (10/97; 2/88) -7.28 -6.34 -7.28 5.71 8.26 --
INO New Opportunities Fund Class IA 22.54 19.41 22.54 -- -- 21.37
(10/97; 5/94)
PUTNAM VT
IPD Diversified Income Fund Class IB -- 2.31 -3.08 3.87 -- 4.00
(11/98; 9/93)
IPG Growth and Income Fund Class IB -- 5.82 13.58 17.17 14.14 --
(11/98; 2/88)
IPH High Yield Fund Class IB (11/98; 2/88) -- 3.48 -7.33 5.57 8.11 --
IPV Voyager Fund Class IB (11/98; 2/88) -- 16.40 22.35 18.40 18.19 --
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 1.25% mortality and expense fee and a 0.15%
variable account administrative charge.
</TABLE>
<PAGE>
Cumulative Total Return
Cumulative total return represents the cumulative change in value of an
investment for a given period (reflecting change in a variable subaccount's
accumulation unit value). We compute aggregate total return using the following
formula:
ERV - P
P
where: P = a hypothetical initial payment of $1,000
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the period, at the
end of the period (or fractional period thereof)
The SEC requires that we assume that you withdraw the entire contract at the end
of the one-, five-, and 10- year periods (or, if less, up to the life of the
variable subaccount). In addition, we may show performance figures without the
deduction of a withdrawal charge. All total return figures reflect the deduction
of all applicable charges including the contract administrative charge, the
variable account administrative charge and the mortality and expense risk fee.
Calculation of Yield for Subaccounts Investing in Money Market Funds
Annualized Simple Yield:
For the subaccounts investing in money market funds, we base quotations of
simple yield on:
(a) the change in the value of a hypothetical subaccount (exclusive of
capital changes and income other than investment income) at the
beginning of a particular seven-day period;
(b) less a pro rata share of the subaccount expenses accrued over the
period;
(c) dividing this difference by the value of the subaccount at the
beginning of the period to obtain the base period return; and
(d) multiplying the base period return by 365/7.
The subaccount's value includes:
o any declared dividends,
o the value of any shares purchased with dividends paid during the period, and
o any dividends declared for such shares.
It does not include:
o the effect of any applicable withdrawal charge, or
o any realized or unrealized gains or losses.
Annualized Compound Yield:
We calculate compound yield using the base period return described above, which
we then compound according to the following formula:
Compound Yield = [(Base Period Return + 1) 365/7] -1
<TABLE>
<CAPTION>
Annualized Yields Based on the Seven-Day Period Ending Dec. 31, 1998
<S> <C> <C> <C>
Subaccount Investing In: Simple Yield Compound Yield
IMS IDS Life Moneyshare Fund 3.29% 3.34%
</TABLE>
<PAGE>
Annualized Yield for Subaccounts Investing in Income Funds
For the subaccounts investing in income funds, we base quotations of yield on
all investment income earned during a particular 30-day period, less expenses
accrued during the period (net investment income) and compute it by dividing net
investment income per accumulation unit by the value of an accumulation unit on
the last day of the period, according to the following formula:
YIELD = 2[( a-b + 1)6 - 1]
cd
where: a = dividends and investment income earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of accumulation units outstanding
during the period that were entitled to receive dividends
d = the maximum offering price per accumulation unit on the last
day of the period
The subaccount earns yield from the increase in the net asset value of shares of
the fund in which it invests and from dividends declared and paid by the fund,
which are automatically invested in shares of the fund.
Annualized Yield Based on the 30-Day Period Ended Dec. 31, 1998
Subaccount Investing In: Yield
ISI IDS Life Special Income Fund 7.18%
Independent rating or statistical services or publishers or publications such as
those listed below may quote subaccount performance, compare it to rankings,
yields or returns, or use it in variable annuity accumulation or settlement
illustrations they publish or prepare.
The Bank Rate Monitor National Index, Barron's, Business Week, CDA
Technologies, Donoghue's Money Market Fund Report, Financial Services
Week, Financial Times, Financial World, Forbes, Fortune, Global
Investor, Institutional Investor, Investor's Daily, Kiplinger's
Personal Finance, Lipper Analytical Services, Money, Morningstar,
Mutual Fund Forecaster, Newsweek, The New York Times, Personal
Investor, Stanger Report, Sylvia Porter's Personal Finance, USA Today,
U.S. News and World Report, The Wall Street Journal and Wiesenberger
Investment Companies Service.
CALCULATING ANNUITY PAYOUTS
The Variable Account
We do the following calculations separately for each of the subaccounts of the
variable account. The separate monthly payouts, added together, make up your
total variable annuity payout.
Initial Payout: To compute your first monthly payment, we:
o determine the dollar value of your contract as of the valuation date that
falls on (or closest to the valuation date that falls before) the seventh
calendar day before the retirement date; then
o apply the result to the annuity table contained in the contract or another
table at least as favorable.
The annuity table shows the amount of the first monthly payment for each $1,000
of value which depends on factors built into the table, as described below.
<PAGE>
Annuity Units: We then convert the value of your subaccount to annuity units. To
compute the number of units credited to you, we divide the first monthly payment
by the annuity unit value (see below) on the valuation date that falls on (or
closest to the valuation date that falls before) the seventh calendar day before
the retirement date. The number of units in your subaccount is fixed. The value
of units fluctuates with the performance of the fund.
Subsequent Payouts: To compute later payouts, we multiply:
o the annuity unit value on the valuation date that falls on (or closest to
the valuation date that falls before) the seventh calendar day before the
payout is due; by
o the fixed number of annuity units credited to you.
Annuity Unit Values: We originally set this value at $1 for each subaccount.
To calculate later values we multiply the last annuity value by the product of:
o the net investment factor; and
o the neutralizing factor.
The purpose of the neutralizing factor is to offset the effect of the assumed
rate built into the annuity table. With an assumed investment rate of 5%, the
neutralizing factor is 0.999866 for a one day valuation period.
Net Investment Factor: We determine the net investment factor by:
o adding the fund's current net asset value per share plus the per share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted net asset value per share; and
o subtracting the percentage factor representing the mortality and expense
risk fee and the variable account administrative charge from the result.
Because the net asset value of the fund may fluctuate, the net investment factor
may be greater or less than one, and the annuity unit value may increase or
decrease. You bear this investment risk in a variable subaccount.
The Fixed Account
We guarantee your fixed annuity payout amounts. Once calculated, your payout
will remain the same and never change. To calculate your annuity payouts we:
o take the value of your fixed account at the retirement date or the date you
have selected to begin receiving your annuity payouts; then
o using an annuity table, we apply the value according to the annuity payout
plan you select.
The annuity payout table we use will be the one in effect at the time your
choose to begin your annuity payouts. The values in the table will be equal to
or greater than the table in your contract.
<PAGE>
RATING AGENCIES
The following chart reflects the ratings given to us by independent rating
agencies. These agencies evaluate the financial soundness and claims-paying
ability of insurance companies based on a number of different factors. This
information does not relate to the management or performance of the variable
subaccounts of the contract. This information relates only to the fixed account
and reflects our ability to make annuity payouts and to pay death benefits and
other distributions from the contract.
Rating agency Rating
A.M. Best A+
(Superior)
Duff & Phelps AAA
PRINCIPAL UNDERWRITER
The principal underwriter for the contracts is American Express Financial
Advisors Inc. (AEFA) which offers them on a continuous basis.
Withdrawal charges received by AEFA for the last year aggregated total $3,628.
Commissions paid by ACL for the last year aggregated total $682,400.
INDEPENDENT AUDITORS
The financial statements appearing in this SAI have been audited by Ernst &
Young LLP (1400 Pillsbury Center, 200 South Sixth Street, Minneapolis, MN 55402)
independent auditors, as stated in their report appearing herein.
<PAGE>
FINANCIAL STATEMENTS
American Centurion Variable Annuity Account
Annual Financial Information
Report of Independent Auditors
The Board of Directors
American Centurion Life Insurance Company
We have audited the individual and combined statements of net assets of the
segregated asset subaccounts of American Centurion Variable Annuity Account 2
(comprised of subaccounts IGN, IIN, IVA, IIG, IVL, ILA, IPA, IAG, ICR, IGD, IIE,
IMG, IMS, ISI, ISB, IWG, IEQ, IMD, ISC, IUS, IGR, IHI, IDI, IPD, IGI, IPG, IHY,
IPH, INO and IPV) as of December 31, 1998, and the related statements of
operations and changes in net assets for the year then ended, except for
subaccounts IGN, IIN, IVA, IIG, IVL, IGD, ISB, IWG, IEQ, ISC, IGR, IHI, IPD,
IPG, IPH and IPV, which are for the period November 4, 1998 (commencement of
operations) to December 31, 1998. These financial statements are the
responsibility of the management of American Centurion Life Insurance Company.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned at December 31, 1998 with the affiliated and
unaffiliated mutual fund managers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the individual and combined financial position of the
segregated asset subaccounts of American Enterprise Variable Annuity Account 2
at December 31, 1998, and the individual and combined results of their
operations and the changes in their net assets for the periods described above,
in conformity with generally accepted accounting principles.
Ernst & Young LLP
Minneapolis, Minnesota
March 12, 1999
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Net Assets Dec. 31, 1998
Segregated Asset Subaccounts
Assets IGN IIN IVA IIG
Investments in shares of mutual
funds and portfolios:
<S> <C> <C> <C> <C>
at cost $ 7,115 $ 4,220 $ 8,899 $ 8,888
------- ------- ------- -------
at market value $ 7,194 $ 4,295 $ 9,284 $ 9,224
Dividends receivable - - - -
Accounts receivable from American Centurion Life
for contract purchase payments 4,104 804 805 801
Receivable from mutual funds and portfolios
for share redemptions - - - -
----- ---- ----- -----
Total assets 11,298 5,099 10,089 10,025
====== ===== ====== ======
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 1 2 7 6
Administrative charge - - 1 1
Payable to mutual funds and portfolios
for investments purchased 4,104 804 805 801
----- --- --- ---
Total liabilities 4,105 806 813 808
----- --- --- ---
Net assets applicable to contracts in
accumulation period $ 7,193 $ 4,293 $ 9,276 $ 9,217
Accumulation units outstanding 6,256 4,138 8,011 8,382
----- ----- ----- -----
Net asset value per accumulation unit $ 1.15 $ 1.04 $ 1.16 $ 1.10
====== ====== ====== ======
Assets IVL ILA IPA
Investments in shares of mutual
funds and portfolios:
at cost $ 3,242 $58,435 $ 59,674
------- ------- --------
at market value $ 3,319 $45,449 $ 65,233
Dividends receivable - - -
Accounts receivable from American Centurion Life
for contract purchase payments 808 - -
Receivable from mutual funds and portfolios
for share redemptions - - -
--- --- ---
Total assets 4,127 45,449 65,233
===== ====== ======
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 1 48 70
Administrative charge - 6 8
Payable to mutual funds and portfolios
for investments purchased 808 - -
--- --- ---
Total liabilities 809 54 78
--- -- --
Net assets applicable to contracts in
accumulation period $ 3,318 $45,395 $ 65,155
Accumulation units outstanding 3,334 70,677 79,763
----- ------ ------
Net asset value per accumulation unit $ 1.00 $ 0.64 $ 0.82
====== ====== ======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Net Assets (continued) Dec. 31, 1998
Segregated Asset Subaccounts
Assets IAG ICR IGD IIE
Investments in shares of mutual
funds and portfolios:
<S> <C> <C> <C> <C>
at cost $ 272,116 $ 908,620 $ 4,156 $ 64,002
--------- --------- ------- --------
at market value $ 250,889 $ 932,106 $ 4,290 $ 62,043
Dividends receivable - - - -
Accounts receivable from American Centurion Life
for contract purchase payments 818 802 804 804
Receivable from mutual funds and portfolios
for share redemptions - 301 - -
------ --- ----- -----
Total assets 251,707 933,209 5,094 62,847
======= ======= ===== ======
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 263 985 2 63
Administration charge 31 118 - 7
Payable to mutual funds and portfolios
for investments purchased 524 - 802 734
--- ----- --- ---
Total liabilities 818 1,103 804 804
--- ----- --- ---
Net assets applicable to contracts in
accumulation period $ 250,889 $ 932,106 $ 4,290 $ 62,043
--------- --------- ------- --------
Accumulation units outstanding 268,836 753,273 3,727 55,847
------- ------- ----- ------
Net asset value per accumulation unit $ 0.93 $ 1.24 $ 1.15 $ 1.11
====== ====== ====== ======
Assets IMG IMS ISI
Investments in shares of mutual
funds and portfolios:
at cost $1,825,704 $ 13,166 $576,252
---------- -------- --------
at market value $1,770,253 $ 13,166 $549,946
Dividends receivable - 54 3,305
Accounts receivable from American Centurion Life
for contract purchase payments 601 - 2,201
Receivable from mutual funds and portfolios
for share redemptions 1,472 - -
----- ------ ------
Total assets 1,772,326 13,220 555,452
========= ====== =======
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 1,852 14 574
Administration charge 222 2 69
Payable to mutual funds and portfolios
for investments purchased - 38 4,863
-- -- -----
Total liabilities 2,074 54 5,506
----- -- -----
Net assets applicable to contracts in
accumulation period $1,770,252 $ 13,166 $549,946
---------- -------- --------
Accumulation units outstanding 1,649,611 13,026 566,274
--------- ------ -------
Net asset value per accumulation unit $ 1.07 $ 1.01 $ 0.97
====== ====== ======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Net Assets (continued) Dec. 31, 1998
Segregated Asset Subaccounts
Assets ISB IWG IEQ IMD
Investments in shares of mutual funds and portfolios:
<S> <C> <C> <C> <C>
at cost $ 41,411 $ 11,798 $ 3,282 $ 1,389,910
-------- -------- ------- -----------
at market value $ 42,561 $ 12,189 $ 3,357 $ 1,390,403
Dividends receivable - - - -
Accounts receivable from American Centurion Life
for contract purchase payments 4,125 4,763 806 3,901
Receivable from mutual funds and portfolios
for share redemptions - - - -
----- ----- ----- -----
Total assets 46,686 16,952 4,163 1,394,304
====== ====== ===== =========
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 15 6 1 1,464
Administration charge 2 1 - 176
Payable to mutual funds and portfolios
for investments purchased 4,125 4,763 806 3,901
----- ----- --- -----
Total liabilities 4,142 4,770 807 5,541
----- ----- --- -----
Net assets applicable to contracts in
accumulation period $ 42,544 $ 12,182 $ 3,356 $ 1,388,763
-------- -------- ------- -----------
Accumulation units outstanding 36,869 10,848 3,262 1,273,953
------ ------ ----- ---------
Net asset value per accumulation unit $ 1.15 $ 1.12 $ 1.03 $ 1.09
====== ====== ====== ======
Assets ISC IUS IGR IHI
Investments in shares of mutual funds and portfolios:
at cost $ 8,292 $1,118,946 $ 12,581 $ 6,055
------- ---------- -------- -------
at market value $ 8,432 $1,124,023 $ 13,154 $ 6,069
Dividends receivable - 1,956 - -
Accounts receivable from American Centurion Life
for contract purchase payments 814 - 4,768 1,001
Receivable from mutual funds and portfolios
for share redemptions - - - -
--- --- --- ---
Total assets 9,246 1,125,979 17,922 7,070
===== ========= ====== =====
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 6 1,184 7 2
Administration charge 1 142 1 -
Payable to mutual funds and portfolios
for investments purchased 814 - 4,768 1,001
--- ----- -----
Total liabilities 821 1,326 4,776 1,003
--- ----- ----- -----
Net assets applicable to contracts in
accumulation period $ 8,425 $1,124,653 $ 13,146 $ 6,067
------- ---------- -------- -------
Accumulation units outstanding 8,243 1,041,627 11,547 5,811
----- --------- ------ -----
Net asset value per accumulation unit $ 1.02 $ 1.08 $ 1.14 $ 1.04
====== ====== ====== ======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Net Assets (continued) Dec. 31, 1998
Segregated Asset Subaccounts
Assets IDI IPD IGI IPG IHY
Investments in shares of mutual
funds and portfolios:
<S> <C> <C> <C> <C> <C>
at cost $ 676,349 $ 14,280 $1,773,897 $18,034 $ 1,184,161
--------- -------- ---------- ------- -----------
at market value $ 653,426 $ 14,310 $1,867,538 $18,334 $ 1,088,002
Dividends receivable - - - - -
Accounts receivable from American Centurion Life
for contract purchase payments - 1,998 - 797 -
Receivable from mutual funds and portfolios
for share redemptions - - - - -
------- ----- ------- ----- ----
Total assets 653,426 16,308 1,867,538 19,131 1,088,002
======= ====== ========= ====== =========
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 693 3 1,962 11 1,153
Administration charge 83 - 235 1 139
Payable to mutual funds and portfolios
for investments purchased - 1,998 - 797 -
--- ----- ---- --- -----
Total liabilities 776 2,001 2,197 809 1,292
--- ----- ----- --- -----
Net assets applicable to contracts in
accumulation period $ 652,650 $ 14,307 $1,865,341 $18,322 $ 1,086,710
--------- -------- ---------- ------- -----------
Accumulation units outstanding 661,787 13,968 1,537,953 17,282 1,150,196
------- ------ --------- ------ ---------
Net asset value per accumulation unit $ 0.99 $ 1.02 $ 1.21 $ 1.06 $ 0.94
====== ====== ====== ====== ======
Combined
Variable
Assets INO IPV Account
Investments in shares of mutual
funds and portfolios:
at cost $ 479,521 $ 15,215 $10,583,107
--------- -------- -----------
at market value $ 532,032 $ 16,272 $10,531,710
Dividends receivable - - 5,315
Accounts receivable from American Centurion Life
for contract purchase payments - 4,773 42,097
Receivable from mutual funds and portfolios
for share redemptions - - 1,773
----- ----- -----
Total assets 532,032 21,045 10,580,895
======= ====== ==========
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 559 10 10,968
Administration charge 67 1 1,314
Payable to mutual funds and portfolios
for investments purchased - 4,773 43,028
-- ----- ------
Total liabilities 626 4,784 55,310
--- ----- ------
Net assets applicable to contracts in
accumulation period $ 531,406 $ 16,261 $10,525,585
--------- -------- -----------
Accumulation units outstanding 410,715 13,942
------- ------
Net asset value per accumulation unit $ 1.29 $ 1.17
====== ======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Operations Year ended Dec. 31, 1998
Segregated Asset Subaccounts
Investment income IGN* IIN* IVA* IIG*
<S> <C> <C> <C> <C>
Dividend income from mutual funds and portfolios $ - $ 7 $ 261 $ 26
Expenses:
Mortality and expense risk fee 1 2 7 6
- - - -
Administrative charge - - 1 1
Total expenses 1 2 8 7
- - - -
Investment income (loss) - net (1) 5 253 19
-- - --- --
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales - - - -
Cost of investments sold - - - -
--- --- --- ---
Net realized gain (loss) on investments - - - -
Net change in unrealized appreciation or
depreciation of investments 79 75 385 336
-- -- --- ---
Net gain (loss) on investments 79 75 385 336
-- -- --- ---
Net increase (decrease) in net assets
resulting from operations $ 78 $ 80 $ 638 $ 355
==== ==== ===== =====
Investment income IVL* ILA IPA
Dividend income from mutual funds and portfolios $ - $ 369 $ 442
Expenses:
Mortality and expense risk fee 1 270 357
- --- ---
Administrative charge - 32 43
Total expenses 1 302 400
- --- ---
Investment income (loss) - net (1) 67 42
-- -- --
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales - 3,354 3,576
Cost of investments sold - 3,693 3,647
--- ----- -----
Net realized gain (loss) on investments - (339) (71)
--- ---- ---
Net change in unrealized appreciation or
depreciation of investments 77 (12,986) 5,559
-- ------- -----
Net gain (loss) on investments 77 (13,325) 5,488
-- ------- -----
Net increase (decrease) in net assets
resulting from operations $ 76 $ (13,258) $ 5,530
==== ========= =======
*For the period Nov. 4, 1998 (commencement of operations) to Dec. 31, 1998.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Operations (continued) Year ended Dec. 31, 1998
Segregated Asset Subaccounts
Investment income IAG ICR IGD* IIE
<S> <C> <C> <C> <C>
Dividend income from mutual funds and portfolios $ 15,408 $ 65,656 $ 2 $ 491
Expenses:
Mortality and expense risk fee 1,407 5,189 2 334
Administrative charge 169 623 - 40
--- --- --
Total expenses 1,576 5,812 2 374
----- ----- - ---
Investment income (loss) - net 13,832 59,844 - 117
------ ------ --- ---
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales 7,852 61,012 - 3,441
Cost of investments sold 8,514 62,230 - 3,353
----- ------ --- -----
Net realized gain (loss) on investments (662) (1,218) - 88
Net change in unrealized appreciation or
depreciation of investments (21,227) 23,486 134 (1,959)
------- ------ --- ------
Net gain (loss) on investments (21,889) 22,268 134 (1,871)
------- ------ --- ------
Net increase (decrease) in net assets
resulting from operations $ (8,057) $ 82,112 $ 134 $ (1,754)
======== ======== ===== ========
Investment income IMG IMS ISI
Dividend income from mutual funds and portfolios $ 170,623 $ 331 $ 21,907
Expenses:
Mortality and expense risk fee 9,927 83 3,545
----- -- -----
Administrative charge 1,191 10 425
----- -- ---
Total expenses 11,118 93 3,970
------ -- -----
Investment income (loss) - net 159,505 238 17,937
------- --- ------
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales 102,896 29,322 18,211
Cost of investments sold 105,810 29,322 18,780
------- ------ ------
Net realized gain (loss) on investments (2,914) - (569)
Net change in unrealized appreciation or
depreciation of investments (55,451) - (26,306)
------- ----- -------
Net gain (loss) on investments (58,365) - (26,875)
------- ----- -------
Net increase (decrease) in net assets
resulting from operations $ 101,140 $ 238 $ (8,938)
========= ===== ========
*For the period Nov. 4, 1998 (commencement of operations) to Dec. 31, 1998.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Operations (continued) Year ended Dec. 31, 1998
Segregated Asset Subaccounts
Investment income ISB* IWG* IEQ* IMD
<S> <C> <C> <C> <C>
Dividend income from mutual funds and portfolios $ 422 $ 10 $ - $ 1,039
Expenses:
Mortality and expense risk fee 15 6 1 8,174
Administrative charge 2 1 - 981
- - ---
Total expenses 17 7 1 9,155
-- - - -----
Investment income (loss) - net 405 3 (1) (8,116)
--- - -- ------
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales - - - 85,754
Cost of investments sold - - - 89,827
--- --- --- ------
Net realized gain (loss) on investments - - - (4,073)
Net change in unrealized appreciation or
depreciation of investments 1,150 391 75 493
----- --- -- ---
Net gain (loss) on investments 1,150 391 75 (3,580)
----- --- -- ------
Net increase (decrease) in net assets
resulting from operations $ 1,555 $ 394 $ 74 $ (11,696)
======= ===== ==== =========
Investment income ISC* IUS IGR* IHI*
Dividend income from mutual funds and portfolios $ - $ 44,290 $ - $ -
Expenses:
Mortality and expense risk fee 6 7,401 7 2
Administrative charge 1 888 1 -
- --- -
Total expenses 7 8,289 8 2
- ----- - -
Investment income (loss) - net (7) 36,001 (8) (2)
-- ------ -- --
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales - 39,287 - -
Cost of investments sold - 38,619 - -
--- ------ --- ---
Net realized gain (loss) on investments - 668 - -
Net change in unrealized appreciation or
depreciation of investments 140 5,077 573 14
--- ----- --- --
Net gain (loss) on investments 140 5,745 573 14
--- ----- --- --
Net increase (decrease) in net assets
resulting from operations $ 133 $ 41,746 $ 565 $ 12
===== ======== ===== ====
*For the period Nov. 4, 1998 (commencement of
operations) to Dec. 31, 1998.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Operations (continued) Year ended Dec. 31, 1998
Segregated Asset Subaccounts
Investment income IDI IPD* IGI IPG* IHY
<S> <C> <C> <C> <C> <C>
Dividend income from mutual funds and portfolios $ 4,193 $ - $ 18,922 $ - $ 6,032
Expenses:
Mortality and expense risk fee 4,310 3 11,209 11 6,952
Administrative charge 517 - 1,345 1 834
--- --- ----- - ---
Total expenses 4,827 3 12,554 12 7,786
----- - ------ -- -----
Investment income (loss) - net (634) (3) 6,368 (12) (1,754)
---- -- ----- --- ------
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales 40,900 - 99,698 - 101,551
Cost of investments sold 42,933 - 103,669 - 108,760
------ --- ------- --- -------
Net realized gain (loss) on investments (2,033) - (3,971) - (7,209)
Net change in unrealized appreciation or
depreciation of investments (22,923) 30 93,641 300 (96,159)
------- -- ------ --- -------
Net gain (loss) on investments (24,956) 30 89,670 300 (103,368)
------- -- ------ --- --------
Net increase (decrease) in net assets
resulting from operations $ (25,590) $ 27 $ 96,038 $ 288 $ (105,122)
========= ==== ======== ===== ==========
Combined
Variable
Investment income IPH* INO IPV* Account
Dividend income from mutual funds and portfolios $ - $ 430 $ - $ 350,861
Expenses:
Mortality and expense risk fee 4 2,906 10 62,148
Administrative charge - 349 1 7,456
--- --- - -----
Total expenses 4 3,255 11 69,604
- ----- -- ------
Investment income (loss) - net (4) (2,825) (11) 281,257
-- ------ --- -------
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales - 17,849 - 614,703
Cost of investments sold - 18,580 - 637,737
--- ------ --- -------
Net realized gain (loss) on investments - (731) - (23,034)
Net change in unrealized appreciation or
depreciation of investments 31 52,511 1,057 (51,397)
-- ------ ----- -------
Net gain (loss) on investments 31 51,780 1,057 (74,431)
-- ------ ----- -------
Net increase (decrease) in net assets
resulting from operations $ 27 $ 48,955 $ 1,046 $ 206,826
==== ======== ======= =========
*For the period Nov. 4, 1998 (commencement of operations) to Dec. 31, 1998.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Changes in Net Assets Year ended Dec. 31, 1998
Segregated Asset Subaccounts
Operations IGN* IIN* IVA* IIG* IVL*
<S> <C> <C> <C> <C> <C>
Investment income (loss) - net $ (1) $ 5 $ 253 $ 19 $ (1)
Net realized gain (loss) on investments - - - - -
Net change in unrealized appreciation or
depreciation of investments 79 75 385 336 77
-- -- --- --- --
Net increase (decrease) in net assets
resulting from operations 78 80 638 355 76
== == === === ==
Contract transactions
Contract purchase payments 7,115 4,213 8,638 8,862 3,242
Net transfers** - - - - -
Contract terminations:
Surrender benefits and contract charges - - - - -
Death benefits - - - - -
--- --- --- --- ---
Increase (decrease) from contract transactions 7,115 4,213 8,638 8,862 3,242
----- ----- ----- ----- -----
Net assets at beginning of year - - - - -
--- --- --- --- ---
Net assets at end of year $ 7,193 $ 4,293 $ 9,276 $ 9,217 $ 3,318
======= ======= ======= ======= =======
Accumualtion unit activity
Units outstanding at beginning of year - - - - -
Contract purchase payments 6,256 4,138 8,011 8,382 3,334
Net transfers** - - - - -
Contract terminations:
Surrender benefits and contract charges - - - - -
Death benefits - - - - -
--- --- --- --- ---
Units outstanding at end of year 6,256 4,138 8,011 8,382 3,334
===== ===== ===== ===== =====
Operations ILA IPA
Investment income (loss) - net $ 67 $ 42
Net realized gain (loss) on investments (339) (71)
Net change in unrealized appreciation or
depreciation of investments (12,986) 5,559
------- -----
Net increase (decrease) in net assets
resulting from operations (13,258) 5,530
======= =====
Contract transactions
Contract purchase payments 61,792 62,912
Net transfers** (435) (681)
Contract terminations:
Surrender benefits and contract charges (2,704) (2,606)
Death benefits - -
--- ---
Increase (decrease) from contract transactions 58,653 59,625
------ ------
Net assets at beginning of year - -
--- ---
Net assets at end of year $45,395 $ 65,155
======= ========
Accumualtion unit activity
Units outstanding at beginning of year - -
Contract purchase payments 74,439 83,976
Net transfers** (667) (841)
Contract terminations:
Surrender benefits and contract charges (3,095) (3,372)
Death benefits - -
--- ---
Units outstanding at end of year 70,677 79,763
====== ======
*For the period Nov. 4, 1998 (commencement of operations) to Dec. 31, 1998.
**Includes transfer activity from (to) other subaccounts and transfers from (to)
American Centurion Life's fixed account. See accompanying notes to financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Changes in Net Assets (continued) Year ended Dec. 31, 1998
Segregated Asset Subaccounts
Operations IAG ICR IGD* IIE
<S> <C> <C> <C> <C>
Investment income (loss) - net $ 13,832 $ 59,844 $ - $ 117
Net realized gain (loss) on investments (662) (1,218) - 88
Net change in unrealized appreciation or
depreciation of investments (21,227) 23,486 134 (1,959)
------- ------ --- ------
Net increase (decrease) in net assets
resulting from operations (8,057) 82,112 134 (1,754)
====== ====== === ======
Contract transactions
Contract purchase payments 265,523 865,655 4,156 66,479
Net transfers** (422) (1,311) - -
Contract terminations:
Surrender benefits and contract charges (5,608) (13,018) - (2,682)
Death benefits (547) (1,332) - -
---- ------ ---- ----
Increase (decrease) from contract transactions 258,946 849,994 4,156 63,797
------- ------- ----- ------
Net assets at beginning of year - - - -
------- ------- ----- ------
Net assets at end of year $ 250,889 $ 932,106 $ 4,290 $ 62,043
========= ========= ======= ========
Accumualtion unit activity
Units outstanding at beginning of year - - - -
Contracts purchase payments 275,694 767,627 3,727 58,109
Net transfers** (521) (1,222) - -
Contract terminations:
Surrender benefits and contract charges (5,690) (11,946) - (2,262)
Death benefits (647) (1,186) - -
---- ------ ----- -----
Units outstanding at end of year 268,836 753,273 3,727 55,847
======= ======= ===== ======
Operations IMG IMS ISI
Investment income (loss) - net $ 159,505 $ 238 $ 17,937
Net realized gain (loss) on investments (2,914) - (569)
Net change in unrealized appreciation or
depreciation of investments (55,451) - (26,306)
------- ----- -------
Net increase (decrease) in net assets
resulting from operations 101,140 238 (8,938)
======= === ======
Contract transactions
Contract purchase payments 1,690,804 22,711 576,127
Net transfers** (2,260) (9,783) (1,741)
Contract terminations:
Surrender benefits and contract charges (17,219) - (13,553)
Death benefits (2,213) - (1,949)
------ ------ ------
Increase (decrease) from contract transactions 1,669,112 12,928 558,884
--------- ------ -------
Net assets at beginning of year - - -
--------- ------ -------
Net assets at end of year $1,770,252 $ 13,166 $549,946
========== ======== ========
Accumualtion unit activity
Units outstanding at beginning of year - - -
Contracts purchase payments 1,671,564 22,831 584,020
Net transfers** (2,378) (9,805) (1,886)
Contract terminations:
Surrender benefits and contract charges (17,394) - (13,858)
Death benefits (2,181) - (2,002)
------ ------ ------
Units outstanding at end of year 1,649,611 13,026 566,274
========= ====== =======
*For the period Nov. 4, 1998 (commencement of operations) to Dec. 31, 1998.
**Includes transfer activity from (to) other subaccounts and transfers from (to)
American Centurion Life's fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Changes in Net Assets (continued) Year ended Dec. 31, 1998
Segregated Asset Subaccounts
Operations ISB* IWG* IEQ* IMD
<S> <C> <C> <C> <C>
Investment income (loss) - net $ 405 $ 3 $ (1) $ (8,116)
Net realized gain (loss) on investments - - - (4,073)
Net change in unrealized appreciation or
depreciation of investments 1,150 391 75 493
----- --- -- ---
Net increase (decrease) in net assets
resulting from operations 1,555 394 74 (11,696)
===== === == =======
Contract transactions
Contract purchase payments 40,989 11,788 3,282 1,442,406
Net transfers** - - - (2,193)
Contract terminations:
Surrender benefits and contract charges - - - (37,628)
Death benefits - - - (2,126)
---- ---- ---- ------
Increase (decrease) from contract transactions 40,989 11,788 3,282 1,400,459
------ ------ ----- ---------
Net assets at beginning of year - - - -
------ ------ ----- ---------
Net assets at end of year $ 42,544 $ 12,182 $ 3,356 $ 1,388,763
======== ======== ======= ===========
Accumualtion unit activity
Units outstanding at beginning of year - - - -
Contracts purchase payments 36,869 10,848 3,262 1,314,197
Net transfers** - - - (2,086)
Contract terminations:
Surrender benefits and contract charges - - - (36,162)
Death benefits - - - (1,996)
----- ----- ---- ------
Units outstanding at end of year 36,869 10,848 3,262 1,273,953
====== ====== ===== =========
Operations ISC* IUS IGR* IHI*
Investment income (loss) - net $ (7) $ 36,001 $ (8) $ (2)
Net realized gain (loss) on investments - 668 - -
Net change in unrealized appreciation or
depreciation of investments 140 5,077 573 14
--- ----- --- --
Net increase (decrease) in net assets
resulting from operations 133 41,746 565 12
=== ====== === ==
Contract transactions
Contract purchase payments 8,292 1,116,209 12,581 6,055
Net transfers** - (4,329) - -
Contract terminations:
Surrender benefits and contract charges - (24,313) - -
Death benefits - (4,660) - -
---- ------ ----- ----
Increase (decrease) from contract transactions 8,292 1,082,907 12,581 6,055
----- --------- ------ -----
Net assets at beginning of year - - - -
----- --------- ------ -----
Net assets at end of year $ 8,425 $1,124,653 $ 13,146 $ 6,067
======= ========== ======== =======
Accumualtion unit activity
Units outstanding at beginning of year - - - -
Contracts purchase payments 8,243 1,072,494 11,547 5,811
Net transfers** - (3,866) - -
Contract terminations:
Surrender benefits and contract charges - (22,701) - -
Death benefits - (4,300) - -
--- ------ ----- ----
Units outstanding at end of year 8,243 1,041,627 11,547 5,811
===== ========= ====== =====
*For the period Nov. 4, 1998 (commencement of operations) to Dec. 31, 1998.
**Includes transfer activity from (to) other subaccounts and transfers from (to)
American Centurion Life's fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Changes in Net Assets (continued) Year ended Dec. 31, 1998
Segregated Asset Subaccounts
Operations IDI IPD* IGI IPG* IHY
<S> <C> <C> <C> <C> <C>
Investment income (loss) - net $ (634) $ (3) $ 6,368 $ (12) $ (1,754)
Net realized gain (loss) on investments (2,033) - (3,971) - (7,209)
Net change in unrealized appreciation or
depreciation of investments (22,923) 30 93,641 300 (96,159)
------- -- ------ --- -------
Net increase (decrease) in net assets
resulting from operations (25,590) 27 96,038 288 (105,122)
======= == ====== === ========
Contract transactions
Contract purchase payments 695,879 14,280 1,809,462 18,034 1,209,995
Net transfers** (1,610) - (1,614) - (2,191)
Contract terminations:
Surrender benefits and contract charges (14,129) - (37,192) - (14,168)
Death benefits (1,900) - (1,353) - (1,804)
------ ----- ------ ----- ------
Increase (decrease) from contract transactions 678,240 14,280 1,769,303 18,034 1,191,832
------- ------ --------- ------ ---------
Net assets at beginning of year - - - - -
------- ------ --------- ------ ---------
Net assets at end of year $ 652,650 $ 14,307 $1,865,341 $18,322 $ 1,086,710
========= ======== ========== ======= ===========
Accumualtion unit activity
Units outstanding at beginning of year - - - - -
Contracts purchase payments 679,470 13,968 1,574,334 17,282 1,168,801
Net transfers** (1,749) - (1,454) - (2,453)
Contract terminations:
Surrender benefits and contract charges (14,013) - (33,771) - (14,256)
Death benefits (1,921) - (1,156) - (1,896)
------ ---- ------ ----- ------
Units outstanding at end of year 661,787 13,968 1,537,953 17,282 1,150,196
======= ====== ========= ====== =========
Combined
Variable
Operations IPH* INO IPV* Account
Investment income (loss) - net $ (4) $ (2,825) $ (11) $ 281,257
Net realized gain (loss) on investments - (731) - (23,034)
Net change in unrealized appreciation or
depreciation of investments 31 52,511 1,057 (51,397)
-- ------ ----- -------
Net increase (decrease) in net assets
resulting from operations 27 48,955 1,046 206,826
== ====== ===== =======
Contract transactions
Contract purchase payments 14,886 497,803 15,215 10,565,385
Net transfers** - 594 - (27,976)
Contract terminations:
Surrender benefits and contract charges - (15,309) - (200,129)
Death benefits - (637) - (18,521)
--- ---- --- -------
Increase (decrease) from contract transactions 14,886 482,451 15,215 10,318,759
------ ------- ------ ----------
Net assets at beginning of year - - - -
------ ------- ------ ----------
Net assets at end of year $14,913 $ 531,406 $ 16,261 $10,525,585
======= ========= ======== ===========
Accumualtion unit activity
Units outstanding at beginning of year - - -
Contracts purchase payments 14,370 423,873 13,942
Net transfers** - 421 -
Contract terminations:
Surrender benefits and contract charges - (13,018) -
Death benefits - (561) -
----- ---- -----
Units outstanding at end of year 14,370 410,715 13,942
====== ======= ======
*For the period Nov. 4, 1998 (commencement of operations) to Dec. 31, 1998.
**Includes transfer activity from (to) other subaccounts and transfers from (to)
American Centurion Life's fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Notes to Financial Statements
1. Organization
American Centurion Variable Annuity Account (the Account) was established under
New York law on Oct.12, 1995 and the subaccounts are registered together as a
single unit investment trust of American Centurion Life Insurance Company
(American Centurion Life) under the Investment Company Act of 1940, as amended
(the 1940 Act).
The Account is comprised of various subaccounts. Each subaccount invests
exclusively in shares of the following mutual funds or portfolios (collectively,
the Funds), which are registered under the 1940 Act as diversified
(non-diversified for GT Global Variable Latin America Fund), open-end management
investment companies and have the following investment managers.
Subaccount Invests exclusively in shares of Investment Manager
<S> <C> <C>
IGN AIM V.I. Growth and Income Fund A I M Advisors, Inc.
IIN AIM V.I. International Equity Fund A I M Advisors, Inc.
IVA AIM V.I. Value Fund A I M Advisors, Inc.
IIG American Century VP Income and Growth American Century Investment Management, Inc.
IVL American Century VP Value American Century Investment Management, Inc.
ILA GT Global Variable Latin America Fund A I M Advisors, Inc.
IPA GT Global Variable New Pacific Fund A I M Advisors, Inc.
IAG IDS Life Aggressive Growth Fund IDS Life Insurance Company 1
ICR IDS Life Capital Resource Fund IDS Life Insurance Company 1
IGD IDS Life Growth Dimensions Fund IDS Life Insurance Company 1
IIE IDS Life International Equity Fund IDS Life Insurance Company 2
IMG IDS Life Managed Fund IDS Life Insurance Company 1
IMS IDS Life Moneyshare Fund IDS Life Insurance Company 1
ISI IDS Life Special Income Fund IDS Life Insurance Company 1
ISB Janus Aspen Series Balanced Portfolio Janus Capital Corporation
IWG Janus Aspen Series Worldwide Growth Portfolio Janus Capital Corporation
IEQ OCC Accumulation Trust Equity Portfolio OpCap Advisors
IMD OCC Accumulation Trust Managed Portfolio OpCap Advisors
ISC OCC Accumulation Trust Small Cap Portfolio OpCap Advisors
IUS OCC Accumulation Trust U.S. Government Income Portfolio OpCap Advisors
IGR Oppenheimer Capital Appreciation Fund/VA Oppenheimer Funds, Inc.
IHI Oppenheimer High Income Fund/VA Oppenheimer Funds, Inc.
IDI Putnam VT Diversified Income Fund - Class IA Shares Putnam Investment Management, Inc.
IPD Putnam VT Diversified Income Fund - Class IB Shares Putnam Investment Management, Inc.
IGI Putnam VT Growth and Income Fund - Class IA Shares Putnam Investment Management, Inc.
IPG Putnam VT Growth and Income Fund - Class IB Shares Putnam Investment Management, Inc.
IHY Putnam VT High Yield Fund - Class IA Shares Putnam Investment Management, Inc.
IPH Putnam VT High Yield Fund - Class IB Shares Putnam Investment Management, Inc.
INO Putnam VT New Opportunities Fund - Class IA Shares Putnam Investment Management, Inc.
IPV Putnam VT Voyager Fund - Class IB Shares Putnam Investment Management, Inc.
1 American Express Financial Corporation (AEFC) is the investment advisor.
2 AEFC is the investment advisor and American Express Asset Management
International Inc. is the sub-investment advisor.
The assets of each subaccount of the Account are not chargeable with liabilities
arising out of the business conducted by any other segregated asset account or
by American Centurion Life.
American Centurion Life issues the contracts that are distributed by banks and
financial institutions either directly or through a network of third-party
marketers.
2. Summary of Significant Accounting Policies
Investments in the Funds
Investments in shares of the Funds are stated at market value which is the net
asset value per share as determined by the respective Funds. Investment
transactions are accounted for on the date the shares are purchased and sold.
The cost of investments sold and redeemed is determined on the average cost
method. Dividend distributions received from the Funds are reinvested in
additional shares of the Funds and are recorded as income by the subaccounts on
the ex-dividend date.
Unrealized appreciation or depreciation of investments in the accompanying
financial statements represents the subaccounts' share of the Funds'
undistributed net investment income, undistributed realized gain or loss and the
unrealized appreciation or depreciation on their investment securities.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increase and decrease in net assets from operations
during the period. Actual results could differ from those estimates.
Federal Income Taxes
American Centurion Life is taxed as a life insurance company. The Account is
treated as part of American Centurion Life for federal income tax purposes.
Under existing federal income tax law, no income taxes are payable with respect
to any investment income of the Account.
3. Mortality and Expense Risk Fee
American Centurion Life makes contractual assurances to the Account that
possible future adverse changes in administrative expenses and mortality
experience of the contract owners and annuitants will not affect the Account.
The mortality and expense risk fee paid to American Centurion Life is computed
daily and is equal, on an annual basis, to 1.25% of the average daily net assets
of the subaccounts.
4. Administrative Charge
American Centurion Life deducts a daily charge equal, on an annual basis, to
0.15% of the average daily net assets of each subaccount as an administrative
charge. This charge covers certain administrative and operating expenses of the
subaccounts incurred by American Centurion Life such as accounting, legal and
data processing fees, and expenses involved in the preparation and distribution
of reports and prospectuses. This charge cannot be increased.
5. Contract Administrative Charge
American Centurion Life deducts a contract administrative charge of $30 per year
on each contract anniversary. This charge cannot be increased and does not apply
after annuity payouts begin. American Centurion Life does not expect to profit
from this charge. This charge reimburses American Centurion Life for expenses
incurred in establishing and maintaining the annuity records. This charge is
waived when the contract value is $50,000 or more on the current contract
anniversary. The $30 annual charge is deducted at the time of any full
surrender.
6. Withdrawal Charge
American Centurion Life will use a withdrawal charge to help it recover certain
expenses relating to the sale of the annuity. The withdrawal charge is deducted
for withdrawals up to the first seven payment years following a purchase
payment. Charges by American Centurion Life for withdrawals are not identified
on an individual segregated asset account basis. Charges for all segregated
asset accounts amounted to $3,628 in 1998. Such charges are not treated as a
separate expense of the subaccounts. They are ultimately deducted from contract
withdrawal benefits paid by American Centurion Life. This charge is waived if
the withdrawal meets certain provisions as stated in the contract.
7. Investment in Shares
The subaccounts' investment in shares of the Funds as of Dec. 31, 1998 were as
follows:
Subaccount Investment Shares NAV
<S> <C> <C> <C>
IGN AIM V.I. Growth and Income Fund 303 $23.75
IIN AIM V.I. International Equity Fund 219 19.62
IVA AIM V.I. Value Fund 354 26.25
IIG American Century VP Income and Growth 1,360 6.78
IVL American Century VP Value 493 6.73
ILA G.T. Global Variable Latin America Fund 4,729 9.61
IPA G.T. Global Variable New Pacific Fund 7,481 8.72
IAG IDS Life Aggressive Growth Fund 16,362 15.33
ICR IDS Life Capital Resource Fund 28,545 32.65
IGD IDS Life Growth Dimensions Fund 245 17.52
IIE IDS Life International Equity Fund 3,983 15.58
IMG IDS Life Managed Fund 95,586 18.52
IMS IDS Life Moneyshare Fund 13,167 1.00
ISI IDS Life Special Income Fund 49,515 11.11
ISB Janus Aspen Series Balanced Portfolio 1,892 22.50
IWG Janus Aspen Series Worldwide Growth Portfolio 419 29.09
IEQ OCC Accumulation Trust Equity Portfolio 87 38.70
IMD OCC Accumulation Trust Managed Portfolio 31,788 43.74
ISC OCC Accumulation Trust Small Cap Portfolio 365 23.10
IUS OCC Accumulation Trust U.S. Government Income Portfolio 105,444 10.66
IGR Oppenheimer Capital Appreciation Fund/VA 359 36.67
IHI Oppenheimer High Income Fund/VA 551 11.02
IDI Putnam VT Diversified Income Fund - Class IA Shares 62,290 10.49
IPD Putnam VT Diversified Income Fund - Class IB Shares 1,367 10.47
IGI Putnam VT Growth and Income Fund - Class IA Shares 64,913 28.77
IPG Putnam VT Growth and Income Fund - Class IB Shares 638 28.75
IHY Putnam VT High Yield Fund - Class IA Shares 92,992 11.70
IPH Putnam VT High Yield Fund - Class IB Shares 1,275 11.70
INO Putnam VT New Opportunities Fund - Class IA Shares 20,416 26.06
IPV Putnam VT Voyager Fund - Class IB Shares 355 45.81
8. Investment Transactions
The subaccounts' purchases of Funds' shares, including reinvestment of dividend
distributions, were as follows:
Subaccount Investment Year ended Dec. 31, 1998
<S> <C> <C>
IGN3 AIM V.I. Growth and Income Fund $ 7,115
IIN3 AIM V.I. International Equity Fund 4,220
IVA3 AIM V.I. Value Fund 8,899
IIG3 American Century VP Income and Growth 8,888
IVL3 American Century VP Value 3,242
ILA2 GT Global Variable Latin America Fund 62,128
IPA2 GT Global Variable New Pacific Fund 63,321
IAG1 IDS Life Aggressive Growth Fund 280,630
ICR1 IDS Life Capital Resource Fund 970,850
IGD3 IDS Life Growth Dimensions Fund 4,156
IIE1 IDS Life International Equity Fund 67,355
IMG1 IDS Life Managed Fund 1,931,514
IMS1 IDS Life Moneyshare Fund 42,488
ISI1 IDS Life Special Income Fund 595,032
ISB3 Janus Aspen Series Balanced Portfolio 41,411
IWG3 Janus Aspen Series Worldwide Growth Portfolio 11,798
IEQ3 OCC Accumulation Trust Equity Portfolio 3,282
IMD2 OCC Accumulation Trust Managed Portfolio 1,479,737
ISC3 OCC Accumulation Trust Small Cap Portfolio 8,292
IUS1 OCC Accumulation Trust U.S. Government Income Portfolio 1,157,565
IGR3 Oppenheimer Capital Appreciation Fund/VA 12,581
IHI3 Oppenheimer High Income Fund/VA 6,055
IDI2 Putnam VT Diversified Income Fund - Class IA Shares 719,282
IPD3 Putnam VT Diversified Income Fund - Class IB Shares 14,280
IGI2 Putnam VT Growth and Income Fund - Class IA Shares 1,877,566
IPG3 Putnam VT Growth and Income Fund - Class IB Shares 18,034
IHY2 Putnam VT High Yield Fund - Class IA Shares 1,292,921
IPH3 Putnam VT High Yield Fund - Class IB Shares 14,886
INO2 Putnam VT New Opportunities Fund - Class IA Shares 498,101
IPV3 Putnam VT Voyager Fund - Class IB Shares 15,215
Combined Variable Account $11,220,844
1 Operations commenced on Oct. 24, 1997. These subaccounts had no activity in 1997.
2 Operations commenced on Oct. 27, 1997. These subaccounts had no activity in 1997.
3 Operations commenced on Nov. 4, 1998.
9. Year 2000 Issue (unaudited)
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of American Centurion Life
and the Account. American Centurion Life and the Account have no computer
systems of their own but are dependent upon the systems of AEFC and certain
other third parties.
A comprehensive review of AEFC's computer systems and business processes has
been conducted to identify the major systems that could be affected by the Year
2000 issue. Steps are being taken to resolve any potential problems including
modification to existing software and the purchase of new software. These
measures are scheduled to be completed and tested on a timely basis. AEFC's
target date for substantially completing corrective measures on business
critical systems was Dec. 31, 1998. Substantial testing of these systems was
targeted for completion early in 1999. AEFC is currently on track with this
schedule and is also on track to finish the work on non-critical systems by June
30, 1999. The Year 2000 readiness of unaffiliated investment managers and other
third parties whose system failures could have an impact on American Centurion
Life's and the Account's operations continues to be evaluated. The potential
materiality of any such impact is not known at this time.
AEFC's Year 2000 project includes establishing Year 2000 contingency plans for
all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. These plans are being amended to include specific Year 2000
considerations and will continue to be refined throughout 1999 as additional
information related to potential Year 2000 exposure is gathered.
</TABLE>
<PAGE>
Report of Independent Auditors
The Board of Directors
American Centurion Life Assurance Company
We have audited the accompanying balance sheets of American Centurion Life
Assurance Company (a wholly owned subsidiary of IDS Life Insurance Company) as
of December 31, 1998 and 1997, and the related statements of income,
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of American Centurion Life
Assurance Company at December 31, 1998 and 1997, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1998, in conformity with generally accepted accounting principles.
February 4, 1999
Minneapolis, Minnesota
<PAGE>
<TABLE>
<CAPTION>
AMERICAN CENTURION LIFE ASSURANCE COMPANY
BALANCE SHEETS
December 31,
($ thousands, except share amounts)
ASSETS 1998 1997
- ------ ---- ------- ---- ----
<S> <C> <C>
Investments:
Fixed maturities:
Held to maturity, at amortized cost (fair value:
1998, $14,307; 1997, $18,153) $ 13,894 $ 17,698
Available for sale, at fair value (amortized cost:
1998, $269,483; 1997, $210,940) 273,873 216,161
--------- ---------
Total Investments 287,767 233,859
Cash and cash equivalents 13,992 3,756
Amounts recoverable from reinsurers 2,515 2,728
Accrued investment income 4,364 3,120
Deferred policy acquisition costs 12,864 9,280
Other assets 69 1,591
Assets held in separate accounts 12,614 1,280
---------- -----------
Total assets $334,185 $255,614
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Future policy benefits:
Fixed annuities $268,348 $206,531
Traditional life insurance 1,724 1,884
Disability income insurance 225 225
Policy claims and other policyholders' funds 2,048 2,305
Amounts due to broker -- 4,941
Deferred income taxes 1,758 2,391
Other liabilities 463 741
Liabilities related to separate accounts 12,614 1,280
---------- -----------
Total liabilities 287,180 220,298
--------- ---------
Stockholder's equity:
Capital stock, $10 par value per share;
100,000 shares authorized, issued and outstanding 1,000 1,000
Additional paid-in capital 26,600 16,600
Accumulated other comprehensive income:
Net unrealized securities gains 2,512 3,139
Retained earnings 16,893 14,577
---------- ----------
Total stockholder's equity 47,005 35,316
---------- ----------
Total liabilities and stockholder's equity $334,185 $255,614
======== ========
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN CENTURION LIFE ASSURANCE COMPANY
STATEMENTS OF INCOME
Years ended December 31,
($ thousands)
1998 1997 1996
- ----- - ----- - ----
Revenues:
<S> <C> <C> <C>
Net investment income $ 18,990 $ 13,331 $ 8,851
Contractholder charges 568 318 306
Mortality and expense risk fees 87 8 --
Net realized gain (loss) on investments 39 25 (57)
----------- ----------- -------
Total revenues 19,684 13,682 9,100
-------- -------- ------
Benefits and expenses:
Death and other benefits on investment contracts 72 2 --
Interest credited on investment contracts 12,838 8,887 5,849
Amortization of deferred policy acquisition costs 624 114 21
Other operating expenses 2,260 1,324 1,387
-------- -------- -------
Total expenses 15,794 10,327 7,257
------- ------- -------
Income before income taxes 3,890 3,355 1,843
Income taxes 1,574 1,389 678
-------- -------- --------
Net income $ 2,316 $ 1,966 $ 1,165
======= ======= =======
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN CENTURION LIFE ASSURANCE COMPANY
STATEMENTS OF STOCKHOLDER'S EQUITY
Three years ended December 31, 1998
($ thousands)
Accumulated Other
Comprehensive
Total Additional
Stockholder's Capital Paid-In Income, Retained
Equity Stock Capital Net of Tax Earnings
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1995 $ 21,250 $ 1,000 $ 6,600 $ 2,204 $ 11,446
Comprehensive income (loss):
Net income 1,165 -- -- -- 1,165
Unrealized holding losses arising
during the year, net of effect on
deferred policy acquisition costs of
$132 and taxes of $734 (1,364) -- -- (1,364) --
Reclassification adjustment for losses
included in net income, net of tax 23
of $(12) -- -- 23 --
-------------------
----------------
Other comprehensive loss (1,341) -- -- (1,341) --
----------------
Comprehensive loss (176)
Capital contribution from parent 10,000 -- 10,000 -- --
--------------------------------------------------------------------------
Balance, December 31, 1996 31,074 1,000 16,600 863 12,611
Comprehensive income:
Net income 1,966 -- -- -- 1,966
Unrealized holding gains arising
during the year, net of effect on
deferred policy acquisition costs of
$(259) and taxes of $(1,231) 2,286 -- -- 2,286 --
Reclassification adjustment for gains
included in net income, net of tax (10)
of $5 -- -- (10) --
-------------------
----------------
Other comprehensive income 2,276 -- -- 2,276 --
----------------
Comprehensive income 4,242
--------------------------------------------------------------------------
Balance, December 31, 1997 35,316 1,000 16,600 3,139 14,577
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN CENTURION LIFE ASSURANCE COMPANY
STATEMENTS OF STOCKHOLDER'S EQUITY (continued)
Three years ended December 31, 1998
($ thousands)
Accumulated
Other
Total Additional Comprehensive
Stockholder's Capital Paid-In Income, Retained
Equity Stock Capital Net of Tax Earnings
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 $ 35,316 $ 1,000 $ 16,600 $ 3,139 $ 14,577
Comprehensive income:
Net income 2,316 -- -- -- 2,316
Unrealized holding losses arising
during the year, net of effect on
deferred policy acquisition costs of
$135, and taxes of $327 (608) -- -- (646) --
Reclassification adjustment for gains
included in net income, net of tax (19)
of $10 -- -- 19 --
-------------------
----------------
Other comprehensive loss (627) -- -- (627) --
----------------
Comprehensive income 1,689
Capital contribution from parent 10,000 -- 10,000 -- --
--------------------------------------------------------------------------
Balance, December 31, 1998 $ 47,005 $ 1,000 $ 26,600 $ 2,512 $ 16,893
==========================================================================
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN CENTURION LIFE ASSURANCE COMPANY
STATEMENTS OF CASH FLOWS
Years ended December 31,
($ thousands)
1998 1997 1996
-------- -------- ------
Cash flows from operating activities:
<S> <C> <C> <C>
Net income $ 2,316 $ 1,966 $ 1,165
Adjustments to reconcile net income to net cash
used in operating activities:
Change in amounts recoverable from reinsurers 213 -- 674
Change in accrued investment income (1,244) (1,016) (604)
Change in deferred policy acquisition costs, net (3,718) (5,175) (3,177)
Change in other assets 1,522 (1,536) 75
Change in liabilities for future policy benefits for
traditional life and disability income insurance (160) 1 (1,696)
Change in policy claims and other
policyholders' funds (257) 1,614 428
Deferred income tax (benefit) provision (295) 574 1,457
Change in other liabilities (278) 707 (1,087)
(Accretion of discount)
amortization of premium, net (46) 7 56
Net realized (gain) loss on investments (39) (25) 57
Other, net (1) 7 --
----------- ----------- -----------
Net cash used in operating activities (1,987) (2,876) (2,652)
-------- -------- --------
Cash flows from investing activities: Fixed maturities held to maturity:
Maturities 3,770 1,847 2,603
Sales -- -- 477
Fixed maturities available for sale:
Purchases (87,699) (86,006) (59,425)
Maturities 22,581 8,438 7,261
Sales 6,695 1,303 1,572
Change in due to brokers (4,941) 24 4,916
---------- ----------- ---------
Net cash used in investing activities (59,594) (74,394) (42,596)
-------- -------- --------
Cash flows from financing activities: Activity related to investment contracts:
Considerations received 78,367 82,656 55,594
Surrenders and other benefits (29,388) (24,373) (14,870)
Interest credited to account balances 12,838 8,887 5,849
Capital contribution from parent 10,000 -- 10,000
--------- ------------ --------
Net cash provided by financing activities 71,817 67,170 56,573
--------- ------ --------
Net increase (decrease) in cash and cash equivalents 10,236 (10,100) 11,325
Cash and cash equivalents at beginning of year 3,756 13,856 2,531
---------- -------- -----------
Cash and cash equivalents at end of year $ 13,992 $ 3,756 $ 13,856
========= ========= =========
</TABLE>
See accompanying notes.
AMERICAN CENTURION LIFE ASSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
($ thousands)
1. Summary of significant accounting policies
Nature of business
American Centurion Life Assurance Company (the Company) is a stock life
insurance company that is domiciled in New York and licensed to transact
insurance business in New York, Alabama and Delaware. The Company's
principal product is deferred annuities which are issued primarily to
individuals who are New York residents. It offers single premium and
installment premium deferred annuities on both a fixed and variable dollar
basis. Immediate annuities are offered as well.
Basis of presentation
The Company is a wholly owned subsidiary of IDS Life Insurance Company (IDS
Life), which is a wholly owned subsidiary of American Express Financial
Corporation (AEFC), which is a wholly owned subsidiary of American Express
Company. The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles which vary in
certain respects from reporting practices prescribed or permitted by the
New York Department of Insurance (see Note 4).
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Investments
Fixed maturities that the Company has both the positive intent and the
ability to hold to maturity are classified as held to maturity and carried
at amortized cost. All other fixed maturities are classified as available
for sale and carried at fair value. Unrealized gains and losses on
securities classified as available for sale are reported as a separate
component of accumulated other comprehensive income, net of deferred policy
acquisition costs and deferred income taxes.
Realized investment gain or loss is determined on an identified cost basis.
Prepayments are anticipated on certain investments in mortgage-backed
securities in determining the constant effective yield used to recognize
interest income. Prepayment estimates are based on information received
from brokers who deal in mortgage-backed securities.
When evidence indicates a decline, which is other than temporary, in the
underlying value or earning power of individual investments, such
investments are written down to the fair value by a charge to income.
Statements of cash flows
The Company considers investments with a maturity at the date of their
acquisition of three months or less to be cash equivalents. These
securities are carried principally at amortized cost which approximates
fair value.
<PAGE>
1. Summary of significant accounting policies (continued)
Supplementary information to the statements of cash flows for the years
ended December 31, is summarized as follows:
1998 1997 1996
-------- -------- --------
Cash paid during the year for:
Income taxes $42 $2,404 $257
Interest on borrowings 332 7 --
Contractholder charges
Contractholder charges include surrender charges and fees collected
regarding the issue and administration of annuity contracts.
Deferred policy acquisition costs
The costs of acquiring new business, principally sales compensation, policy
issue costs, and certain sales expenses, including direct response
advertising costs, have been deferred on annuity contracts. The deferred
acquisition costs for single premium deferred annuities and certain
installment annuities are amortized primarily using the interest method.
The costs for other installment annuities are amortized as a percentage of
the estimated gross profits expected to be realized on the policies.
Liabilities for future policy benefits
Liabilities for single premium deferred annuities and installment annuities
are accumulation values. Liabilities for fixed annuities in a benefit
status are based on established industry mortality tables and interest
rates of 5.75% to 6.25%, depending on the year of issue.
Federal income taxes
The Company's taxable income is included in the consolidated federal income
tax return of American Express Company. The Company provides for income
taxes on a separate return basis, except that, under an agreement between
AEFC and American Express Company, tax benefit is recognized for losses to
the extent they can be used on the consolidated tax return. It is the
policy of AEFC and its subsidiaries that AEFC will reimburse subsidiaries
for all tax benefits.
Included in Other liabilities at December 31, 1998 and 1997 are $178
payable to and $1,532 receivable from, IDS Life for federal income taxes.
Separate account business
The separate account assets and liabilities represent funds held for the
exclusive benefit of the variable annuity contract owners. The Company
receives mortality and expense risk fees from the variable annuity separate
accounts.
<PAGE>
1. Summary of significant accounting policies (continued)
The Company makes contractual mortality assurances to the variable annuity
contract owners that the net assets of the separate accounts will not be
affected by future variations in the actual life expectancy experience of
the annuitants and the beneficiaries from the mortality assumptions
implicit in the annuity contracts. The Company makes periodic fund
transfers to, or withdrawals from, the separate accounts for such actuarial
adjustments for variable annuities that are in the benefit payment period.
The Company also guarantees that the rates at which administrative fees are
deducted from contract funds will not exceed contractural maximums.
Accounting Changes
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income." SFAS
No. 130 requires the reporting and display of comprehensive income and its
components. Comprehensive income is defined as the aggregate change in
stockholder's equity excluding changes in ownership interests. For the
Company, it is net income and the unrealized gains or losses on
available-for-sale securities net of effect on deferred policy acquisition
costs, taxes and reclassification adjustment.
In March 1998, the American Institute of Certified Public Accountants
(AICPA) issued Statement of Position (SOP) 98-1, "Accounting for Costs of
Computer Software Developed or Obtained for Internal Use." The SOP, which
is effective January 1, 1999, requires the capitalization of certain costs
incurred after the date of adoption to develop or obtain software for
internal use. Software utilized by the Company is owned by AEFC and will be
capitalized on AEFC's financial statements. A result, the new rule will not
have a material impact on the Company's results of operations or financial
condition.
In December 1997, the AICPA issued SOP 97-3, "Accounting by Insurance and
Other Enterprises for Insurance-Related Assessments," providing guidance
for the timing of recognition of liabilities related to guaranty fund
assessments. The Company will adopt the SOP on January 1, 1999. Adoption of
the SOP will not have a material impact on the Company's results of
operations or financial condition. The ultimate financial impact of the new
rule will be measured based on the derivatives in place at adoption and
cannot be estimated at this time.
<PAGE>
1. Summary of significant accounting policies (continued)
Reclassification
Certain 1997 and 1996 amounts have been reclassified to conform to the 1998
presentation.
2. Investments
Fair values of investments in fixed maturities represent quoted market
prices and estimated values when quoted prices are not available. Estimated
values are determined by established procedures involving, among other
things, review of market indices, price levels of current offerings of
comparable issues, price estimates and market data from independent brokers
and financial files.
The amortized cost, gross unrealized gains and losses and fair value of
investments in fixed maturities at December 31, 1998 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
---------------- ---- -------- -- ------- -- ------- --- -----
Corporate bonds and obligations $ 12,483 $ 352 $ -- $ 12,835
Mortgage-backed securities 1,411 61 -- 1,472
------------ ---------- ------------ ----------
$ 13,894 $ 413 $ -- $ 14,307
========= ======== =========== =========
Available for sale
U.S. Government agency obligations $ 1,075 $ 70 $ -- $ 1,145
State and municipal obligations 1,000 48 -- 1,048
Corporate bonds and obligations 181,622 6,050 3,782 183,890
Mortgage-backed securities 85,786 2,036 32 87,790
---------- -------- ---------- ----------
$269,483 $ 8,204 $ 3,814 $273,873
======== ======= ======= ========
</TABLE>
<PAGE>
2. Investments (continued)
The amortized cost, gross unrealized gains and losses and fair value of
investments in fixed maturities at December 31, 1997 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
---------------- ---- -------- -- ------- - ------- --- -----
Corporate bonds and obligations $ 16,176 $ 368 $ 26 $ 16,518
Mortgage-backed securities 1,522 113 -- 1,635
---------- -------- --------- ----------
$ 17,698 $ 481 $ 26 $ 18,153
========= ======== ========= =========
Available for sale
U.S. Government agency obligations $ 2,085 $ 15 $ 1 $ 2,099
State and municipal obligations 1,000 31 -- 1,031
Corporate bonds and obligations 118,450 4,141 356 122,235
Mortgage-backed securities 89,405 1,544 153 90,796
---------- -------- --------- ----------
$210,940 $ 5,731 $ 510 $216,161
======== ======= ========= ========
The amortized cost and fair value of investments in fixed maturities at
December 31, 1998 by contractual maturity are shown below. Actual
maturities will differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or
prepayment penalties.
</TABLE>
Amortized Fair
Held to maturity Cost Value
Due in one year or less $ 2,249 $ 2,258
Due from one to five years 8,433 8,748
Due from five to ten years 357 361
Due in more than ten years 1,444 1,468
Mortgage-backed securities 1,411 1,472
------------ ------------
$ 13,894 $ 14,307
========== ==========
Amortized Fair
Available for sale Cost Value
Due in one year or less $ 6,661 $ 6,752
Due from one to five years 18,872 19,735
Due from five to ten years 97,693 100,962
Due in more than ten years 60,471 58,634
Mortgage-backed securities 85,786 87,790
---------- -----------
$ 269,483 $ 273,873
========= =========
<PAGE>
2. Investments (continued)
There were no sales of fixed maturities classified as held to maturity in
1998 and 1997. During the year ended December 31, 1996, fixed maturities
classified as held to maturity were sold with amortized cost of $500. Net
gains and losses on these sales were not significant. The sales of these
fixed maturities were due to significant deterioration in the issuers'
credit worthiness.
In addition, fixed maturities available for sale were sold during 1998 with
proceeds of $6,695 and gross realized gains and losses of $253 and $224,
respectively. Fixed maturities available for sale were sold during 1997
with proceeds of $1,303 and gross realized gains and losses of $14 and
$nil, respectively. Fixed maturities available for sale were sold during
1996 with proceeds of $1,572 and gross realized gains and losses of $36 and
$71, respectively.
At December 31, 1998, bonds carried at $1,075 were on deposit with various
states as required by law.
Securities are rated by Moody's and Standard & Poor's (S&P), except for
approximately $53 million of securities which are rated by American Express
Financial Corporation's internal analysts using criteria similar to Moody's
and S&P. A summary of investments in fixed maturities, at amortized cost,
by rating on December 31 is as follows:
Rating 1998 1997
---------------------- - --------- - ------
Aaa/AAA $ 88,286 $ 92,682
Aa/AA 4,942 3,890
Aa/A 2,509 1,952
A/A 26,700 28,258
A/BBB 13,439 7,802
Baa/BBB 104,236 61,661
Baa/BB 5,651 4,011
Below investment grade 37,614 28,382
--------- ---------
$283,377 $228,638
======== ========
At December 31, 1998, approximately 83 percent of the securities rated
Aaa/AAA are GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of
any other issuer are greater than ten percent of stockholder's equity.
Net investment income for the years ended December 31 is summarized as
follows:
1998 1997 1996
-------- -------- ------
Interest on fixed maturities $ 19,338 $ 13,818 $ 9,170
Interest on cash equivalents 131 276 308
Other 132 1 16
------------ ------------- ----------
19,601 14,095 9,494
Less investment expenses 611 764 643
----------- ----------- ----------
$ 18,990 $ 13,331 $ 8,851
========= ========= =========
<PAGE>
2. Investments (continued)
Net realized gain (loss) on investments was $39, $25 and $(57) for the
years ended December 31, 1998, 1997 and 1996, respectively, and was
entirely due to sales of fixed maturities.
Changes in net unrealized (depreciation) appreciation of investments for
the years ended December 31 are summarized as follows:
1998 1997 1996
------- ------- ------
Fixed maturities available for sale $(831) $ 3,761 $ (1,931)
3. Income taxes
The Company qualifies as a life insurance company for federal income tax
purposes. As such, the Company is subject to the Internal Revenue Code
provisions applicable to life insurance companies.
The income tax expense (benefit) for the years ended December 31, consists
of the following:
1998 1997 1996
------ -- ------ ------
Federal income taxes:
Current $ 1,544 $ 486 $ (819)
Deferred (295) 574 1,457
--------- ------ -----
1,249 1,060 638
State income taxes-current 325 329 40
--------- ------ -------
Income tax expense $ 1,574 $1,389 $ 678
======= ====== ======
Increases to the federal income tax provision applicable to pretax income
based on the statutory rate for the years ended December 31, are
attributable to:
<TABLE>
<CAPTION>
1998 1997 1996
------------ ------------ --------------------
Provision Rate Provision Rate Provision Rate
Federal income taxes based
<S> <C> <C> <C> <C> <C> <C>
on the statutory rate $1,361 35.0% $1,174 35.0% $ 645 35.0%
Increases are attributable to:
State tax, net 211 5.4 214 6.4 26 1.4
Other, net 2 0.1 1 0 7 .4
------ ----- -------- ------ -------- ----
Federal income taxes $1,574 40.5% $1,389 41.4% $ 678 36.8%
------ ---- ------ ---- ----- ----
</TABLE>
<PAGE>
3. Income taxes (continued)
Significant components of the Company's deferred income tax assets and
liabilities as of December 31 are as follows:
Deferred income tax assets: 1998 1997
----- -----
Policy reserves $ 3,049 $ 1,616
------- -------
Deferred income tax liabilities:
Deferred policy acquisition costs 3,234 2,144
Investments 1,518 1,703
Other 55 160
----------- --------
Total deferred income tax liabilities 4,807 4,007
--------- -------
Net deferred income tax liabilities $ 1,758 $2,391
======= ======
The Company is required to establish a valuation allowance for any portion
of the deferred income tax assets that management believes will not be
realized. In the opinion of management, it is more likely than not that the
Company will realize the benefit of the deferred income tax assets and,
therefore, no such valuation allowance has been established.
4. Stockholder's equity
Retained earnings available for distribution as dividends to the parent are
limited to the Company's surplus as determined in accordance with
accounting practices prescribed by the New York Department of Insurance.
All dividend distributions must be approved by the New York Department of
Insurance. Statutory unassigned surplus aggregated $7,512 and $6,278 as of
December 31, 1998 and 1997, respectively (see note 9 for a reconciliation
of net income and stockholder's equity per the accompanying financial
statements to statutory net income and surplus).
5. Related party transactions
The Company participates in the American Express Retirement Plan which
covers all permanent employees age 21 and over who have met certain
employment requirements. Employer contributions to the plan are based on
participants' age, years of service and total compensation for the year.
Funding of retirement costs for this plan complies with the applicable
minimum funding requirements specified by ERISA. The Company's share of the
total net periodic pension cost was $3, $nil and $nil in 1998, 1997 and
1996, respectively.
The Company also participates in defined contribution pension plans of
American Express Company which cover all employees who have met certain
employment requirements. Company contributions to the plans are a percent
of either each employee's eligible compensation or basic contributions.
Costs of these plans charged to operations in 1998, 1997 and 1996 were $19,
$23 and $19, respectively.
<PAGE>
5. Related party transactions (continued)
The Company participates in defined benefit health care plans of AEFC that
provide health care and life insurance benefits to retired employees. The
plans include participant contributions and service related eligibility
requirements. Upon retirement, such employees are considered to have been
employees of AEFC. Costs of these plans charged to operations in 1998, 1997
and 1996 were $nil.
Charges by IDS Life and AEFC for use of joint facilities, marketing
services and other services aggregated $2,910, $2,536 and $3,142 for 1998,
1997 and 1996, respectively. Certain of these costs are included in
deferred policy acquisition costs.
6. Lines of credit
The Company has an available line of credit with AEFC of $10,000 at AEFC's
cost of funds. The interest rate for the line of credit is AEFC's cost of
funds, ranging from 20 to 45 basis points over an established index. There
were no borrowings outstanding under this agreement at December 31, 1998 or
1997.
7. Commitments and contingencies
A number of lawsuits have been filed against life and health insurers in
jurisdictions in which the Company conducts business involving insurers'
sales practices, alleged agent misconduct, failure to properly supervise
agents, and other matters. The Company, along with AEFC and its insurance
subsidiaries, has been named as a defendant in one of these types of
actions.
The plaintiffs purport to represent a class consisting of all persons who
purchased policies or contracts from IDS Life and its subsidiaries. The
complaint puts at issue various alleged sales practices and
misrepresentations, alleged breaches of fiduciary duties and alleged
violations of consumer fraud statutes. IDS Life and its subsidiaries
believe they have meritorious defenses to the claims raised in this
lawsuit.
The outcome of any litigation cannot be predicted with certainty. In the
opinion of management, however, the ultimate resolution of this lawsuit
should not have a material adverse effect on the Company's financial
position.
The Company has an agreement whereby it ceded 100 percent of a block of
individual life insurance and individual annuities to an unaffiliated
company. At December 31, 1998 and 1997, traditional life insurance in-force
aggregated $191,972 and $216,961, respectively, of which $191,737 and
$216,726 were reinsured at the respective year ends. Under all reinsurance
agreements, premiums ceded to reinsurers amounted to $1,354, $1,346 and
$1,351 for the years ended December 31, 1998, 1997 and 1996. Reinsurance
recovered from reinsurers amounted to $601, $718 and $2,027 for the years
ended December 31, 1998, 1997 and 1996. Reinsurance contracts do not
relieve the Company from its primary obligations to policyholders.
<PAGE>
8. Fair values of financial instruments
The Company discloses fair value information for most on- and off-balance
sheet financial instruments for which it is practicable to estimate that
value. Fair value of life insurance obligations, receivables and all
non-financial instruments, such as deferred acquisition costs are excluded.
Off-balance sheet intangible assets are also excluded. Management believes
the value of excluded assets and liabilities is significant. The fair value
of the Company, therefore, cannot be estimated by aggregating the amounts
presented.
<TABLE>
<CAPTION>
December 31,
1998 1997
Carrying Fair Carrying Fair
Financial Assets Amount Value Amount Value
---------------- -- -------- ------ - ------ ------
Investments in fixed maturities (Note 2)
<S> <C> <C> <C> <C>
Held to maturity $ 13,894 $ 14,307 $ 17,698 $ 18,153
Available for sale 273,873 273,873 216,161 216,161
Cash and cash equivalents (Note 1) 13,992 13,992 3,756 3,756
Separate account assets 12,614 12,614 1,280 1,280
Financial Liabilities
Future policy benefits for fixed
Annuities $268,285 $ 258,578 $206,516 $200,209
Separate account liabilities 12,614 11,851 1,280 1,233
</TABLE>
At December 31, 1998 and 1997, the carrying amount and fair value of future
policy benefits for fixed annuities exclude life insurance-related
contracts carried at $63 and $15, respectively. The fair value of these
benefits is based on the status of the annuities at December 31, 1998 and
1997. The fair values of deferred annuities and separate account
liabilities are estimated as the carrying amount less applicable surrender
charges. The fair value for annuities in non-life contingent payout status
is estimated as the present value of projected benefit payments at rates
appropriate for contracts issued in 1998 and 1997.
<PAGE>
9. Statutory insurance accounting practices
Reconciliations of net income for the years ended December 31 and
stockholder's equity at December 31, as shown in the accompanying financial
statements, to that determined using statutory accounting practices are as
follows:
<TABLE>
<CAPTION>
1998 1997 1996
-- ---- -- ---- -- ----
<S> <C> <C> <C>
Net income, per accompanying financial statements $ 2,316 $ 1,966 $ 1,165
Deferred policy acquisition costs (3,719) (5,175) (3,177)
Adjustments of future policy benefit liabilities 3,540 2,222 (57)
Deferred federal income taxes (295) 574 1,457
IMR gain/loss transfer and amortization (148) (16) 47
Deferred surrender charge 665 -- --
Prior period adjustment -- -- (313)
Other, net (252) 255 16
--------- -------- ---------
Net income (loss), on basis of statutory
accounting practices $ 2,107 $ (174) $ (862)
======= ======= =======
Stockholder's equity, per accompanying
financial statements $47,005 $35,316
Deferred policy acquisition costs (12,864) (9,280)
Adjustments of future policy benefit liabilities 8,694 5,367
Adjustments of reinsurance ceded reserves (2,515) (2,728)
Deferred federal income taxes 1,758 2,391
Asset valuation reserve (2,986) (2,107)
Net unrealized gain on investments (4,390) (5,220)
Interest maintenance reserve (227) (79)
Other, net 637 219
---------- ----------
Stockholder's equity on basis of statutory
accounting practices $35,112 $23,879
======= =======
</TABLE>
<PAGE>
10. Year 2000 (unaudited)
The Year 2000 issue is the result of computer programs having been written
using two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900
rather than 2000. This could result in the failure of major systems or
miscalculations, which could have a material impact on the operations of
the Company. All of the systems used by the Company are maintained by AEFC
and are utilized by multiple subsidiaries and affiliates of AEFC. The
Company's business is heavily dependent upon AEFC's computer systems and
has significant interactions with systems of third parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to the Company, has been conducted to identify the
major systems that could be affected by the Year 2000 issue. Steps are
being taken to resolve any potential problems including modification to
existing software and the purchase of new software. These measures are
scheduled to be completed and tested on a timely basis. AEFC's target date
for substantially completing corrective measures on business critical
systems was December 31, 1998. Substantial testing of these systems was
targeted for completion early in 1999. AEFC is currently on track with this
schedule and is also on track to finish the work on non-critical systems by
June 30, 1999.
AEFC continues to evaluate the Year 2000 readiness of advisors and other
third parties whose system failures could have an impact on the Company's
operations. The potential materiality of any such impact is not known at
this time.
AEFC's Year 2000 project includes establishing Year 2000 contingency plans
for all key business units. Business continuation plans, which address
business continuation in the event of a system disruption, are in place for
all key business units. These plans are being amended to include specific
Year 2000 considerations and will continue to be refined throughout 1999 as
additional information related to potential Year 2000 exposure is gathered.
<PAGE>
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B of this Registration Statement:
The audited financial statements of American Centurion Life Assurance
Company:
Balance sheets as of Dec. 31, 1998 and 1997; and
Related statements of income, stockholder's equity and cash flows for
the years ended Dec. 31, 1998, 1997 and 1996.
Notes to Financial Statements
Report of Independent Auditors dated February 4, 1999.
(b) Exhibits:
1. Certificate establishing the ACL Variable Annuity Account 2 dated
December 1, 1995, filed electronically as Exhibit 1 to Pre-Effective
Amendment No. 1 to Registration Statement No. 333-00519, filed on or
about February 5, 1997, is incorporated herein by reference.
2. Not applicable.
3. Form of Variable Annuity Distribution Agreement filed electronically as
Exhibit 3 to Pre-Effective Amendment No. 2 to Registration Statement No.
333-00519, filed on or about April 30, 1997, is incorporated herein by
reference.
4.1 Form of Flexible Payment Deferred Annuity Contract (form 45054), filed
electronically as Exhibit 4.1 to Pre-Effective Amendment No. 2 to
Registration Statement No. 333-00519, filed on or about April 30, 1997, is
incorporated herein by reference.
4.2 Form of Annuity Endorsement (form 45065) filed on or about June 22,
1998, filed electronically as Exhibit 4.2 to Post-Effective Amendment
No. 3 to Registration Statement No. 333-00519, filed on or about
November 4, 1998 is incorporated herein by reference.
5. Application for American Centurion Life Variable Annuity (form 45055),
filed electronically as Exhibit 5.1 to Pre-Effective Amendment No. 2
to Registration Statement No. 333-00519, filed on or about April 30,
1997, is incorporated herein by reference.
6.1 Amended and Restated By-Laws of American Centurion Life Assurance Company,
filed electronically as Exhibit 6.1 to Pre-Effective Amendment No. 1 to
Registration Statement No. 333-00519, filed on or about February 5, 1997,
is incorporated herein by reference.
6.2 Amended and Restated Articles of Incorporation of American Centurion Life
Assurance Company, filed electronically as Exhibit 6.2 to Pre-Effective
Amendment No. 1 to Registration Statement No. 333-00519, filed on or about
February 5, 1997, is incorporated herein by reference.
6.3 Emergency By-Laws of American Centurion Life Assurance Company, filed
electronically as Exhibit 6.3 to Pre-Effective Amendment No. 1 to
Registration Statement No. 333-00519, filed on or about February 5, 1997,
is incorporated herein by reference.
7. Not applicable.
<PAGE>
8.1 Copy of Amendment 1 to Participation Agreement among Putnam Variable
Trust, Putnam Mutual Funds Corp. and American Centurion Life Assurance
Company, dated October 14, 1998, filed electronically as Exhibit 8.1 to
Post-Effective Amendment No. 3 to Registration Statement No. 333-00519,
filed on or about November 4, 1998 is incorporated herein by reference.
Copy of Participation Agreement among Putnam Variable Trust, Putnam
Mutual Funds Corp. and American Centurion Life Assurance Company, dated
April 30, 1997, filed electronically as Exhibit 8.1 to Pre-Effective
Amendment No. 3 to Registration Statement No. 333-00519, filed on or
about November 4, 1998 is incorporated herein by reference.
8.2 Copy of Amendment No. 1 to Participation Agreement by and among OCC
Accumulation Trust, American Centurion Life Assurance Company and OCC
Distributors, dated October 14, 1998, filed electronically as Exhibit
8.2 to Post-Effective Amendment No. 3 to Registration Statement No.
333-00519, filed on or about November 4, 1998 is incorporated herein by
reference. Copy of Participation Agreement by and among OCC
Accumulation Trust and American Centurion Life Assurance Company and
OCC Distributors, dated September 17, 1997, filed electronically as
Exhibit 8.2 to Pre-Effective Amendment No. 3 to Registration Statement
No. 333-00519, filed on or about November 4, 1998 is incorporated
herein by reference.
8.3 Form of Extension of Participation Agreement Termination date among
American Centurion Life Assurance Company, G.T. Global Variable
Investment Trust, G.T. Global Variable Investment Series and G.T.
Global Inc., dated October 20, 1998, and Copy of Notice of Termination
of Participation Agreement among American Centurion Life Assurance
Company, G.T. Global Variable Investment Trust, G.T. Global Variable
Investment Series and G.T. Global, Inc., dated August 25, 1998, filed
electronically as Exhibit 8.3 to Post-Effective Amendment No. 3 to
Registration Statement No. 333-00519, filed on or about November 4,
1998 is incorporated herein by reference. Copy of Participation
Agreement among American Centurion Life Assurance Company and GT Global
Variable Investment Trust and GT Global Variable Investment Series and
GT Global, Inc., dated May 30, 1997, filed electronically as Exhibit
8.3 to Pre-Effective Amendment No. 3 to Registration Statement No.
333-00519, filed on or about November 4, 1998 is incorporated herein by
reference.
8.4 Copy of Amendment No. 1 to Fund Participation Agreement, by and among
American Centurion Life Assurance Company, American Century Investment
Management, Inc. and American Century Variable Portfolios Inc., dated
August 21, 1998, filed electronically as Exhibit 8.4 to Post-Effective
Amendment No. 3 to Registration Statement No. 333-00519, filed on or about
November 4, 1998 is incorporated herein by reference. Copy of Participation
Agreement by and among American Centurion Life Assurance Company, TCI
Portfolios, Inc. and Investors Research Corporation, dated July 31, 1996,
filed electronically as Exhibit 8.2 to Post-Effective Amendment No. 2 to
Registration Statement No. 333-00041, is incorporated herein by reference.
8.5 Copy of Amendment to Participation Agreement dated October 23, 1996
between Janus Aspen Series and American Centurion Life Assurance
Company, amendment dated October 8, 1997, filed electronically as
Exhibit 8.5 to Post-Effective Amendment No. 3 to Registration Statement
No. 333-00519, filed on or about November 4, 1998 is incorporated
herein by reference. Copy of Participation Agreement between Janus
Aspen Series and American Centurion Life Assurance Company, dated
October 23, 1997, filed electronically as Exhibit 8.3 to Post-Effective
Amendment No. 2 to Registration Statement No. 333-00041, is
incorporated herein by reference.
8.6 Copy of Participation Agreement among AIM Variable Insurance Funds,
Inc., AIM Distributors, Inc., American Centurion Life Assurance Company
and American Express Financial Advisors Inc., dated October 30, 1997,
filed electronically as Exhibit 8.6 to Post-Effective Amendment No. 3
to Registration Statement No. 333-00519, filed on or about November 4,
1998 is incorporated herein by reference.
<PAGE>
8.7 Copy of Participation Agreement among Oppenhiemer Variable Account
Funds, Oppenheimer Funds, Inc., and American Centurion Life Assurance
Company, dated September 4, 1998, filed electronically to
Post-Effective Amendment No. 3 to Registration Statement No. 333-00519,
filed on or about November 4, 1998 is incorporated herein by reference.
9. Opinion of counsel and consent to its use as to the legality of the
securities being registered is filed electronically herewith.
10. Consent of Independent Auditors is filed electronically herewith.
11. None.
12. Not applicable.
13. Copy of schedule for computation of each performance quotation provided
in the Registration Statement in response to Item 21, filed
electronically as Exhibit 13 to Pre-Effective Amendment No. 1 to
Registration Statement No. 333-00519, filed on or about February 5,
1997, is incorporated herein by reference.
14. Power of Attorney to sign Amendments to this Registration Statement,
dated April 14, 1999, is filed electronically herewith.
<TABLE>
<CAPTION>
Item 25. Directors and Officers of the Depositor (American Centurion Life
Assurance Company)
<S> <C> <C>
Name Principal Business Address Positions and Offices with
Depositor
- ------------------------------------- ---------------------------------------- -----------------------------------
Timothy V. Bechtold IDS Tower 10 Director and President
Minneapolis, MN 55440
Maureen A. Buckley IDS Tower 10 Director, Vice President, Chief
Minneapolis, MN 55440 Operating Officer and Consumer
Affairs Officer
Rodney P. Burwell IDS Tower 10 Director
Minneapolis, MN 55440
John R. Cattau American Express Tower Director
World Financial Center
New York, NY 10285
James E. Choat IDS Tower 10 Executive Vice
Minneapolis, MN 55440 President-Institutional
Products Group
Robert R. Grew IDS Tower 10 Director
Minneapolis, MN 55440
Lorraine R. Hart IDS Tower 10 Vice President-Investments
Minneapolis, MN 55440
Jay C. Hatlestad IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller-Assured Assets
Jeffrey S. Horton IDS Tower 10 Vice President and Treasurer
Minneapolis, MN 55440
<PAGE>
Jean B. Keffeler IDS Tower 10 Director
Minneapolis, MN 55440
Richard W. Kling IDS Tower 10 Director and Chairman of the Board
Minneapolis, MN 55440
Eric L. Marhoun IDS Tower 10 General Counsel and Secretary
Minneapolis, MN 55440
Thomas R. McBurney IDS Tower 10 Director
Minneapolis, MN 55440
Edward J. Muhl IDS Tower 10 Director
Minneapolis, MN 55440
Thomas V. Nicolosi IDS Tower 10 Director
Minneapolis, MN 55440
Stephen P. Norman IDS Tower 10 Director
Minneapolis, MN 55440
F. Dale Simmons IDS Tower 10 Vice President-Real Estate Loan
Minneapolis, MN 55440 Management
Richard M. Starr IDS Tower 10 Director
Minneapolis, MN 55440
Philip C. Wentzel IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller-Risk Management
Michael R. Woodward IDS Tower 10 Director
Minneapolis, MN 55440
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant
American Centurion Life Assurance Company is a wholly-owned
subsidiary of IDS Life Insurance Company which is a
wholly-owned subsidiary of American Express Financial
Corporation. American Express Financial Corporation is a
wholly-owned subsidiary of American Express Company (American
Express).
The following list includes the names of major subsidiaries of American Express.
Jurisdiction of
Name of Subsidiary
Incorporation
<TABLE>
<CAPTION>
<S> <C>
I. Travel Related Services
American Express Travel Related Services Company, Inc. New York
II. International Banking Services
American Express Bank Ltd.
Connecticut
<PAGE>
III. Companies engaged in Financial Services
Advisory Capital Partners LLC Delaware
Advisory Capital Strategies Group Inc. Minnesota
American Centurion Life Assurance Company New York
American Enterprise Investment Services Inc. Minnesota
American Enterprise Life Insurance Company Indiana
American Express Asset Management Group Inc. Minnesota
American Express Asset Management International Inc. Delaware
American Express Asset Management International (Japan) Ltd. Japan
American Express Asset Management Ltd. England
American Express Client Service Corporation Minnesota
American Express Corporation Delaware
American Express Financial Advisors Inc. Delaware
American Express Financial Advisors Japan Inc. Delaware
American Express Financial Corporation Delaware
American Express Insurance Agency of Arizona Inc. Arizona
American Express Insurance Agency of Idaho Inc. Idaho
American Express Insurance Agency of Nevada Inc. Nevada
American Express Insurance Agency of Oregon Inc. Oregon
American Express Minnesota Foundation Minnesota
American Express Property Casualty Insurance Agency of Kentucky Inc. Kentucky
American Express Property Casualty Insurance Agency of Maryland Inc. Maryland
American Express Property Casualty Insurance Agency of Mississippi Inc.
Mississippi
American Express Property Casualty Insurance Agency of Pennsylvania Inc.
Pennsylvania
American Express Trust Company Minnesota
American Partners Life Insurance Company Arizona
IDS Cable Corporation Minnesota
IDS Cable II Corporation Minnesota
IDS Capital Holdings Inc. Minnesota
IDS Certificate Company Delaware
IDS Futures Brokerage Group Minnesota
IDS Futures Corporation Minnesota
IDS Insurance Agency of Alabama Inc. Alabama
IDS Insurance Agency of Arkansas Inc. Arkansas
IDS Insurance Agency of Massachusetts Inc.
Massachusetts
IDS Insurance Agency of Mississippi Ltd.
Mississippi
IDS Insurance Agency of New Mexico Inc. New Mexico
IDS Insurance Agency of North Carolina Inc. North
Carolina
IDS Insurance Agency of Ohio Inc. Ohio
IDS Insurance Agency of Texas Inc. Texas
IDS Insurance Agency of Utah Inc. Utah
IDS Insurance Agency of Wyoming Inc. Wyoming
IDS Life Insurance Company Minnesota
IDS Life Insurance Company of New York New York
IDS Management Corporation Minnesota
IDS Partnership Services Corporation Minnesota
IDS Plan Services of California, Inc. Minnesota
IDS Property Casualty Insurance Company Wisconsin
IDS Real Estate Services, Inc. Delaware
IDS Realty Corporation Minnesota
<PAGE>
IDS Sales Support Inc. Minnesota
Investors Syndicate Development Corp. Nevada
Public Employee Payment Company Minnesota
</TABLE>
Item 27. Number of Contract owners
As of March 31, 1999, there were 128 contract owners of
qualified contracts and there were 302 owners of non-qualified
contracts.
Item 28. Indemnification
The By-Laws of the depositor provide that it shall indemnify a
director, officer, agent or employee of the depositor pursuant
to the provisions of applicable statutes or pursuant to
contract.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the 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 whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 29. Principal Underwriters.
(a) American Express Financial Advisors acts as principal underwriter for
the following investment companies:
IDS Bond Fund, Inc.; IDS California Tax-Exempt Trust; IDS Discovery
Fund, Inc.; IDS Equity Select Fund, Inc.; IDS Extra Income Fund, Inc.;
IDS Federal Income Fund, Inc.; IDS Global Series, Inc.; IDS Growth
Fund, Inc.; IDS High Yield Tax-Exempt Fund, Inc.; IDS International
Fund, Inc.; IDS Investment Series, Inc.; IDS Managed Retirement Fund,
Inc.; IDS Market Advantage Series, Inc.; IDS Money Market Series, Inc.;
IDS New Dimensions Fund, Inc.; IDS Precious Metals Fund, Inc.; IDS
Progressive Fund, Inc.; IDS Selective Fund, Inc.; IDS Special
Tax-Exempt Series Trust; IDS Stock Fund, Inc.; IDS Strategy Fund, Inc.;
IDS Tax-Exempt Bond Fund, Inc.; IDS Tax-Free Money Fund, Inc.; IDS
Utilities Income Fund, Inc., Growth Trust; Growth and Income Trust;
Income Trust, Tax-Free Income Trust, World Trust and IDS Certificate
Company.
<PAGE>
(b) As to each director, officer or partner of the principal underwriter:
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Principal Business Address Position and Offices with Positions with Offices with
Underwriter Registrant
- ------------------------------------------ ------------------------------------ -----------------------------
Ronald. G. Abrahamson Vice President - Service Quality None
IDS Tower 10 and Reengineering
Minneapolis, MN 55440
Douglas A. Alger Senior Vice President - Human None
IDS Tower 10 Resources
Minneapolis, MN 55440
Peter J. Anderson Senior Vice President - Investment Vice President
IDS Tower 10 Operations
Minneapolis, MN 55440
Ward D. Armstrong Vice President-American Express None
IDS Tower 10 Retirement Services
Minneapolis, MN 55440
John M. Baker Vice President - Plan Sponsor None
IDS Tower 10 Services
Minneapolis, MN 55440
Joseph M. Barksy, III Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Timothy V. Bechtold Vice President - Risk Management Director and President
IDS Tower 10 Products
Minneapolis, MN 55440
John D. Begley Group Vice President - Ohio/Indiana None
Suite 100
7760 Olentangy River Rd.
Columbus, OH 43235
Brent L. Bisson Group Vice President - Los Angeles None
Suite 900 Metro
E. Westside Twr
11835 West Olympic Blvd.
Los Angeles, CA 90064
John C. Boeder Vice President - Nonproprietary None
IDS Tower 10 Products
Minneapolis, MN 55440
Walter K. Booker Group Vice President - New Jersey None
IDS Tower 10
Minneapolis, MN 55440
Bruce J. Bordelon Group Vice President - Gulf States None
Galleria One Suite 1900
Galleria Blvd.
Metairie, LA 70001
<PAGE>
Charles R. Branch Group Vice President - Northwest None
Suite 200
West 111 North River Dr.
Spokane, WA 99201
Douglas W. Brewers Vice President - Sales Support None
IDS Tower 10
Minneapolis, MN 55440
Karl J. Breyer Corporate Senior Vice President None
IDS Tower 10
Minneapolis, MN 55440
Cynthia M. Carlson Vice President - American Express None
IDS Tower 10 Securities Services
Minneapolis, MN 55440
Mark W. Carter Senior Vice President and Chief None
IDS Tower 10 Marketing Officer
Minneapolis, MN 55440
James E. Choat Senior Vice President - Executive Vice President -
IDS Tower 10 Institutional Products Group Institutional Products Group
Minneapolis, MN 55440
Kenneth J. Ciak Vice President and General Manager None
IDS Property Casualty - IDS Property Casualty
1400 Lombardi Avenue
Green Bay, WI 54304
Paul A. Connolly Vice President - Advisor Staffing, None
IDS Tower 10 Training and Support
Minneapolis, MN 55440
Henry J. Cormier Group Vice President - Connecticut None
Commerce Center One
333 East River Drive
East Hartford, CT 06108
John M. Crawford Group Vice President - None
Suite 200 Arkansas/Springfield/Memphis
10800 Financial Ctr Pkwy
Little Rock, AR 72211
Kevin F. Crowe Group Vice President - None
Suite 312 Carolinas/Eastern Georgia
7300 Carmel Executive Pk
Charlotte, NC 28226
Colleen Curran Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Luz Maria Davis Vice President - Communications None
IDS Tower 10
Minneapolis, MN 55440
<PAGE>
Scott M. DiGiammarino Group Vice President - None
Suite 500 Washington/Baltimore
8045 Leesburg Pike
Vienna, VA 22182
Bradford L. Drew Group Vice President - Eastern None
Two Datran Center Florida
Penthouse One B
9130 S. Dadeland Blvd.
Miami, FL 33156
Douglas K. Dunning Vice President - Assured Assets None
IDS Tower 10 Product Development and Management
Minneapolis, MN 55440
James P. Egge Group Vice President - Western None
4305 South Louise, Suite 202 Iowa, Nebraska, Dakotas
Sioux Falls, SD 57103
Gordon L. Eid Senior Vice President, General None
IDS Tower 10 Counsel and Chief Compliance
Minneapolis, MN 55440 Officer
Robert M. Elconin Vice President - Government None
IDS Tower 10 Relations
Minneapolis, MN 55440
Phillip W. Evans, Group Vice President - Rocky None
Suite 600 Mountain
6985 Union Park Center
Midvale, UT 84047-4177
Gordon M. Fines Vice President - Mutual Fund None
IDS Tower 10 Equity Investments
Minneapolis, MN 55440
Douglas L. Forsberg Vice President - Institutional None
IDS Tower 10 Products Group
Minneapolis, MN 55440
Jeffrey P. Fox Vice President and Corporate None
IDS Tower 10 Controller
Minneapolis, MN 55440
William P. Fritz Group Vice President - Gateway None
Suite 160
12855 Flushing Meadows Dr.
St. Louis, MO 63131
Carl W. Gans Group Vice President - Twin City None
8500 Tower Suite 1770 Metro
8500 Normandale Lake Blvd.
Bloomington, MN 55437
David A. Hammer Vice President and Marketing None
IDS Tower 10 Controller
Minneapolis, MN 55440
<PAGE>
Teresa A. Hanratty Group Vice President - Northern None
Suites 6&7 New England
169 South River Road
Bedford, NH 03110
Robert L. Harden Group Vice President - Boston Metro None
Two Constitution Plaza
Boston, MA 02129
Lorraine R. Hart Vice President - Insurance Vice President, Investments
IDS Tower 10 Investments
Minneapolis, MN 55440
Scott A. Hawkinson Vice President and Controller - None
IDS Tower 10 Private Client Group
Minneapolis, MN 55440
Brian M. Heath Group Vice President - North Texas None
Suite 150
801 E. Campbell Road
Richardson, TX 75081
Janis K. Heaney Vice President - Incentive None
IDS Tower 10 Management
Minneapolis, MN 55440
James G. Hirsh Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Jon E. Hjelm Group Vice President - Rhode None
310 Southbridge Street Island/Central - Western
Auburn, MA 01501 Massachusetts
David J. Hockenberry Group Vice President - Tennessee None
30 Burton Hills Blvd. Valley
Suite 175
Nashville, TN 37215
Jeffrey S. Horton Vice President and Treasurer None
IDS Tower 10
Minneapolis, MN 55440
David R. Hubers Chairman, President and Chief Board member
IDS Tower 10 Executive Officer
Minneapolis, MN 55440
Martin G. Hurwitz Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
James M. Jensen Vice President - Insurance Product None
IDS Tower 10 Development and Management
Minneapolis, MN 55440
Marietta L. Johns Senior Vice President - Field None
IDS Tower 10 Management
Minneapolis, MN 55440
<PAGE>
Nancy E. Jones Vice President - Business None
IDS Tower 10 Development
Minneapolis, MN 55440
Ora J. Kaine Vice President - Financial None
IDS Tower 10 Advisory Services
Minneapolis, MN 55440
Linda B. Keene Vice President - Market Development None
IDS Tower 10
Minneapolis, MN 55440
G. Michael Kennedy Vice President - Investment None
IDS Tower 10 Services and Investment Research
Minneapolis, MN 55440
Susan D. Kinder Senior Vice President - None
IDS Tower 10 Distribution Services
Minneapolis, MN 55440
Richard W. Kling Senior Vice President - Products Director and Chairman of
IDS Tower 10 the Board
Minneapolis, MN 55440
John M. Knight Vice President - Investment Treasurer
IDS Tower 10 Accounting
Minneapolis, MN 55440
Paul F. Kolkman Vice President - Actuarial Finance None
IDS Tower 10
Minneapolis, MN 55440
Claire Kolmodin Vice President - Service Quality None
IDS Tower 10
Minneapolis, MN 55440
David S. Kreager Group Vice President - Greater None
Suite 108 Michigan
Trestle Bridge V
5126 Lovers Lane
Kalamazoo, MI 49002
Steven C. Kumagai Director and Senior Vice President None
IDS Tower 10 - Field Management and Business
Minneapolis, MN 55440 Systems
Mitre Kutanovski Group Vice President - Chicago None
Suite 680 Metro
8585 Broadway
Merrillville, IN 48410
Kurt A. Larson Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Lori J. Larson Vice President - Brokerage and None
IDS Tower 10 Direct Services
Minneapolis, MN 55440
<PAGE>
Daniel E. Laufenberg Vice President and Chief U.S. None
IDS Tower 10 Economist
Minneapolis, MN 55440
Peter A. Lefferts Senior Vice President - Corporate None
IDS Tower 10 Strategy and Development
Minneapolis, MN 55440
Douglas A. Lennick Director and Executive Vice None
IDS Tower 10 President - Private Client Group
Minneapolis, MN 55440
Mary J. Malevich Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Fred A. Mandell Vice President - Field Marketing None
IDS Tower 10 Readiness
Minneapolis, MN 55440
Daniel E. Martin Group Vice President - Pittsburgh None
Suite 650 Metro
5700 Corporate Drive
Pittsburgh, PA 15237
Sarah A. Mealey Vice President - Mutual Funds None
IDS Tower 10
Minneapolis, MN 55440
Paula R. Meyer Vice President - Assured Assets None
IDS Tower 10
Minneapolis, MN 55440
William P. Miller Vice President and Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
James A. Mitchell Executive Vice President - None
IDS Tower 10 Marketing and Products
Minneapolis, MN 55440
Pamela J. Moret Vice President - Variable Assets None
IDS Tower 10
Minneapolis, MN 55440
Alan D. Morgenstern Group Vice President - Central None
Suite 200 California/Western Nevada
3500 Market Street
Camp Hill, NJ 17011
Barry J. Murphy Senior Vice President - Client None
IDS Tower 10 Service
Minneapolis, MN 55440
Mary Owens Neal Vice President - Mature Market None
IDS Tower 10 Segment
Minneapolis, MN 55440
<PAGE>
Thomas V. Nicolosi Group Vice President - New York Director
Suite 220 Metro Area
500 Mamaroneck Avenue
Harrison, NY 10528
Michael J. O'Keefe Vice President - Advisory Business None
IDS Tower 10 Systems
Minneapolis, MN 55440
James R. Palmer Vice President - Taxes None
IDS Tower 10
Minneapolis, MN 55440
Marc A. Parker Group Vice President - None
10200 SW Greenburg Road Portland/Eugene
Suite 110
Portland, OR 97223
Carla P. Pavone Vice President - Compensation and None
IDS Tower 10 Field Administration
Minneapolis, MN 55440
Thomas P. Perrine Senior Vice President - Group None
IDS Tower 10 Relationship Leader/American
Minneapolis, MN 55440 Express Technologies Financial
Services
Susan B. Plimpton Vice President - Marketing Services None
IDS Tower 10
Minneapolis, MN 55440
Larry M. Post Group Vice President - None
One Tower Bridge Philadelphia Metro
100 Front Street, 8th Fl
West Conshohocken, PA 19428
Ronald W. Powell Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Diana R. Prost Group Vice President - None
3030 N.W. Expressway Kansas/Oklahoma
Suite 900
Oklahoma City, OK 73112
James M. Punch Vice President and Project Manager None
IDS Tower 10 - Platform I Value Enhanced
Minneapolis, MN 55440
Frederick C. Quirsfeld Senior Vice President - Fixed None
IDS Tower 10 Income
Minneapolis, MN 55440
Rollyn C. Renstrom Vice President - Corporate None
IDS Tower 10 Planning and Analysis
Minneapolis, MN 55440
<PAGE>
R. Daniel Richardson Group Vice President - Southern None
Suite 800 Texas
Arboretum Plaza One
9442 Capital of Texas Hwy. N
Austin, TX 78759
ReBecca K. Roloff Senior Vice President - Field None
IDS Tower 10 Management and Financial Advisory
Minneapolis, MN 55440 Service
Stephen W. Roszell Senior Vice President - None
IDS Tower 10 Institutional
Minneapolis, MN 55440
Max G. Roth Group Vice President - None
Suite 201 S. IDS Ctr Wisconsin/Upper Michigan
1400 Lombardi Avenue
Green Bay, WI 54304
Erven A. Samsel Senior Vice President - Field None
45 Braintree Hill Park Management
Suite 402
Braintree, MA 02184
Russell L. Scalfano Group Vice President - None
Suite 201 Illinois/Indiana/Kentucky
101 Plaza East Blvd.
Evansville, IN 47715
William G. Scholz Group Vice President - Arizona/Las None
Suite 205 Vegas
7333 E. Doubletree Ranch Rd
Scottsdale, AZ 85258
Stuart A. Sedlacek Senior Vice President and Chief None
IDS Tower 10 Financial Officer
Minneapolis, MN 55440
Donald K. Shanks Vice President - Property Casualty None
IDS Tower 10
Minneapolis, MN 55440
F. Dale Simmons Vice President - Senior Portfolio Vice President, Real Estate
IDS Tower 10 Manager, Insurance Investments Loan Management
Minneapolis, MN 55440
Judy P. Skoglund Vice President - Quality and None
IDS Tower 10 Service Support
Minneapolis, MN 55440
James B. Solberg Group Vice President - Eastern None
466 Westdale Mall Iowa Area
Cedar Rapids, IA 52404
Bridget Sperl Vice President - Geographic None
IDS Tower 10 Service Teams
Minneapolis, MN 55440
<PAGE>
Paul J. Stanislaw Group Vice President - Southern None
Suite 1100 California
Two Park Plaza
Irvine, CA 92714
Lisa A. Steffes Vice President - Cardmember None
IDS Tower 10 Initiatives
Minneapolis, MN 55440
Lois A. Stilwell Group Vice President - Outstate None
Suite 433 Minnesota Area/North
9900 East Bren Road Dakota/Western Wisconsin
Minnetonka, MN 55343
William A. Stoltzmann Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
James J. Strauss Vice President and General Auditor None
IDS Tower 10
Minneapolis, MN 55440
Jeffrey J. Stremcha Vice President - Information None
IDS Tower 10 Resource Management/ISD
Minneapolis, MN 55440
Barbara Stroup Stewart Vice President - Channel None
IDS Tower 10 Development
Minneapolis, MN 55440
Craig P. Taucher Group Vice President - None
Suite 150 Orlando/Jacksonville
4190 Belfort Road
Jacksonville, FL 32216
Neil G. Taylor Group Vice President - None
Suite 425 Seattle/Tacoma/Hawaii
101 Elliott Avenue West
Seattle, WA 98119
John R. Thomas Senior Vice President None
IDS Tower 10
Minneapolis, MN 55440
Peter S. Velardi Group Vice President - None
Suite 180 Atlanta/Birmingham
1200 Ashwood Parkway
Atlanta, GA 30338
Charles F. Wachendorfer Group Vice President - Detroit None
Suite 100 Metro
Stanford Plaza II
7979 East Tufts Ave. Pkwy
Denver, CO 80237
Wesley W. Wadman Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
<PAGE>
Donald F. Weaver Group Vice President - Greater None
3500 Market Street, Suite 200 Pennsylvania
Camp Hill, PA 17011
Norman Weaver Jr. Senior Vice President - Field None
1010 Main St., Suite 2B Management
Huntington Beach, CA 92648
Michael L. Weiner Vice President - Tax Research and None
IDS Tower 10 Audit
Minneapolis, MN 55440
Lawrence J. Welte Vice President - Investment None
IDS Tower 10 Administration
Minneapolis, MN 55440
Jeffry M. Welter Vice President - Equity and Fixed None
IDS Tower 10 Income Trading
Minneapolis, MN 55440
Thomas L. White Group Vice President - Cleveland None
Suite 200 Metro
28601 Chagrin Blvd.
Woodmere, OH 44122
Eric S. Williams Group Vice President - Virginia None
Suite 250
3951 Westerre Parkway
Richmond, VA 23233
William J. Williams Group Vice President - Western None
Two North Tamiami Trail Florida
Suite 702
Sarasota, FL 34236
<PAGE>
Edwin M. Wistrand Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Michael D. Wolf Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Michael R. Woodward Senior Vice President - Field Director
32 Ellicott St. Management
Suite 100
Batavia, NY 14020
</TABLE>
Item 29(c).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net Underwriting
Name of Principal Discounts and Compensation on Brokerage
Underwriter Commissions Redemption Commissions Compensation
American Express 682,400 3,628 None None
Financial Advisors
Inc.
</TABLE>
<PAGE>
Item 30. Location of Accounts and Records
American Centurion Life Assurance Company
20 Madison Avenue Extension
Albany, NY 12205-0555
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Registrant undertakes that it will file a
post-effective amendment to this registration
statement as frequently as is necessary to ensure
that the audited financial statements in the
registration statement are never more than 16 months
old for so long as payments under the variable
annuity contracts may be accepted.
(b) Registrant undertakes that it will 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.
(c) Registrant 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 to American
Centurion Life Contract Owner Service at the address
or phone number listed in the prospectus.
(d) The sponsoring insurance company represents that the
fees and charges deducted under the contract, in the
aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and
the risks assumed by the insurance company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, American Centurion Life Assurance Company, on behalf of the Registrant,
certifies that it meets all of the requirements for effectiveness of this
Amendment to its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Minneapolis, and State of Minnesota, on the 28th day
of April, 1999.
ACL VARIABLE ANNUITY ACCOUNT 2
(Registrant)
By American Centurion Life Assurance Company
(Depositor)
By /s/ Timothy V. Bechtold*
Timothy V. Bechtold
Director and President
As required by the Securities Act of 1933, this Amendment to the Registration
Statement has been signed by the following persons in the capacities indicated
on the 28th day of April, 1999.
<TABLE>
<CAPTION>
Signature Title
<S> <C>
/s/ Timothy V. Bechtold* Director and President
Timothy V. Bechtold
/s/ Maureen A. Buckley* Director, Vice President,
Maureen A. Buckley Chief Operating Officer
and Consumer Affair Officer
/s/ Rodney P. Burwell* Director
Rodney P. Burwell
/s/ John R. Cattau* Director
John R. Cattau
/s/ Robert R. Grew* Director
Robert R. Grew
/s/ Jay C. Hatlestad* Vice President and Controller
Jay C. Hatlestad
/s/ Jeffrey S. Horton* Vice President
Jeffrey S. Horton and Treasurer
<PAGE>
Signature Title
/s/ Jean B. Keffeler* Director
Jean B. Keffeler
/s/ Richard W. Kling* Director and Chairman of the Board
Richard W. Kling
/s/ Thomas R. McBurney* Director
Thomas R. McBurney
/s/ Edward J. Muhl* Director
Edward J. Muhl
/s/ Thomas V. Nicolosi* Director
Thomas V. Nicolosi
/s/ Stephen P. Norman* Director
Stephen P. Norman
/s/ Richard M. Starr* Director
Richard M. Starr
/s/ Michael R. Woodward* Director
Michael R. Woodward
</TABLE>
*Signed pursuant to Power of Attorney, dated April 14, 1999, filed
electronically as Exhibit 14 to Post-Effective Amendment No. 4 to Registration
Statement No. 333-00519.
By:/s/ Mary Ellyn Minenko
Mary Ellyn Minenko
<PAGE>
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 4
TO REGISTRATION STATEMENT NO. 333-00519
This Amendment to the Registration Statement is comprised of the following
papers and documents:
The Cover Page.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements
Part C.
Other Information.
The signatures.
ACL Personal Portfolio Plus 2
Registration Statement 333-00519
EXHIBIT INDEX
Exhibit 9 Opinion of Counsel.
Exhibit 10 Consent of Independent Auditors.
Exhibit 14 Power of Attorney dated April 14, 1999.
April 28, 1999
American Centurion Life Assurance Company
20 Madison Avenue Extension
P.O. Box 5555
Albany, NY 12205-0555
RE: ACL Variable Annuity Account 2
Post-Effective Amendment No. 4
File No.: 333-00519/811-07511
Ladies and Gentlemen:
I am familiar with the establishment of the ACL Variable Annuity Account 2
("Account"), which is a separate account of American Centurion Life Assurance
Company ("Company") established by the Company's Board of Directors according to
applicable insurance law. I also am familiar with the above-referenced
Registration Statement filed by the Company on behalf of the Account with the
Securities and Exchange Commission.
I have made such examination of law and examined such documents and records as
in my judgment are necessary and appropriate to enable me to give the following
opinion:
1. The Company is duly incorporated, validly existing and in good standing
under applicable state law and is duly licensed or qualified to do business
in each jurisdiction where it transacts business. The Company has all
corporate powers required to carry on its business and to issue the
contracts.
2. The Account is a validly created and existing separate account of the
Company and is duly authorized to issue the securities registered.
3. The contracts issued by the Company, when offered and sold in accordance
with the prospectus contained in the Registration Statement and in
compliance with applicable law, will be legally issued and represent
binding obligations of the Company in accordance with their terms.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
/s/ Mary Ellyn Minenko
Mary Ellyn Minenko
Group Counsel
Consent of Independent Auditors
We consent to the use of our report dated February 4, 1999 on the financial
statements American Centurion Life Assurance Company and our report dated March
12, 1999 on the financial statements of American Centurion Variable Annuity
Account 2 in Post-Effective Amendment No. 4 to the Registration Statement (Form
N-4, No. 333-00519) and related Prospectus for the registration of the ACL
Personal Portfolio and ACL Personal Portfolio Plus 2 Annuity Contracts to be
offered by American Centurion Life Assurance Company.
/s/ Ernst & Young LLP.
Minneapolis, Minnesota
April 27, 1999
AMERICAN CENTURION LIFE ASSURANCE COMPANY
POWER OF ATTORNEY
City of Albany
State of New York
Each of the undersigned, as a director and/or officer of American Centurion Life
Assurance Company (ACL) on behalf of the below listed registrants previously
have filed registration statements and amendments thereto pursuant to the
requirements of the Securities Act of 1933 and the Investment Company Act of
1940 with the Securities and Exchange Commission:
<TABLE>
<CAPTION>
<S> <C> <C>
1933 Act 1940 Act
Reg. Number Reg. Number
ACL Variable Annuity Account 1 333-00041 811-07475
Privileged Assets Select Annuity (PASA-NY)
- ---------------------------------------------------
ACL Variable Annuity Account 2 333-00519 811-07511
ACL Personal PortfolioSM/
ACL Personal Portfolio Plus2 (ACL-PLUS 2)
</TABLE>
hereby constitutes and appoints William A. Stoltzmann, Mary Ellyn Minenko,
Eileen J. Newhouse, Christopher R. Long, Timothy S. Meehan and Eric L. Marhoun
or any one of them, as his/her attorney-in-fact and agent, to sign for him/her
in his/her name, place and stead any and all filings, applications (including
applications for exemptive relief), periodic reports, registration statements
for existing or future products (with all exhibits and other documents required
or desirable in connection therewith), other documents, and amendments thereto
and to file such filings, applications periodic reports, registration
statements, other documents, and amendments thereto with the Securities and
Exchange Commission, and any necessary states, and grants to any or all of them
the full power and authority to do and perform each and every act required or
necessary in connection therewith.
Dated the 14 day of April, 1999.
/s/ Timothy V. Bechtold
Timothy V. Bechtold
Director and President
/s/ Maureen A. Buckley
Maureen A. Buckley
Director, Vice President, Chief Operating Officer
and Consumer Affairs Officer
/s/ Rodney P. Burwell
Rodney P. Burwell
Director
/s/ John R. Cattau
John R. Cattau
Director
<PAGE>
/s/ Robert R. Grew
Robert R. Grew
Director
/s/ Jay C. Hatlestad
Jay C. Hatlestad
Vice President and Controller
/s/ Jeffrey S. Horton
Jeffrey S. Horton
Vice President and Treasurer
/s/ Jean B. Keffeler
Jean B. Keffeler
Director
/s/ Richard W. Kling
Richard W. Kling
Director and Chairman of the Board
/s/ Thomas R. McBurney
Thomas R. McBurney
Director
/s/ Edward J. Muhl
Edward J. Muhl
Director
/s/ Thomas V. Nicolosi
Thomas V. Nicolosi
Director
/s/ Stephen P. Norman
Stephen P. Norman
Director
/s/ Richard M. Starr
Richard M. Starr
Director
/s/ Michael R. Woodward
Michael R. Woodward
Director
