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. 5 (File No. 333-00519) [X]
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 9 (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, 200 AXP Financial Center, Minneapolis, MN 55474
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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 May 1, 2000 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>
PROSPECTUS
MAY 1, 2000
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 (AMERICAN CENTURION LIFE)
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):
- - American Express-Registered Trademark- Variable Portfolio Funds;
- - AIM Variable Insurance Funds;
- - American Century Variable Portfolios, Inc.;
- - Janus Aspen Series: Institutional Shares;
- - OCC Accumulation Trust;
- - Oppenheimer Variable Account Funds; and
- - Putnam Variable Trust.
For ACL PERSONAL PORTFOLIO(SM):
- - American Express-Registered Trademark- Variable Portfolio Funds;
- - AIM Variable Insurance Funds;
- - OCC Accumulation Trust; and
- - Putnam Variable Trust.
Please read the prospectuses carefully and keep them for future reference.
THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY 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 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.
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PROSPECTUS -- MAY 1, 2000 1
<PAGE>
TABLE OF CONTENTS
KEY TERMS ................................... 3
THE CONTRACT IN BRIEF ....................... 4
EXPENSE SUMMARY ............................. 6
CONDENSED FINANCIAL INFORMATION
(UNAUDITED) ................................. 9
FINANCIAL STATEMENTS ........................ 13
PERFORMANCE INFORMATION ..................... 13
THE VARIABLE ACCOUNT AND THE FUNDS .......... 14
THE FIXED ACCOUNT ........................... 18
BUYING YOUR CONTRACT ........................ 18
CHARGES ..................................... 19
VALUING YOUR INVESTMENT ..................... 22
MAKING THE MOST OF YOUR CONTRACT ............ 24
WITHDRAWALS ................................. 27
CHANGING OWNERSHIP .......................... 27
BENEFITS IN CASE OF DEATH ................... 28
THE ANNUITY PAYOUT PERIOD ................... 30
TAXES ....................................... 32
VOTING RIGHTS ............................... 34
SUBSTITUTION OF INVESTMENTS ................. 34
ABOUT THE SERVICE PROVIDERS ................. 35
YEAR 2000 ................................... 36
TABLE OF CONTENTS OF THE STATEMENT OF
ADDITIONAL
INFORMATION ............................... 37
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2 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
KEY TERMS
THESE TERMS CAN HELP YOU UNDERSTAND DETAILS ABOUT YOUR CONTRACT.
ACCUMULATION UNIT: A measure of the value of each 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: A deferred annuity contract that permits you to accumulate money for
retirement by making one or more purchase payments. It provides for lifetime or
other forms of payouts beginning at a specified time in the future.
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: Investment options under your contract. You may allocate your purchase
payments into 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 receives the contract's benefits.
QUALIFIED ANNUITY: A contract that you purchase to fund one of the following
tax-deferred retirement plans that is subject to applicable federal law and any
rules of the plan itself:
- - Individual Retirement Annuities (IRAs) under Section 408(b) of the Internal
Revenue Code of 1986, as amended (the Code)
- - Roth IRAs under Section 408A of the Code
- - Simplified Employee Pension (SEP) plans under Section 408(k) of the Code
A qualified annuity will not provide any necessary or additional tax deferral if
it is used to fund a retirement plan that is already tax-deferred.
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.
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PROSPECTUS -- MAY 1, 2000 3
<PAGE>
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.
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 purchase payments; you may
allocate your purchase payments to the fixed account and/or subaccounts under
the contract. These accounts, in turn, may earn returns that increase the value
of the contract. Beginning at a specified time in the future called the
retirement date, the contract provides lifetime or other forms of payouts of
your contract value (less any applicable premium tax). 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.
A qualified annuity will not provide any necessary or additional tax deferral if
it is used to fund a retirement plan that is tax-deferred. However, the contract
has features other than tax deferral that may make it an appropriate investment
for your retirement plan. You should compare these features and their costs with
other investment options before deciding to purchase this contract.
FREE LOOK PERIOD: You may return your contract to your sales representative or
to our office within the time stated on the first page of your contract and
receive a full refund of the contract value. We will not deduct any charges.
However, you bear the investment risk from the time of purchase until you return
the contract; the refund amount may be more or less than the payment you made.
(Exception: If the law requires, we will refund all of 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. 14)
- - the fixed account, which earns interest at a rate that we adjust
periodically. (p. 18)
BUYING YOUR CONTRACT: Your sales representative 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. After your initial
purchase payment, you have the option of making additional purchase payments in
the future. Some states have time limitations for making additional
payments. (p. 18)
- - 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 accounts 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 accounts. Fixed account
transfers are subject to special restrictions. (p. 24)
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4 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
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. 27)
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. 27)
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. 28)
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. 30)
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. However, Roth IRAs may grow and be
distributed tax-free, if you meet certain distribution requirements. (p. 32)
CHARGES: We assess certain charges in connection with your contract:
- - $30 annual contract administrative charge;
- - 0.15% variable account administrative charge;
- - 1.25% mortality and expense risk fee (if you allocate money to one or more
subaccounts);
- - withdrawal charge; and
- - the operating expenses of the funds in which the subaccounts invest.
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PROSPECTUS -- MAY 1, 2000 5
<PAGE>
EXPENSE SUMMARY
The purpose of the following information 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
we deduct directly from your contract or indirectly from the subaccounts and
funds below. Some expenses may vary as we explain under "Charges." Please see
the fund prospectuses for more information on the operating expenses for each
fund.
CONTRACT OWNER EXPENSES
WITHDRAWAL CHARGE (contingent deferred sales charge as a percentage of purchase
payment withdrawn)
<TABLE>
<CAPTION>
YEARS FROM PURCHASE WITHDRAWAL CHARGE
PAYMENT RECEIPT PERCENTAGE
<S> <C>
1 7%
2 6
3 5
4 4
5 3
6 2
7 1
Thereafter 0
</TABLE>
<TABLE>
<S> <C>
ANNUAL CONTRACT ADMINISTRATIVE CHARGE $30*
</TABLE>
*We will waive this charge when your contract value is $50,000 or more on the
current contract anniversary.
ANNUAL VARIABLE ACCOUNT EXPENSES
(as a percentage of average subaccount value):
<TABLE>
<S> <C>
VARIABLE ACCOUNT ADMINISTRATIVE CHARGE 0.15%
MORTALITY AND EXPENSE RISK FEE 1.25%
-----
TOTAL ANNUAL VARIABLE ACCOUNT EXPENSES 1.40%
</TABLE>
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6 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
ANNUAL OPERATING EXPENSES OF THE FUNDS (AFTER FEE WAIVERS AND/OR EXPENSE
REIMBURSEMENTS, IF APPLICABLE, AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
<TABLE>
<CAPTION>
MANAGEMENT 12B-1 OTHER
FEES FEES EXPENSES TOTAL
<S> <C> <C> <C> <C>
AXP(SM) Variable Portfolio --
Bond Fund .60% .13 .08 .81%(1)
Capital Resource Fund .60% .13 .06 .79%(1)
Cash Management Fund .51% .13 .05 .69%(1)
International Fund .83% .13 .11 1.07%(1)
Managed Fund .59% .13 .04 .76%(1)
New Dimensions Fund-Registered Trademark- .61% .13 .07 .81%(1)
Strategy Aggressive Fund .60% .13 .07 .80%(1)
AIM V.I.
Growth and Income Fund .61% -- .16 .77%(2)
International Equity Fund .75% -- .22 .97%(2)
Value Fund .61% -- .15 .76%(2)
American Century VP
Income and Growth .70% -- -- .70%(3)
Value 1.00% -- -- 1.00%(3)
Janus Aspen Series
Balanced Portfolio: Institutional Shares .65% -- .02 .67%(4)
Worldwide Growth Portfolio: Institutional Shares .65% -- .05 .70%(4)
OCC Accumulation Trust
Equity Portfolio .80% -- .11 .91%(5)
Managed Portfolio .77% -- .06 .83%(5)
Small Cap Portfolio .80% -- .09 .89%(5)
U.S. Government Income Portfolio .80% -- .15 .95%(5)
OppenheimerFunds, Inc.
Capital Appreciation Fund/VA .68% -- .02 .70%(2)
High Income Fund/VA .74% -- .01 .75%(2)
Putnam Variable Trust
Putnam VT Diversified Income Fund -- Class IA Shares .68% -- .10 .78%(2)
Putnam VT Diversified Income Fund -- Class IB Shares .68% .15 .10 .93%(2)
Putnam VT Growth and Income Fund -- Class IA Shares .46% -- .04 .50%(2)
Putnam VT Growth and Income Fund -- Class IB Shares .46% .15 .04 .65%(2)
Putnam VT High Yield Fund -- Class IA Shares .65% -- .07 .72%(2)
Putnam VT High Yield Fund -- Class IB Shares .65% .15 .07 .87%(2)
Putnam VT New Opportunities Fund -- Class IA Shares .54% -- .05 .59%(2)
Putnam VT Voyager Fund -- Class IB Shares .53% .15 .04 .72%(2)
</TABLE>
<TABLE>
<C> <S>
(1) The fund's expense figures are based on actual expenses for
the fiscal year ended Aug. 31, 1999 restated to include a
Rule 12b-1 distribution fee of .125% that went into effect
Sept. 21, 1999.
(2) Figures in "Management Fees", "12b-1 Fees", "Other Expenses"
and "Total" are based on actual expenses for the fiscal year
ended Dec. 31, 1999.
(3) The fund has a stepped fee schedule. As a result, the fund's
management fee rate generally decreases as fund assets
increase.
(4) Expenses are based upon expenses for the fiscal year ended
Dec. 31, 1999, restated to reflect a reduction in the
management fee for Balanced and Worldwide Growth Portfolios.
(5) Annualized operating expenses of funds at Dec. 31, 1999.
</TABLE>
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PROSPECTUS -- MAY 1, 2000 7
<PAGE>
EXAMPLE:*
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and...
<TABLE>
<CAPTION>
NO WITHDRAWAL OR SELECTION
TOTAL WITHDRAWAL AT THE OF AN ANNUITY PAYOUT PLAN AT THE
END OF EACH TIME PERIOD END OF EACH TIME PERIOD
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AXP(SM) Variable Portfolio --
Bond Fund $93.22 $121.53 $152.47 $262.24 $23.22 $71.53 $122.47 $262.24
Capital Resource Fund 93.01 120.91 151.44 260.17 23.01 70.91 121.44 260.17
Cash Management Fund 91.99 117.82 146.27 249.75 21.99 67.82 116.27 249.75
International Fund 95.88 129.53 165.80 288.79 25.88 79.53 135.80 288.79
Managed Fund 92.70 119.99 149.89 257.06 22.70 69.99 119.89 257.06
New Dimensions
Fund-Registered Trademark- 93.22 121.53 152.47 262.24 23.22 71.53 122.47 262.24
Strategy Aggressive Fund 93.11 121.22 151.95 261.20 23.11 71.22 121.95 261.20
AIM V.I.
Growth and Income Fund 92.81 120.30 150.40 258.09 22.81 70.30 120.40 258.09
International Equity Fund 94.86 126.46 160.69 278.66 24.86 76.46 130.69 278.66
Value Fund 92.70 119.99 149.89 257.06 22.70 69.99 119.89 257.06
American Century VP
Income and Growth 92.09 118.13 146.78 250.80 22.09 68.13 116.78 250.80
Value 95.16 127.38 162.23 281.71 25.16 77.38 132.23 281.71
Janus Aspen Series
Balanced Porfolio:
Institutional Shares 91.78 117.21 145.23 247.66 21.78 67.21 115.23 247.66
Worldwide Growth Portfolio:
Institutional Shares 92.09 118.13 146.78 250.80 22.09 68.13 116.78 250.80
OCC Accumulation Trust
Equity Portfolio 94.24 124.61 157.61 272.53 24.24 74.61 127.61 272.53
Managed Portfolio 93.42 122.15 153.50 264.31 23.42 72.15 123.50 264.31
Small Cap Portfolio 94.04 124.00 156.59 270.48 24.04 74.00 126.59 270.48
U.S. Government Income
Portfolio 94.65 125.84 159.67 276.62 24.65 75.84 129.67 276.62
OppenheimerFunds, Inc.
Capital Appreciation Fund/VA 92.09 118.13 146.78 250.80 22.09 68.13 116.78 250.80
High Income Fund/VA 92.60 119.68 149.37 256.02 22.60 69.68 119.37 256.02
Putnam Variable Trust
Putnam VT Diversified Income
Fund -- Class IA Shares 92.91 120.60 150.92 259.13 22.91 70.60 120.92 259.13
Putnam VT Diversified Income
Fund -- Class IB Shares 94.45 125.23 158.64 274.58 24.45 75.23 128.64 274.58
Putnam VT Growth and Income
Fund -- Class IA Shares 90.04 111.94 136.38 229.68 20.04 61.94 106.38 229.68
Putnam VT Growth and Income
Fund -- Class IB Shares 91.58 116.59 144.19 245.56 21.58 66.59 114.19 245.56
Putnam VT High Yield Fund --
Class IA Shares 92.29 118.75 147.82 252.89 22.29 68.75 117.82 252.89
Putnam VT High Yield Fund --
Class IB Shares 93.83 123.38 155.56 268.43 23.83 73.38 125.56 268.43
Putnam VT New Opportunities
Fund -- Class IA Shares 90.96 114.73 141.07 239.24 20.96 64.73 111.07 239.24
Putnam VT Voyager Fund --
Class IB Shares 92.29 118.75 147.82 252.89 22.29 68.75 117.82 252.89
</TABLE>
<TABLE>
<C> <S>
* In this example, the $30 contract administrative charge is
approximated as a 0.055% charge based on our average
contract size. We entered into certain arrangements under
which we are compensated by the funds' advisors and/or
distributors for the administrative services we provide to
the funds.
</TABLE>
YOU SHOULD NOT CONSIDER THIS EXAMPLE AS A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
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8 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
CONDENSED FINANCIAL INFORMATION
(UNAUDITED)
The following tables give per-unit information about the financial history of
each subaccount.
<TABLE>
<CAPTION>
YEAR ENDED DEC. 31, 1999 1998 1997
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<S> <C> <C> <C>
SUBACCOUNT ISI(1) (INVESTING IN SHARES OF AXP(SM) VARIABLE
PORTFOLIO -- BOND FUND)
Accumulation unit value at
beginning of period $0.97 $0.97 $1.00
Accumulation unit value at end
of period $0.97 $0.97 $0.97
Number of accumulation units
outstanding at end of period
(000 omitted) 898 566 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
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SUBACCOUNT ICR(1) (INVESTING IN SHARES OF AXP(SM) VARIABLE
PORTFOLIO -- CAPITAL RESOURCE FUND)
Accumulation unit value at
beginning of period $1.24 $1.01 $1.00
Accumulation unit value at end
of period $1.51 $1.24 $1.01
Number of accumulation units
outstanding at end of period
(000 omitted) 861 753 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
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SUBACCOUNT IMS(1) (INVESTING IN SHARES OF AXP(SM) VARIABLE
PORTFOLIO -- CASH MANAGEMENT FUND)
Accumulation unit value at
beginning of period $1.01 $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% 1.40% --
Simple yield(2) 4.53% 3.29% --
Compound yield(2) 4.63% 3.34% --
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SUBACCOUNT IIE(1) (INVESTING IN SHARES OF AXP(SM) VARIABLE
PORTFOLIO -- INTERNATIONAL FUND)
Accumulation unit value at
beginning of period $1.11 $0.97 $1.00
Accumulation unit value at end
of period $1.60 $1.11 $0.97
Number of accumulation units
outstanding at end of period
(000 omitted) 143 56 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
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SUBACCOUNT IMG(1) (INVESTING IN SHARES OF AXP(SM) VARIABLE
PORTFOLIO -- MANAGED FUND)
Accumulation unit value at
beginning of period $1.07 $0.97 $1.00
Accumulation unit value at end
of period $1.22 $1.07 $0.97
Number of accumulation units
outstanding at end of period
(000 omitted) 1,962 1,650 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
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SUBACCOUNT IGD(3) (INVESTING IN SHARES OF AXP(SM) VARIABLE
PORTFOLIO -- NEW DIMENSION FUND-REGISTERED TRADEMARK-)
Accumulation unit value at
beginning of period $1.15 $1.00 --
Accumulation unit value at end
of period $1.50 $1.15 --
Number of accumulation units
outstanding at end of period
(000 omitted) 88 4 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
</TABLE>
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PROSPECTUS -- MAY 1, 2000 9
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DEC. 31, 1999 1998 1997
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<S> <C> <C> <C>
SUBACCOUNT IAG(1) (INVESTING IN SHARES OF AXP(SM) VARIABLE
PORTFOLIO -- STRATEGY AGGRESSIVE FUND)
Accumulation unit value at
beginning of period $0.93 $0.92 $1.00
Accumulation unit value at end
of period $1.57 $0.93 $0.92
Number of accumulation units
outstanding at end of period
(000 omitted) 427 269 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IGN(3) (INVESTING IN SHARES OF AIM V.I. GROWTH
AND INCOME FUND)
Accumulation unit value at
beginning of period $1.15 $1.00 --
Accumulation unit value at end
of period $1.52 $1.15 --
Number of accumulation units
outstanding at end of period
(000 omitted) 381 6 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IIN(3) (INVESTING IN SHARES OF AIM V.I.
INTERNATIONAL EQUITY FUND)
Accumulation unit value at
beginning of period $1.04 $1.00 --
Accumulation unit value at end
of period $1.59 $1.04 --
Number of accumulation units
outstanding at end of period
(000 omitted) 230 4 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IVA(3) (INVESTING IN SHARES OF AIM V.I. VALUE
FUND)
Accumulation unit value at
beginning of period $1.16 $1.00 --
Accumulation unit value at end
of period $1.48 $1.16 --
Number of accumulation units
outstanding at end of period
(000 omitted) 482 8 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IIG(3) (INVESTING IN SHARES OF AMERICAN CENTURY
VP INCOME AND GROWTH)
Accumulation unit value at
beginning of period $1.10 $1.00 --
Accumulation unit value at end
of period $1.28 $1.10 --
Number of accumulation units
outstanding at end of period
(000 omitted) 180 8 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IVL(3) (INVESTING IN SHARES OF AMERICAN CENTURY
VP VALUE)
Accumulation unit value at
beginning of period $1.00 $1.00 --
Accumulation unit value at end
of period $0.97 $1.00 --
Number of accumulation units
outstanding at end of period
(000 omitted) 116 3 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
</TABLE>
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10 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DEC. 31, 1999 1998 1997
- ------------------------------------------------------------
<S> <C> <C> <C>
SUBACCOUNT ISB(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES
BALANCED PORTFOLIO: INSTITUTIONAL SHARES)
Accumulation unit value at
beginning of period $1.15 $1.00 --
Accumulation unit value at end
of period $1.44 $1.15 --
Number of accumulation units
outstanding at end of period
(000 omitted) 1,783 37 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IWG(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES
WORLDWIDE GROWTH PORTFOLIO: INSTITUTIONAL SHARES)
Accumulation unit value at
beginning of period $1.12 $1.00 --
Accumulation unit value at end
of period $1.82 $1.12 --
Number of accumulation units
outstanding at end of period
(000 omitted) 280 11 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IEQ(3) (INVESTING IN SHARES OF OCC ACCUMULATION
TRUST EQUITY PORTFOLIO)
Accumulation unit value at
beginning of period $1.03 $1.00 --
Accumulation unit value at end
of period $1.04 $1.03 --
Number of accumulation units
outstanding at end of period
(000 omitted) 101 3 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IMD(4) (INVESTING IN SHARES OF OCC ACCUMULATION
TRUST MANAGED PORTFOLIO)
Accumulation unit value at
beginning of period $1.09 $1.03 $1.00
Accumulation unit value at end
of period $1.13 $1.09 $1.03
Number of accumulation units
outstanding at end of period
(000 omitted) 1,293 1,274 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT ISC(3) (INVESTING IN SHARES OF OCC ACCUMULATION
TRUST SMALL CAP PORTFOLIO)
Accumulation unit value at
beginning of period $1.02 $1.00 --
Accumulation unit value at end
of period $0.99 $1.02 --
Number of accumulation units
outstanding at end of period
(000 omitted) 125 8 --
Ratio of operating expenses to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IUS(1) (INVESTING IN SHARES OF OCC ACCUMULATION
TRUST U.S. GOVERNMENT INCOME PORTFOLIO)
Accumulation unit value at
beginning of period $1.08 $1.01 $1.00
Accumulation unit value at end
of period $1.05 $1.08 $1.01
Number of accumulation units
outstanding at end of period
(000 omitted) 1,070 1,042 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IGR(3) (INVESTING IN SHARES OF OPPENHEIMER
CAPITAL APPRECIATION FUND/VA)
Accumulation unit value at
beginning of period $1.14 $1.00 --
Accumulation unit value at end
of period $1.59 $1.14 --
Number of accumulation units
outstanding at end of period
(000 omitted) 329 12 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IHI(3) (INVESTING IN SHARES OF OPPENHEIMER HIGH
INCOME FUND/VA)
Accumulation unit value at
beginning of period $1.04 $1.00 --
Accumulation unit value at end
of period $1.07 $1.04 --
Number of accumulation units
outstanding at end of period
(000 omitted) 253 6 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 11
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DEC. 31, 1999 1998 1997
- ------------------------------------------------------------
<S> <C> <C> <C>
SUBACCOUNT IDI(4) (INVESTING IN SHARES OF PUTNAM VT
DIVERSIFIED INCOME FUND -- CLASS IA SHARES)
Accumulation unit value at
beginning of period $0.99 $1.01 $1.00
Accumulation unit value at end
of period $0.99 $0.99 $1.01
Number of accumulation units
outstanding at end of period
(000 omitted) 605 662 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IPD(3) (INVESTING IN SHARES OF PUTNAM VT
DIVERSIFIED INCOME FUND -- CLASS IB SHARES)
Accumulation unit value at
beginning of period $1.02 $1.00 --
Accumulation unit value at end
of period $1.03 $1.02 --
Number of accumulation units
outstanding at end of period
(000 omitted) 428 14 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IGI(4) (INVESTING IN SHARES OF PUTNAM VT GROWTH
AND INCOME FUND -- CLASS IA SHARES)
Accumulation unit value at
beginning of period $1.21 $1.07 $1.00
Accumulation unit value at end
of period $1.21 $1.21 $1.07
Number of accumulation units
outstanding at end of period
(000 omitted) 1,585 1,538 --
Ratio of operating expense to
average net assets 1.40% 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 $1.06 $1.00 --
Accumulation unit value at end
of period $1.06 $1.06 --
Number of accumulation units
outstanding at end of period
(000 omitted) 866 17 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IHY(4) (INVESTING IN SHARES OF PUTNAM VT HIGH
YIELD FUND -- CLASS IA SHARES)
Accumulation unit value at
beginning of period $0.94 $1.02 $1.00
Accumulation unit value at end
of period $0.99 $0.94 $1.02
Number of accumulation units
outstanding at end of period
(000 omitted) 859 1,150 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IPH(3) (INVESTING IN SHARES OF PUTNAM VT HIGH
YIELD FUND -- CLASS IB SHARES)
Accumulation unit value at
beginning of period $1.04 $1.00 --
Accumulation unit value at end
of period $1.08 $1.04 --
Number of accumulation units
outstanding at end of period
(000 omitted) 235 14 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT INO(4) (INVESTING IN SHARES OF PUTNAM VT NEW
OPPORTUNITIES FUND -- CLASS IA SHARES)
Accumulation unit value at
beginning of period $1.29 $1.05 $1.00
Accumulation unit value at end
of period $2.16 $1.29 $1.05
Number of accumulation units
outstanding at end of period
(000 omitted) 471 411 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
SUBACCOUNT IPV(3) (INVESTING IN SHARES OF PUTNAM VT VOYAGER
FUND -- CLASS IB SHARES)
Accumulation unit value at
beginning of period $1.17 $1.00 --
Accumulation unit value at end
of period $1.82 $1.17 --
Number of accumulation units
outstanding at end of period
(000 omitted) 538 14 --
Ratio of operating expense to
average net assets 1.40% 1.40% --
- ------------------------------------------------------------
</TABLE>
(1) Operations commenced on Oct. 24, 1997. These subaccounts had no activity in
1997.
(2) Net of annual contract administrative charge and mortality and expense risk
fee.
(3) Operations commenced on Nov. 4, 1998.
(4) Operations commenced on Oct. 27, 1997. These subaccounts had no activity in
1997.
- --------------------------------------------------------------------------------
12 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<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 which it did not. 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:
- - 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 show optional total return quotations that do not reflect a withdrawal
charge deduction (assuming no withdrawal). We may show total return quotations
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 ten years (or up to the life of
the 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 generally will be higher than average annual
total return.
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.
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 first page of this
prospectus.
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 13
<PAGE>
THE VARIABLE ACCOUNT AND THE FUNDS
You may allocate payments to any or all of the subaccounts of the variable
account that invest in shares of the following funds:
<TABLE>
<CAPTION>
AVAILABLE UNDER
ACL
PERSONAL ACL
PORTFOLIO PERSONAL
SUBACCOUNT INVESTING IN PLUS(2) PORTFOLIO(SM) INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISOR OR MANAGER
<S> <C> <C> <C> <C> <C>
ISI AXP(SM) Variable Yes Yes Objective: high level of current IDS Life Insurance Company
Portfolio - Bond Fund income while conserving the value (IDS Life), investment
of the investment and continuing a manager; American Express
high level of income for the Financial Corporation (AEFC),
longest time period. Invests investment advisor.
primarily in bonds and other debt
securities.
ICR AXP(SM) Variable Yes Yes Objective: capital appreciation. IDS Life, investment manager;
Portfolio - Capital Invests primarily in U.S. common AEFC investment advisor.
Resource Fund stocks.
IMS AXP(SM) Variable Yes Yes Objective: maximum current income IDS Life, investment manager;
Portfolio - Cash consistent with liquidity and AEFC investment advisor.
Management Fund conservation of capital. Invests
primarily in money market
securities.
IIE AXP(SM) Variable Yes Yes Objective: capital appreciation. IDS Life, investment manager;
Portfolio - Invests primarily in common stocks AEFC investment advisor.
International Fund of foreign issuers. American Express Asset
Management International,
Inc., a wholly-owned
subsidiary of AEFC, is the
sub-investment advisor.
IMG AXP(SM) Variable Yes Yes Objective: maximum total investment IDS Life, investment manager;
Portfolio - Managed Fund return through a combination of AEFC investment advisor.
capital growth and current income.
Invests primarily in a combination
of common and preferred stocks,
convertible securities, bonds and
other debt securities.
IGD AXP(SM) Variable Yes No Objective: long-term growth of IDS Life, investment manager;
Portfolio - capital. Invests primarily in AEFC investment advisor.
New Dimensions Fund-Registered Trademark- common stocks of U.S. and foreign
companies showing potential for
significant growth.
IAG AXP(SM) Variable Yes Yes Objective: capital appreciation. IDS Life, investment manager;
Portfolio - Strategy Invests primarily in common stocks AEFC investment advisor.
Aggressive Fund of small-and medium-sized
companies.
IGN AIM V.I. Growth and Yes No Objective: growth of capital, with A I M Advisors, Inc.
Income Fund current income as a secondary
objective. Invests at least 65% of
its net assets in income-producing
securities, including
dividend-paying common stock and
convertible securities.
IIN AIM V.I. International Yes Yes Objective: long-term growth of A I M Advisors, Inc.
Equity Fund capital. Invests primarily in a
diversified portfolio of
international equity securities,
whose issuers are considered to
have strong earnings momentum.
</TABLE>
- --------------------------------------------------------------------------------
14 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
<TABLE>
<CAPTION>
AVAILABLE UNDER
ACL
PERSONAL ACL
PORTFOLIO PERSONAL
SUBACCOUNT INVESTING IN PLUS(2) PORTFOLIO(SM) INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISOR OR MANAGER
<S> <C> <C> <C> <C> <C>
IVA AIM V.I. Value Fund Yes No Objective: long-term growth of A I M Advisors, Inc.
capital with income as a secondary
objective. Invests primarily in
equity securities judged to be
undervalued relative to the
investment advisor's appraisal of
the current or projected earnings
of the companies issuing the
securities, or relative to current
market values of assets owned by
the companies issuing the
securities, or relative to the
equity market generally.
IIG American Century VP Yes No Objective: dividend growth, current American Century Investment
Income and Growth income and capital appreciation. Management, Inc.
Invests primarily in common stocks.
IVL American Century VP Value Yes No Objective: long-term capital American Century Investment
growth, with income as a secondary Management, Inc.
objective. Invests primarily in
securities that management believes
to be undervalued at the time of
purchase.
ISB Janus Aspen Series Yes No Objective: long-term growth of Janus Capital Corporation
Balanced Portfolio: capital, balanced by current
Institutional Shares income. Normally invests 40-60% of
its assets in securities selected
primarily for their growth
potential and 40-60% in securities
selected primarily for their income
potential.
IWG Janus Aspen Series Yes No Objective: long-term growth of Janus Capital Corporation
Worldwide Growth capital in a manner consistent with
Portfolio: Institutional the preservation of capital.
Shares Invests primarily in common stocks
of foreign and domestic issuers.
IEQ OCC Accumulation Trust Yes No Objective: long-term capital OpCap Advisors
Equity Portfolio appreciation. Invests in a
diversified portfolio of equity
securities selected on the basis of
a value-oriented approach to
investing.
IMD OCC Accumulation Trust Yes Yes Objective: growth of capital. OpCap Advisors
Managed Portfolio Invests in common stocks, bonds,
money market and cash equivalent
securities, the percentage of which
will vary based on management's
assessment of relative investment
values.
ISC OCC Accumulation Trust Yes No Objective: capital appreciation. OpCap Advisors
Small Cap Portfolio Invests in a diversified portfolio
of equity securities of companies
with market capitalizations of
under $1 billion.
</TABLE>
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 15
<PAGE>
<TABLE>
<CAPTION>
AVAILABLE UNDER
ACL
PERSONAL ACL
PORTFOLIO PERSONAL
SUBACCOUNT INVESTING IN PLUS(2) PORTFOLIO(SM) INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISOR OR MANAGER
<S> <C> <C> <C> <C> <C>
IUS OCC Accumulation Trust Yes Yes Objective: high level of current OpCap Advisors
U.S. Government Income income together with protection of
Portfolio capital. Invests exclusively in
debt obligations, including
mortgage-backed securities, issued
or guaranteed by the United States
government, its agencies or
instrumentalities.
IGR Oppenheimer Capital Yes No Objective: capital appreciation. OppenheimerFunds, Inc.
Appreciation Fund/VA Invests in securities of
well-known, established companies.
IHI Oppenheimer High Income Yes No Objective: high level of current OppenheimerFunds, Inc.
Fund/VA income from investments in high-
yield fixed income securities.
IDI Putnam VT Diversified No Yes Objective: high current income Putnam Investment Management,
Income Fund - Class IA consistent with capital Inc.
Shares preservation. The Fund invests in
higher-yielding, lower-rated
securities commonly
IPD Putnam VT Diversified Yes No referred to as "junk bonds." See
Income Fund - Class IB special considerations for
Shares investments in these securities in
the fund prospectus.
IGI Putnam VT Growth and No Yes Objective: capital growth and Putnam Investment Management,
Income Fund - Class IA current income. Invests primarily Inc.
Shares in common stocks that offer
potential of capital
IPG Putnam VT Growth and Yes No growth, current income or both.
Income Fund - Class IB
Shares
IHY Putnam VT High Yield No Yes Objective: high current income and, Putnam Investment Management,
Fund - Class IA Shares when consistent with this Inc.
objective, capital growth as a
secondary objective. Invests
primarily in high-yield,
lower-rated fixed income securities
constituting a portfolio
IPH Putnam VT High Yield Yes No which Putnam Investment Management,
Fund - Class IB Shares Inc. ("Putnam Management") believes
does not involve undue risk to
income or principal. See special
considerations for investments in
high yield securities described in
the fund prospectus.
INO Putnam VT New No Yes Objective: long-term capital Putnam Investment Management,
Opportunities Fund - appreciation. Invests primarily in Inc.
Class IA Shares common stocks of companies in
sectors of the economy that Putnam
Management believes possess above
average long-term growth potential.
IPV Putnam VT Voyager Fund - Yes No Objective: capital appreciation. Putnam Investment Management,
Class IB Shares Invests primarily in common stocks Inc.
of companies that Putnam management
believes have potential for capital
appreciation that is significantly
greater than that of market
averages.
</TABLE>
- --------------------------------------------------------------------------------
16 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
The investment objectives and policies of some of the funds are similar to the
investment objectives and policies of other mutual funds that an 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 and those
results may differ significantly from other funds with similar investment
objectives and policies.
The investment managers and advisors cannot guarantee that the funds will meet
their investment objectives. Please read the fund prospectuses for facts you
should know before investing. These prospectuses are also available by
contacting us at the address or telephone number on the first page of this
prospectus.
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 tax-deferred retirement plans. It is
possible that in the future, it may be disadvantageous for variable annuity
accounts and variable life insurance accounts and/or tax-deferred retirement
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 tax-deferred retirement 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 tax-deferred retirement 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 tax-deferred retirement plan
accounts.
The Internal Revenue Service (IRS) issued final regulations relating to the
diversification requirements under Section 817(h) of the Code. Each fund intends
to comply with these requirements.
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.
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 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 the 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.
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 17
<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.
We credit and compound interest daily. We will change the interest rates from
time to time at our discretion. These rates will be based on various factors
including, but not limited to, the interest rate environment, returns earned on
investments backing these annuities, the rates currently in effect for new and
existing company annuities, product design, competition, and the company's
revenues and expenses.
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.)
BUYING YOUR CONTRACT
You can fill out an 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.
- --------------------------------------------------------------------------------
18 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
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.)
PURCHASE PAYMENTS
MINIMUM ALLOWABLE PURCHASE PAYMENTS
Initial purchase payment: $2,000 (We reserve the right to decrease the minimum
payment.)
Additional purchase payments: $50
MAXIMUM ALLOWABLE PURCHASE PAYMENTS: $1,000,000 of cumulative payments (We
reserve the right to increase the maximum payment.)
HOW TO MAKE PURCHASE PAYMENTS
1 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
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, or total purchase payments
less any payments withdrawn, is $50,000 or more on the current contract
anniversary.
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 19
<PAGE>
If you take a full withdrawal from your contract, we will deduct this charge at
the time of withdrawal regardless of the contract value or purchase payments
made. 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 apply this charge daily to the subaccounts. It is reflected in the unit
values of your subaccounts 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. We
could profit from the expense risk fee if future expenses are less than
expected.
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.
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, in each contract year, we withdraw amounts totaling up to 10% of your
prior anniversary contract value. (We consider your initial purchase payment
to be the prior anniversary contract value during the first contract year.) We
do not assess a withdrawal charge on this amount.
- - Next, we withdraw contract earnings, if any, that are greater than the annual
10% free withdrawal amount described above. Contract earnings equal contract
value less purchase payments received and not previously withdrawn. We do not
assess a withdrawal charge on contract earnings.
- --------------------------------------------------------------------------------
20 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
NOTE: We determine contract earnings by looking at the entire contract value,
not the earnings of any particular subaccount or the fixed account.
- - Next, we withdraw purchase payments received eight or more years before the
withdrawal and not previously withdrawn. We do not assess a withdrawal charge
on these purchase payments.
- - Finally, if necessary, we withdraw purchase payments received in the seven
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 payments withdrawn.
<TABLE>
<CAPTION>
YEARS FROM PURCHASE WITHDRAWAL CHARGE
PAYMENT RECEIPT PERCENTAGE
<S> <C>
1 7%
2 6
3 5
4 4
5 3
6 2
7 1
Thereafter 0
</TABLE>
For a partial withdrawal that is subject to a withdrawal charge, the amount
deducted for the withdrawal charge will be a percentage of the total amount
withdrawn. We will deduct the charge from the value remaining after we pay you
the amount you requested. Example: Assume you request a withdrawal of $1,000 and
there is a 7% withdrawal charge. The withdrawal charge is $75.26 for a total
withdrawal amount of $1,075.26. This charge represents 7% of the total amount
withdrawn and we deduct it from the contract value remaining after we pay you
the $1,000 you requested.
WITHDRAWAL CHARGE CALCULATION EXAMPLE:
The following is an example of the calculation we would make to determine the
withdrawal charge on a contract with this history:
- - The contract date is July 1, 2000 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, 2000;
-- $8,000 Dec. 31, 2005;
-- $6,000 Feb. 20, 2008; and
- - The owner withdraws the contract for its total withdrawal value of $38,101 on
Aug. 5, 2010 and had not made any other withdrawals during that contract year;
and
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 21
<PAGE>
- - The prior anniversary July 1, 2010 contract value was $38,488.
<TABLE>
<CAPTION>
WITHDRAWAL CHARGE EXPLANATION
<C> <S>
$3,848.80 is 10% of the prior anniversary contract value withdrawn without
$0 withdrawal charge; and
$10,252.20 is contract earnings in excess of the 10% free withdrawal amount
0 withdrawn without withdrawal charge; and
$10,000 July 1, 2000 payment was received eight or more contract years
0 before withdrawal and is withdrawn without withdrawal charge; and
$8,000 Dec. 31, 2005 payment is in its fifth contract year from receipt,
240 withdrawn with a 3% withdrawal charge; and
$6,000 Feb. 20, 2008 payment is in its fourth contract year from receipt,
240 withdrawn with a 4% withdrawal charge.
---------
$480
</TABLE>
WAIVER OF WITHDRAWAL CHARGE:
We do not assess withdrawal charges for:
- - withdrawals of amounts totaling up to 10% of your prior contract anniversary
contract value;
- - withdrawals of any contract earnings 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.
VALUING YOUR INVESTMENT
We value your accounts 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.
- --------------------------------------------------------------------------------
22 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
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 variable
account 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 variable
subaccount equals the last value times the subaccount's current 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:
- - 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;
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 23
<PAGE>
- - mortality and expense risk fees; and/or
- - variable account administrative charges.
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>
By investing an Jan $100 $20 5.00
equal number of Feb 100 18 5.56
dollars each month... Mar 100 17 5.88
you automatically -- Apr 100 15 6.67
buy more units May 100 16 6.25
when the per unit Jun 100 18 5.56
market price is low... Jul 100 17 5.88
and fewer units -- Aug 100 19 5.26
when the per unit Sept 100 21 4.76
market price is high. 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 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 sales representative. Some
restrictions may apply.
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 ten valuation dates between each transfer,
- --------------------------------------------------------------------------------
24 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
- - 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
contract holders in a class if we determine, in our sole discretion, that the
exercise of transfer rights by any one or more contract owner is, or would be,
to the disadvantage of other contract owners.
For information on transfers after annuity payouts begin, see "Transfer
policies" below.
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 three 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 at any time 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 variable
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.
HOW TO REQUEST A TRANSFER OR WITHDRAWAL
1 BY LETTER
- --------------------------------------------------------------------------------
Send your name, contract number, Social Security Number or Taxpayer
Identification Number and signed request for a transfer or withdrawal to:
REGULAR MAIL:
AMERICAN CENTURION LIFE ASSURANCE COMPANY
P.O. BOX 5555
ALBANY, NY 12205
EXPRESS MAIL:
AMERICAN CENTURION LIFE ASSURANCE COMPANY
20 MADISON AVENUE EXTENSION
ALBANY, NY 12203
<TABLE>
<S> <C>
MINIMUM AMOUNT
Transfers or withdrawals: $500 or entire account balance
MAXIMUM AMOUNT
Transfers or withdrawals: Contract value or the entire account balance
</TABLE>
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 25
<PAGE>
2 BY AUTOMATED TRANSFERS AND AUTOMATED PARTIAL WITHDRAWALS
- --------------------------------------------------------------------------------
Your sales representative can help you set up automated transfers among your
subaccounts or fixed account or partial withdrawals from the accounts.
You can start or stop this service by written request or other method acceptable
to us. You must allow 30 days for us to change any instructions that are
currently in place.
- - 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.
<TABLE>
<S> <C>
MINIMUM AMOUNT
Transfers or withdrawals: $100 monthly
$250 quarterly, semiannually or annually
MAXIMUM AMOUNT
Transfers or withdrawals: Contract value (except for automated transfers from the
fixed account)
</TABLE>
3 BY PHONE
- --------------------------------------------------------------------------------
Call between 8 a.m. and 6 p.m. Eastern time:
1-800-504-0469
<TABLE>
<S> <C>
MINIMUM AMOUNT
Transfers or withdrawals: $500 or entire subaccount or fixed account balance
MAXIMUM AMOUNT
Transfers: Contract value or the entire subaccount or fixed account
balance
Withdrawals: $25,000
</TABLE>
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.
- --------------------------------------------------------------------------------
26 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
WITHDRAWALS
You may withdraw all or part of your contract 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 your 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 -- Withdrawal charge") 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 account 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.
NOTE: We will charge you a fee if you request express mail delivery.
Normally, we will send the payment 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.
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. However, if the
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 27
<PAGE>
owner is a trust or custodian, or an employer acting in similar capacity,
ownership of the contract may be transferred to the annuitant.
BENEFITS IN CASE OF DEATH
YOUR 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 each partial withdrawal by
multiplying (a) times (b) where:
<TABLE>
<S> <C> <C>
(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.
</TABLE>
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, 2000.
- - On January 1, 2001 (the first contract anniversary) the contract value reaches
$24,000.
- - On March 1, 2001 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, 2001 as follows:
<TABLE>
<C> <C> <C> <C> <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>
- --------------------------------------------------------------------------------
28 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
YOUR 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.
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 a contract for $20,000 on January 1, 2000.
- - On June 1, 2005 the contract value reaches $33,000.
- - On June 1, 2005 you take a $1,500 partial withdrawal, leaving a contract value
of $31,500.
- - On July 15, 2005 you make an additional payment of $1,000.
- - On March 1, 2006 the contract value falls to $31,000.
We calculate the death benefit on March 1, 2006 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 contract as owner. To do this, the spouse must give us written
instructions within 60 days after we receive proof of death.
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 29
<PAGE>
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 determine the contract's value at the next
close of business after fulfillment of our death claim requirements. Interest,
if any, will be paid 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 the
fulfillment of our death claim requirements. (See "Taxes.")
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. We do not deduct 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 amount 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.
During the annuity payout period, we reserve the right to limit the number of
subaccounts in which you may invest.
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 underlying 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.
- --------------------------------------------------------------------------------
30 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
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 are rising 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 made only one monthly payout, we will not make any more payouts.
PLAN B -- LIFE ANNUITY WITH FIVE, TEN OR 15 YEARS CERTAIN: We make monthly
payouts for a guaranteed payout period of five, ten or 15 years that you elect.
This election will determine the 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 ten 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 TAX-DEFERRED RETIREMENT 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
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 31
<PAGE>
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.
TAXES
Generally, under current law, your contract has a tax deferral feature. This
means, any increase in the value of the fixed account and/or subaccounts in
which you invest 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 normally are 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 and be
distributed tax free if you meet certain distribution requirements.
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.
QUALIFIED ANNUITIES: Your contract may be used to fund a tax-deferred retirement
plan that is already tax-deferred under the Code. The contract will not provide
any necessary or additional tax deferral if it is used to fund a retirement plan
that is tax-deferred. 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 IRAs) 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 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 tax-deferred 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
- --------------------------------------------------------------------------------
32 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
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;
- - 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
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 33
<PAGE>
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 amendments.
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.
SUBSTITUTION OF INVESTMENTS
We may substitute the funds in which the subaccounts invest if:
- - laws or regulations change,
- - the existing funds become unavailable, or
- - in our judgment, the funds no longer are suitable for the subaccounts.
- --------------------------------------------------------------------------------
34 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
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
- - make additional subaccounts investing in additional 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.
ABOUT THE SERVICE PROVIDERS
PRINCIPAL UNDERWRITER
American Express Financial Advisors Inc. (AEFA) serves as the principal
underwriter for the contracts. Its offices are located at 200 AXP Financial
Center, Minneapolis, MN 55474. AEFA is a wholly-owned subsidiary of American
Express Financial Corporation (AEFC), which is a wholly-owned subsidiary of
American Express Company.
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.
American Centurion Life pays commission for the sales of contracts to the
insurance agencies who have entered into distribution agreements with American
Centurion Life 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.
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. American Express
Company is a financial services company principally engaged through subsidiaries
(in addition to AEFC) in travel related services, investment services and
international banking services.
American Centurion Life is a stock life insurance company organized in 1969
under the laws of the State of New York. Our offices are 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 American Centurion Life and its affiliates do business
involving insurers' sales practices, alleged agent misconduct, failure to
properly supervise agents and other matters. IDS Life is a defendant in three
class action lawsuits of this nature. American Centurion Life is a named
defendant in one of these suits, 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 which was commenced in Minnesota State Court in October 1998. The
action was brought by individuals who purchased an annuity in a qualified plan.
The plaintiffs allege that the sale of annuities in
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 35
<PAGE>
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.
American Centurion Life is included as a party to preliminary settlement of all
three class action lawsuits. We believe this approach will put these cases
behind us and provide a fair outcome for our clients. Our decision to settle
does not include any admission of wrongdoing. We do not anticipate that this
proposed settlement, or any other lawsuits in which American Centurion Life is a
defendant, will have a material adverse effect on our financial condition.
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 American Centurion Life
and the variable account. All of the major systems used by American Centurion
Life and the variable account are maintained by AEFC and are utilized by
multiple subsidiaries and affiliates of AEFC. American Centurion Life and the
variable account's businesses are heavily dependent upon AEFC's computer systems
and have significant interaction with systems of third parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to American Centurion Life and the variable account,
was conducted to identify the major systems that could be affected by the Year
2000 issue. Steps were taken to resolve potential problems including
modification to existing software and the purchase of new software. As of
Dec. 31, 1999, AEFC had completed its program of corrective measures on its
internal systems and applications, including Year 2000 compliance testing. As of
Dec. 31, 1999, AEFC had also completed an evaluation of the Year 2000 readiness
of other third parties whose system failures could have an impact on American
Centurion Life's and the variable account's operations.
AEFC's Year 2000 project also included 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. As of Dec. 31, 1999, these plans had been amended to include
specific Year 2000 considerations.
In assessing its Year 2000 initiatives and the results of actual production
since Jan. 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on American Centurion Life's and
the variable account's business, results of operations, or financial condition
as a result of the Year 2000 issue.
- --------------------------------------------------------------------------------
36 ACL PERSONAL PORTFOLIO PLUS(2) / ACL PERSONAL PORTFOLIO(SM)
<PAGE>
TABLE OF CONTENTS OF THE STATEMENT OF
ADDITIONAL INFORMATION
Performance Information...................... 3
Calculating Annuity Payouts.................. 7
Rating Agencies.............................. 9
Principal Underwriter........................ 9
Independent Auditors......................... 9
Financial Statements
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 37
<PAGE>
Please check the appropriate box to receive a copy of the Statement of
Additional Information for:
/ / ACL Personal Portfolio Plus(2)/ACL Personal Portfolio(SM)
/ / American Express Variable Portfolio Funds
/ / AIM Variable Insurance Funds
/ / American Century Variable Portfolios, Inc.
/ / Janus Aspen Series Portfolios
/ / OCC Accumulation Trust Portfolios
/ / Oppenheimer Variable Account Funds
/ / Putnam Variable Trust
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 ________________________
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
ACL PERSONAL PORTFOLIO PLUS2
and
ACL PERSONAL PORTFOLIOSM
ACL VARIABLE ANNUITY ACCOUNT 2
May 1, 2000
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>
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 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 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 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, which it
did not. Although we base performance on historical earnings, past performance
does not guarantee future results.
<PAGE>
Average Annual Total Return With Withdrawal For Periods Ending Dec. 31, 1999
<TABLE>
<CAPTION>
Performance since
commencement of the Performance since
subaccount commencement of the Fund**
<S> <C> <C> <C> <C> <C> <C> <C>
Since Since
Subaccount Investing In: 1 Year commencement 1 Year 5 Years 10 Years commencement
AXPSM VARIABLE PORTFOLIO -
ISI Bond Fund (10/97; 10/81)* -6.13% -1.99% -6.13% 5.96% 6.60% 9.11%
ICR Capital Resource Fund (10/97; 10/81) 14.96 18.47 14.96 19.30 13.83 14.30
IMS Cash Management Fund (10/97; 10/81) -3.32 1.27 -3.32 3.02 3.36 5.02
IIE International Fund (10/97; 1/92) 36.53 21.80 36.53 14.15 -- 11.73
IMG Managed Fund (10/97; 4/86) 6.17 10.50 6.17 16.17 11.89 11.24
IGD New Dimensions Fund(R)(11/98; 5/96) 23.10 36.84 23.10 -- -- 23.88
IAG Strategy Aggressive Fund (10/97; 1/92) 61.58 24.12 61.58 22.73 -- 15.32
AIM V.I.
IGN Growth and Income Fund (11/98; 5/94) 25.31 38.58 25.31 26.10 -- 22.55
IIN International Equity Fund (11/98; 5/93) 45.82 43.99 45.82 19.88 -- 17.03
IVA Value Fund (11/98; 5/93) 21.02 35.50 21.02 25.16 -- 21.23
AMERICAN CENTURY VARIABLE PORTFOLIO, INC.
IIG Income and Growth (11/98; 10/97) 9.31 18.56 9.31 -- -- 20.92
IVL Value (11/98; 5/96) -8.44 -7.13 -8.44 -- -- 8.75
JANUS ASPEN SERIES
ISB Balanced Portfolio: Institutional 17.92 32.15 17.92 22.62 -- 18.81
Shares (11/98; 9/93)
IWG Worldwide Growth Portfolio: 55.09 62.93 55.09 31.48 - 27.78
Institutional Shares (11/98; 9/93)
OCC ACCUMULATION TRUST
IEQ Equity Portfolio (11/98; 8/88) -5.33 -1.59 -5.33 17.96 13.79 13.98
IMD Managed Portfolio (10/97; 8/88) -3.08 4.48 -3.08 17.66 14.91 15.99
ISC Small Cap Portfolio (11/98; 8/88) -9.34 -5.72 -9.34 6.31 9.50 9.86
IUS U.S. Government Income Portfolio -9.11 0.01 -9.11 -- -- 3.74
(10/97; 1/95)
OPPENHEIMER VARIABLE ACCOUNT FUNDS
IGR Capital Appreciation Fund/VA (11/98; 32.61 44.29 32.61 28.56 16.74 15.90
4/85)
IHI High Income Fund/VA (11/98; 4/86) -3.73 1.22 -3.73 8.22 11.02 10.03
<PAGE>
PUTNAM VARIABLE TRUST
IDI Putnam VT Diversified Income Fund - -6.04 -3.28 -6.04 4.86 -- 3.44
Class IA Shares (10/97; 9/93)
IGI Putnam VT Growth and Income Fund - -6.21 4.81 -6.21 17.34 12.34 13.51
Class IA Shares (10/97; 2/88)
IHY Putnam VT High Yield Fund - Class IA -2.23 -3.62 -2.23 6.72 9.21 7.84
Shares (10/97; 2/88)
INO Putnam VT New Opportunities Fund - 59.93 37.65 59.93 30.77 -- 28.31
Class IA Shares (10/97; 5/94)
PUTNAM VARIABLE TRUST
IPD Putnam VT Diversified Income Fund - -6.06 -2.49 -6.06 4.71 -- 3.30
Class IB Shares (11/98; 9/93)***
IPG Putnam VT Growth and Income Fund - -6.32 0.17 -6.32 17.18 12.18 13.35
Class IB Shares (11/98; 1/88) ***
IPH Putnam VT High Yield Fund - Class IB -2.33 1.86 -2.33 6.58 9.07 7.69
Shares (11/98; 1/88) ***
IPV Putnam VT Voyager Fund - Class IB 48.75 62.63 48.75 29.35 20.36 19.59
Shares (11/98; 1/88) ***
* (Commencement dates of the subaccount; Commencement dates 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.
*** Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to the inception of Class IB Shares, performance
information for Class IB Shares is based upon performance of Class IA
Shares (not offered) of the fund, adjusted to reflect the fees paid by
Class IB Shares, including a 12b-1 fee of 0.15%.
<PAGE>
Average Annual Total Return Without Withdrawal For Periods Ending Dec. 31, 1999
Performance since
commencement of the Performance since
subaccount commencement of the Fund**
Since Since
Subaccount Investing In: 1 Year commencement 1 Year 5 Years 10 Years commencement
AXPSM VARIABLE PORTFOLIO -
ISI Bond Fund (10/97; 10/81)* 0.19% 0.09% 0.19% 6.43% 6.60% 9.11%
ICR Capital Resource Fund (10/97; 10/81) 21.96 20.32 21.96 19.60 13.83 14.30
IMS Cash Management Fund (10/97; 10/81) 3.20 3.43 3.20 3.55 3.36 5.02
IIE International Fund (10/97; 1/92) 43.53 23.60 43.53 14.50 -- 11.73
IMG Managed Fund (10/97; 4/86) 13.17 12.51 13.17 16.50 11.89 11.24
IGD New Dimensions Fund(R)(11/98; 5/96) 30.10 41.77 30.10 -- -- 24.50
IAG Strategy Aggressive Fund (10/97; 1/92) 68.58 25.88 68.58 22.99 -- 15.32
AIM V.I.
IGN Growth and Income Fund (11/98; 5/94) 32.31 43.50 32.31 26.34 -- 22.69
IIN International Equity Fund (11/98; 5/93) 52.82 48.88 52.82 20.17 -- 17.10
IVA Value Fund (11/98; 5/93) 28.02 40.44 28.02 25.40 -- 21.29
AMERICAN CENTURY VARIABLE PORTFOLIO, INC.
IIG Income and Growth (11/98; 10/97) 16.31 23.60 16.31 -- -- 22.75
IVL Value (11/98; 5/96) -2.30 -2.57 -2.30 -- -- 9.61
JANUS ASPEN SERIES
ISB Balanced Portfolio: Institutional 24.92 37.10 24.92 22.89 -- 18.87
Shares (11/98; 9/93)
IWG Worldwide Growth Portfolio: 62.09 67.72 62.09 31.68 -- 27.83
Institutional Shares (11/98; 9/93)
OCC ACCUMULATION TRUST
IEQ Equity Portfolio (11/98; 8/88) 1.04 3.24 1.04 18.26 13.79 13.98
IMD Managed Portfolio (10/97; 8/88) 3.46 6.63 3.46 17.97 14.91 15.99
ISC Small Cap Portfolio (11/98; 8/88) -3.27 -1.06 -3.27 6.78 9.50 9.86
IUS U.S. Government Income Portfolio -3.02 2.14 -3.02 -- -- 4.25
(10/97; 1/95)
OPPENHEIMER VARIABLE ACCOUNT FUNDS
IGR Capital Appreciation Fund/VA (11/98; 39.61 49.18 39.61 28.77 16.74 15.90
4/85)
IHI High Income Fund/VA (11/98; 4/86) 2.77 6.20 2.77 8.65 11.02 10.03
<PAGE>
PUTNAM VARIABLE TRUST
IDI Putnam VT Diversified Income Fund - 0.28 -1.22 0.28 5.35 -- 3.57
Class IA Shares (10/97; 9/93)
IGI Putnam VT Growth and Income Fund - 0.10 6.95 0.10 17.66 12.34 13.51
Class IA Shares (10/97; 2/88)
IHY Putnam VT High Yield Fund - Class IA 4.38 -1.56 4.38 7.17 9.21 7.84
Shares (10/97; 2/88)
INO Putnam VT New Opportunities Fund - 66.93 39.20 66.93 30.97 -- 28.42
Class IA Shares (10/97; 5/94)
PUTNAM VARIABLE TRUST
IPD Putnam VT Diversified Income Fund - 0.26 2.32 0.26 5.21 -- 3.43
Class IB Shares (11/98; 9/93)***
IPG Putnam VT Growth and Income Fund - -0.02 5.09 -0.02 17.50 12.18 13.35
Class IB Shares (11/98; 1/88)***
IPH Putnam VT High Yield Fund - Class IB 4.27 6.88 4.27 7.04 9.07 7.69
Shares (11/98; 1/88)***
IPV Putnam VT Voyager Fund - Class IB 55.75 67.43 55.75 29.57 20.36 19.59
Shares (11/98; 1/88)***
</TABLE>
* (Commencement dates of the subaccount; Commencement dates 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.
*** Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to the inception of Class IB Shares, performance
information for Class IB Shares is based upon performance of Class IA
Shares (not offered) of the fund, adjusted to reflect the fees paid by
Class IB Shares, including a 12b-1 fee of 0.15%.
<PAGE>
Cumulative Total Return
Cumulative total return represents the cumulative change in value of an
investment for a given period (reflecting change in a subaccount's accumulation
unit value). We compute cumulative 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)
Total return figures reflect the deduction of the surrender charge which assumes
you withdraw the entire contract value at the end of the one, five and ten year
periods (or, if less, up to the life of the subaccount). We may also show
performance figures without the deduction of a surrender charge. In addition,
total return figures reflect the deduction of all other applicable charges
including the contract administrative charge and 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
You must consider (when comparing an investment in subaccounts investing in
money market funds with fixed annuities) that fixed annuities often provide an
agreed-to or guaranteed yield for a stated period of time, whereas the
subaccount's yield fluctuates. In comparing the yield of the subaccount to a
money market fund, you should consider the different services that the contract
provides.
<PAGE>
Annualized Yields Based on the Seven-Day Period Ending Dec. 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Subaccount Investing In: Simple Yield Compound Yield
- ---------- ------------- ------------ --------------
IMS AXPSM Variable Portfolio - Cash Management Fund 4.53% 4.63%
</TABLE>
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, 1999
Subaccount Investing In: Yield
- ---------- ------------- -----
ISI AXPSM Variable Portfolio - Bond Fund 7.47%
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 Business 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 & 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 on the valuation date; then
o apply the result to the annuity table contained in the contract or another
table at least as favorable.
<PAGE>
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.
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. 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; 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 two years aggregated total
$6481 and $3,628, respectively.
Commissions paid by ACL for the last two years aggregated total $673,812 and
$682,400, respectively.
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.
FINANCIAL STATEMENTS
<PAGE>
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 ISI, ICR, IMS, IIE, IMG, IGD, IAG, IGN, IIN, IVA, IIG,
IVL, ILA, IPA, ISB, IWG, IEQ, IMD, ISC, IUS, IGR, IHI, IDI, IPD, IGI, IPG, IHY,
IPH, INO and IPV) as of December 31, 1999, and the related statements of
operations and changes in net assets for the periods indicated therein. 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 auditing standards generally accepted
in the United States. 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, 1999 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 Centurion Variable Annuity Account 2
(as described above) at December 31, 1999, and the individual and combined
results of their operations and the changes in their net assets for the periods
indicated therein, in conformity with accounting principles generally accepted
in the United States.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Minneapolis, Minnesota
March 17, 2000
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Net Assets
December 31, 1999
Segregated Asset Subaccounts
Assets ISI ICR IMS IIE
Investments in shares of mutual funds
and portfolios:
<S> <C> <C> <C> <C>
at cost $ 930,323 $ 1,165,388 $-- $ 194,337
--------- ----------- - ---------
at market value $ 871,060 $ 1,302,384 $-- $ 228,743
Dividends receivable 5,397 -- -- --
Accounts receivable from American Centurion Life
for contract purchase paymentments -- 100 -- 140
Receivable from mutual funds and portfolios
for share redemptions -- -- -- --
------ ------- --- ------
Total assets 876,457 1,302,484 -- 228,883
======= ========= =======
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 933 1,429 -- 247
Administrative charge 112 171 -- 30
Contract terminations -- -- -- --
Payable to mutual funds and portfolios
for investments purchased -- -- -- --
---- ---- --- ----
Total liabilities 1,045 1,600 -- 277
----- ----- ---
Net assets applicable to contracts in
accumulation period $ 875,412 $ 1,300,884 $-- $ 228,606
========= =========== === =========
Accumulation units outstanding 898,191 861,356 -- 143,309
======= ======= ==== =======
Net asset value per accumulation unit $ 0.97 $ 1.51 $-- $ 1.60
====== ====== === ======
Assets IMG IGD IAG
Investments in shares of mutual funds
and portfolios:
at cost $ 2,293,731 $ 106,465 $ 495,089
----------- --------- ---------
at market value $ 2,387,570 $ 131,589 $ 672,739
Dividends receivable -- -- --
Accounts receivable from American Centurion Life
for contract purchase paymentments 60 100 197
Receivable from mutual funds and portfolios
for share redemptions -- -- --
------- ------- ------
Total assets 2,387,630 131,689 672,936
========= ======= =======
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 2,610 140 611
Administrative charge 640 17 73
Contract terminations -- -- --
Payable to mutual funds and portfolios
for investments purchased -- -- --
---- --- ----
Total liabilities 3,250 157 684
----- --- ---
Net assets applicable to contracts in
accumulation period $ 2,384,380 $ 131,532 $ 672,252
----------- --------- ---------
Accumulation units outstanding 1,961,883 87,802 427,306
========= ====== =======
Net asset value per accumulation unit $ 1.22 $ 1.50 $ 1.57
====== ====== ======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Net Assets
December 31, 1999
Segregated Asset Subaccounts
Assets IGN IIN IVA IIG
Investments in shares of mutual funds
and portfolios:
<S> <C> <C> <C> <C>
at cost $ 477,135 $ 306,272 $ 622,139 $ 204,383
--------- --------- --------- ---------
at market value $ 579,552 $ 364,800 $ 714,243 $ 230,216
Dividends receivable -- -- -- --
Accounts receivable from American Centurion Life
for contract purchase payments 49 50,025 93 202
Receivable from mutual funds and portfolios
for share redemptions 680 303 836 274
--- --- --- ---
Total assets 580,281 415,128 715,172 230,692
======= ======= ======= =======
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 607 271 746 245
Administrative charge 73 32 90 29
Contract terminations -- -- -- --
Payable to mutual funds and portfolios
for investments purchased 49 50,025 93 202
-- ------ -- ---
Total liabilities 729 50,328 929 476
--- ------ --- ---
Net assets applicable to contracts
in accumulation period $ 579,552 $ 364,800 $ 714,243 $ 230,216
========= ========= ========= =========
Accumulation units outstanding 380,785 229,735 481,544 179,829
======= ======= ======= =======
Net asset value per accumulation unit $ 1.52 $ 1.59 $ 1.48 $ 1.28
====== ====== ====== ======
Assets IVL ISB IWG
Investments in shares of mutual funds
and portfolios:
at cost $ 120,178 $ 2,278,074 $ 352,067
--------- ----------- ---------
at market value $ 112,530 $ 2,571,831 $ 509,326
Dividends receivable -- -- --
Accounts receivable from American Centurion Life
for contract purchase payments 10 45 137
Receivable from mutual funds and portfolios
for share redemptions 134 2,923 592
--- ----- ---
Total assets 112,674 2,574,799 510,055
======= ========= =======
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 120 2,610 528
Administrative charge 14 313 63
Contract terminations -- -- --
Payable to mutual funds and portfolios
for investments purchased 10 44 137
-- -- ---
Total liabilities 144 2,967 728
--- ----- ---
Net assets applicable to contracts
in accumulation period $ 112,530 $ 2,571,832 $ 509,327
========= =========== =========
Accumulation units outstanding 115,690 1,783,055 279,685
======= ========= =======
Net asset value per accumulation unit $ 0.97 $ 1.44 $ 1.82
====== ====== ======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Net Assets
December 31, 1999
Segregated Asset Subaccounts
Assets IEQ IMD ISC IUS
Investments in shares of mutual funds
and portfolios:
<S> <C> <C> <C> <C>
at cost $ 106,207 $ 1,454,739 $ 122,574 $ 1,181,105
--------- ----------- --------- -----------
at market value $ 105,198 $ 1,459,230 $ 124,147 $ 1,117,900
Dividends receivable -- -- -- 2,294
Accounts receivable from American Centurion Life
for contract purchase payments 98 1,990 355 --
Receivable from mutual funds and portfolios
for share redemptions 125 1,773 148 1,376
--- ----- --- -----
Total assets 105,421 1,462,993 124,650 1,121,570
======= ========= ======= =========
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 112 1,583 132 1,198
Administrative charge 13 190 16 144
Contract terminations -- -- -- 34
Payable to mutual funds and portfolios
for investments purchased 98 1,990 355 --
-- ----- ---
Total liabilities 223 3,763 503 1,376
--- ----- --- -----
Net assets applicable to contracts
in accumulation period $ 105,198 $ 1,459,230 $ 124,147 $ 1,120,194
========= =========== ========= ===========
Accumulation units outstanding 101,116 1,292,784 125,478 1,070,012
======= ========= ======= =========
Net asset value per accumulation unit $ 1.04 $ 1.13 $ 0.99 $ 1.05
====== ====== ====== ======
Assets IGR IHI IDI
Investments in shares of mutual funds
and portfolios:
at cost $ 409,502 $ 273,664 $ 647,230
--------- --------- ---------
at market value $ 523,107 $ 271,409 $ 598,457
Dividends receivable -- -- --
Accounts receivable from American Centurion Life
for contract purchase payments 96 63 35
Receivable from mutual funds and portfolios
for share redemptions 619 324 718
--- --- ---
Total assets 523,822 271,796 599,210
======= ======= =======
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 553 289 641
Administrative charge 66 35 77
Contract terminations -- -- --
Payable to mutual funds and portfolios
for investments purchased 96 63 35
-- -- --
Total liabilities 715 387 753
--- --- ---
Net assets applicable to contracts
in accumulation period $ 523,107 $ 271,409 $ 598,457
========= ========= =========
Accumulation units outstanding 328,913 252,767 604,703
======= ======= =======
Net asset value per accumulation unit $ 1.59 $ 1.07 $ 0.99
====== ====== ======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Net Assets
December 31, 1999
Segregated Asset Subaccounts
Assets IPD IGI IPG IHY
Investments in shares of mutual funds
and portfolios:
<S> <C> <C> <C> <C>
at cost $ 445,094 $ 1,970,968 $ 958,557 $ 952,743
--------- ----------- --------- ---------
at market value $ 440,222 $ 1,925,898 $ 918,305 $ 847,850
Dividends receivable -- -- -- --
Accounts receivable from American Centurion Life
for contract purchase payments 9 -- 933 53
Receivable from mutual funds and portfolios
for share redemptions 522 2,534 1,028 1,032
--- ----- ----- -----
Total assets 440,753 1,928,432 920,266 848,935
======= ========= ======= =======
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 466 2,118 918 921
Administrative charge 56 254 110 111
Contract terminations -- 162 -- --
Payable to mutual funds and portfolios
for investments purchased 9 -- 933 53
- --- --
Total liabilities 531 2,534 1,961 1,085
--- ----- ----- -----
Net assets applicable to contracts
in accumulation period $ 440,222 $ 1,925,898 $ 918,305 $ 847,850
========= =========== ========= =========
Accumulation units outstanding 428,361 1,585,177 865,696 859,120
======= ========= ======= =======
Net asset value per accumulation unit $ 1.03 $ 1.21 $ 1.06 $ 0.99
====== ====== ====== ======
Combined
Variable
Assets IPH INO IPV Account
Investments in shares of mutual funds
and portfolios:
at cost $ 257,734 $ 636,268 $ 722,011 $ 19,683,977
--------- --------- --------- ------------
at market value $ 254,831 $ 1,017,527 $ 978,346 $ 21,259,010
Dividends receivable -- -- -- 7,691
Accounts receivable from American Centurion Life
for contract purchase payments 63 5 5,273 60,131
Receivable from mutual funds and portfolios
for share redemptions 302 1,032 1,095 18,370
--- ----- ----- ------
Total assets 255,196 1,018,564 984,714 21,345,202
======= ========= ======= ==========
Liabilities
Payable to American Centurion Life for:
Mortality and expense risk fee 270 921 978 22,197
Administrative charge 32 111 117 2,989
Contract terminations -- -- -- 196
Payable to mutual funds and portfolios
for investments purchased 63 5 5,273 59,533
-- - ----- ------
Total liabilities 365 1,037 6,368 84,915
--- ----- ----- ------
Net assets applicable to contracts
in accumulation period $ 254,831 $ 1,017,527 $ 978,346 $ 21,260,287
========= =========== ========= ============
Accumulation units outstanding 235,336 470,907 538,322
======= ======= =======
Net asset value per accumulation unit $ 1.08 $ 2.16 $ 1.82
====== ====== ======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Operations
Year ended December 31, 1999
Segregated Asset Subaccounts
Investment income ISI ICR IMS IIE
Dividend income from mutual funds
<S> <C> <C> <C> <C>
and portfolios $ 51,970 $ 122,112 $ 304 $ 29,601
-------- --------- ----- --------
Expenses:
Mortality and expense risk fee 9,490 13,744 86 1,778
Administrative charge 1,139 1,649 10 213
----- ----- -- ---
Total expenses 10,629 15,393 96 1,991
------ ------ -- -----
Investment income (loss) - net 41,341 106,719 208 27,610
====== ======= === ======
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales 88,356 205,584 33,355 11,699
Cost of investments sold 93,485 189,208 33,354 10,630
------ ------- ------ ------
Net realized gain (loss) on investments (5,129) 16,376 1 1,069
Net change in unrealized appreciation or
depreciation of investments (32,957) 113,510 -- 36,365
------- ------- ------
Net gain (loss) on investments (38,086) 129,886 1 37,434
------- ------- - ------
Net increase (decrease) in net assets
resulting from operations $ 3,255 $ 236,605 $ 209 $ 65,044
======= ========= ===== ========
Investment income IMG IGD IAG IGN
Dividend income from mutual funds
and portfolios $ 157,141 $ 1,250 $ 41,216 $ 4,732
--------- ------- -------- -------
Expenses:
Mortality and expense risk fee 27,208 933 4,521 3,145
Administrative charge 3,244 112 488 377
----- --- --- ---
Total expenses 30,452 1,045 5,009 3,522
------ ----- ----- -----
Investment income (loss) - net 126,689 205 36,207 1,210
======= === ====== =====
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales 230,309 4,331 45,013 20,896
Cost of investments sold 226,977 3,999 42,311 19,798
------- ----- ------ ------
Net realized gain (loss) on investments 3,332 332 2,702 1,098
Net change in unrealized appreciation or
depreciation of investments 149,290 24,990 198,877 102,338
------- ------ ------- -------
Net gain (loss) on investments 152,622 25,322 201,579 103,436
------- ------ ------- -------
Net increase (decrease) in net assets
resulting from operations $ 279,311 $ 25,527 $ 237,786 $ 104,646
========= ======== ========= =========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Operations
Year ended December 31, 1999
Segregated Asset Subaccounts
Investment income IIN1 IVA IIG IVL
Dividend income from mutual funds
<S> <C> <C> <C> <C>
and portfolios $ 6,235 $ 11,732 $ 11 $ 3,908
------- -------- ---- -------
Expenses:
Mortality and expense risk fee 1,166 3,700 1,642 939
Administrative charge 140 444 197 113
--- --- --- ---
Total expenses 1,306 4,144 1,839 1,052
----- ----- ----- -----
Investment income (loss) - net 4,929 7,588 (1,828) 2,856
===== ===== ====== =====
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales 145,490 29,328 9,510 4,067
Cost of investments sold 132,262 28,083 9,120 4,100
------- ------ ----- -----
Net realized gain (loss) on investments 13,228 1,245 390 (33)
Net change in unrealized appreciation or
depreciation of investments 58,453 91,719 25,497 (7,725)
------ ------ ------ ------
Net gain (loss) on investments 71,681 92,964 25,887 (7,758)
------ ------ ------ ------
Net increase (decrease) in net assets
resulting from operations $ 76,610 $ 100,552 $ 24,059 $ (4,902)
======== ========= ======== ========
Investment income ILA1 IPA1 ISB IWG
Dividend income from mutual funds
and portfolios $ 2,711 $ 2,381 $ 40,723 $ 331
------- ------- -------- -----
Expenses:
Mortality and expense risk fee 544 661 14,545 2,457
Administrative charge 65 79 1,745 295
Total expenses 609 740 16,290 2,752
--- --- ------ -----
Investment income (loss) - net 2,102 1,641 24,433 (2,421)
===== ===== ====== ======
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales 58,946 69,319 91,094 22,754
Cost of investments sold 66,933 60,879 86,565 20,591
------ ------ ------ ------
Net realized gain (loss) on investments (7,987) 8,440 4,529 2,163
Net change in unrealized appreciation or
depreciation of investments 12,986 (5,559) 292,607 156,868
------ ------ ------- -------
Net gain (loss) on investments 4,999 2,881 297,136 159,031
----- ----- ------- -------
Net increase (decrease) in net assets
resulting from operations $ 7,101 $ 4,522 $ 321,569 $ 156,610
======= ======= ========= =========
See accompanying notes to financial statements.
1Effective Oct.22, 1999, GT Global Variable Latin America Fund and GT Global New
Pacific Fund merged into AIM V.I. International Equity Fund. Subaccounts ILA
and IPA net assets were transferred to Subaccount IIN.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Operations
Year ended December 31, 1999
Segregated Asset Subaccounts
Investment income IEQ IMD ISC IUS
Dividend income from mutual funds
<S> <C> <C> <C> <C>
and portfolios $ 1,165 $ 65,295 $ 216 $ 55,044
------- -------- ----- --------
Expenses:
Mortality and expense risk fee 869 18,029 1,056 14,317
Administrative charge 104 2,163 127 1,718
--- ----- --- -----
Total expenses 973 20,192 1,183 16,035
--- ------ ----- ------
Investment income (loss) - net 192 45,103 (967) 39,009
=== ====== ==== ======
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales 3,829 206,355 4,684 190,526
Cost of investments sold 3,843 207,384 4,623 196,483
----- ------- ----- -------
Net realized gain (loss) on investments (14) (1,029) 61 (5,957)
Net change in unrealized appreciation or
depreciation of investments (1,084) 3,998 1,433 (68,282)
------ ----- ----- -------
Net gain (loss) on investments (1,098) 2,969 1,494 (74,239)
------ ----- ----- -------
Net increase (decrease) in net assets
resulting from operations $ (906) $ 48,072 $ 527 $ (35,230)
====== ======== ===== =========
Investment income IGR IHI IDI IPD
Dividend income from mutual funds
and portfolios $ 3,471 $ 5,014 $ 43,435 $ 12,347
------- ------- -------- --------
Expenses:
Mortality and expense risk fee 2,777 2,008 7,753 3,538
Administrative charge 333 241 930 424
--- --- --- ---
Total expenses 3,110 2,249 8,683 3,962
----- ----- ----- -----
Investment income (loss) - net 361 2,765 34,752 8,385
=== ===== ====== =====
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales 24,489 10,421 99,286 17,739
Cost of investments sold 23,392 10,648 106,479 18,347
------ ------ ------- ------
Net realized gain (loss) on investments 1,097 (227) (7,193) (608)
Net change in unrealized appreciation or
depreciation of investments 113,032 (2,269) (25,850) (4,902)
------- ------ ------- ------
Net gain (loss) on investments 114,129 (2,496) (33,043) (5,510)
------- ------ ------- ------
Net increase (decrease) in net assets
resulting from operations $ 114,490 $ 269 $ 1,709 $ 2,875
========= ===== ======= =======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Operations
Year ended December 31, 1999
Segregated Asset Subaccounts
Investment income IGI IPG IHY IPH
Dividend income from mutual funds
<S> <C> <C> <C> <C>
and portfolios $ 170,682 $ 18,721 $ 98,345 $ 10,848
--------- -------- -------- --------
Expenses:
Mortality and expense risk fee 25,746 5,629 11,485 2,053
Administrative charge 3,089 675 1,378 246
----- --- ----- ---
Total expenses 28,835 6,304 12,863 2,299
------ ----- ------ -----
Investment income (loss) - net 141,847 12,417 85,482 8,549
======= ====== ====== =====
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales 251,833 60,812 330,749 8,604
Cost of investments sold 248,495 63,210 366,045 8,959
------- ------ ------- -----
Net realized gain (loss) on investments 3,338 (2,398) (35,296) (355)
Net change in unrealized appreciation or
depreciation of investments (138,711) (40,552) (8,734) (2,934)
-------- ------- ------ ------
Net gain (loss) on investments (135,373) (42,950) (44,030) (3,289)
-------- ------- ------- ------
Net increase (decrease) in net assets
resulting from operations $ 6,474 $ (30,533) $ 41,452 $ 5,260
======= ========= ======== =======
Combined
Variable
Investment income INO IPV Account
Dividend income from mutual funds
and portfolios $ 7,442 $ 9,950 $ 978,333
------- ------- ---------
Expenses:
Mortality and expense risk fee 7,399 4,073 193,291
Administrative charge 888 489 23,115
--- --- ------
Total expenses 8,287 4,562 216,406
----- ----- -------
Investment income (loss) - net (845) 5,388 761,927
==== ===== =======
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on sales of investments
in mutual funds and portfolios:
Proceeds from sales 74,440 31,926 2,385,744
Cost of investments sold 61,550 26,354 2,374,107
------ ------ ---------
Net realized gain (loss) on investments 12,890 5,572 11,637
Net change in unrealized appreciation or
depreciation of investments 328,748 255,278 1,626,430
------- ------- ---------
Net gain (loss) on investments 341,638 260,850 1,638,067
------- ------- ---------
Net increase (decrease) in net assets
resulting from operations $ 340,793 $ 266,238 $ 2,399,994
========= ========= ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Changes in Net Assets
Period ended December 31, 1999
Segregated Asset Subaccounts
Operations ISI ICR IMS IIE
<S> <C> <C> <C> <C>
Investment income (loss) - net $ 41,341 $ 106,719 $ 208 $ 27,610
Net realized gain (loss) on investments (5,129) 16,376 1 1,069
Net change in unrealized appreciation
or depreciation of investments (32,957) 113,510 -- 36,365
------- ------- ------
Net increase (decrease) in net assets
resulting from operations 3,255 236,605 209 65,044
===== ======= === ======
Contract transactions
Contract purchase payments 401,663 185,591 (2) 106,161
Net transfers* (36,908) 8,314 (2) (340)
Contract charges (362) (729) -- (72)
Contract terminations:
Surrender benefits (24,386) (28,073) -- (4,230)
Death benefits (17,796) (32,930) (13,371) --
------- ------- -------
Increase (decrease) from contract transactions 322,211 132,173 (13,375) 101,519
------- ------- ------- -------
Net assets at beginning of year 549,946 932,106 13,166 62,043
------- ------- ------ ------
Net assets at end of year $ 875,412 $ 1,300,884 $-- $ 228,606
========= =========== = =========
Accumulation unit activity
Units outstanding at beginning of year 566,274 753,273 13,026 55,847
Contract purchase payments 423,401 144,018 -- 92,121
Net transfers* (38,331) 12,483 -- (251)
Contract terminations:
Surrender benefits and contract charges (34,699) (22,715) (4,408)
Death benefits (18,454) (25,703) (13,026) --
------- ------- ------- ------
Units outstanding at end of year 898,191 861,356 -- 143,309
======= ======= ======= =======
Operations IMG IGD IAG IGN
Investment income (loss) - net $ 126,689 $ 205 $ 36,207 $ 1,210
Net realized gain (loss) on investments 3,332 332 2,702 1,098
Net change in unrealized appreciation
or depreciation of investments 149,290 24,990 198,877 102,338
------- ------ ------- -------
Net increase (decrease) in net assets
resulting from operations 279,311 25,527 237,786 104,646
======= ====== ======= =======
Contract transactions
Contract purchase payments 362,964 104,322 120,273 430,330
Net transfers* 63,127 (599) 78,648 41,376
Contract charges (1,393) (17) (225) (10)
Contract terminations:
Surrender benefits (49,775) (1,991) (12,836) (3,983)
Death benefits (40,106) -- (2,283) --
------- ------
Increase (decrease) from contract transactions 334,817 101,715 183,577 467,713
------- ------- ------- -------
Net assets at beginning of year 1,770,252 4,290 250,889 7,193
--------- ----- ------- -----
Net assets at end of year $ 2,384,380 $ 131,532 $ 672,252 $ 579,552
=========== ========= ========= =========
Accumulation unit activity
Units outstanding at beginning of year 1,649,611 3,727 268,836 6,256
Contract purchase payments 331,224 87,127 128,579 353,412
Net transfers* 64,220 (465) 45,282 31,325
Contract terminations:
Surrender benefits and contract charges (46,817) (2,587) (12,987) (10,208)
Death benefits (36,355) -- (2,404) --
------- ------
Units outstanding at end of year 1,961,883 87,802 427,306 380,785
========= ====== ======= =======
*Includes transfer activity from (to) other subaccounts and
andntransfersmfrom)(to)rAmericantCenturioneLife'sefixedoaccount.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Changes in Net Assets
Period ended December 31, 1999
Segregated Asset Subaccounts
Operations IIN1 IVA IIG IVL
<S> <C> <C> <C> <C>
Investment income (loss) - net $ 4,929 $ 7,588 $ (1,828) $ 2,856
Net realized gain (loss) on investments 13,228 1,245 390 (33)
Net change in unrealized appreciation or
depreciation of investments 58,453 91,719 25,497 (7,725)
------ ------ ------ ------
Net increase (decrease) in net assets
resulting from operations 76,610 100,552 24,059 (4,902)
====== ======= ====== ======
Contract transactions
Contract purchase payments 107,070 589,120 190,319 113,460
Net transfers* 181,317 20,605 9,052 2,574
Contract charges (17) (5) (5) (4)
Contract terminations:
Surrender benefits (4,473) (5,305) (2,426) (1,916)
Death benefits -- -- -- --
---- ----- ------ -----
Increase (decrease) from contract transactions 283,897 604,415 196,940 114,114
------- ------- ------- -------
Net assets at beginning of year 4,293 9,276 9,217 3,318
----- ----- ----- -----
Net assets at end of year $ 364,800 $ 714,243 $ 230,216 $ 112,530
========= ========= ========= =========
Accumulation unit activity
Units outstanding at beginning of year 4,138 8,011 8,382 3,334
Contract purchase payments 102,927 475,243 171,234 112,972
Net transfers* 127,345 16,133 7,543 2,566
Contract terminations:
Surrender benefits and contract charges (4,675) (17,843) (7,330) (3,182)
Death benefits -- -- -- --
---- ----- ------ -----
Units outstanding at end of year 229,735 481,544 179,829 115,690
======= ======= ======= =======
Operations ILA1 IPA1 ISB IWG
Investment income (loss) - net $ 2,102 $ 1,641 $ 24,433 $ (2,421)
Net realized gain (loss) on investments (7,987) 8,440 4,529 2,163
Net change in unrealized appreciation or
depreciation of investments 12,986 (5,559) 292,607 156,868
------ ------ ------- -------
Net increase (decrease) in net assets
resulting from operations 7,101 4,522 321,569 156,610
===== ===== ======= =======
Contract transactions
Contract purchase payments 780 740 2,160,403 333,774
Net transfers* (52,525) (69,351) 63,447 10,599
Contract charges (52) (69) (53) (13)
Contract terminations:
Surrender benefits (699) (997) (16,078) (3,825)
Death benefits -- -- -- --
------ ---- ----- ------
Increase (decrease) from contract transactions (52,496) (69,677) 2,207,719 340,535
------- ------- --------- -------
Net assets at beginning of year 45,395 65,155 42,544 12,182
------ ------ ------ ------
Net assets at end of year $-- $-- $ 2,571,832 $ 509,327
= = =========== =========
Accumulation unit activity
Units outstanding at beginning of year 70,677 79,763 36,869 10,848
Contract purchase payments 986 850 1,755,815 274,020
Net transfers* (70,500) (79,357) 47,214 7,716
Contract terminations:
Surrender benefits and contract charges (1,163) (1,256) (56,843) (12,899)
Death benefits -- -- -- --
--- ---- ----- ------
Units outstanding at end of year -- -- 1,783,055 279,685
========= =======
*Includes transfer activity from (to) other subaccounts and
transfers from(to) American Centurion Life's fixed account.
See accompanying notes to financial statements.
1Effective Oct.22, 1999, GT Global Variable Latin America Fund and GT Global New
Pacific Fund merged into AIM V.I. International Equity Fund. Subaccounts ILA and
IPA net assets were transferred to Subaccount IIN.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Centurion Variable Annuity Account
Statements of Changes in Net Assets
Period ended December 31, 1999
Segregated Asset Subaccounts
Operations IEQ IMD ISC IUS
<S> <C> <C> <C> <C>
Investment income (loss) - net $ 192 $ 45,103 $ (967) $ 39,009
Net realized gain (loss) on investments (14) (1,029) 61 (5,957)
Net change in unrealized appreciation
or depreciation of investments (1,084) 3,998 1,433 (68,282)
------ ----- ----- -------
Net increase (decrease) in net assets
resulting from operations (906) 48,072 527 (35,230)
==== ====== === =======
Contract transactions
Contract purchase payments 101,775 199,855 117,052 196,932
Net transfers* 2,836 (103,369) 544 (105,933)
Contract charges (4) (895) (11) (695)
Contract terminations:
Surrender benefits (1,859) (40,333) (2,390) (44,689)
Death benefits -- (32,863) -- (14,844)
------- -------
Increase (decrease) from contract transactions 102,748 22,395 115,195 30,771
------- ------ ------- ------
Net assets at beginning of year 3,356 1,388,763 8,425 1,124,653
----- --------- ----- ---------
Net assets at end of year $ 105,198 $ 1,459,230 $ 124,147 $ 1,120,194
========= =========== ========= ===========
Accumulation unit activity
Units outstanding at beginning of year 3,262 1,273,953 8,243 1,041,627
Contract purchase payments 98,155 180,531 120,443 191,109
Net transfers* 2,735 (93,821) 569 (99,550)
Contract terminations:
Surrender benefits and contract charges (3,036) (38,323) (3,777) (48,964)
Death benefits -- (29,556) -- (14,210)
------- -------
Units outstanding at end of year 101,116 1,292,784 125,478 1,070,012
======= ========= ======= =========
Operations IGR IHI IDI IPD
Investment income (loss) - net $ 361 $ 2,765 $ 34,752 $ 8,385
Net realized gain (loss) on investments 1,097 (227) (7,193) (608)
Net change in unrealized appreciation
or depreciation of investments 113,032 (2,269) (25,850) (4,902)
------- ------ ------- ------
Net increase (decrease) in net assets
resulting from operations 114,490 269 1,709 2,875
======= === ===== =====
Contract transactions
Contract purchase payments 394,411 271,008 8,473 422,584
Net transfers* 4,367 240 (34,641) 6,165
Contract charges (11) (13) (413) (24)
Contract terminations:
Surrender benefits (3,296) (6,162) (22,652) (5,685)
Death benefits -- -- (6,669) --
------
Increase (decrease) from contract transactions 395,471 265,073 (55,902) 423,040
------- ------- ------- -------
Net assets at beginning of year 13,146 6,067 652,650 14,307
------ ----- ------- ------
Net assets at end of year $ 523,107 $ 271,409 $ 598,457 $ 440,222
========= ========= ========= =========
Accumulation unit activity
Units outstanding at beginning of year 11,547 5,811 661,787 13,968
Contract purchase payments 325,692 256,276 8,605 422,578
Net transfers* 3,304 220 (35,204) 6,062
Contract terminations:
Surrender benefits and contract charges (11,630) (9,540) (23,622) (14,247)
Death benefits -- -- (6,863) --
------
Units outstanding at end of year 328,913 252,767 604,703 428,361
======= ======= ======= =======
*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
Period ended December 31, 1999
Segregated Asset Subaccounts
Operations IGI IPG IHY IPH
<S> <C> <C> <C> <C>
Investment income (loss) - net $ 141,847 $ 12,417 $ 85,482 $ 8,549
Net realized gain (loss) on investments 3,338 (2,398) (35,296) (355)
Net change in unrealized appreciation or
depreciation of investments (138,711) (40,552) (8,734) (2,934)
-------- ------- ------ ------
Net increase (decrease) in net assets
resulting from operations 6,474 (30,533) 41,452 5,260
===== ======= ====== =====
Contract transactions
Contract purchase payments 29,292 907,600 10,189 232,137
Net transfers* 127,495 28,698 (232,913) 5,620
Contract charges (1,841) (25) (720) (20)
Contract terminations:
Surrender benefits (47,422) (5,757) (25,477) (3,079)
Death benefits (53,441) -- (31,391) --
------- -------
Increase (decrease) from contract transactions 54,083 930,516 (280,312) 234,658
------ ------- -------- -------
Net assets at beginning of year 1,865,341 18,322 1,086,710 14,913
--------- ------ --------- ------
Net assets at end of year $ 1,925,898 $ 918,305 $ 847,850 $ 254,831
=========== ========= ========= =========
Accumulation unit activity
Units outstanding at beginning of year 1,537,953 17,282 1,150,196 14,370
Contract purchase payments 22,861 857,722 10,567 222,400
Net transfers* 104,733 26,867 (242,135) 5,283
Contract terminations:
Surrender benefits and contract charges (39,052) (36,175) (27,059) (6,717)
Death benefits (41,318) -- (32,449) --
------- -------
Units outstanding at end of year 1,585,177 865,696 859,120 235,336
========= ======= ======= =======
Operations INO IPV Account
Investment income (loss) - net $ (845) $ 5,388 $ 761,927
Net realized gain (loss) on investments 12,890 5,572 11,637
Net change in unrealized appreciation or
depreciation of investments 328,748 255,278 1,626,430
------- ------- ---------
Net increase (decrease) in net assets
resulting from operations 340,793 266,238 2,399,994
======= ======= =========
Contract transactions
Contract purchase payments 5,641 666,916 8,770,833
Net transfers* 153,891 33,142 205,476
Contract charges (548) (23) (8,269)
Contract terminations:
Surrender benefits (11,362) (4,188) (385,344)
Death benefits (2,294) -- (247,988)
------ --------
Increase (decrease) from contract transactions 145,328 695,847 8,334,708
------- ------- ---------
Net assets at beginning of year 531,406 16,261 10,525,585
------- ------ ----------
Net assets at end of year $ 1,017,527 $ 978,346 $ 21,260,287
=========== ========= ============
Accumulation unit activity
Units outstanding at beginning of year 410,715 13,942
Contract purchase payments 4,022 523,883
Net transfers* 65,751 20,081
Contract terminations:
Surrender benefits and contract charges (7,893) (19,584)
Death benefits (1,688) --
------
Units outstanding at end of year 470,907 538,322
======= =======
*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
Year ended December 31, 1998
Segregated Asset Subaccounts
Operations ISI ICR IMS IIE
<S> <C> <C> <C> <C>
Investment income (loss) - net $ 17,937 $ 59,844 $ 238 $ 117
Net realized gain (loss) on investments (569) (1,218) -- 88
Net change in unrealized appreciation or
depreciation of investments (26,306) 23,486 -- (1,959)
------- ------ ------
Net increase (decrease) in net assets
resulting from operations (8,938) 82,112 238 (1,754)
====== ====== === ======
Contract transactions
Contract purchase payments 576,127 865,655 22,711 66,479
Net transfers** (1,741) (1,311) (9,783) --
Contract terminations:
Surrender benefits and contract charges (13,553) (13,018) -- (2,682)
Death benefits (1,949) (1,332) -- --
------ ------
Increase (decrease) from contract transactions 558,884 849,994 12,928 63,797
------- ------- ------ ------
Net assets at beginning of year -- -- -- --
-------- ------- ------- ------
Net assets at end of year $ 549,946 $ 932,106 $ 13,166 $ 62,043
========= ========= ======== ========
Accumualtion unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 584,020 767,627 22,831 58,109
Net transfers** (1,886) (1,222) (9,805) --
Contract terminations:
Surrender benefits and contract charges (13,858) (11,946) -- (2,262)
Death benefits (2,002) (1,186) -- --
------ ------
Units outstanding at end of year 566,274 753,273 13,026 55,847
======= ======= ====== ======
Operations IMG IGD* IAG IGN*
Investment income (loss) - net $ 159,505 -- $ 13,832 $ (1)
Net realized gain (loss) on investments (2,914) -- (662) --
Net change in unrealized appreciation or
depreciation of investments (55,451) 134 (21,227) 79
------- --- ------- --
Net increase (decrease) in net assets
resulting from operations 101,140 134 (8,057) 78
======= === ====== ==
Contract transactions
Contract purchase payments 1,690,804 4,156 265,523 7,115
Net transfers** (2,260) -- (422) --
Contract terminations:
Surrender benefits and contract charges (17,219) -- (5,608) --
Death benefits (2,213) -- (547) --
------ ----
Increase (decrease) from contract transactions 1,669,112 4,156 258,946 7,115
--------- ----- ------- -----
Net assets at beginning of year -- -- -- --
Net assets at end of year $ 1,770,252 $ 4,290 $ 250,889 $ 7,193
=========== ======= ========= =======
Accumualtion unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 1,671,564 3,727 275,694 6,256
Net transfers** (2,378) -- (521) --
Contract terminations:
Surrender benefits and contract charges (17,394) -- (5,690) --
Death benefits (2,181) -- (647) --
------ ----
Units outstanding at end of year 1,649,611 3,727 268,836 6,256
========= ===== ======= =====
* 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
Year ended December 31, 1998
Segregated Asset Subaccounts
Operations IIN* IVA* IIG* IVL*
<S> <C> <C> <C> <C>
Investment income (loss) - net $ 5 $ 253 $ 19 $ (1)
Net realized gain (loss) on investments -- -- -- --
Net change in unrealized appreciation or
depreciation of investments 75 385 336 77
-- --- --- --
Net increase (decrease) in net assets
resulting from operations 80 638 355 76
== === === ==
Contract transactions
Contract purchase payments 4,213 8,638 8,862 3,242
Net transfers** -- -- -- --
Contract terminations:
Surrender benefits and contract charges -- -- -- --
Death benefits -- -- -- --
--- --- --- ---
Increase (decrease) from contract transactions 4,213 8,638 8,862 3,242
----- ----- ----- -----
Net assets at beginning of year -- -- -- --
----- ----- ----- -----
Net assets at end of year $ 4,293 $ 9,276 $ 9,217 $ 3,318
======= ======= ======= =======
Accumualtion unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 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 4,138 8,011 8,382 3,334
===== ===== ===== =====
Operations ILA IPA ISB* IWG*
Investment income (loss) - net $ 67 $ 42 $ 405 $ 3
Net realized gain (loss) on investments (339) (71) -- --
Net change in unrealized appreciation or
depreciation of investments (12,986) 5,559 1,150 391
------- ----- ----- ---
Net increase (decrease) in net assets
resulting from operations (13,258) 5,530 1,555 394
======= ===== ===== ===
Contract transactions
Contract purchase payments 61,792 62,912 40,989 11,788
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 40,989 11,788
------ ------ ------ ------
Net assets at beginning of year -- -- -- --
------- ------ ------ -------
Net assets at end of year $ 45,395 $ 65,155 $ 42,544 $ 12,182
======== ======== ======== ========
Accumualtion unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 74,439 83,976 36,869 10,848
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 36,869 10,848
====== ====== ====== ======
*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
Year ended December 31, 1998
Segregated Asset Subaccounts
Operations IEQ* IMD ISC* IUS
<S> <C> <C> <C> <C>
Investment income (loss) - net $ (1) $ (8,116) $ (7) $ 36,001
Net realized gain (loss) on investments -- (4,073) -- 668
Net change in unrealized appreciation or
depreciation of investments 75 493 140 5,077
-- --- --- -----
Net increase (decrease) in net assets
resulting from operations 74 (11,696) 133 41,746
== ======= === ======
Contract transactions
Contract purchase payments 3,282 1,442,406 8,292 1,116,209
Net transfers** -- (2,193) -- (4,329)
Contract terminations:
Surrender benefits and contract charges -- (37,628) -- (24,313)
Death benefits -- (2,126) -- (4,660)
------ ------
Increase (decrease) from contract transactions 3,282 1,400,459 8,292 1,082,907
----- --------- ----- ---------
Net assets at beginning of year -- -- -- --
---- --------- ---- ---------
Net assets at end of year $ 3,356 $ 1,388,763 $ 8,425 $ 1,124,653
======= =========== ======= ===========
Accumualtion unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 3,262 1,314,197 8,243 1,072,494
Net transfers** -- (2,086) -- (3,866)
Contract terminations:
Surrender benefits and contract charges -- (36,162) -- (22,701)
Death benefits -- (1,996) -- (4,300)
------ ------
Units outstanding at end of year 3,262 1,273,953 8,243 1,041,627
===== ========= ===== =========
Operations IGR* IHI* IDI IPD*
Investment income (loss) - net $ (8) $ (2) $ (634) $ (3)
Net realized gain (loss) on investments -- -- (2,033) --
Net change in unrealized appreciation or
depreciation of investments 573 14 (22,923) 30
--- -- ------- --
Net increase (decrease) in net assets
resulting from operations 565 12 (25,590) 27
=== == ======= ==
Contract transactions
Contract purchase payments 12,581 6,055 695,879 14,280
Net transfers** -- -- (1,610) --
Contract terminations:
Surrender benefits and contract charges -- -- (14,129) --
Death benefits -- -- (1,900) --
------
Increase (decrease) from contract transactions 12,581 6,055 678,240 14,280
------ ----- ------- ------
Net assets at beginning of year -- -- -- --
------ ---- ------- ------
Net assets at end of year $ 13,146 $ 6,067 $ 652,650 $ 14,307
======== ======= ========= ========
Accumualtion unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 11,547 5,811 679,470 13,968
Net transfers** -- -- (1,749) --
Contract terminations:
Surrender benefits and contract charges -- -- (14,013) --
Death benefits -- -- (1,921) --
------
Units outstanding at end of year 11,547 5,811 661,787 13,968
====== ===== ======= ======
*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
Year ended December 31, 1998
Segregated Asset Subaccounts
Operations IGI IPG* IHY IPH*
<S> <C> <C> <C> <C>
Investment income (loss) - net $ 6,368 $ (12) $ (1,754) $ (4)
Net realized gain (loss) on investments (3,971) -- (7,209) --
Net change in unrealized appreciation or
depreciation of investments 93,641 300 (96,159) 31
------ --- ------- --
Net increase (decrease) in net assets
resulting from operations 96,038 288 (105,122) 27
====== === ======== ==
Contract transactions
Contract purchase payments 1,809,462 18,034 1,209,995 14,886
Net transfers** (1,614) -- (2,191) --
Contract terminations:
Surrender benefits and contract charges (37,192) -- (14,168) --
Death benefits (1,353) -- (1,804) --
------ ------
Increase (decrease) from contract transactions 1,769,303 18,034 1,191,832 14,886
--------- ------ --------- ------
Net assets at beginning of year -- -- -- --
------- ------- ------- -------
Net assets at end of year $ 1,865,341 $ 18,322 $ 1,086,710 $ 14,913
=========== ======== =========== ========
Accumualtion unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 1,574,334 17,282 1,168,801 14,370
Net transfers** (1,454) -- (2,453) --
Contract terminations:
Surrender benefits and contract charges (33,771) -- (14,256) --
Death benefits (1,156) -- (1,896) --
------ ------
Units outstanding at end of year 1,537,953 17,282 1,150,196 14,370
========= ====== ========= ======
Combined
Variable
Operations INO IPV* Account
Investment income (loss) - net $ (2,825) $ (11) $ 281,257
Net realized gain (loss) on investments (731) -- (23,034)
Net change in unrealized appreciation or
depreciation of investments 52,511 1,057 (51,397)
------ ----- -------
Net increase (decrease) in net assets
resulting from operations 48,955 1,046 206,826
====== ===== =======
Contract transactions
Contract purchase payments 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) -- (13,027)
---- -------
Increase (decrease) from contract transactions 482,451 15,215 6,900,942
------- ------ ---------
Net assets at beginning of year -- -- --
---- ---- ----
Net assets at end of year $ 531,406 $ 16,261 $ 6,942,893
========= ======== ===========
Accumualtion unit activity
Units outstanding at beginning of year -- --
Contract purchase payments 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 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>
ISI AXPSM Variable Portfolio-- Bond Fund IDS Life Insurance Company 1
ICR AXPSM Variable Portfolio-- Capital Resource Fund IDS Life Insurance Company 1
IMS AXPSM Variable Portfolio-- Cash Management Fund IDS Life Insurance Company 1
IIE AXPSM Variable Portfolio-- International Fund IDS Life Insurance Company 2
IMG AXPSM Variable Portfolio-- Managed Fund IDS Life Insurance Company 1
IGD AXPSM Variable Portfolio-- New Dimensions Fund(R) IDS Life Insurance Company 1
IAG AXPSM Variable Portfolio-- Strategy Aggressive Fund IDS Life Insurance Company 1
IGN AIM V.I. Growth and Income Fund A I M Advisors, Inc.
IIN AIM V.I. International Equity Fund3 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 Fund3 A I M Advisors, Inc.
IPA GT Global Variable New Pacific Fund3 A I M Advisors, Inc.
ISB Janus Aspen Series Balanced Portfolio: Institutional Janus Capital Corporation
Shares
IWG Janus Aspen Series Worldwide Growth Portfolio: Janus Capital Corporation
Institutional Shares
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.
3 Effective Oct. 22, 1999, GT Global Variable Latin America Fund and GT Global
Variable New Pacific Fund merged into AIM V.I. International Equity
Fund. Subaccount ILA and IPA net assets were transferred to subaccount IIN.
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 accounting principles
generally accepted in the United States 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 $6,481 in 1999 and $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, 1999 were as follows:
Subaccount Investment Shares NAV
<S> <C> <C> <C>
ISI AXPSM Variable Portfolio-- Bond Fund 82,611 $10.54
ICR AXPSM Variable Portfolio-- Capital Resource Fund 35,784 36.40
IMS AXPSM Variable Portfolio-- Cash Management Fund -- 1.00
IIE AXPSM Variable Portfolio-- International Fund 11,802 19.38
IMG AXPSM Variable Portfolio-- Managed Fund 120,486 19.82
IGD AXPSM Variable Portfolio-- New Dimensions Fund(R) 5,757 22.86
IAG AXPSM Variable Portfolio-- Strategy Aggressive Fund 28,129 23.92
IGN AIM V.I. Growth and Income Fund 18,346 31.59
IIN AIM V.I. International Equity Fund 12,455 29.29
IVA AIM V.I. Value Fund 21,321 33.50
IIG American Century VP Income and Growth 28,777 8.00
IVL American Century VP Value 18,913 5.95
ISB Janus Aspen Series Balanced Portfolio: Institutional Shares 92,114 27.92
IWG Janus Aspen Series Worldwide Growth Portfolio:
Institutional Shares 10,667 47.75
IEQ OCC Accumulation Trust Equity Portfolio 2,801 37.56
IMD OCC Accumulation Trust Managed Portfolio 33,430 43.65
ISC OCC Accumulation Trust Small Cap Portfolio 5,513 22.52
IUS OCC Accumulation Trust U.S. Government Income Portfolio 111,790 10.00
IGR Oppenheimer Capital Appreciation Fund/VA 10,496 49.84
IHI Oppenheimer High Income Fund/VA 25,318 10.72
IDI Putnam VT Diversified Income Fund - Class IA Shares 60,268 9.93
IPD Putnam VT Diversified Income Fund - Class IB Shares 44,422 9.91
IGI Putnam VT Growth and Income Fund - Class IA Shares 71,862 26.80
IPG Putnam VT Growth and Income Fund - Class IB Shares 34,329 26.75
IHY Putnam VT High Yield Fund - Class IA Shares 76,452 11.09
IPH Putnam VT High Yield Fund - Class IB Shares 22,999 11.08
INO Putnam VT New Opportunities Fund - Class IA Shares 23,370 43.54
IPV Putnam VT Voyager Fund - Class IB Shares 14,799 66.11
8. INVESTMENT TRANSACTIONS
The subaccounts' purchases of Funds' shares, including reinvestment of dividend
distributions, were as follows:
Year ended Dec. 31,
Subaccount Investment 1999 1998
<S> <C> <C> <C>
ISI AXPSM Variable Portfolio-- Bond Fund $ 447,556 $ 595,032
ICR AXPSM Variable Portfolio-- Capital Resource Fund 445,976 42,488
IMS AXPSM Variable Portfolio-- Cash Management Fund 20,188 970,850
IIE AXPSM Variable Portfolio-- International Fund 140,965 67,355
IMG AXPSM Variable Portfolio-- Managed Fund 695,004 1,931,514
IGD1 AXPSM Variable Portfolio-- New Dimensions Fund(R) 106,308 4,156
IAG AXPSM Variable Portfolio-- Strategy Aggressive Fund 265,284 280,630
IGN1 AIM V.I. Growth and Income Fund 489,818 7,115
IIN1 AIM V.I. International Equity Fund 434,314 4,220
IVA1 AIM V.I. Value Fund 641,323 8,899
IIG1 American Century VP Income and Growth 204,615 8,888
IVL1 American Century VP Value 121,036 3,242
ILA2 GT Global Variable Latin America Fund 8,498 62,128
IPA2 GT Global Variable New Pacific Fund 1,205 63,321
ISB1 Janus Aspen Series Balanced Portfolio: Institutional Shares 2,323,228 41,411
IWG1 Janus Aspen Series Worldwide Growth Portfolio: Institutional 360,860 11,798
Shares
IEQ1 OCC Accumulation Trust Equity Portfolio 106,768 3,282
IMD OCC Accumulation Trust Managed Portfolio 272,213 1,479,737
ISC1 OCC Accumulation Trust Small Cap Portfolio 118,905 8,292
IUS OCC Accumulation Trust U.S. Government Income Portfolio 258,642 1,157,565
IGR1 Oppenheimer Capital Appreciation Fund/VA 420,313 12,581
IHI1 Oppenheimer High Income Fund/VA 278,257 6,055
IDI Putnam VT Diversified Income Fund - Class IA Shares 77,360 719,282
IPD1 Putnam VT Diversified Income Fund - Class IB Shares 449,161 14,280
IGI Putnam VT Growth and Income Fund - Class IA Shares 445,566 1,877,566
IPG1 Putnam VT Growth and Income Fund - Class IB Shares 1,003,733 18,034
IHY Putnam VT High Yield Fund - Class IA Shares 134,627 1,292,921
IPH1 Putnam VT High Yield Fund - Class IB Shares 251,807 14,886
INO Putnam VT New Opportunities Fund - Class IA Shares 218,297 498,101
IPV1 Putnam VT Voyager Fund - Class IB Shares 733,150 15,215
Combined Variable Account $11,474,977 $11,220,844
1 Operations commenced on Nov. 4, 1998.
2 Effective Oct. 22, 1999, GT Global Variable Latin America Fund and GT Global
Variable New Pacific Fund merged into AIM V.I. International Equity Fund.
Subaccount ILA and IPA net assets were transferred to subaccount IIN.
9. 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 American Centurion Life
and the Account. All of the major systems used by American Centurion Life and
the Account are maintained by AEFC and are utilized by multiple subsidiaries and
affiliates of AEFC. American Centurion Life and the Account's businesses are
heavily dependent upon AEFC's computer systems and have significant interactions
with systems of third parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to American Centurion Life and the Account, was
conducted to identify the major systems that could be affected by the Year 2000
issue. Steps were taken to resolve potential problems including modification to
existing software and the purchase of new software. As of Dec. 31, 1999, AEFC
had completed its program of corrective measures on its internal systems and
applications, including Year 2000 compliance testing. As of Dec. 31, 1999, AEFC
had also completed an evaluation of the Year 2000 readiness of other third
parties whose system failures could have an impact on American Centurion Life's
and the Account's operations.
AEFC's Year 2000 project also included 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. As of Dec. 31, 1999, these plans had been amended to include
specific Year 2000 considerations.
In assessing its Year 2000 initiatives and the results of actual production
since Jan. 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on American Centurion Life's and
the Account's business, results of operations, or financial condition as a
result of the Year 2000 issue.
</TABLE>
<PAGE>
<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, 1999 and 1998, and the related statements of income,
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 1999. 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 auditing standards generally accepted
in the United States. 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, 1999 and 1998, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.
February 3, 2000
Minneapolis, Minnesota
- --------------------------------------------------------------------------------
1
<PAGE>
AMERICAN CENTURION LIFE ASSURANCE COMPANY
BALANCE SHEETS
DECEMBER 31,
($ THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
ASSETS
- ------------------------------------------------------------
Investments:
Fixed maturities:
Held to maturity, at amortized cost
(fair value:
1999, $10,939; 1998, $14,307) $ 10,971 $ 13,894
Available for sale, at fair value
(amortized cost:
1999, $315,486; 1998, $269,483) 297,251 273,873
------------------
308,222 287,767
Mortgage loans on real estate 11,691 --
- ------------------------------------------------------------
Total investments 319,913 287,767
Cash and cash equivalents 7,159 13,992
Amounts recoverable from reinsurers 2,389 2,515
Accrued investment income 4,974 4,364
Deferred policy acquisition costs 16,823 12,864
Deferred income taxes 6,201 --
Other assets 77 69
Separate account assets 24,597 12,614
- ------------------------------------------------------------
Total assets $382,133 $334,185
LIABILITIES AND STOCKHOLDER'S EQUITY
- ------------------------------------------------------------
Liabilities:
Future policy benefits:
Fixed annuities $317,709 $268,348
Traditional life insurance 1,653 1,724
Disability income insurance 85 225
Policy claims and other policyholders'
funds 672 2,048
Deferred income taxes -- 1,758
Other liabilities 701 463
Separate account liabilities 24,597 12,614
- ------------------------------------------------------------
Total liabilities 345,417 287,180
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 26,600
Accumulated other comprehensive (loss)
income:
Net unrealized securities (losses)
gains (11,102) 2,512
Retained earnings 20,218 16,893
- ------------------------------------------------------------
Total stockholder's equity 36,716 47,005
- ------------------------------------------------------------
Total liabilities and
stockholder's equity $382,133 $334,185
- ------------------------------------------------------------
</TABLE>
See accompanying notes.
- --------------------------------------------------------------------------------
2
<PAGE>
AMERICAN CENTURION LIFE ASSURANCE COMPANY
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31,
($ THOUSANDS)
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Revenues:
Net investment income $23,693 $18,990 $13,331
Contractholder charges 760 568 318
Mortality and expense risk fees 242 87 8
Net realized gain on investments 153 39 25
- ----------------------------------------------------------------------
Total revenues 24,848 19,684 13,682
Benefits and expenses:
Death and other benefits on investment
contracts (117) 72 2
Interest credited on investment
contracts 15,290 12,838 8,887
Amortization of deferred policy
acquisition costs 1,413 624 114
Other operating expenses 2,511 2,260 1,324
- ----------------------------------------------------------------------
Total expenses 19,097 15,794 10,327
- ----------------------------------------------------------------------
Income before income taxes 5,751 3,890 3,355
Income taxes 2,426 1,574 1,389
- ----------------------------------------------------------------------
Net income $ 3,325 $ 2,316 $ 1,966
- ----------------------------------------------------------------------
</TABLE>
See accompanying notes.
- --------------------------------------------------------------------------------
3
<PAGE>
AMERICAN CENTURION LIFE ASSURANCE COMPANY
STATEMENTS OF STOCKHOLDER'S EQUITY
THREE YEARS ENDED DECEMBER 31, 1999
($ THOUSANDS)
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
TOTAL ADDITIONAL COMPREHENSIVE
STOCKHOLDER'S CAPITAL PAID-IN (LOSS) INCOME, RETAINED
EQUITY STOCK CAPITAL NET OF TAX EARNINGS
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996 $31,074 $1,000 $16,600 $ 863 $12,611
Comprehensive income:
Net income 1,966 -- -- -- 1,966
Unrealized holding losses arising
during the year, net of 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
of $5 (10) -- -- (10) --
- -------------------------------------------------------------------------------------------------------
Other comprehensive income 2,276 -- -- 2,276 --
- -------------------------------------------------------------------------------------------------------
Comprehensive income 4,242
Capital contribution from parent 10,000 -- 10,000 -- --
- -------------------------------------------------------------------------------------------------------
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 deferred
policy acquisition costs of $135
and taxes of $327 (608) -- -- (646) --
Reclassification adjustment for gains
included in net income, net of tax
of $10 (19) -- -- 19 --
- -------------------------------------------------------------------------------------------------------
Other comprehensive loss (627) -- -- (627) --
- -------------------------------------------------------------------------------------------------------
Comprehensive income 1,689
Capital contribution from IDS Life 10,000 -- 10,000 -- --
- -------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 47,005 1,000 26,600 2,512 16,893
Comprehensive income:
Net income 3,325 -- -- -- 3,325
Unrealized holding losses arising
During the year, net of deferred
policy acquisition costs of
$1,680, and taxes of $7,216 (13,401) -- -- (13,401) --
Reclassification adjustment for gains
included in net income, net of tax
of $114 (213) -- -- (213) --
- -------------------------------------------------------------------------------------------------------
Other comprehensive loss (13,614) -- -- (13,614) --
- -------------------------------------------------------------------------------------------------------
Comprehensive loss (10,289)
- -------------------------------------------------------------------------------------------------------
Balance, December 31, 1999 $36,716 $1,000 $26,600 ($11,102) $20,218
- -------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes
- --------------------------------------------------------------------------------
4
<PAGE>
AMERICAN CENTURION LIFE ASSURANCE COMPANY
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31,
($ THOUSANDS)
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 3,325 $ 2,316 $ 1,966
Adjustments to reconcile net income to
net cash used in operating
activities:
Change in amounts recoverable from
reinsurers 126 213 --
Change in accrued investment income (610) (1,244) (1,016)
Change in deferred policy
acquisition costs, net (2,279) (3,718) (5,175)
Change in other assets (8) 1,522 (1,536)
Change in liabilities for future
policy benefits for traditional
life and disability income
insurance (211) (160) 1
Change in policy claims and other
policyholders' funds (1,376) (257) 1,614
Deferred income tax (benefit)
provision (629) (295) 574
Change in other liabilities 238 (278) 707
(Accretion of discount) amortization
of premium, net (408) (46) 7
Net realized gain on investments (153) (39) (25)
Other, net (125) (1) 7
- ----------------------------------------------------------------------
Net cash used in operating
activities (2,110) (1,987) (2,876)
- ----------------------------------------------------------------------
Cash flows from investing activities:
Fixed maturities held to maturity:
Maturities 2,884 3,770 1,847
Fixed maturities available for sale:
Purchases (83,722) (87,699) (86,006)
Maturities 24,965 22,581 8,438
Sales 13,480 6,695 1,303
Other investments:
Purchases (11,744) --
Sales 53 -- --
Change in due to brokers -- (4,941) 24
- ----------------------------------------------------------------------
Net cash used in investing
activities (54,084) (59,594) (74,394)
- ----------------------------------------------------------------------
Cash flows from financing activities:
Activity related to investment
contracts:
Considerations received 69,806 78,367 82,656
Surrenders and other benefits (35,735) (29,388) (24,373)
Interest credited to account
balances 15,290 12,838 8,887
Capital contribution from parent -- 10,000 --
- ----------------------------------------------------------------------
Net cash provided by financing
activities 49,361 71,817 67,170
- ----------------------------------------------------------------------
Net (decrease) increase in cash and cash
equivalents (6,833) 10,236 (10,100)
Cash and cash equivalents at beginning
of year 13,992 3,756 13,856
- ----------------------------------------------------------------------
Cash and cash equivalents at end of year $ 7,159 $ 13,992 $ 3,756
- ----------------------------------------------------------------------
</TABLE>
See accompanying notes.
- --------------------------------------------------------------------------------
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 accounting principles generally accepted in the United States 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 accounting principles
generally accepted in the United States 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 (loss) 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.
Mortgage loans on real estate are carried at amortized cost less an allowance
for mortgage loan losses. The estimated fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage interest rates
currently offered for mortgages of similar maturities.
Impairment of mortgage loans is measured as the excess of the loan's recorded
investment over its present value of expected principal and interest payments
discounted at the loan's effective interest rate, or the fair value of
collateral. The amount of the impairment is recorded in an allowance for
mortgage loan losses. The allowance for mortgage loan losses is maintained at a
level that management believes is adequate to absorb estimated losses in the
portfolio. The level of the allowance account is determined based on several
factors, including historical experience, expected future principal and interest
payments, estimated collateral values, and current and anticipated economic and
political conditions. Management regularly evaluates the adequacy of the
allowance for mortgage loan losses.
- --------------------------------------------------------------------------------
6
<PAGE>
The Company generally stops accruing interest on mortgage loans for which
interest payments are delinquent more than three months. Based on management's
judgment as to the ultimate collectibility of principal, interest payments
received are either recognized as income or applied to the recorded investment
in the loan.
The cost of interest rate caps and floors is amortized to investment income over
the life of the contracts and payments received as a result of these agreements
are recorded as investment income when realized. The amortized cost of interest
rate caps and floors is included in other investments
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.
Supplementary information to the statements of cash flows for the years ended
December 31, is summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
- ---------------------------------------------------------
<S> <C> <C> <C>
Cash paid during the year for:
Income taxes $2,700 $ 42 $2,404
Interest on borrowings 11 332 7
</TABLE>
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, have been deferred on annuity
contracts. These costs are amortized using primarily the interest method.
For variable annuities and variable universal life insurance, the amortization
of deferred acquisition costs can be impacted by separate account asset
performance. The Company generally assumes assets will appreciate at a constant
rate, and considers whether recent fluctuations from that rate are temporary and
likely to correct.
LIABILITIES FOR FUTURE POLICY BENEFITS
Liabilities for universal-life type insurance and fixed and variable deferred
annuities are accumulation values.
Liabilities for equity indexed deferred annuities are determined as the present
value of guaranteed benefits and the intrinsic value of index-based benefits.
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, 1999 and 1998 are $335 receivable
from and $178 payable to IDS Life for federal income taxes, respectively.
- --------------------------------------------------------------------------------
7
<PAGE>
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.
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 contractual maximums.
ACCOUNTING CHANGES
American Institute of Certified Public Accountants (AICPA) Statement of Position
(SOP) 98-1, "Accounting for Costs of Computer Software Developed or Obtained for
Internal Use" became effective January 1, 1999. The SOP 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 capitalized by AEFC. As a result, the new rule did not have a
material impact on the Company's results of operations or financial condition.
Effective January 1, 1999, the Company adopted AICPA 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. Adoption of the SOP did not have a material impact on the Company's
results of operations or financial condition.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities," which is effective January 1, 2001. This Statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the balance sheet and measure those instruments
at fair value. The accounting for changes in the fair value of a derivative
depends on the intended use of the derivative and the resulting designation. The
ultimate financial effect of the new rule will be measured based on the
derivatives in place at adoption and cannot be estimated at this time.
PERMITTED STATUTORY ACCOUNTING PRACTICES
The Company's statutory-basis financial statements are prepared in accordance
with accounting practices prescribed or permitted by the New York Insurance
Department. Currently, "prescribed" statutory practices are interspersed
throughout state insurance laws and regulations, the NAIC's ACCOUNTING PRACTICES
AND PROCEDURES MANUAL and a variety of other NAIC publications. "Permitted"
statutory accounting practices encompass all accounting practices that are not
prescribed; such practices may differ from state to state, may differ from
company to company within a state, and may change in the future.
In 1998, the NAIC adopted codified statutory accounting principles
("Codification") effective January 1, 2001. Codification will likely change, to
some extent, prescribed statutory accounting practices and may result in changes
to the accounting practices that the Company uses to prepare its statutory-basis
financial statements. Codification will require adoption by the various states
before it becomes the prescribed statutory basis of accounting for insurance
companies domesticated within those states. Accordingly, before Codification
becomes effective for the Company, the State of New York must adopt Codification
as the prescribed basis of accounting on which domestic insurers must report
their statutory-basis results to the Insurance Department. New York has not yet
- --------------------------------------------------------------------------------
8
<PAGE>
made a decision regarding whether or not it will accept Codification. While
management has not yet determined the impact of Codification to the Company's
statutory-basis financial statements, it does not believe the impact will be
material.
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, 1999 are
as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
HELD TO MATURITY COST GAINS LOSSES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Corporate bonds and
obligations $ 10,006 $ 53 $ 115 $ 9,944
Mortgage-backed securities 965 30 -- 995
- ----------------------------------------------------------------------------
$ 10,971 $ 83 $ 115 $ 10,939
- ----------------------------------------------------------------------------
AVAILABLE FOR SALE
- ----------------------------------------------------------------------------
U.S. Government agency
obligations $ 1,064 $ -- $ 21 $ 1,043
State and municipal
obligations 900 6 -- 906
Corporate bonds and
obligations 211,606 632 14,716 197,522
Mortgage-backed securities 101,916 113 4,249 97,780
- ----------------------------------------------------------------------------
$315,486 $ 751 $18,986 $297,251
- ----------------------------------------------------------------------------
</TABLE>
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>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
HELD TO MATURITY COST GAINS LOSSES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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>
- --------------------------------------------------------------------------------
9
<PAGE>
The amortized cost and fair value of investments in fixed maturities at December
31, 1999 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>
<CAPTION>
AMORTIZED FAIR
HELD TO MATURITY COST VALUE
- -------------------------------------------------------------
<S> <C> <C>
Due in one year or less $ 5,052 $ 5,057
Due from one to five years 3,557 3,585
Due in more than ten years 1,397 1,302
Mortgage-backed securities 965 995
- -------------------------------------------------------------
$ 10,971 $ 10,939
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AMORTIZED FAIR
AVAILABLE FOR SALE COST VALUE
- -------------------------------------------------------------
<S> <C> <C>
Due in one year or less $ 6,531 $ 6,553
Due from one to five years 19,017 18,661
Due from five to ten years 124,664 116,727
Due in more than ten years 63,358 57,530
Mortgage-backed securities 101,916 97,780
- -------------------------------------------------------------
$315,486 $297,251
- -------------------------------------------------------------
</TABLE>
Fixed maturities available for sale were sold during 1999 with proceeds of
$13,480 and gross realized gains and losses of $419 and $92, respectively. 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.
At December 31, 1999, bonds carried at $1,064 were on deposit with various
states as required by law.
At 12/31/99, fixed maturities comprised 96 percent of the Company's total
invested assets.
Securities are rated by Moody's and Standard & Poor's (S&P), except for
approximately $51 million of securities which are rated by AEFC'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:
<TABLE>
<CAPTION>
RATING 1999 1998
- ------------------------------------------------------------
<S> <C> <C>
Aaa/AAA $103,877 $ 88,286
Aa/AA 6,297 4,942
Aa/A 4,751 2,509
A/A 30,560 26,700
A/BBB 8,903 13,439
Baa/BBB 129,337 104,236
Baa/BB 4,427 5,651
Below investment grade 38,305 37,614
- ------------------------------------------------------------
$326,457 $283,377
- ------------------------------------------------------------
</TABLE>
At December 31, 1999, approximately 79 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.
- --------------------------------------------------------------------------------
10
<PAGE>
At December 31, 1999, approximately 4 percent of the Company's invested assets
were mortgage loans on real estate. Summaries of mortgage loans by region of the
United States and by type of real estate are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1999
--------------------------
ON COMMITMENTS
REGION BALANCE SHEET TO PURCHASE
- --------------------------------------------------------------------
<S> <C> <C>
South Atlantic $ -- $2,544
Middle Atlantic 1,279 --
East North Central 4,483 106
Mountain 2,000 --
West North Central 2,284 --
New England 1,645 --
- --------------------------------------------------------------------
$11,691 $2,650
- --------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1999
--------------------------
ON COMMITMENTS
PROPERTY TYPE BALANCE SHEET TO PURCHASE
- --------------------------------------------------------------------
<S> <C> <C>
Department/retail stores $ 4,527 $ --
Apartments 1,093 1,299
Office buildings 5,035 1,245
Industrial buildings 1,036 106
- --------------------------------------------------------------------
$11,691 $2,650
- --------------------------------------------------------------------
</TABLE>
Mortgage loan fundings are restricted by state insurance regulatory authorities
to 80 percent or less of the market value of the real estate at the time of
origination of the loan. The Company holds the mortgage document, which gives it
the right to take possession of the property if the borrower fails to perform
according to the terms of the agreement. Commitments to purchase mortgages are
made in the ordinary course of business. The fair value of the mortgage
commitments is $nil.
At December 31, 1999, the Company's recorded investment in impaired loans was
$nil.
Net investment income for the years ended December 31 is summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
- --------------------------------------------------------------
<S> <C> <C> <C>
Interest on fixed maturities $22,822 $19,338 $13,818
Interest on mortgage loans 281 -- --
Interest on cash equivalents 277 131 276
Other 585 132 1
- --------------------------------------------------------------
23,965 19,601 14,095
Less investment expenses 272 611 764
- --------------------------------------------------------------
$23,693 $18,990 $13,331
- --------------------------------------------------------------
</TABLE>
Net realized gain on investments was $153, $39 and $25 for the years ended
December 31, 1999, 1998 and 1997, 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:
<TABLE>
<CAPTION>
1999 1998 1997
- ------------------------------------------------------------
<S> <C> <C> <C>
Fixed maturities available for sale $(22,625) $(831) $3,761
</TABLE>
- --------------------------------------------------------------------------------
11
<PAGE>
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:
<TABLE>
<CAPTION>
1999 1998 1997
- -----------------------------------------------------------
<S> <C> <C> <C>
Federal income taxes:
Current $2,417 $1,544 $ 486
Deferred (629) (295) 574
- -----------------------------------------------------------
1,788 1,249 1,060
State income taxes -- current 638 325 329
- -----------------------------------------------------------
Income tax expense $2,426 $1,574 $1,389
- -----------------------------------------------------------
</TABLE>
Increases to the income tax provision applicable to pretax income based on the
statutory rate for the years ended December 31, are attributable to:
<TABLE>
<CAPTION>
1999 1998 1997
------------------ ------------------ ------------------
PROVISION RATE PROVISION RATE PROVISION RATE
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Federal income taxes
based on the statutory
rate $2,013 35.0% $1,361 35.0% $1,174 35.0%
Increases are
attributable to:
State tax, net 415 7.2 211 5.4 214 6.4
Other, net (2) -- 2 0.1 1 0
- -------------------------------------------------------------------------------------
Total income taxes $2,426 42.2% $1,574 40.5% $1,389 41.4%
- -------------------------------------------------------------------------------------
</TABLE>
Significant components of the Company's deferred income tax assets and
liabilities as of December 31 are as follows:
<TABLE>
<CAPTION>
1999 1998
- ----------------------------------------------------------
<S> <C> <C>
Deferred income tax assets:
Policy reserves $ 4,326 $ 3,049
Investments 6,070 --
- ----------------------------------------------------------
Total deferred income tax assets 10,396 3,049
- ----------------------------------------------------------
Deferred income tax liabilities:
Deferred policy acquisition costs 3,900 3,234
Investments -- 1,518
Other 295 55
- ----------------------------------------------------------
Total deferred income tax
liabilities 4,195 4,807
- ----------------------------------------------------------
Net deferred income tax
assets/(liabilities) $ 6,201 $(1,758)
- ----------------------------------------------------------
</TABLE>
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
- --------------------------------------------------------------------------------
12
<PAGE>
approved by the New York Department of Insurance. Statutory unassigned surplus
aggregated $9,149 and $7,512 as of December 31, 1999 and 1998, 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 $4, $3 and $nil in 1999, 1998 and 1997, 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 1999, 1998 and 1997 were $19, $19 and $23,
respectively.
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 1999, 1998 and 1997 were $nil.
Charges by IDS Life and AEFC for use of joint facilities, marketing services and
other services aggregated $2,751, $2,910 and $2,536 for 1999, 1998 and 1997,
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 established by reference
to various indicies plus 20 to 45 basis points, depending on the term. There
were no borrowings outstanding under this agreement at December 31, 1999 or
1998.
7. COMMITMENTS AND CONTINGENCIES
In January 2000, AEFC reached an agreement in principle to settle three
class-action lawsuits. The Company had been named as a co-defendant in one of
these lawsuits. It is expected the settlement will provide $215 million of
benefits to more than 2 million participants. The agreement in principle to
settle also provides for release by class members of all insurance and annuity
market conduct claims dating back to 1985 and is subject to a number of
contingencies including a definitive agreement and court approval. The portion
of the settlement allocated to the Company did not have a material impact on the
Company's financial position or results from operations.
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, 1999 and 1998, traditional life insurance in-force aggregated
$168,830 and $191,972, respectively, of which $168,595 and $191,737 were
reinsured at the respective year ends. Under all reinsurance agreements,
premiums ceded to reinsurers amounted to $1,289, $1,354 and $1,346 for the years
ended December 31, 1999, 1998 and 1997. Reinsurance recovered from reinsurers
amounted to $1,602, $601 and $718 for the years ended December 31, 1999, 1998
and 1997. Reinsurance contracts do not relieve the Company from its primary
obligations to policyholders.
- --------------------------------------------------------------------------------
13
<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,
--------------------------------------
1999 1998
------------------ ------------------
CARRYING FAIR CARRYING FAIR
FINANCIAL ASSETS AMOUNT VALUE AMOUNT VALUE
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments in fixed
maturities (Note 2)
Held to maturity $ 10,971 $ 10,939 $ 13,894 $ 14,307
Available for sale 297,251 297,251 273,873 273,873
Mortgage loans on real estate
(Note 2) 11,691 11,182 -- --
Cash and cash equivalents
(Note 1) 7,159 7,159 13,992 13,992
Separate account assets 24,597 24,597 12,614 12,614
FINANCIAL LIABILITIES
- ----------------------------------------------------------------------
Future policy benefits for
fixed Annuities $317,600 $305,733 $268,285 $258,578
Separate account liabilities 24,597 23,394 12,614 11,851
</TABLE>
At December 31, 1999 and 1998, the carrying amount and fair value of future
policy benefits for fixed annuities exclude life insurance-related contracts
carried at $109 and $63, respectively. The fair value of these benefits is based
on the status of the annuities at December 31, 1999 and 1998. 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 1999 and
1998.
- --------------------------------------------------------------------------------
14
<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>
1999 1998 1997
- ----------------------------------------------------------------
<S> <C> <C> <C>
Net income, per accompanying
financial statements $ 3,325 $ 2,316 $ 1,966
Deferred policy acquisition costs (2,279) (3,719) (5,175)
Adjustments of future policy
benefit liabilities 2,793 2,540 2,222
Deferred federal income taxes (629) (295) 574
IMR gain/loss transfer and
amortization (230) (148) (16)
Deferred surrender charge 513 665 --
Other, net 175 (252) 255
- ----------------------------------------------------------------
Net income (loss), on basis of
statutory accounting practices $ 3,668 $ 1,107 $ (174)
- ----------------------------------------------------------------
Stockholder's equity, per
accompanying financial statements $ 36,716 $ 47,005
Deferred policy acquisition costs (16,823) (12,864)
Adjustments of future policy
benefit liabilities 10,361 8,694
Adjustments of reinsurance ceded
reserves (2,390) (2,515)
Deferred federal income taxes (6,201) 1,758
Asset valuation reserve (4,021) (2,986)
Net unrealized gain on investments 18,408 (4,390)
Interest maintenance reserve (456) (227)
Other, net 1,155 637
- ----------------------------------------------------------------
Stockholder's equity on basis of
statutory accounting practices $ 36,749 $ 35,112
- ----------------------------------------------------------------
</TABLE>
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
major systems used by the Company are maintained by AEFC and are utilized by
multiple subsidiaries and affiliates of AEFC. The Company's businesses are
heavily dependent upon AEFC's computer systems and have significant interaction
with systems of third parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to the Company, was conducted to identify the major
systems that could be affected by the Year 2000 issue. Steps were taken to
resolve potential problems including modification to existing software and the
purchase of new software. As of December 31, 1999, AEFC had completed its
program of corrective measures on its internal systems and applications,
including Year 2000 compliance testing. As of December 31, 1999, AEFC had also
completed an evaluation of the Year 2000 readiness of other third parties whose
system failures could have an impact on the Company's operations.
AEFC's Year 2000 project also included 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. At December 31, 1999, these plans had been amended to include
specific Year 2000 considerations.
In assessing its Year 2000 initiatives and the results of actual production
since January 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on the Company's business, results
of operations, or financial condition as a result of the Year 2000 issue.
- --------------------------------------------------------------------------------
15
<PAGE>
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B of this Registration Statement:
The audited financial statement of ACL Variable Account 2:
Statements of Net Assets for year ended Dec. 31, 1999;
Statements of Operations for year ended Dec. 31, 1999;
Statements of Changes in Net Assets for years ended Dec. 31, 1999.
Notes to Financial Statements.
Report of Independent Auditors for ACL Variable Annuity Account 2
dated March 17, 2000.
The audited financial statements of American Centurion Life Assurance
Company:
Balance sheets as of Dec. 31, 1999 and 1998; and
Related statements of income, stockholder's equity and cash flows for the
years ended Dec. 31, 1999, 1998 and 1997.
Notes to Financial Statements
Report of Independent Auditors dated Feb. 3, 2000.
(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.
<PAGE>
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.
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.
<PAGE>
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.
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, filed electronically as Exhibit 14 to Post-Effective
Amendment No. 8 to Registration Statement No. 333-00519, filed on or about
April 28, 1999, is incorporated herein by reference.
14.1 Power of Attorney to sign Amendments to this Registration Statement dated
April 21, 2000 is filed electronically herewith.
Item 25. Directors and Officers of the Depositor (American Centurion Life
Assurance Company)
<TABLE>
<CAPTION>
<S> <C> <C>
Name Principal Business Address Positions and Offices with
Depositor
- ------------------------------------- ---------------------------------------- -----------------------------------
Timothy V. Bechtold 200 AXP Financial Center Director and President
Minneapolis, MN 55474
Maureen A. Buckley 200 AXP Financial Center Director, Vice President, Chief
Minneapolis, MN 55474 Operating Officer and Consumer
Affairs Officer
Rodney P. Burwell 200 AXP Financial Center Director
Minneapolis, MN 55474
John R. Cattau American Express Tower Director
World Financial Center
New York, NY 10285
James E. Choat 200 AXP Financial Center Executive Vice
Minneapolis, MN 55474 President-Institutional
Products Group
Robert R. Grew 200 AXP Financial Center Director
Minneapolis, MN 55474
<PAGE>
Lorraine R. Hart 200 AXP Financial Center Vice President-Investments
Minneapolis, MN 55474
Jeffrey S. Horton 200 AXP Financial Center Vice President and Treasurer
Minneapolis, MN 55474
Jean B. Keffeler 200 AXP Financial Center Director
Minneapolis, MN 55474
Richard W. Kling 200 AXP Financial Center Director and Chairman of the Board
Minneapolis, MN 55474
Eric L. Marhoun 200 AXP Financial Center General Counsel and Secretary
Minneapolis, MN 55474
Thomas R. McBurney 200 AXP Financial Center Director
Minneapolis, MN 55474
Edward J. Muhl 200 AXP Financial Center Director
Minneapolis, MN 55474
Thomas V. Nicolosi 200 AXP Financial Center Director
Minneapolis, MN 55474
Stephen P. Norman 200 AXP Financial Center Director
Minneapolis, MN 55474
Richard M. Starr 200 AXP Financial Center Director
Minneapolis, MN 55474
Philip C. Wentzel 200 AXP Financial Center Vice President and Controller
Minneapolis, MN 55474
Michael R. Woodward 200 AXP Financial Center Director
Minneapolis, MN 55474
</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.
<TABLE>
<CAPTION>
<S> <C>
Jurisdiction of
Name of Subsidiary Incorporation
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
IDS Sales Support Inc. Minnesota
Investors Syndicate Development Corp. Nevada
Public Employee Payment Company Minnesota
</TABLE>
<PAGE>
Item 27. Number of Contract owners
As of March 31, 2000, there were 249 contract owners of qualified
contracts and there were 439 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:
AXP Bond Fund, Inc.; AXP California Tax-Exempt Trust; AXP Discovery Fund,
Inc.; AXP Equity Select Fund, Inc.; AXP Extra Income Fund, Inc.; AXP
Federal Income Fund, Inc.; AXP Global Series, Inc.; AXP Growth Series,
Inc.; AXP High Yield Tax-Exempt Fund, Inc.; AXP International Fund, Inc.;
AXP Investment Series, Inc.; AXP Managed Series, Inc.; AXP Market Advantage
Series, Inc.; AXP Money Market Series, Inc.; AXP New Dimensions Fund, Inc.;
AXP Precious Metals Fund, Inc.; AXP Progressive Fund, Inc.; AXP Selective
Fund, Inc.; AXP Special Tax-Exempt Series Trust; AXP Stock Fund, Inc.; AXP
Strategy Series, Inc.; AXP Tax-Exempt Series, Inc.; AXP Tax-Free Money
Fund, Inc.; AXP Utilities Income Fund, Inc., Growth Trust; Growth and
Income Trust; Income Trust; Tax-Free Income Trust; World Trust; IDS
Certificate Company; Strategist Income Fund, Inc.; Strategist Growth Fund,
Inc.; Strategist Growth and Income Fund, Inc.; Strategist World Fund, Inc.
and Strategist Tax-Free Income Fund, Inc.
(b) As to each director, officer or partner of the principal underwriter:
Name and Principal Business Address Position and Offices with
Underwriter
- ------------------------------------- -----------------------------------
Ronald. G. Abrahamson Vice President - Business
200 AXP Financial Center Transformation
Minneapolis, MN 55474
<PAGE>
Douglas A. Alger Senior Vice President - Human
200 AXP Financial Center Resources
Minneapolis, MN 55474
Peter J. Anderson Senior Vice President -
200 AXP Financial Center Investment Operations
Minneapolis, MN 55474
Ward D. Armstrong Senior Vice President -
200 AXP Financial Center Retirement Services
Minneapolis, MN 55474
John M. Baker Vice President - Plan Sponsor
200 AXP Financial Center Services
Minneapolis, MN 55474
Joseph M. Barsky, III Vice President - Mutual Fund
200 AXP Financial Center Equities
Minneapolis, MN 55474
Timothy V. Bechtold Vice President - Risk Management
200 AXP Financial Center Products
Minneapolis, MN 55474
John D. Begley Group Vice President -
Suite 100 Ohio/Indiana
7760 Olentangy River Rd.
Columbus, OH 43235
Brent L. Bisson Group Vice President - Los
Suite 900 Angeles Metro
E. Westside Twr
11835 West Olympic Blvd.
Los Angeles, CA 90064
John C. Boeder Vice President - Nonproprietary
200 AXP Financial Center Products
Minneapolis, MN 55474
Walter K. Booker Group Vice President - New Jersey
200 AXP Financial Center
Minneapolis, MN 55474
Bruce J. Bordelon Group Vice President - San
1333 N. California Blvd., Suite 200 Francisco Bay Area
Walnut Creek, CA 94596
Charles R. Branch Group Vice President - Northwest
Suite 200
West 111 North River Dr.
Spokane, WA 99201
<PAGE>
Douglas W. Brewers Vice President - Sales Support
200 AXP Financial Center
Minneapolis, MN 55474
Karl J. Breyer Corporate Senior Vice President
200 AXP Financial Center
Minneapolis, MN 55474
<PAGE>
Cynthia M. Carlson Vice President - American Express
200 AXP Financial Center Securities Services
Minneapolis, MN 55474
Mark W. Carter Senior Vice President and Chief
200 AXP Financial Center Marketing Officer
Minneapolis, MN 55474
James E. Choat Senior Vice President - Third
200 AXP Financial Center Party Distribution
Minneapolis, MN 55474
Kenneth J. Ciak Vice President and General
IDS Property Casualty Manager - IDS Property Casualty
1400 Lombardi Avenue
Green Bay, WI 54304
Paul A. Connolly Vice President - Advisor
200 AXP Financial Center Staffing, Training and Support
Minneapolis, MN 55474
Henry J. Cormier Group Vice President - Connecticut
Commerce Center One
333 East River Drive
East Hartford, CT 06108
John M. Crawford Group Vice President -
Suite 200 Arkansas/Springfield/Memphis
10800 Financial Ctr Pkwy
Little Rock, AR 72211
Kevin F. Crowe Group Vice President -
Suite 312 Carolinas/Eastern Georgia
7300 Carmel Executive Pk
Charlotte, NC 28226
Colleen Curran Vice President and Assistant
200 AXP Financial Center General Counsel
Minneapolis, MN 55474
Luz Maria Davis Vice President - Communications
200 AXP Financial Center
Minneapolis, MN 55474
Arthur E. DeLorenzo Group Vice President - Upstate
4 Atrium Drive, #100 New York
Albany, NY 12205
Scott M. DiGiammarino Group Vice President -
Suite 500 Washington/Baltimore
8045 Leesburg Pike
Vienna, VA 22182
Bradford L. Drew Group Vice President - Eastern
Two Datran Center Florida
Penthouse One B
9130 S. Dadeland Blvd.
Miami, FL 33156
<PAGE>
Douglas K. Dunning Vice President - Assured Assets
200 AXP Financial Center Product Development and Management
Minneapolis, MN 55474
James P. Egge Group Vice President - Western
4305 South Louise, Suite 202 Iowa, Nebraska, Dakotas
Sioux Falls, SD 57103
Gordon L. Eid Senior Vice President, General
200 AXP Financial Center Counsel and Chief Compliance
Minneapolis, MN 55474 Officer
Robert M. Elconin Vice President - Government
200 AXP Financial Center Relations
Minneapolis, MN 55474
Phillip W. Evans, Group Vice President - Rocky
Suite 600 Mountain
6985 Union Park Center
Midvale, UT 84047-4177
Gordon M. Fines Vice President - Mutual Fund
200 AXP Financial Center Equity Investments
Minneapolis, MN 55474
Douglas L. Forsberg Vice President - International
200 AXP Financial Center
Minneapolis, MN 55474
Jeffrey P. Fox Vice President and Corporate
200 AXP Financial Center Controller
Minneapolis, MN 55474
William P. Fritz Group Vice President - Gateway
Suite 160
12855 Flushing Meadows Dr.
St. Louis, MO 63131
Carl W. Gans Group Vice President - Twin City
8500 Tower Suite 1770 Metro
8500 Normandale Lake Blvd.
Bloomington, MN 55437
Peter A. Gallus Vice President-Investment
200 AXP Financial Center Administration
Minneapolis, MN 55474
Derek G. Gledhill Vice President - Integrated
200 AXP Financial Center Financial Services Field
Minneapolis, MN 55474 Implementation
David A. Hammer Vice President and Marketing
200 AXP Financial Center Controller
Minneapolis, MN 55474
Teresa A. Hanratty Senior Vice President-Field
Suites 6&7 Management
169 South River Road
Bedford, NH 03110
<PAGE>
Robert L. Harden Group Vice President - Boston
Two Constitution Plaza Metro
Boston, MA 02129
Lorraine R. Hart Vice President - Insurance
200 AXP Financial Center Investments
Minneapolis, MN 55474
Scott A. Hawkinson Vice President and Controller -
200 AXP Financial Center Private Client Group
Minneapolis, MN 55474
Brian M. Heath Senior Vice President and General
Suite 150 Sales Manager
801 E. Campbell Road
Richardson, TX 75081
Janis K. Heaney Vice President - Incentive
200 AXP Financial Center Management
Minneapolis, MN 55474
Jon E. Hjelm Group Vice President - Rhode
310 Southbridge Street Island/Central - Western
Auburn, MA 01501 Massachusetts
David J. Hockenberry Group Vice President - Tennessee
30 Burton Hills Blvd. Valley
Suite 175
Nashville, TN 37215
Jeffrey S. Horton Vice President and Treasurer
200 AXP Financial Center
Minneapolis, MN 55474
David R. Hubers Chairman, President and Chief
200 AXP Financial Center Executive Officer
Minneapolis, MN 55474
Debra A. Hutchinson Vice President - Relationship
200 AXP Financial Center Leader
Minneapolis, MN 55474
James M. Jensen Vice President and
200 AXP Financial Center Controller-Advice and Retail
Minneapolis, MN 55474 Distribution Group
Marietta L. Johns Senior Vice President - Field
200 AXP Financial Center Management
Minneapolis, MN 55474
Nancy E. Jones Vice President - Business
200 AXP Financial Center Development
Minneapolis, MN 55474
Ora J. Kaine Vice President - Financial
200 AXP Financial Center Advisory Services
Minneapolis, MN 55474
<PAGE>
Linda B. Keene Vice President - Market
200 AXP Financial Center Development
Minneapolis, MN 55474
G. Michael Kennedy Vice President - Senior Portfolio
200 AXP Financial Center Manager
Minneapolis, MN 55474
Richard W. Kling Senior Vice President - Products
200 AXP Financial Center
Minneapolis, MN 55474
John M. Knight Vice President - Investment
200 AXP Financial Center Accounting
Minneapolis, MN 55474
Paul F. Kolkman Vice President - Actuarial Finance
200 AXP Financial Center
Minneapolis, MN 55474
Claire Kolmodin Vice President - Service Quality
200 AXP Financial Center
Minneapolis, MN 55474
David S. Kreager Group Vice President - Greater
Suite 108 Michigan
Trestle Bridge V
5126 Lovers Lane
Kalamazoo, MI 49002
Steven C. Kumagai Director and Senior Vice
200 AXP Financial Center President-Direct and Interactive
Minneapolis, MN 55474 Group
Mitre Kutanovski Group Vice President - Chicago
Suite 680 Metro
8585 Broadway
Merrillville, IN 48410
Kurt A. Larson Vice President - Senior Portfolio
200 AXP Financial Center Manager
Minneapolis, MN 55474
Lori J. Larson Vice President - Brokerage and
200 AXP Financial Center Direct Services
Minneapolis, MN 55474
Daniel E. Laufenberg Vice President and Chief U.S.
200 AXP Financial Center Economist
Minneapolis, MN 55474
Jane W. Lee Vice President - New Business
200 AXP Financial Center Development and Marketing
Minneapolis, MN 55474
Peter A. Lefferts Senior Vice President - Corporate
200 AXP Financial Center Strategy and Development
Minneapolis, MN 55474
<PAGE>
Douglas A. Lennick Director and Executive Vice
200 AXP Financial Center President - Private Client Group
Minneapolis, MN 55474
Fred A. Mandell Vice President - Field Marketing
200 AXP Financial Center Readiness
Minneapolis, MN 55474
Daniel E. Martin Group Vice President - Pittsburgh
Suite 650 Metro
5700 Corporate Drive
Pittsburgh, PA 15237
Timothy J. Masek Vice President and Director of
200 AXP Financial Center Global Research
Minneapolis, MN 55474
Sarah A. Mealey Vice President - Mutual Funds
200 AXP Financial Center
Minneapolis, MN 55474
Paula R. Meyer Vice President - Assured Assets
200 AXP Financial Center
Minneapolis, MN 55474
William P. Miller Vice President and Senior
200 AXP Financial Center Portfolio Manager
Minneapolis, MN 55474
Shashank B. Modak Vice President - Technology Leader
200 AXP Financial Center
Minneapolis, MN 55474
Pamela J. Moret Vice President - Variable Assets
200 AXP Financial Center
Minneapolis, MN 55474
Barry J. Murphy Senior Vice President - Client
200 AXP Financial Center Service
Minneapolis, MN 55474
Mary Owens Neal Vice President-Consumer Marketing
200 AXP Financial Center
Minneapolis, MN 55474
Thomas V. Nicolosi Group Vice President - New York
Suite 220 Metro Area
500 Mamaroneck Avenue
Harrison, NY 10528
Michael J. O'Keefe Vice President - Advisory
200 AXP Financial Center Business Systems
Minneapolis, MN 55474
James R. Palmer Vice President - Taxes
200 AXP Financial Center
Minneapolis, MN 55474
<PAGE>
Marc A. Parker Group Vice President -
10200 SW Greenburg Road Portland/Eugene
Suite 110
Portland, OR 97223
Carla P. Pavone Vice President-Compensation
200 AXP Financial Center Services and ARD Product
Minneapolis, MN 55474 Distribution
Thomas P. Perrine Senior Vice President - Group
200 AXP Financial Center Relationship Leader/American
Minneapolis, MN 55474 Express Technologies Financial
Services
Susan B. Plimpton Vice President - Marketing
200 AXP Financial Center Services
Minneapolis, MN 55474
Larry M. Post Group Vice President -
One Tower Bridge Philadelphia Metro and Northern
100 Front Street, 8th Fl New England
West Conshohocken, PA 19428
Ronald W. Powell Vice President and Assistant
200 AXP Financial Center General Counsel
Minneapolis, MN 55474
Diana R. Prost Group Vice President -
3030 N.W. Expressway Kansas/Oklahoma
Suite 900
Oklahoma City, OK 73112
James M. Punch Vice President and Project
200 AXP Financial Center Manager - Platform I Value
Minneapolis, MN 55474 Enhanced
Frederick C. Quirsfeld Senior Vice President - Fixed
200 AXP Financial Center Income
Minneapolis, MN 55474
Rollyn C. Renstrom Vice President - Corporate
200 AXP Financial Center Planning and Analysis
Minneapolis, MN 55474
R. Daniel Richardson Group Vice President - Southern
Suite 800 Texas
Arboretum Plaza One
9442 Capital of Texas Hwy. N
Austin, TX 78759
ReBecca K. Roloff Senior Vice President - Field
200 AXP Financial Center Management and Financial Advisory
Minneapolis, MN 55474 Service
Stephen W. Roszell Senior Vice President -
200 AXP Financial Center Institutional
Minneapolis, MN 55474
<PAGE>
Max G. Roth Group Vice President -
Suite 201 S. IDS Ctr Wisconsin/Upper Michigan
1400 Lombardi Avenue
Green Bay, WI 54304
Erven A. Samsel Senior Vice President - Field
45 Braintree Hill Park Management
Suite 402
Braintree, MA 02184
Theresa M. Sapp Vice President - Relationship
200 AXP Financial Center Leader
Minneapolis, MN 55474
Russell L. Scalfano Group Vice President -
Suite 201 Illinois/Indiana/Kentucky
101 Plaza East Blvd.
Evansville, IN 47715
William G. Scholz Group Vice President -
Suite 205 Arizona/Las Vegas
7333 E. Doubletree Ranch Rd
Scottsdale, AZ 85258
Stuart A. Sedlacek Senior Vice President and Chief
200 AXP Financial Center Financial Officer
Minneapolis, MN 55474
Donald K. Shanks Vice President - Property Casualty
200 AXP Financial Center
Minneapolis, MN 55474
Judy P. Skoglund Vice President - Quality and
200 AXP Financial Center Service Support
Minneapolis, MN 55474
James B. Solberg Group Vice President - Eastern
466 Westdale Mall Iowa Area
Cedar Rapids, IA 52404
Bridget Sperl Vice President - Geographic
200 AXP Financial Center Service Teams
Minneapolis, MN 55474
Paul J. Stanislaw Group Vice President - Southern
Suite 1100 California
Two Park Plaza
Irvine, CA 92714
Lisa A. Steffes Vice President - Marketing Offer
200 AXP Financial Center Development
Minneapolis, MN 55474
Lois A. Stilwell Group Vice President - Outstate
Suite 433 Minnesota Area/North
9900 East Bren Road Dakota/Western Wisconsin
Minnetonka, MN 55343
<PAGE>
William A. Stoltzmann Vice President and Assistant
200 AXP Financial Center General Counsel
Minneapolis, MN 55474
James J. Strauss Vice President and General Auditor
200 AXP Financial Center
Minneapolis, MN 55474
Jeffrey J. Stremcha Vice President - Information
200 AXP Financial Center Resource Management/ISD
Minneapolis, MN 55474
Barbara Stroup Stewart Vice President - Channel
200 AXP Financial Center Development
Minneapolis, MN 55474
Craig P. Taucher Group Vice President -
Suite 150 Orlando/Jacksonville
4190 Belfort Road
Jacksonville, FL 32216
Neil G. Taylor Group Vice President -
Suite 425 Seattle/Tacoma/Hawaii
101 Elliott Avenue West
Seattle, WA 98119
John R. Thomas Senior Vice President
200 AXP Financial Center
Minneapolis, MN 55474
Keith N. Tufte Vice President and Director of
200 AXP Financial Center Equity Research
Minneapolis, MN 55474
Peter S. Velardi Group Vice President -
Suite 180 Atlanta/Birmingham
1200 Ashwood Parkway
Atlanta, GA 30338
Charles F. Wachendorfer Group Vice President - Detroit
Suite 100 Metro
Stanford Plaza II
7979 East Tufts Ave. Pkwy
Denver, CO 80237
Donald F. Weaver Group Vice President - Greater
3500 Market Street, Suite 200 Pennsylvania
Camp Hill, PA 17011
Norman Weaver Jr. Senior Vice President - Alliance
1010 Main St., Suite 2B Group
Huntington Beach, CA 92648
Michael L. Weiner Vice President - Tax Research and
200 AXP Financial Center Audit
Minneapolis, MN 55474
Jeffry M. Welter Vice President - Equity and Fixed
200 AXP Financial Center Income Trading
Minneapolis, MN 55474
<PAGE>
Thomas L. White Group Vice President - Cleveland
Suite 200 Metro
28601 Chagrin Blvd.
Woodmere, OH 44122
Eric S. Williams Group Vice President - Virginia
Suite 250
3951 Westerre Parkway
Richmond, VA 23233
William J. Williams Group Vice President - Western
Two North Tamiami Trail Florida
Suite 702
Sarasota, FL 34236
<PAGE>
Edwin M. Wistrand Vice President and Assistant
200 AXP Financial Center General Counsel
Minneapolis, MN 55474
Michael D. Wolf Vice President - Senior Portfolio
200 AXP Financial Center Manager
Minneapolis, MN 55474
Michael R. Woodward Senior Vice President - Field
32 Ellicott St. Management
Suite 100
Batavia, NY 14020
Rande L. Zellers Group Vice President-Gulf States
1 Galleria Blvd., Suite 1900
Metairie, LA 70001
Item 29(c).
Net
Name of Principal Underwriting Compensation Brokerage
Underwriter Discounts and on Redemption Commissions Compensation
Commissions
American Express $673,812 $6,481 None None
Financial Advisors
Inc.
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.
<PAGE>
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 27th day
of April, 2000.
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 27th day of April, 2000.
Signature Title
/s/ Timothy V. Bechtold* Director and President
Timothy V. Bechtold
/s/ Maureen A. Buckley* Director, Vice President, Chief Operating
Maureen A. Buckley Officer, Consumer Affair Officer and
Claims 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/ 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/ Philip C. Wentzel** Vice President and Controller
Philip C. Wentzel
/s/ Michael R. Woodward* Director
Michael R. Woodward
* 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.
** Signed pursuant to Power of Attorney, dated April 21, 2000, filed
electronically herewith.
By: /s/ Mary Ellyn Minenko
Mary Ellyn Minenko
<PAGE>
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 5
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 14.1: Power of Attorney dated April 21, 2000
April 27, 2000
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. 5
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 reference to our firm under the caption "Independent Auditors"
in the Statement of Additional Information and to the use of our report dated
February 3, 2000 with respect to the financial statements of American Centurion
Life Assurance Company and to the use of our report dated March 17, 2000 with
respect to the financial statements of American Centurion Variable Annuity
Account 2, included in Post-Effective Amendment No. 5 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 24, 2000
AMERICAN CENTURION LIFE ASSURANCE COMPANY
POWER OF ATTORNEY
City of Albany
State of New York
The undersigned, as an 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:
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)
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 21st day of April, 2000.
/s/ Philip C. Wentzel
Philip C. Wentzel
Vice President and Controller
