<PAGE>
As filed with the Securities and Exchange Commission on April 14, 1998.
File No. 333-10105
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 4 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 5 [X]
AMERICAN MATURITY LIFE INSURANCE COMPANY
SEPARATE ACCOUNT AMLVA
(Exact Name of Registrant)
AMERICAN MATURITY LIFE INSURANCE COMPANY
(Name of Depositor)
P.O. BOX 2999
HARTFORD, CT 06104-2999
(Address of Depositor's Principal Offices)
(860) 843-7563
(Depositor's Telephone Number, Including Area Code)
MARIANNE O'DOHERTY, ESQ.
HARTFORD LIFE, INC.
P.O. BOX 2999
HARTFORD, CT 06104-2999
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
___ immediately upon filing pursuant to paragraph (b) of Rule 485
_X_ on May 1, 1998 pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
___ on May 1, 1998 pursuant to paragraph (a)(1) of Rule 485
___ this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
PURSUANT TO RULE 24F-2(a)(1) UNDER THE INVESTMENT COMPANY ACT OF 1940, THE
REGISTRANT HAS REGISTERED AN INDEFINITE AMOUNT OF SECURITIES.
<PAGE>
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(a)
(Part A)
N-4 ITEM NO. PROSPECTUS HEADING
------------ ------------------
1. Cover Page Cover Page
2. Definitions Definitions
3. Synopsis Fee Table, Summary
4. Condensed Financial Information Accumulation Unit Values;
Performance Related Information
5. General Description of Registrant, American Maturity, the Separate
Depositor, and Portfolio Companies Account, the Funds, and the General
Account; Your Investment Options;
Miscellaneous
6. Deductions Charges Under the Certificate
7. General Description of Variable The Certificate; American Maturity,
Annuity Contracts the Separate Account, the Funds,
and the General Account;
Miscellaneous
8. Annuity Period Annuity Benefits
9. Death Benefit Death Benefits
10. Purchases and Contract Value The Certificate
11. Redemptions Surrenders
12. Taxes Federal Tax Considerations
13. Legal Proceedings Miscellaneous - Legal Matters and
Experts
14. Table of Contents of the Statement Table of Contents to the Statement
of Additional Information of Additional Information.
<PAGE>
(Part B)
N-4 ITEM NO. HEADING
------------ -------
15. Cover Page Cover Page
16. Table of Contents Table of Contents
17. General Information and History Description of American Maturity
Life Insurance Company
18. Services Independent Public Accountants
19. Purchase of Securities Being Offered Distribution of the Certificates
20. Underwriters Distribution of the Certificates
21. Calculation of Performance Data Calculation of Yield and Return
22. Annuity Payments Annuity Period
23. Financial Statements Financial Statements
(Part C)
24. Financial Statements and Exhibits Financial Statements and Exhibits
25. Directors and Officers of the Directors and Officers of the
Depositor Depositor
26. Persons Controlled by or Under Persons Controlled by or Under
Common Control with the Depositor Common Control with the Depositor
or Registrant or Registrant
27. Number of Contract Owners Number of Certificate Owners
28. Indemnification Indemnification
29. Principal Underwriters Principal Underwriters
30. Location of Accounts and Records Location of Accounts and Records
31. Management Services Management Services
32. Undertakings Undertakings
<PAGE>
THE AARP VARIABLE ANNUITY
AMERICAN MATURITY LIFE INSURANCE COMPANY
P.O. BOX 7005
PASADENA, CA 91109-7005
TELEPHONE: 1-800-923-3334
This Prospectus describes the AARP Variable Annuity, a group flexible premium
variable annuity contract. American Maturity Life Insurance Company ("American
Maturity" or "Company" or "We" or "Us") offers the AARP Variable Annuity by
issuing you a Certificate or Contract ("Certificate") if you are eligible. We
offer the Certificate to members of the American Association of Retired Persons
("AARP") for retirement planning purposes. We allocate premium payments for each
Certificate to Sub-Accounts of American Maturity's Separate Account AMLVA
("Separate Account"), or American Maturity's General Account. The following
Sub-Accounts are currently available:
MONEY MARKET PORTFOLIO of the Scudder Variable Life Investment Fund
BOND PORTFOLIO of the Scudder Variable Life Investment Fund
BALANCED PORTFOLIO of the Janus Aspen Series
CAPITAL GROWTH PORTFOLIO of the Scudder Variable Life Investment Fund
GROWTH & INCOME PORTFOLIO of the Scudder Variable Life Investment Fund
PARTNERS PORTFOLIO OF Neuberger&Berman Advisers Management Trust
CAPITAL APPRECIATION PORTFOLIO of the Dreyfus Variable Investment Fund
SMALL CAP PORTFOLIO of the Dreyfus Variable Investment Fund
WORLDWIDE GROWTH PORTFOLIO of the Janus Aspen Series
- --------------------------------------------------------------------------------
This Prospectus provides information you should know before purchasing a
Certificate. You should read this Prospectus carefully and keep it for future
reference. We sent additional information about the Separate Account to the
Securities and Exchange Commission. It is called the Statement of Additional
Information, and we will send a copy to you without charge if you write or call
Us at the address or telephone number listed above. The Table of Contents for
the Statement of Additional Information is reproduced on page 30 of this
Prospectus. The Statement of Additional Information is incorporated by reference
to this Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE CERTIFICATE IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR ENDORSED BY,
ANY BANK. IT IS NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY.
INVESTMENT IN A CERTIFICATE INVOLVES RISK, INCLUDING POSSIBLE LOSS OF THE
PRINCIPAL AMOUNT INVESTED.
THE CERTIFICATE IS NOT AVAILABLE IN ALL STATES AND THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY JURISDICTION IN WHICH SUCH AN OFFER MAY NOT BE MADE
LAWFULLY. NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS OTHER THAN
THOSE CONTAINED IN THIS PROSPECTUS AND THE RELATED STATEMENT OF ADDITIONAL
INFORMATION (OR ANY SALES LITERATURE APPROVED BY AMERICAN MATURITY), AND ANY
SUCH UNAUTHORIZED INFORMATION OR REPRESENTATION, IF GIVEN OR MADE, SHOULD NOT BE
RELIED UPON.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY CURRENT PROSPECTUSES FOR THE
FUNDS.
- --------------------------------------------------------------------------------
PROSPECTUS DATED: MAY 1, 1998
STATEMENT OF ADDITIONAL INFORMATION DATED: MAY 1, 1998
<PAGE>
2 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
DEFINITIONS........................................................... 3
SUMMARY............................................................... 5
FEE TABLE............................................................. 6
AMERICAN MATURITY, THE SEPARATE ACCOUNT, THE FUNDS AND THE GENERAL
ACCOUNT.............................................................. 10
American Maturity Life Insurance Company............................ 10
Separate Account AMLVA.............................................. 10
The Funds........................................................... 11
Investment Advisers to the Funds.................................... 12
The General Account................................................. 12
Performance Related Information..................................... 12
THE CERTIFICATE....................................................... 13
What is the Certificate?............................................ 13
How to Apply for Your Certificate................................... 13
Making Your Premium Payments........................................ 13
How Your Payments are Invested...................................... 13
Certificate Value................................................... 14
Transfers Between the Sub-Accounts/Fixed Account.................... 14
Charges Under the Certificates...................................... 15
Death Benefits...................................................... 17
Surrenders.......................................................... 18
Annuity Benefits.................................................... 18
Annuity Options..................................................... 19
FEDERAL TAX CONSIDERATIONS............................................ 20
INFORMATION REGARDING TAX QUALIFIED PLANS............................. 20
MISCELLANEOUS......................................................... 24
Voting Rights....................................................... 24
How the Certificates are Sold....................................... 25
Custodian of Separate Account Assets................................ 25
Assignment.......................................................... 25
Rights of Annuitant and Certificate Owner(s)........................ 25
Modification of Group Contract and Certificates Thereunder.......... 25
Change in the Operation of the Separate Account..................... 26
Legal Matters and Experts........................................... 26
Additional Information.............................................. 26
APPENDIX I -- INFORMATION REGARDING TAX-QUALIFIED PLANS............... 27
TABLE OF CONTENTS TO STATEMENT OF ADDITIONAL INFORMATION.............. 30
</TABLE>
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 3
- --------------------------------------------------------------------------------
DEFINITIONS
In this Prospectus, "We," "Our," "Us," or "the Company" refers to American
Maturity Life Insurance Company ("American Maturity"). "You" and "your" refer to
the Certificate Owner.
ACCUMULATION UNIT -- A unit of measure used to calculate the value of a
Sub-Account of a Certificate before the Annuity Commencement Date.
ADMINISTRATION CHARGE -- A dollar amount We deduct to cover administrative
expenses. This charge is an annual percentage. It will be shown on your
Certificate on the page entitled "Certificate Specifications."
ADMINISTRATIVE OFFICE OF THE COMPANY -- See "Miscellaneous -- Additional
Information," page 26, for address information.
ANNUAL FEE -- An amount that is deducted from your Certificate at the end of
each Certificate Year before the Annuity Commencement Date, or on the date of
full surrender of the Certificate, if earlier.
ANNUITANT -- The person on whose life an annuity is purchased.
ANNUITY COMMENCEMENT DATE -- The date on which your selected annuity option, to
receive regular annuity payments, becomes effective.
ANNUITY UNIT -- A unit of measure used to calculate the value of annuity
payments under the variable annuity option.
BENEFICIARY -- The person entitled to receive benefits according to the terms of
the Contract in case of the death of a Certificate Owner or Annuitant, as
applicable.
BUSINESS DAY -- Every day the New York Stock Exchange is open for trading. The
end of the Business Day is the close of the New York Stock Exchange. The New
York Stock Exchange normally closes at 4:00 p.m. Eastern time.
CERTIFICATE -- Your annuity policy. The Certificate is issued by Us to you. It
is evidence that you, or someone on your behalf, made a premium payment under
the group contract issued by Us to the AARP Group Annuity Trust.
CERTIFICATE ANNIVERSARY -- An anniversary of the Certificate Date. Similarly,
Certificate Years are measured from the Certificate Date. The Certificate Date
will be shown on your Certificate on the page entitled "Certificate
Specifications."
CERTIFICATE DATE -- The effective date of the Certificate (the date on which
your annuity takes effect).
CERTIFICATE OWNER -- The owner(s) of the Certificate, sometimes referred to as
"you."
CERTIFICATE VALUE -- The value of the Sub-Account(s) plus the value of the Fixed
Account on any Business Day.
CERTIFICATE YEAR -- Each 12-month period starting on the Certificate Date and
ending the day before each Certificate Anniversary.
CODE -- The Internal Revenue Code of 1986, as amended.
COMPANY -- American Maturity Life Insurance Company, sometimes referred to as
"We" or "Us."
CONTINGENT ANNUITANT -- The person designated by you who, upon the Annuitant's
death prior to the Annuity Commencement Date, becomes the Annuitant.
CONTINGENT DEFERRED SALES CHARGE -- A charge that may be deducted from Your
Certificate Value if you make withdrawals from your Certificate within a certain
number of years.
CONTRACT OWNER -- The AARP Group Annuity Trust.
DUE PROOF OF DEATH -- A certified copy of the death certificate, an order of a
court of competent jurisdiction, a statement from a physician who attended the
deceased, or any other proof acceptable to Us.
ENROLLMENT FORM -- A form you completed in order to purchase a Certificate.
FIXED ACCOUNT -- An investment option that earns a rate of interest of at least
3% per year. Amounts invested in the Fixed Account become part of Our General
Account.
FUND(S) -- The underlying investments contained in each Sub-Account of the
Separate Account.
GENERAL ACCOUNT -- All assets of the Company other than those allocated to the
Separate Accounts of the Company.
GROSS SURRENDER VALUE -- The Certificate Value (dollar amount) to be deducted
from your Certificate when you make a full or partial surrender.
MORTALITY AND EXPENSE RISK CHARGE -- A dollar amount we deduct from the
Sub-Accounts to cover risks of administrative expenses and mortality. This
charge is an annual percentage.
NET INVESTMENT FACTOR -- A factor used to determine the value of Accumulation
Units or Annuity Units each day.
NET SURRENDER VALUE -- The amount payable to you on a full or partial surrender
after the deduction for any unpaid Taxes, Annual Fee (for full surrenders only),
and any Contingent Deferred Sales Charge.
NON-QUALIFIED CERTIFICATE -- A Certificate other than a Qualified Certificate.
QUALIFIED CERTIFICATE -- A Certificate that qualifies under the Code as an
Individual Retirement Annuity ("IRA"), or a Certificate purchased by a Qualified
Plan, qualifying for special tax treatment under the Code.
<PAGE>
4 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
QUALIFIED PLAN -- A retirement plan that receives favorable tax treatment under
Section 401, 403(a), 403(b), 408 or 547 of the Code.
SEC -- Securities and Exchange Commission, which is a federal regulatory body
authorized by Congress.
SEPARATE ACCOUNT -- An account established by Us to separate the assets funding
the variable benefits for the class of contracts to which this Certificate
belongs from the other assets of the Company. The assets in the Separate Account
are not chargeable with liabilities arising out of any other business We may
conduct.
SUB-ACCOUNT -- The subdivisions of the Separate Account. You purchase units of
the Sub-Accounts to participate in the investment experience of the underlying
Funds.
SURRENDER -- A full or partial withdrawal from your Certificate.
TAXES -- The amount of tax, if any, charged by a federal, state or municipal
entity on premium payments or Certificate Values. Premium taxes imposed by some
states currently range up to 3.5%.
VALUATION PERIOD -- The period between the close of business on successive
Business Days.
WE, OUR, US -- American Maturity Life Insurance Company.
YOU, YOUR -- The Certificate Owner(s).
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 5
- --------------------------------------------------------------------------------
SUMMARY
THIS BRIEF DESCRIPTION IS ONLY AN OVERVIEW OF THE MORE SIGNIFICANT FEATURES OF
THE CERTIFICATE. MORE DETAILED INFORMATION MAY BE FOUND IN SUBSEQUENT SECTIONS
OF THIS PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL INFORMATION.
WHAT IS THE CERTIFICATE? The AARP Variable Annuity (the "Certificate") is a
long-term financial planning device offered to eligible members of the American
Association of Retired Persons. The Certificate permits you to invest on a
tax-deferred basis for retirement or other long-range goals, and to receive a
series of regular payments for life or a period of years. The Certificate is
also available for Individual Retirement Annuities (IRAs). (See "The
Certificate," page 13.)
HOW DO I PURCHASE A CERTIFICATE? Generally, you may purchase a Certificate
by completing an Enrollment Form and submitting it with your initial premium
payment to Us for approval. Initially you must invest at least $5,000 (or $2,500
if you enroll in our pre-authorized checking plan with scheduled contributions
of $100 per month). If you wish, you may make additional investments of at least
$250 (or $100 if enrolled in our pre-authorized checking plan).
For a limited time, usually ten days after you receive it, you may cancel
your Certificate without withdrawal charges. (See "The Certificate -- Making
Your Premium Payments," page 13.)
WHAT ARE MY INVESTMENT OPTIONS? You select your own investment options. The
underlying investments for the Certificate are certain shares of the Dreyfus
Variable Investment Fund, the Janus Aspen Series, Neuberger&Berman Advisers
Management Trust, and the Scudder Variable Life Investment Fund, all which are
series investment companies with multiple portfolios ("the Funds") and the Fixed
Account. The available Funds are listed on page 11.
WHAT CHARGES WILL I PAY? We charge an Administrative Fee of 0.20% per year,
and a Mortality and Expense Risk Charge of 0.65% per year against amounts held
in the Separate Account. Amounts held in the Separate Account are also subject
to the fees and expenses imposed on the corresponding Funds. Before the Annuity
Commencement Date, or at the time of a full withdrawal, if your Certificate
Value is less than $50,000, We charge an Annual Fee of $25. Withdrawals of
premium payments may be subject to a Contingent Deferred Sales Charge if you
withdraw money before your Certificate has been in effect for five years. This
Charge is determined by the amount of your withdrawal and declines over time
from your original purchase date of the Certificate. We may waive the Charge
under certain circumstances. You may also be subject to other fees. (See "The
Certificate -- Charges Under the Certificates," page 15.)
CAN I WITHDRAW MY CERTIFICATE VALUE? Subject to any applicable charges, you
may withdraw all or part of your Certificate at any time on or prior to your
Annuity Commencement Date starting 30 days after your Certificate is issued.
Withdrawals may be subject to tax and, in certain circumstances, a tax penalty.
Each year you may withdraw up to 10% of remaining premium payments without the
assessment of a Contingent Deferred Sales Charge. (See "The Certificate --
Surrenders," page 18.)
DOES THE CERTIFICATE HAVE A DEATH BENEFIT? There is a Death Benefit if the
Annuitant or Certificate Owner or Joint Certificate Owner dies before the
Annuity Commencement Date. (See "The Certificate -- Death Benefits," page 17.)
WHAT ARE THE AVAILABLE ANNUITY OPTIONS UNDER THE CERTIFICATE? There are five
Annuity Options described on page 19. You may not defer the Annuity Commencement
Date beyond the Annuitant's 90th birthday (or earlier in some states). If you do
not tell Us otherwise, We will elect the Fifth Annuity Option to provide a
Payment for a Designated Period for 5 years on the Annuity Commencement Date for
you.
HOW DO I REACH AMERICAN MATURITY? You can reach our service representatives
at 1-800-923-3334. See "Miscellaneous -- Additional Information," page 26, for
address information.
<PAGE>
6 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FEE TABLE
CERTIFICATE OWNER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Charge Imposed on Purchases (as a percentage of premium
payments)....................................................... None
Contingent Deferred Sales Charge (as a percentage of premium
payments).......................................................
First Year (1).................................................. 5%
Second Year (1)................................................. 4%
Third Year (1).................................................. 3%
Fourth Year (1)................................................. 2%
Fifth Year (1).................................................. 1%
Sixth Year (1).................................................. 0%
Transfer Fee (2)................................................ None
Withdrawal Fee (3).............................................. None
Annual Maintenance Fee (4)...................................... $25
</TABLE>
- ---------
(1) Length of time from purchase date in years.
(2) We reserve the right to impose a transaction fee in the future of up to
$15.00 per transfer in excess of 12 in any Certificate Year. See "The
Contract -- Transfers Between the Sub-Accounts/Fixed Account," page 14.
(3) We reserve the right to impose a withdrawal fee in the future of up to
$15.00 per withdrawal on withdrawals in excess of 12 in any Certificate
Year. See "The Certificate -- Surrenders," page 18.
(4) This fee will be charged at the end of each Certificate Year prior to your
Annuity Commencement Date and at the time of a full withdrawal unless your
Certificate Value is at least $50,000 on that date.
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
<TABLE>
<S> <C>
Mortality and Expense Risk Charge.................................................................... 0.65%
Administration Fee................................................................................... 0.20%
---
Total Separate Account Expenses...................................................................... 0.85%
---
---
</TABLE>
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 7
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets
after any Fee Waiver and/or Expense Reimbursement)
<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OTHER OPERATING
FEE EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Money Market Portfolio (Scudder)................ 0.370% 0.090% 0.460%
Bond Portfolio (Scudder)........................ 0.480% 0.140% 0.620%
Balanced Portfolio (Janus) (1).................. 0.760% 0.070% 0.830%
Capital Growth Portfolio (Scudder).............. 0.470% 0.040% 0.510%
Growth & Income Portfolio (Scudder)............. 0.480% 0.100% 0.580%
AMT Partners Portfolio (Neuberger&Berman
Management) (2)............................... 0.800% 0.060% 0.860%
Capital Appreciation Portfolio (Dreyfus)........ 0.750% 0.050% 0.800%
Small Cap Portfolio (Dreyfus)................... 0.750% 0.030% 0.780%
Worldwide Growth Portfolio (Janus) (1).......... 0.660% 0.080% 0.740%
</TABLE>
Other expenses are based on amounts incurred during the most recent fiscal
year or based on estimated amounts for the current fiscal year.
The purpose of the foregoing table (Annual Fund Operating Expenses) is to
assist Certificate Owners in understanding the expenses of the Funds that they
bear directly or indirectly. The expenses relating to the Funds have been
provided to American Maturity by the Funds, and have not been independently
verified by American Maturity. See the sections on charges in the accompanying
Fund prospectuses.
- ---------
(1) Janus Aspen Series. The management fees in the table are based on a reduced
fee schedule effective July 1, 1997, as applied to net assets as of December
31, 1997. Other expenses in the table above are based on gross expenses
before expense offset arrangements for the fiscal year ended December 31,
1997. The information for the Worldwide Growth and Balanced Portfolios is
net of fee reductions from Janus Capital. Fee reductions for the Worldwide
Growth and Balanced Portfolios reduce the management fee to the level of the
corresponding Janus retail fund. Without such reductions, the Management
Fee, Other Expenses and Total Operating Expenses would have been,
respectively, 0.72%, 0.09% and 0.81% for the Worldwide Growth Portfolio and
0.77%, 0.06% and 0.83% for the Balanced Portfolio. Janus Capital may modify
or terminate the reductions at any time upon at least 90 days notice to the
Trustees of Janus Aspen Series.
(2) Neuberger&Berman Advisers Management Trust. The fees and expenses are based
on fees and expenses for the fiscal year ended December 31, 1997. The
figures reported under "Management Fees" include the aggregate of the
administration fees paid by the Partners Portfolio and the management fees
paid by the Series of Advisers Managers Trust in which the Partners
Portfolio invests. Similarly "Other Expenses" includes all other expenses of
the Partners Portfolio and the related Series in which the Partners
Portfolio invests. (See "Expenses" in Neuberger&Berman Advisers Management
Trust's prospectus).
<PAGE>
8 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
EXAMPLE
IF YOU SURRENDER YOUR CERTIFICATE AT THE END OF THE APPLICABLE TIME PERIOD,
YOU WOULD PAY THE FOLLOWING EXPENSES ON A $1,000 INVESTMENT, ASSUMING A 5%
ANNUAL RETURN ON ASSETS:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Money Market Portfolio...................................... $ 64 $ 74
Bond Portfolio.............................................. 66 79
Balanced Portfolio.......................................... 68 86
Capital Growth Portfolio.................................... 65 76
Growth & Income Portfolio................................... 65 78
AMT Partners Portfolio...................................... 68 86
Capital Appreciation Portfolio.............................. 68 85
Small Cap Portfolio......................................... 67 84
Worldwide Growth Portfolio.................................. 67 83
</TABLE>
IF YOU ANNUITIZE YOUR CERTIFICATE AT THE END OF THE APPLICABLE TIME PERIOD,
YOU WOULD PAY THE FOLLOWING EXPENSES ON A $1,000 INVESTMENT, ASSUMING A 5%
ANNUAL RETURN ON ASSETS:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Money Market Portfolio...................................... $ 13 $ 43
Bond Portfolio.............................................. 15 48
Balanced Portfolio.......................................... 17 55
Capital Growth Portfolio.................................... 14 45
Growth & Income Portfolio................................... 15 47
AMT Partners Portfolio...................................... 18 56
Capital Appreciation Portfolio.............................. 17 54
Small Cap Portfolio......................................... 17 53
Worldwide Growth Portfolio.................................. 16 52
</TABLE>
IF YOU DO NOT SURRENDER YOUR CERTIFICATE, YOU WOULD PAY THE FOLLOWING
EXPENSES ON A $1,000 INVESTMENT, ASSUMING A 5% ANNUAL RETURN ON ASSETS:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Money Market Portfolio...................................... $ 14 $ 44
Bond Portfolio.............................................. 16 49
Balanced Portfolio.......................................... 18 56
Capital Growth Portfolio.................................... 15 46
Growth & Income Portfolio................................... 15 48
AMT Partners Portfolio...................................... 18 56
Capital Appreciation Portfolio.............................. 18 55
Small Cap Portfolio......................................... 17 54
Worldwide Growth Portfolio.................................. 17 53
</TABLE>
The purpose of this table is to assist you in understanding various costs
and expenses that you will bear directly or indirectly. The table reflects
expenses of the Separate Account and underlying Funds. For more complete
descriptions of the various costs and expenses involved, see "The Certificate --
Charges under the Certificates," page 15, and see the Fund prospectuses. Premium
taxes may also be applicable. THIS EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN. The Annual Expenses of the Funds and the Example are
based on data provided by the respective Funds. We have not independently
verified such data.
The Annual Fee is reflected in the Example, using an assumed Certificate
Value of $35,000. No Annual Fee is deducted from annuitized amounts, or if your
Certificate Value is at least $50,000, or on payment of a death benefit.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
ACCUMULATION UNIT VALUES
(FOR AN ACCUMULATION UNIT OUTSTANDING THROUGHOUT THE PERIOD)
The following information has been derived from the audited financial
statements of the Separate Account, which have been audited by Arthur Andersen,
LLP, independent accountants, as indicated in their report thereto, and should
be read in conjunction with those statements which are included in the Statement
of Additional Information, which is incorporated by reference in this
Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
SUB-ACCOUNTS 1997
- ------------------------------------------------------------ ------------
<S> <C>
SCUDDER MONEY MARKET FUND (INCEPTION DATE MARCH 17, 1997)
Accumulation unit value at beginning of period.............. $ 1.000
Accumulation unit value at end of period.................... $10.348
Number accumulation units outstanding at end of period (in
thousands)................................................. 33
SCUDDER BOND FUND (INCEPTION DATE MARCH 17, 1997)
Accumulation unit value at beginning of period.............. $ 1.000
Accumulation unit value at end of period.................... $10.820
Number accumulation units outstanding at end of period (in
thousands)................................................. 52
JANUS BALANCED FUND (INCEPTION DATE MARCH 17, 1997)
Accumulation unit value at beginning of period.............. $ 1.000
Accumulation unit value at end of period.................... $11.535
Number accumulation units outstanding at end of period (in
thousands)................................................. 26
SCUDDER CAPITAL GROWTH FUND (INCEPTION DATE MARCH 17, 1997)
Accumulation unit value at beginning of period.............. $ 1.000
Accumulation unit value at end of period.................... $12.483
Number accumulation units outstanding at end of period (in
thousands)................................................. 45
SCUDDER GROWTH AND INCOME FUND (INCEPTION DATE MARCH 17,
1997)
Accumulation unit value at beginning of period.............. $ 1.000
Accumulation unit value at end of period.................... $12.121
Number accumulation units outstanding at end of period (in
thousands)................................................. 170
NEUBERGER&BERMAN PARTNERS FUND (INCEPTION DATE MARCH 17,
1997)
Accumulation unit value at beginning of period.............. $ 1.000
Accumulation unit value at end of period.................... $12.334
Number accumulation units outstanding at end of period (in
thousands)................................................. 71
DREYFUS CAPITAL APPRECIATION FUND (INCEPTION DATE MARCH 17,
1997)
Accumulation unit value at beginning of period.............. $ 1.000
Accumulation unit value at end of period.................... $11.787
Number accumulation units outstanding at end of period (in
thousands)................................................. 110
DREYFUS SMALL CAPITAL FUND (INCEPTION DATE MARCH 17, 1997)
Accumulation unit value at beginning of period.............. $ 1.000
Accumulation unit value at end of period.................... $11.833
Number accumulation units outstanding at end of period (in
thousands)................................................. 35
JANUS WORLD WIDE GROWTH FUND (INCEPTION DATE MARCH 17, 1997)
Accumulation unit value at beginning of period.............. $ 1.000
Accumulation unit value at end of period.................... $11.406
Number accumulation units outstanding at end of period (in
thousands)................................................. 116
</TABLE>
<PAGE>
10 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
AMERICAN MATURITY, THE SEPARATE
ACCOUNT, THE FUNDS, AND THE
GENERAL ACCOUNT
AMERICAN MATURITY LIFE INSURANCE COMPANY
We are American Maturity Life Insurance Company ("American Maturity" or "We"
or "Us"), domiciled in Connecticut. Our principal office is at 200 Hopmeadow
Street, Simsbury, Connecticut 06089. However our mailing address is 700 Newport
Center Drive, Newport Beach, California 92660.
American Maturity is a stock insurance company engaged in the business of
writing annuities. American Maturity was originally incorporated under the name
of First Equicor Life Insurance Company under the laws of California on October
24, 1972. On July 29, 1994 First Equicor Life Insurance Company redomesticated
to Connecticut and changed its name to American Maturity Life Insurance Company.
American Maturity is owned 60% by Hartford Life and Accident Insurance Company
(domiciled in Connecticut) and 40% by Pacific Mutual Life Insurance Company
(domiciled in California). Pacific Mutual serves as the administrator of the
Certificates.
The American Association of Retired Persons ("AARP") granted American
Maturity the exclusive right to offer annuity products to the membership of AARP
pursuant to an agreement established July 6, 1994. The agreement requires
American Maturity to maintain minimum capital surplus levels, minimum ratings
from nationally recognized rating services, and generally to obtain AARP's
consent in all matters relating to the offering of annuities to AARP members.
The agreement also includes a shareholder's agreement of American Maturity's
shareholders. In return for the right to use the AARP name, logo and symbol,
American Maturity pays AARP a royalty fee. The royalty fee paid by American
Maturity to AARP is calculated monthly and depends on the average aggregate
value of the Sub-Accounts and the Fixed Account. The fee decreases as the
average aggregate value in the Sub-Accounts and Fixed Account increases. The
monthly fee for each level of average aggregate value is one twelfth of 0.07 of
1% for the first $6 billion of average aggregate value, 0.06 of 1% for the next
$10 billion and 0.05 of 1% thereafter. The royalty fee is paid by American
Maturity and is not charged against the separate account or otherwise paid
directly by the Certificate Owner. The agreement is effective until December 31,
2004, at which time AARP and American Maturity may or may not renew the
agreement.
Based on its financial soundness and operating performance, American
Maturity has earned an A+ (Superior) rating from A.M. Best Company, Inc., and an
(AA) (Excellent) rating from Standard & Poor's. Based on claims paying ability,
American Maturity has earned an (AA+) (Very High) rating from Duff and Phelps.
These ratings do not apply to the performance of the Separate Account.
However, the contractual obligations under this variable annuity are the general
corporate obligations of American Maturity. These ratings do apply to American
Maturity's ability to meet its insurance obligations under the Certificate.
SEPARATE ACCOUNT AMLVA
Separate Account AMLVA (the "Separate Account") was established on February
28, 1996, in accordance with authorization by Our Board of Directors. It is the
Separate Account in which We set aside and invest the assets attributable to the
Certificates described in this Prospectus. Although the Separate Account is an
integral part of American Maturity, it is registered as a unit investment trust
under the Investment Company Act of 1940. This registration does not, however,
involve SEC supervision of the management or the investment practices or
policies of the Separate Account or American Maturity. The Separate Account
meets the definition of "separate account" under federal securities law.
Under Connecticut law, the assets of the Separate Account attributable to
the Certificates offered under this Prospectus are held for the benefit of the
owners of, and the persons entitled to payments under, those Certificates.
Income, gains, and losses, whether or not realized, from assets allocated to the
Separate Account, are, in accordance with the Certificates, credited to or
charged against the Separate Account. Also, the assets in the Separate Account
are not chargeable with liabilities arising out of any other business American
Maturity may conduct. So, Certificate Values allocated to the Sub-Accounts will
not be affected by the rate of return of American Maturity's General Account,
nor by the investment performance of any of American Maturity's other separate
accounts. However, all obligations arising under the Certificates are general
corporate obligations of American Maturity.
Your investment in the Separate Account is allocated to one or more
Sub-Accounts as per your specifications. Each Sub-Account is invested
exclusively in the assets of a Fund. Premium payments and proceeds of transfers
between Sub-Accounts are applied to purchase shares in the appropriate Funds at
net asset values determined as of the end of the Business Day during which the
payments were received or the transfer made. All distributions from the Fund are
reinvested at net asset value. The value of your investment will therefore vary
in accordance with the net income and fluctuation in the individual investments
within the underlying Fund. During the variable annuity payout period, both your
annuity payments and reserve values will vary in accordance with these factors.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
American Maturity does not guarantee the investment results of the
Sub-Accounts or any of the underlying investments. There is no assurance that
the value of a Certificate during the years prior to retirement or the aggregate
amount of the variable annuity payments will equal the total of premium payments
made under the Certificate. Since each underlying Fund has different investment
objectives, each is subject to different risks. These risks are more fully
described in the accompanying prospectus for each of the Funds.
American Maturity reserves the right to substitute the shares of any other
registered investment company for the shares of any Fund already purchased or to
be purchased in the future by the Separate Account provided that the
substitution has been approved by the SEC.
The investment portfolios of the Funds are available to registered separate
accounts offering variable annuity and variable life products of other
participating insurance companies. Although we do not anticipate any
disadvantages to this, there is a possibility that a material conflict may arise
between the interest of the Separate Account and one or more of the other
separate accounts participating in the Funds. A conflict may occur due to a
change in law affecting the operations of variable life and variable annuity
separate accounts, differences in voting instructions of our Certifi-
cate Owners and those of other companies, or some other reason. In the event of
a conflict, we will take any steps necessary to protect Certificate Owners. See
the accompanying prospectuses for the Funds for more information.
THE FUNDS
The underlying variable investments for the Certificates are certain shares
of the Dreyfus Variable Investment Fund, Janus Aspen Series, Neuberger&Berman
Advisers Management Trust, and Scudder Variable Life Investment Fund, all
diversified series investment companies with multiple portfolios. We reserve the
right, subject to compliance with the law, to offer additional funds with
differing investment objectives. The Funds may not be available in all states.
A full description of the Funds, their investment policies and restrictions,
risks, charges and expenses and all other aspects of their operation is
contained in separate prospectuses (reprinted at the end of this booklet). Each
prospectus should be read in conjunction with this Prospectus before investing.
The investment objectives of each of the Funds are summarized below. There
is, of course, no assurance that any Fund will meet its objective:
THESE FUNDS MAY NOT BE AVAILABLE IN ALL STATES.
<TABLE>
<CAPTION>
FUND: INVESTMENT STRATEGY: ADVISER:
------------------------- -------------------------------------------------- -----------
<S> <C> <C> <C>
Current Income MONEY MARKET PORTFOLIO Seeks stability and current income from a Scudder
portfolio of money market instruments. The Money
Market Portfolio will maintain a dollar-weighted
average portfolio maturity of 90 days or less in
an effort to maintain a constant net asset value
of $1.00 per share.
BOND PORTFOLIO Seeks high income from a high quality portfolio of Scudder
bonds.
Balanced BALANCED PORTFOLIO Seeks long-term capital growth, consistent with Janus
preservation of capital balanced by current
income.
Stock Growth CAPITAL GROWTH Seeks to maximize long-term capital Portfolio Scudder
growth from a portfolio consisting primarily of
equity securities.
GROWTH & INCOME Seeks long-term growth of capital, Portfolio Scudder
current income and growth of income from a
portfolio consisting primarily of common stocks
and securities convertible into common stocks.
PARTNERS PORTFOLIO Seeks capital growth, through an approach that is Neuberger&
designed to increase capital with reasonable risk. Berman
Its investment program seeks securities believed Mgmt. Inc.
to be under-valued based on strong fundamentals
such as low price-to-earnings ratios, consistent
cash flow, and the company's track record through
all parts of the market cycle.
CAPITAL APPRECIATION Seeks to provide long-term capital Portfolio Dreyfus
growth consistent with the preservation of capital
through investments in common stocks of domestic
and foreign issuers; current income is a secondary
investment objective.
</TABLE>
<PAGE>
12 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUND: INVESTMENT STRATEGY: ADVISER:
------------------------- -------------------------------------------------- -----------
<S> <C> <C> <C>
SMALL CAP PORTFOLIO Seeks maximum capital appreciation through Dreyfus
investments in common stocks of domestic and
foreign issuers that the investment adviser
considers to be emerging smaller-sized companies.
Global WORLDWIDE GROWTH Seeks long-term growth of capital in a manner Janus
PORTFOLIO consistent with preservation of capital. Pursues
this objective by investing primarily in common
stocks of foreign and domestic issuers.
<CAPTION>
GENERAL ACCOUNT:
-------------------------
<S> <C> <C> <C>
Fixed Rate FIXED ACCOUNT Seeks guaranteed current interest income. n/a
</TABLE>
INVESTMENT ADVISERS TO THE FUNDS
THE DREYFUS CORPORATION
200 Park Avenue
New York, New York 10166
Investment adviser for the Capital Appreciation
Portfolio and the Small Cap Portfolio.
JANUS CAPITAL
100 Filmore Street
Denver, Colorado 80206-4923
Investment adviser for the Balanced Portfolio and
the Worldwide Growth Portfolio.
NEUBERGER&BERMAN MANAGEMENT INCORPORATED
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
Investment adviser for the AMT Partners Portfolio.
SCUDDER, STEVENS & CLARK, INC.
Two International Place
Boston, Massachusetts 02110-4103
Investment adviser for the Money Market Portfolio,
the Bond Portfolio, the Growth & Income Portfolio,
and Capital Growth Portfolio.
Please see the prospectuses for the Dreyfus Variable Investment Fund, Janus
Aspen Series, Neuberger&Berman Advisers Management Trust and Scudder Variable
Life Investment Fund for more information on each investment adviser.
THE GENERAL ACCOUNT
THAT PORTION OF THE CERTIFICATE RELATING TO THE FIXED ACCOUNT IS NOT
REGISTERED UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") AND THE FIXED ACCOUNT
IS NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF
1940 ("1940 ACT"). ACCORDINGLY, NEITHER THE FIXED ACCOUNT NOR ANY INTERESTS
THEREIN ARE SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE
1940 ACT, AND THE DISCLOSURE REGARDING THE FIXED ACCOUNT HAS NOT BEEN REVIEWED
BY THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION. THE FOLLOWING DISCLOSURE
ABOUT THE FIXED ACCOUNT MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE
PROVISIONS OF THE FEDERAL SECURITIES LAWS REGARDING THE ACCURACY AND
COMPLETENESS OF DISCLOSURE.
Premium payments and Certificate Values allocated to the Fixed Account
become a part of Our general assets. We invest the assets of the General Account
in accordance with applicable law governing the investments of insurance company
general accounts.
Currently, We guarantee interest at a rate of not less than 3.0% per year,
compounded annually, to amounts allocated to the Fixed Account. However, We
reserve the right to change the rate according to state insurance law. We may
credit interest at a rate in excess of 3.0% per year; however, We are not
obligated to credit any interest in excess of 3.0% per year. There is no
specific formula for the determination of excess interest credits. Some of the
factors that We may consider in determining whether to credit excess interest to
amounts allocated to the Fixed Account and the amount thereof, are general
economic trends, rates of return currently available and anticipated on Our
investments, regulatory and tax requirements and competitive factors. ANY
INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF 3% PER
YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF AMERICAN MATURITY. THE OWNER
ACCEPTS THAT INTEREST CREDITED TO FIXED ACCOUNT ALLOCATIONS MAY NOT EXCEED THE
MINIMUM GUARANTEE OF 3% FOR ANY GIVEN YEAR.
PERFORMANCE RELATED INFORMATION
The Separate Account may advertise certain performance related information
concerning its Sub-Accounts. Performance information about a Sub-Account is
based on the Sub-Account's past performance only and is no indication of future
performance.
Historical performance information can help you understand how investment
performance can affect your investment in the Sub-Accounts. Although the Sub-
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
Accounts are newly-established and have no historical performance, each
Sub-Account will be investing in shares of a Fund that does have historical
performance data. Performance data include total returns for each Sub-Account,
current and effective yields for the Money Market Sub-Account, and yields for
the other fixed income Sub-Accounts. Calculations are in accordance with
standard formulas prescribed by the SEC. Yields do not reflect any charge for
premium taxes and/or other taxes; this exclusion may cause yields to show more
favorable performance. Total returns may or may not reflect withdrawal charges,
Annual Fees or any charge for premium and/or other taxes; data that do not
reflect these charges may have more favorable performance.
The Statement of Additional Information presents some hypothetical
performance data, showing what the performance of each Sub-Account would have
been if it had been investing in the corresponding Fund since that Fund's
inception. The Statement of Additional Information also presents some
performance benchmarks, based on unmanaged market indices, such as the S&P 500,
and on "peer groups," which use other managed funds with similar investment
objectives. These benchmarks may give you a broader perspective when you examine
hypothetical or actual Sub-Account performance.
THE CERTIFICATE
WHAT IS THE CERTIFICATE?
Your AARP Variable Annuity (your "Certificate") provides you with
flexibility in tax-deferred retirement planning or other long-term financial
planning. You may select among the Funds and the Fixed Account. You may add to
your Certificate Value at any time, and your additional investments may be in
any amount you choose (subject to certain limitations). When you annuitize, the
Annuitant will receive a series of variable and/or fixed payments for life or
for a specified period of years.
If you purchase a Certificate with after-tax dollars, your Certificate is
called a "Non-Qualified" Certificate. If your Certificate is purchased through a
Qualified Plan, it is called a "Qualified Certificate". Either way, your
earnings on your Certificate are not subject to tax until amounts are withdrawn
or distributed (including annuity payments).
HOW TO APPLY FOR YOUR CERTIFICATE
To purchase a Certificate, fill out an Enrollment Form and submit it along
with your initial Premium payment to American Maturity Life Insurance Company at
P.O. Box 100194, Pasadena, CA 91189-0194. If your Enrollment Form and payment
are complete when received, or once they have been complete, We will issue your
Certificate within the next two Business Days. If some information is missing
from your Enrollment Form, We may delay issuing your Certificate while we obtain
the missing information, however, we will not hold your initial Premium payment
for more than five Business Days without your permission.
If you already own a variable annuity contract, you may purchase a
Certificate by exchanging your existing contract(s). If you are interested in
this option, call Us for more information.
We reserve the right to reject any Enrollment Form or premium payment for
any reason, subject to any applicable state nondiscrimination laws and to our
own standards and guidelines. You must be age 90 or under (85 or under in
Pennsylvania) to purchase a Certificate.
MAKING YOUR PREMIUM PAYMENTS
PREMIUM PAYMENTS -- Your initial premium payment must be at least $5,000.
You may pay this entire amount when you submit your Enrollment Form, or you may
choose our pre-authorized checking plan. If you choose the preauthorized
checking plan, you must make your first installment payment of at least $2,500
when you submit your Enrollment Form, and you must schedule to contribute at
least $100 per month. You must obtain our consent before making an initial or
additional premium payment that will bring your aggregate premium payments over
$1,000,000. You may choose to invest additional amounts in your Certificate at
any time. Each additional premium payment must be at least $250 (or $100 if
enrolled in the preauthorized checking plan).
SHORT TERM CANCELLATION RIGHT ("RIGHT TO EXAMINE") -- If you are not
satisfied with your purchase you may cancel the Certificate by returning it
within ten days (or longer in some states) after you receive it. Your
cancellation request must be in writing. If you choose to cancel, We will pay
you an amount equal to the Certificate Value on the date we receive your
request, without any deduction for the Contingent Deferred Sales Charge. You
bear the investment risk of the Certificate before We receive your request for
cancellation. However, in those states where required by law, and for Individual
Retirement Annuities (IRAs), We will refund the premium you paid (rather than
the Certificate Value).
HOW YOUR PAYMENTS ARE INVESTED
Each initial premium payment is credited to your Certificate within two
business days of receipt of a properly completed Enrollment Form by American
Maturity at its Administrative Office. It will be credited to the Sub-Account(s)
and/or the Fixed Account in accordance with your election. If the Enrollment
Form is incomplete when received, once completed each initial premium payment
<PAGE>
14 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
will be credited to the Sub-Account(s) or the Fixed Account within five business
days of receipt. If the initial premium payment is not credited within five
business days, the premium payment will be immediately returned unless you have
been informed of the delay and request that the premium payment not be returned.
Any additional premium payments are credited to your Certificate on the Business
Day We receive your completed request.
If your Certificate is issued in a state which requires the return of
premium upon the exercise of your "Right to Examine," your initial premium
payment to be allocated to any Sub-Account will be allocated to the Money Market
Sub-Account during your "Right to Examine" period. In most cases your initial
premium payment will be allocated to your chosen Sub-Accounts at the end of the
15th calendar day after your Certificate Date. We reserve the right to extend
this period to correspond with the number of days in which your state allows you
to return your Certificate under the "Right to Examine" provision.
The number of Accumulation Units in each Sub-Account to be credited to a
Certificate is determined by dividing the portion of the premium payment being
credited to each Sub-Account by the value of an Accumulation Unit in that
Sub-Account on that date. Subsequent premium payments are priced on the Business
Day received by American Maturity.
CERTIFICATE VALUE
The value of your Sub-Account(s) under your Certificate at any time prior to
the Annuity Commencement Date is determined by multiplying the total number of
Accumulation Units credited to your Certificate in each Sub-Account by the then
current Accumulation Unit values for the applicable Sub-Account. The value of
the Fixed Account under your Certificate will be the amount allocated to the
Fixed Account plus interest credited less withdrawals. You will be advised at
least quarterly of the number of Accumulation Units credited to each
Sub-Account, the current Accumulation Unit values, the Fixed Account value, and
the total value of your Certificate.
The Accumulation Unit value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund. It will be determined on each
Business Day by multiplying the Accumulation Unit value of the particular
Sub-Account on the preceding Business Day by a "Net Investment Factor" for that
Sub-Account for the Business Day then ended. The "Net Investment Factor" for
each of the Sub-Accounts is equal to the net asset value per share of the
corresponding Fund at the end of the Business Day (plus the per share amount of
any dividends or capital gains distributed by that Fund if the ex-dividend date
occurs in the Business Day then ended) divided by the net asset value per share
of the corresponding Fund at the beginning of the Business Day and subtracting
from that amount the Mortality and Expense Risk Charge and the Administration
Charge. You should refer to the Fund prospectuses which accompany this
Prospectus for a description of how the assets of each Fund are valued since
each determination has a direct bearing on the Accumulation Unit value of the
Sub-Account and therefore the value of a Certificate. The Accumulation Unit
Value is affected by the performance of the underlying Fund(s), expenses and
deduction of the charges described in this Prospectus.
The shares of the Fund are valued at net asset value on each Business Day. A
complete description of the valuation method used in valuing Fund shares may be
found in the accompanying prospectuses for the Funds.
American Maturity will determine the value of the Fixed Account by crediting
interest to amounts allocated to the Fixed Account. The minimum Fixed Account
interest rate is 3%, compounded annually. We may not credit a lower minimum
interest rate according to state law. We also may credit interest at rates
greater than the minimum Fixed Account interest rate.
TRANSFERS BETWEEN THE SUB-ACCOUNTS/
FIXED ACCOUNT
TRANSFERS BETWEEN THE SUB-ACCOUNTS AND FIXED ACCOUNT -- You may transfer the
values among your Sub-Accounts and the Fixed Account free of charge before the
Annuity Commencement Date.
If the Fixed Account contains amounts credited with different rates of
interest, any transfer from the Fixed Account will reduce each of those amounts
pro rata according to the amount transferred.
We reserve the right to limit transfers. Currently, you may make up to 12
transfers in a Certificate Year, but transfers are not allowed on consecutive
Business Days. We also reserve the right to limit the size of a transfer. We may
restrict, suspend or reject any transfer request. If We decide to allow more
than 12 transfers in a Certificate Year, We may charge a fee for the additional
transfers equal to the lesser of $15 or 2.0% of the amount transferred. This
transfer fee would be deducted from Certificate Values remaining in the
Sub-Account from which the transfer is made. Transfers from the Fixed Account
may be deferred for up to 6 months from the date We receive the request. If any
transfer from the Fixed Account would leave a balance of $500 or less, We will
distribute the entire balance of the Fixed Account to the Sub-Accounts according
to your last allocation instructions.
After the Annuity Commencement Date, you may only transfer among the
Sub-Accounts once per calendar quarter. For any transfer, the minimum allocation
to any Sub-Account may not be less than $500. No transfers may be made between
the General Account and the Sub-Accounts after the Annuity Commencement Date.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 15
- --------------------------------------------------------------------------------
We will send you a written confirmation of any transfer. It will be your
responsibility to verify the accuracy of all confirmations of transfers and to
advise Us of any inaccuracies within 30 days of receipt of the confirmation.
TRANSFERS BY TELEPHONE -- American Maturity may permit you to authorize
transfers among the Sub-Accounts and the Fixed Account over the telephone. We
will not be responsible for losses resulting from acting upon telephone requests
reasonably believed to be genuine. We will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. All transfer
instructions by telephone are tape recorded.
Transaction instructions we receive by telephone before 4:00 p.m. Eastern
time (1:00 p.m. Pacific time), (or the close of the New York Stock Exchange, if
earlier), on any Business Day will normally be effective on that day, and we
will send you written confirmation of each telephone transfer. We cannot
guarantee that you will always be able to reach us to complete a telephone
transaction in the event of busy telephone lines, severe weather conditions, or
other emergencies.
The right to reallocate Certificate Values between the Sub-Accounts is
subject to modification if We determine, in our sole opinion, that the exercise
of that right by one or more Certificate Owners is, or would be, to the
disadvantage of other Certificate Owners. Any modification could be applied to
transfers to or from some or all of the Sub-Accounts and the Fixed Account and
could include, but not be limited to, the requirement of a minimum time period
between each transfer, not accepting transfer requests of an agent acting under
a power of attorney on behalf of more than one Certificate Owner, or limiting
the dollar amount that may be transferred between the Sub-Accounts and the Fixed
Account by a Certificate Owner at any one time. Such restrictions may be applied
in any manner reasonably designed to prevent any use of the transfer right which
is considered by American Maturity to be to the disadvantage of other
Certificate Owners.
DOLLAR COST AVERAGING -- Dollar cost averaging is a method in which
investors buy securities in a series of regular purchases instead of in a single
purchase. This allows the investor to have a lower average security price over
time. This allows the investor to purchase more units in a lower price
environment, and fewer units in a higher price environment. Prior to your
Annuity Commencement Date, you may use dollar cost averaging to transfer
amounts, over time, from any Sub-Account or the Fixed Account with a Certificate
Value of at least $500 to one or more other Sub-Accounts.
FUND REBALANCING -- You may instruct us to maintain a specific balance of
Sub-Accounts under your Certificate (e.g., 30% in one Sub-Account, 40% in
another Sub-Account, and 30% in the last Sub-Account) prior to your Annuity
Commencement Date. Periodically, We will "rebalance" your investment to the
percentage you have specified. Rebalancing may result in transferring amounts
from a Sub-Account earning a relatively higher return to one earning a
relatively lower return. The Fixed Account is not available for rebalancing.
EARNINGS SWEEP -- You may instruct us to make automatic periodic transfers
of your earnings from the Fixed Account to one or more Sub-Accounts (other than
the Money Market Sub-Account).
CHARGES UNDER THE CERTIFICATES
CONTINGENT DEFERRED SALES CHARGE -- There is no deduction for sales expenses
from premium payments when made. However, a Contingent Deferred Sales Charge may
be assessed against Certificate Values if they are withdrawn before the fifth
(5th) Certificate Anniversary and prior to your Annuity Commencement Date. The
length of time from your Certificate Date to the time of surrender determines
the Contingent Deferred Sales Charge. The charge is a percentage of the Gross
Surrender Value (the amount you withdraw) attributable to premium payments. For
purposes of calculating the charge, premium payments are deemed to be
surrendered before earnings.
<TABLE>
<CAPTION>
CERTIFICATE
YEAR CHARGE
- -------------- ---------
<S> <C>
1 5%
2 4%
3 3%
4 2%
5 1%
6 or greater 0%
</TABLE>
The amount of any Contingent Deferred Sales Charge and any charge for
premium taxes and/or other taxes is added to the amount of your withdrawal
request. For example, if you request to withdraw a net amount of $10,000, pay a
5% sales charge, and owe a 1% premium tax, your Certificate Value is reduced by
$10,638.30. Premium payments will be deemed to be surrendered in the order in
which they were received.
If, at the time of a surrender, you own another AARP Variable Annuity
Certificate(s), the Contingent Deferred Sales Charge is calculated based on the
purchase date of your oldest Certificate.
Transfers between Sub-Accounts and/or the Fixed Account are not considered
withdrawals of an amount from your Certificate, so no Contingent Deferred Sales
Charge is imposed at the time of such transfers.
AMOUNTS NOT SUBJECT TO THE CONTINGENT DEFERRED SALES CHARGE -- No Contingent
Deferred Sales Charge is imposed on amounts withdrawn:
- at annuitization
<PAGE>
16 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
- at death
- under the Annual Withdrawal Amount (see below)
- to meet IRS minimum distribution requirements on a qualified contract (see
below)
- while you are confined to a nursing home (see below)
- while your are under age 65 and totally disabled (see below)
- while you have a terminal illness (see below)
ANNUAL WITHDRAWAL AMOUNT -- No Contingent Deferred Sales Charge will be
assessed against any withdrawals made each Certificate Year, on a non-cumulative
basis, of up to 10% of premium payments remaining in the Certificate as of the
last Certificate Anniversary. Withdrawals in excess of this amount will be
subject to the Contingent Deferred Sales Charge.
NURSING HOME WAIVER -- No Contingent Deferred Sales Charge will be assessed
upon surrenders that occur during your confinement in a facility certified as a
nursing home. Such confinement (1) must have been continuous for at least 90
days before the surrender request; (2) must be at the recommendation of a U.S.
licensed physician; (3) must be for medically necessary reasons and; (4) must be
in effect at the time of the surrender request. In Massachusetts, your nursing
home confinement must also be terminal. This Nursing Home Waiver is not
available in New York.
DISABILITY WAIVER -- No Contingent Deferred Sales Charge will be assessed
upon surrenders that occur when you are under age 65 and Totally Disabled. You
must provide written proof, satisfactory to us, that you are Totally Disabled.
Totally Disabled means a disability that: (1) results from bodily injury or
disease; (2) begins while the Certificate is in force; (3) has existed
continuously for at least 12 months; and (4) prevents you from engaging in the
substantial and material duties of your regular occupation. During the first 12
months of Total Disability, regular occupation means your usual full time (at
least 30 hours per week) work when Total Disability begins. We reserve the right
to require reasonable proof of such work. After the first 12 months of Total
Disability, regular occupation means that for which you are reasonably qualified
by education, training or experience. This Disability Waiver is not available in
Massachusetts or New York.
TERMINAL ILLNESS -- No Contingent Deferred Sales Charge will be assessed
upon surrenders that occur when you have been diagnosed with a medical condition
that results in a life expectancy of less than twelve months. You must provide
written proof, satisfactory to us, that you have been diagnosed by a U.S.
licensed physician with a medical determinable condition that results in a life
expectancy of less than twelve months. This Terminal Illness waiver is not
available in New York.
IRS MINIMUM DISTRIBUTIONS -- No Contingent Deferred Sales Charge will be
assessed against surrenders necessary to meet the minimum distribution
requirements set forth in Section 401(a) of the Code as such requirements apply
to amounts held under the Certificate if you so specify in writing.
PREMIUM TAXES -- A deduction is made for premium taxes or other taxes
("Taxes"), if applicable, that are imposed by some states or other governmental
entities. Premium taxes imposed by some states currently range up to 3.5%. We
will determine when taxes have resulted from the receipt of premium payments,
the commencement of annuity payments, or the investment experience of the
Separate Account. We may, at our discretion, pay taxes when due and deduct that
amount from the Certificate Value at a later date. Payment at a earlier date
does not waive any right that We may have to deduct amounts at a later date. We
reserve the right to establish a provision for federal income taxes if the
Company determines, in its sole discretion, that it will incur a tax as a result
of the operation of the Separate Account.
ANNUAL MAINTENANCE FEE -- American Maturity will deduct an Annual Fee of $25
at the end of each Certificate year prior to the Annuity Commencement Date, or
at the time you withdraw your entire Certificate Value, if your Certificate
Value is less than $50,000 on either date. The fee is not imposed on amounts you
annuitize or on payment of a death benefit. The fee reimburses a certain number
of our costs in administering the Certificates and the Separate Account; we do
not intend to realize a profit from this fee. Your Annual Fee will be charged
proportionately according to the value in each Sub-Account and the Fixed
Account.
MORTALITY AND EXPENSE RISK CHARGE -- American Maturity assesses a charge
against the assets of the Separate Account to compensate for certain mortality
and expense risks that we assume under the Certificates (the "Risk Charge").
Mortality risk is the risk that an Annuitant will live longer (and therefore
receive more annuity payments) than we predict through our actuarial
calculations at the time the Certificate is issued. American Maturity also bears
mortality risk in connection with death benefits payable under the Certificates.
Expense risk is the risk that the expense charges and fees under the
Certificates and Separate Account are less than our actual administrative and
operating expenses.
For assuming these risks, We charge 0.65% per year against all Certificate
Values held in the Sub-Accounts during the life of the Certificate.
Risk Charges will stop at annuitization if you select a fixed annuity; Risk
Charges will continue after annuitization
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AMERICAN MATURITY LIFE INSURANCE COMPANY 17
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if you choose any variable annuity, even though we do not bear mortality risk if
your Annuity Option is Period Certain Only. American Maturity will realize a
gain if the Risk Charge exceeds our actual cost of expenses and benefits, and
will suffer a loss if actual costs exceed the Risk Charge. Any gain will become
part of American Maturity's General Account; we may use it for any reason,
including covering sales expenses on the Certificates.
ADMINISTRATION CHARGE -- American Maturity charges an Administrative Fee as
compensation for costs we incur in operating the Separate Account and issuing
and administering the Certificates, including processing Enrollment Forms and
payments, and issuing reports to Certificate Owners and to regulatory
authorities.
We charge 0.20% per year against all Certificate Values held in the
Sub-Accounts during the life of the Certificate. This fee is assessed daily
during both the accumulation and the annuity periods. A relationship will not
necessarily exist between the actual administrative expenses attributable to a
particular Certificate and the Administrative Fee paid in respect of that
particular Certificate.
EXPENSES OF THE FUNDS -- Your Certificate Value will reflect advisory fees
and other expenses incurred by the Funds as the underlying investments of your
Sub-Account(s). These fees and expenses are not specified by your Certificate,
and you should refer to the Fund prospectuses for a description of the
deductions and expenses paid out of the assets of the Funds.
SALES COMMISSIONS -- American Maturity compensates its registered
representatives primarily with a base salary and offers variable performance pay
and awards in recognition of achieving quality customer service and overall
sales goals. American Maturity incurs sales expenses in the form of direct
marketing and advertising costs.
DEATH BENEFITS
WHEN A DEATH BENEFIT IS CALCULATED -- Before the Annuity Commencement Date,
a death benefit may be payable upon the death of the last surviving Annuitant or
upon the first death of any Certificate Owner. We calculate the death benefit as
of the end of the Business Day in which the Company receives written
notification of Due Proof of Death.
THE AMOUNT OF THE DEATH BENEFIT -- The death benefit amount prior to the
Annuity Commencement Date shall be the greater of (a) total Purchase Payments
less any Gross Surrenders since the Certificate Date or (b) the Certificate
Value. The death benefit shall be calculated as of the end of the Business Day
in which the Company receives Due Proof of Death. During the time period between
Our receipt of written notification of Due Proof of Death and Our receipt of the
completed settlement instructions, the calculated Death Benefit will remain
invested in the Sub-Account(s) previously elected by the Contract Owner and will
be subject to market fluctuations.
BENEFICIARY -- The death benefit is payable to your Beneficiary as described
in the Control Provisions of your Certificate. Usually the Beneficiary will be
the person you name in your Enrollment Form if you name yourself as both the
Owner and Annuitant. However, the Beneficiary of a jointly owned Certificate
will be the surviving joint owner, regardless of the beneficiary designation in
your Enrollment Form. Also, upon the death of the last Annuitant who was not a
Certificate Owner, the Beneficiary will be the surviving Certificate Owner(s),
regardless of the beneficiary designation in your Enrollment Form. If you
designate your spouse as the Beneficiary in your Enrollment Form, at your death
your spouse may become the Certificate Owner and continue the Certificate in
lieu of receiving the death benefit. The Beneficiary(s) may request a transfer
of the calculated death benefit amount to any Sub-Account(s) available under the
Certificate. The transfer request must be in writing and must be from all
Beneficiaries, if more than one.
PAYMENT OF THE DEATH BENEFIT -- The death benefit may be taken in a lump sum
or under any of the settlement options then being offered by the Company,
subject however to certain required distributions that are imposed by the Code
upon the death of the Certificate Owner (See "Federal Tax Considerations --
Required Distributions," page 23). When payment of the death benefit is taken in
a lump sum, payment will be made within seven days after settlement instructions
are received, except when the Company is permitted to defer such payment under
the Investment Company Act of 1940. Payment to the Beneficiary, other than in a
lump sum, may only be elected during the sixty-day period beginning with the
date of receipt of Due Proof of Death.
In the event of the death of the Annuitant after the Annuity Commencement
Date, a death benefit, equal to the present value of any remaining payments
according to the Annuity Option in effect, will be paid in one sum to the
Beneficiary unless other provisions shall have been made and approved by the
Company.
If death proceeds are received by a Beneficiary upon the death of the
Annuitant who was not a Certificate Owner, such payment may be subject to a 10%
tax penalty.
SURRENDERS
FULL SURRENDERS -- Beginning 30 days after your Certificate Date, at any
time prior to the Annuity Commencement Date, you have the right to terminate the
Certificate and take its Net Surrender Value in a lump sum. The Net Surrender
Value is equal to the Certificate Value less any
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18 AMERICAN MATURITY LIFE INSURANCE COMPANY
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applicable Premium Taxes, the Annual Fee and any applicable Contingent Deferred
Sales Charges. The Net Surrender Value may be more or less than the amount of
the premium payments made to a Certificate.
PARTIAL SURRENDERS -- Beginning 30 days after your Certificate Date, you may
make a partial surrender of Certificate Values at any time prior to the Annuity
Commencement Date so long as the amount surrendered is at least $500.
Additionally, if the remaining Certificate Value following a surrender is less
than $5,000, We may terminate the Certificate and pay the Net Surrender Value.
We may permit you to pre-authorize partial surrenders subject to certain
limitations then in effect.
In requesting a partial surrender you should specify the Sub-Account(s)
and/or the Fixed Account from which the partial surrender is to be taken.
Otherwise, such surrender and any applicable Contingent Deferred Sales Charges
will be effected on a pro rata basis according to the value in the Fixed Account
and each Sub-Account under your Certificate.
No surrenders are permitted after the Annuity Commencement Date.
WITHDRAWAL TRANSACTION FEES -- There is currently no transaction fee for
partial surrenders. However, we reserve the right to impose a withdrawal
transaction fee in the future of up to $15 for each partial withdrawal in excess
of 12 in any Certificate Year. Any such fee would be charged against your
Sub-Account(s) and the Fixed Account, proportionately based on your Certificate
Value in each, immediately after the withdrawal.
TAX CONSEQUENCES OF SURRENDERS -- Any surrender will generally have federal
income tax consequences, which could include tax penalties. Any surrender made
prior to the Certificate Owner's attained age 59 will generally be subject to a
10% penalty tax. You should consult with a tax adviser before making any
withdrawal. See "Federal Tax Considerations," beginning on page 20, for more
information.
SPECIAL RESTRICTIONS -- American Maturity may defer payment of any amounts
from the Fixed Account for up to six months from the date of the request for the
withdrawal. If we defer payment for more than 30 days, we will pay interest of
at least 3.0% per annum on the amount deferred.
There may be postponement of payment of a withdrawal whenever (a) the New
York Stock Exchange is closed, except for holidays or weekends, or trading on
the New York Stock Exchange is restricted as determined by the SEC; (b) the SEC
permits postponement and so orders; or (c) the SEC determines that an emergency
exists making valuation of the amounts or disposal of securities not reasonably
practicable.
ANNUITY BENEFITS
ANNUITY COMMENCEMENT DATE -- You may select an Annuity Commencement Date.
The Annuity Commencement Date selected must be at least one year after the
Certificate Date and on or before the Annuitant's attained age 90. If you do not
select an Annuity Commencement Date, the scheduled Annuity Commencement Date
will be the date of the Annuitant's attained age 90. You may change the Annuity
Commencement Date provided you notify us, in writing, 30 days before the
scheduled Annuity Commencement Date.
ANNUITY BENEFIT -- On the Annuity Commencement Date, unless directed
otherwise, We will apply the Net Surrender Value to purchase monthly income
payments payable to the Annuitant according to the Annuity Option elected. The
Contingent Deferred Sales Charge will not be assessed. The Certificate may not
be surrendered after the Annuity Commencement Date.
ELECTION OF ANNUITY OPTION -- You may elect any one of the annuity options
described below or under any of the settlement options then being offered by Us.
In the absence of your election, the Net Surrender Value, without deduction for
any Contingent Deferred Sales Charge, will be applied on the Annuity
Commencement Date under the fifth option to provide a Payment for a Designated
Period for 5 years. The Net Surrender Value is determined on the basis of the
Accumulation Unit value of each Sub-Account no later than the fifth Business Day
preceding the date annuity payments are to commence, plus the value of the Fixed
Account on the Annuity Commencement Date.
DATE OF PAYMENT -- The first annuity payment under the Annuity Option shall
be made one month, (or the period selected for periodic payments: annual,
semi-annual, quarterly, or monthly), following the Annuity Commencement Date.
Subsequent payments shall be made on the same calendar day of the month as was
the first payment, or the preceding day if no such day exists (e.g., September
31), in accordance with the payment period selected.
If the Annuitant dies after the Annuity Commencement Date but before the
Company issues the payee's first check, the Beneficiary will be entitled to the
Net Surrender Value applied to the Annuity Option, without assessment of the
Contingent Deferred Sales Charge or Annual Fee.
ALLOCATION OF ANNUITY -- The person electing an annuity option may further
elect to have the value of the Certificate applied to provide a variable
annuity, a fixed dollar annuity or a combination of both. Once every 3 months,
following the commencement of annuity payments, the Certificate Owner may elect,
in writing, to transfer among any Sub-Account(s) on which variable annuity
payments are based. No transfers may be made
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AMERICAN MATURITY LIFE INSURANCE COMPANY 19
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between the Sub-Accounts and the General Account after the Annuity Commencement
Date.
If no election is made to the contrary, the value of each Sub-Account shall
be applied to provide a variable annuity based thereon, and the value of the
Fixed Account shall be applied to provide a fixed dollar annuity.
VARIABLE ANNUITY -- A variable annuity is an annuity with payments
increasing or decreasing in amount in accordance with the net investment results
of the Sub-Account(s) of the Separate Account. After the first monthly payment
for a variable Annuity has been determined in accordance with the provisions of
the Certificate (see "Annuity Options -- Description of Tables," page 19), a
number of Annuity Units is determined by dividing that first monthly payment by
the appropriate Annuity Unit value on the effective date of the annuity
payments.
The value of an Annuity Unit for each Sub-Account of the Separate Account
will vary to reflect the investment experience of the applicable Funds and will
be determined by multiplying the value of the Annuity Unit for that Sub-Account
on the preceding business day by the product of (a) the net investment factor
for that Sub-Account for the day for which the Annuity Unit value is being
calculated, and (b) an interest factor to offset the effect of the assumed
interest rate of 5% per year, which is built into the Annuity Tables.
The number of Annuity Units remains fixed with respect to a particular
Sub-Account. If the Certificate Owner elects that continuing annuity payments be
based on different Sub-Account(s), the number will change effective with that
election but will remain constant following such election.
The dollar amount of the second and subsequent variable annuity payments is
not predetermined and may increase or decrease from month to month. The actual
amount of each variable annuity payment after the first is determined by
multiplying the number of Annuity Units by the Annuity Unit value. The Annuity
Unit value will be determined no earlier than the fifth Business Day preceding
the date the annuity payment is due.
The Company guarantees that the dollar amount of variable annuity payments
will not be adversely affected by variations in the expense results of the
Company and/or in the actual mortality experience of Annuitants from the
mortality assumptions, including any age adjustment, used in determining the
first monthly payment.
You should consider the question of allocation among the Sub-Accounts and
the General Account to make certain that annuity payments are based on the
investment alternative best suited to your needs for retirement.
FIXED DOLLAR ANNUITY -- A fixed dollar annuity is an annuity with payments
which remain fixed as to dollar amount throughout the payment period.
ANNUITY OPTIONS
FIRST OPTION: LIFE ANNUITY
An annuity payable monthly during the lifetime of the Annuitant, ceasing
with the last payment due prior to the death of the Annuitant. This option
offers the largest payment amount of any of the life Annuity options since there
is no guarantee of a minimum number of payments nor a provision for a death
benefit payable to a Beneficiary.
It would be possible under this option for an Annuitant to receive only one
Annuity payment if he died prior to the due date of the second Annuity payment,
two if he died before the due date of the third Annuity payment, etc.
SECOND OPTION: LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN
An annuity providing monthly income for a fixed period of 120 months, 180
months, or 240 months (as selected), and for as long thereafter as the Annuitant
shall live.
If, at the death of the Annuitant, payments have been made for less than the
minimum elected number of months, then the present value as of the date of the
Annuitant's death, of any remaining guaranteed payments will be paid in one sum
to the Beneficiary unless other provisions have been made and approved by
American Maturity.
THIRD OPTION: CASH REFUND LIFE ANNUITY
An annuity payable monthly during the lifetime of the Annuitant ceasing with
the last payment due prior to the death of the Annuitant provided that, at the
death of the Annuitant, the Beneficiary will receive an additional payment equal
to the excess, if any, of (a) minus (b) where: (a) is the Net Surrender Value
applied on the Annuity Commencement Date under this option: and (b) is the
dollar amount of annuity payments already paid. This option is not available for
variable payouts.
FOURTH OPTION: JOINT AND LAST SURVIVOR LIFE ANNUITY
An annuity payable monthly during the joint lifetime of the Annuitant and a
secondary Annuitant, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
It would be possible under this option for an Annuitant and designated
second person to receive only one payment in the event of the common or
simultaneous death of the parties prior to the due date for the second payment
and so on.
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20 AMERICAN MATURITY LIFE INSURANCE COMPANY
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FIFTH OPTION: PAYMENT FOR A DESIGNATED PERIOD
An amount payable monthly for the number of years selected which may be from
5 to 30 years.
In the event of the Annuitant's death prior to the end of the designated
period, the present value as of the date of the Annuitant's death, of any
remaining guaranteed payments will be paid in one sum to the Beneficiary unless
other provisions have been made and approved by American Maturity.
Option 5 is an option that does not involve life contingencies and thus no
mortality guarantee. Charges made for the mortality undertaking under the
Certificates thus provide no real benefit to a Certificate Owner.
American Maturity may offer other annuity options from time to time.
DESCRIPTION OF TABLES: The Certificate contains tables that show the dollar
amount of the first monthly payment for the variable annuity and the minimum
dollar amount of the monthly payments for the fixed annuity for each $1,000
applied under the Annuity Options. The variable payment annuity tables are based
on the 1983a Individual Annuity Mortality Table with ages set back one year, and
an interest rate of 5% per annum. The fixed annuity payment tables are based on
the 1983a Individual Annuity Mortality Table with ages set back one year, and an
interest rate of 3% per annum. Once you have elected an annuity option, that
election may not be changed with respect to any Annuitant following the
commencement of annuity payments.
MINIMUM PAYMENT: No election of any options or combination of options may
be made under the Certificate unless the first payment for each affected
Sub-Account or Fixed Account would be at least equal to the minimum payment
amount according to Company rules then in effect. If at any time, payments to be
made to any Annuitant from each Account are or become less than the minimum
payment amount, the Company shall have the right to change the frequency of
payment to such intervals as will result in a payment at least equal to the
minimum. If any amount due would be less than the minimum payment amount per
annum, the Company may make such other settlement as may be equitable to the
Annuitant.
FEDERAL TAX CONSIDERATIONS
What are some of the federal tax consequences which affect these Contracts?
A. GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE CONTRACT OWNER INVOLVED AND THE TYPE OF PLAN UNDER
WHICH THE CONTRACT IS PURCHASED, LEGAL AND TAX ADVICE MAY BE NEEDED BY A PERSON,
TRUSTEE OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A CONTRACT DESCRIBED
HEREIN.
It should be understood that any detailed description of the federal income
tax consequences regarding the purchase of these Contracts cannot be made in
this Prospectus and that special tax rules may be applicable with respect to
certain purchase situations not discussed herein. In addition, no attempt is
made here to consider any applicable state or other tax laws. For detailed
information, a qualified tax adviser should always be consulted. The discussion
here and in Appendix I, commencing on page 27, is based on the Company's
understanding of existing federal income tax laws as they are currently
interpreted.
B. TAXATION OF COMPANY AND THE SEPARATE ACCOUNT
The Separate Account is taxed as part of the Company which is taxed as a
life insurance company in accordance with the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, the Separate Account will not be taxed as a
"regulated investment company" under subchapter M of Chapter 1 of the Code.
Investment income and any realized capital gains on the assets of the Separate
Account are reinvested and are taken into account in determining the value of
the Accumulation and Annuity Units (See "Value of Accumulation Units" commencing
on page 14). As a result, such investment income and realized capital gains are
automatically applied to increase reserves under the Contract.
No taxes are due on interest, dividends and short-term or long-term capital
gains earned by the Separate Account with respect to Qualified or Non-Qualified
Contracts.
C. TAXATION OF ANNUITIES -- GENERAL PROVISIONS AFFECTING PURCHASERS OTHER
THAN QUALIFIED RETIREMENT PLANS
Section 72 of the Code governs the taxation of annuities in general.
1. NON-NATURAL PERSONS, CORPORATIONS, ETC. Section 72 contains provisions
for Contract Owners which are non-natural persons. Non-natural persons
include corporations, trusts, limited liability companies and
partnerships. The annual net increase in the value of the Contract is
currently includable in the gross income of a non-natural person, unless
the non-natural person holds the Contract as an agent for a natural
person. There are additional exceptions from current inclusion for (i)
certain annuities held by structured settlement companies, (ii) certain
annuities held by an employer with respect to a terminated qualified
retirement plan and (iii) certain immediate annuities. A non-natural
person which is a tax-exempt entity for federal tax purposes will not be
subject to income tax as a result of this provision.
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AMERICAN MATURITY LIFE INSURANCE COMPANY 21
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If the Contract Owner is not an individual, the primary Annuitant shall
be treated as the Contract Owner for purposes of making distributions
which are required to be made upon the death of the Contract Owner. If
there is a change in the primary Annuitant, such change shall be treated
as the death of the Contract Owner.
2. OTHER CONTRACT OWNERS (NATURAL PERSONS). A Contract Owner is not taxed
on increases in the value of the Contract until an amount is received or
deemed received, e.g., in the form of a lump sum payment (full or
partial value of a Contract) or as Annuity payments under the settlement
option elected.
The provisions of Section 72 of the Code concerning distributions are
summarized briefly below. Also summarized are special rules affecting
distributions from Contracts obtained in a tax-free exchange for other
annuity contracts or life insurance contracts which were purchased prior
to August 14, 1982.
a. DISTRIBUTIONS PRIOR TO THE ANNUITY COMMENCEMENT DATE.
i. Total premium payments less amounts received which were not
includable in gross income equal the "investment in the
contract" under Section 72 of the Code.
ii. To the extent that the value of the Contract (ignoring any
surrender charges except on a full surrender) exceeds the
"investment in the contract," such excess constitutes the
"income on the contract."
iii. Any amount received or deemed received prior to the Annuity
Commencement Date (e.g., upon a partial surrender) is deemed to
come first from any such "income on the contract" and then from
"investment in the contract," and for these purposes such
"income on the contract" shall be computed by reference to any
aggregation rule in subparagraph 2.c. below. As a result, any
such amount received or deemed received (1) shall be includable
in gross income to the extent that such amount does not exceed
any such "income on the contract," and (2) shall not be
includable in gross income to the extent that such amount does
exceed any such "income on the contract." If at the time that
any amount is received or deemed received there is no "income
on the contract" (e.g., because the gross value of the Contract
does not exceed the "investment in the contract" and no
aggregation rule applies), then such amount received or deemed
received will not be includable in gross income, and will
simply reduce the "investment in the contract."
iv. The receipt of any amount as a loan under the Contract or the
assignment or pledge of any portion of the value of the
Contract shall be treated as an amount received for purposes of
this subparagraph a. and the next subparagraph b.
v. In general, the transfer of the Contract, without full and
adequate consideration, will be treated as an amount received
for purposes of this subparagraph a. and the next subparagraph
b. This transfer rule does not apply, however, to certain
transfers of property between spouses or incident to divorce.
b. DISTRIBUTIONS AFTER ANNUITY COMMENCEMENT DATE. Annuity payments made
periodically after the Annuity Commencement Date are includable in
gross income to the extent the payments exceed the amount determined
by the application of the ratio of the "investment in the contract"
to the total amount of the payments to be made after the Annuity
Commencement Date (the "exclusion ratio").
i. When the total of amounts excluded from income by application of
the exclusion ratio is equal to the investment in the contract
as of the Annuity Commencement Date, any additional payments
(including surrenders) will be entirely includable in gross
income.
If the annuity payments cease by reason of the death of the
Annuitant and, as of the date of death, the amount of annuity
payments excluded from gross income by the exclusion ratio does
not exceed the investment in the contract as of the Annuity
Commencement Date, then the remaining portion of unrecovered
investment shall be allowed as a deduction for the last taxable
year of the Annuitant.
iii. Generally, nonperiodic amounts received or deemed received
after the Annuity Commencement Date are not entitled to any
exclusion ratio and shall be fully includable in gross income.
However,
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22 AMERICAN MATURITY LIFE INSURANCE COMPANY
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upon a full surrender after such date, only the excess of the
amount received (after any surrender charge) over the remaining
"investment in the contract" shall be includable in gross
income (except to the extent that the aggregation rule referred
to in the next subparagraph c. may apply).
c. AGGREGATION OF TWO OR MORE ANNUITY CONTRACTS. Contracts issued after
October 21, 1988 by the same insurer (or affiliated insurer) to the
same Contract Owner within the same calendar year (other than
certain contracts held in connection with a tax-qualified retirement
arrangement) will be treated as one annuity Contract for the purpose
of determining the taxation of distributions prior to the Annuity
Commencement Date. An annuity contract received in a tax-free
exchange for another annuity contract or life insurance contract may
be treated as a new Contract for this purpose. The Company believes
that for any annuity subject to such aggregation, the values under
the Contracts and the investment in the contracts will be added
together to determine the taxation under subparagraph 2.a., above,
of amounts received or deemed received prior to the Annuity
Commencement Date. Withdrawals will first be treated as withdrawals
of income until all of the income from all such Contracts is
withdrawn. As of the date of this Prospectus, there are no
regulations interpreting this provision.
d. 10% PENALTY TAX -- APPLICABLE TO CERTAIN WITHDRAWALS AND ANNUITY
PAYMENTS.
i. If any amount is received or deemed received on the Contract
(before or after the Annuity Commencement Date), the Code
applies a penalty tax equal to ten percent of the portion of the
amount includable in gross income, unless an exception applies.
ii. The 10% penalty tax will not apply to the following
distributions (exceptions vary based upon the precise plan
involved):
1. Distributions made on or after the date the recipient has
attained the age of 59 1/2.
2. Distributions made on or after the death of the holder or
where the holder is not an individual, the death of the
primary annuitant.
3. Distributions attributable to a recipient's becoming
disabled.
4. A distribution that is part of a scheduled series of
substantially equal periodic payments for the life (or life
expectancy) of the recipient (or the joint lives or life
expectancies of the recipient and the recipient's
Beneficiary).
5. Distributions of amounts which are allocable to the
"investment in the contract" prior to August 14, 1982 (see
next subparagraph e.).
e. SPECIAL PROVISIONS AFFECTING CONTRACTS OBTAINED THROUGH A TAX-FREE
EXCHANGE OF OTHER ANNUITY OR LIFE INSURANCE CONTRACTS PURCHASED
PRIOR TO AUGUST 14, 1982. If the Contract was obtained by a tax-free
exchange of a life insurance or annuity Contract purchased prior to
August 14, 1982, then any amount received or deemed received prior
to the Annuity Commencement Date shall be deemed to come (1) first
from the amount of the "investment in the contract" prior to August
14, 1982 ("pre-8/14/82 investment") carried over from the prior
Contract, (2) then from the portion of the "income on the contract"
(carried over to, as well as accumulating in, the successor
Contract) that is attributable to such pre-8/14/82 investment, (3)
then from the remaining "income on the contract" and (4) last from
the remaining "investment in the contract." As a result, to the
extent that such amount received or deemed received does not exceed
such pre-8/14/82 investment, such amount is not includable in gross
income., In addition, to the extent that such amount received or
deemed received does not exceed the sum of (a) such pre-8/14/82
investment and (b) the "income on the contract" attributable
thereto, such amount is not subject to the 10% penalty tax. In all
other respects, amounts received or deemed received from
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AMERICAN MATURITY LIFE INSURANCE COMPANY 23
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such post-exchange Contracts are generally subject to the rules
described in this subparagraph 3.
f. REQUIRED DISTRIBUTIONS
i. Death of Contract Owner or Primary Annuitant
Subject to the alternative election or spouse beneficiary
provisions in ii or iii below:
1. If any Contract Owner dies on or after the Annuity
Commencement Date and before the entire interest in the
Contract has been distributed, the remaining portion of such
interest shall be distributed at least as rapidly as under
the method of distribution being used as of the date of such
death;
2. If any Contract Owner dies before the Annuity Commencement
Date, the entire interest in the Contract will be
distributed within 5 years after such death; and
3. If the Contract Owner is not an individual, then for
purposes of 1. or 2. above, the primary annuitant under the
Contract shall be treated as the Contract Owner, and any
change in the primary annuitant shall be treated as the
death of the Contract Owner. The primary annuitant is the
individual, the events in the life of whom are of primary
importance in affecting the timing or amount of the payout
under the Contract.
ii. Alternative Election to Satisfy Distribution Requirements
If any portion of the interest of a Contract Owner described in
i. above is payable to or for the benefit of a designated
beneficiary, such beneficiary may elect to have the portion
distributed over a period that does not extend beyond the life
or life expectancy of the beneficiary. The election and payments
must begin within a year of the death.
iii. Spouse Beneficiary
If any portion of the interest of a Contract Owner is payable to
or for the benefit of his or her spouse, and the Annuitant or
Contingent Annuitant is living, such spouse shall be treated as
the Contract Owner of such portion for purposes of section i.
above.
3. DIVERSIFICATION REQUIREMENTS. Section 817 of the Code provides that a
variable annuity contract will not be treated as an annuity contract for
any period during which the investments made by the separate account or
underlying fund are not adequately diversified in accordance with
regulations prescribed by the Treasury Department. If a Contract is not
treated as an annuity contract, the Contract Owner will be subject to
income tax on the annual increases in cash value.
The Treasury Department has issued diversification regulations which
generally require, among other things, that no more than 55% of the
value of the total assets of the segregated asset account underlying a
variable contract is represented by any one investment, no more than 70%
is represented by any two investments, no more than 80% is represented
by any three investments, and no more than 90% is represented by any
four investments. In determining whether the diversification standards
are met, all securities of the same issuer, all interests in the same
real property project, and all interests in the same commodity are each
treated as a single investment. In addition, in the case of government
securities, each government agency or instrumentality shall be treated
as a separate issuer.
A separate account must be in compliance with the diversification
standards on the last day of each calendar quarter or within 30 days
after the quarter ends. If an insurance company inadvertently fails to
meet the diversification requirements, the company may comply within a
reasonable period and avoid the taxation of contract income on an
ongoing basis. However, either the company or the Contract Owner must
agree to pay the tax due for the period during which the diversification
requirements were not met.
The Company monitors the diversification of investments in the separate
accounts and tests for diversification as required by the Code. The
Company intends to administer all contracts subject to the
diversification requirements in a manner that will maintain adequate
diversification.
4. OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT. In order for a variable
annuity contract to qualify for tax deferral, assets in the segregated
asset accounts supporting the variable contract must be considered to be
owned by the insurance company and not by the variable contract owner.
The Internal Revenue Service ("IRS") has issued
<PAGE>
24 AMERICAN MATURITY LIFE INSURANCE COMPANY
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several rulings which discuss investor control. The IRS has ruled that
certain incidents of ownership by the contract owner, such as the
ability to select and control investments in a separate account, will
cause the contract owner to be treated as the owner of the assets for
tax purposes.
Further, in the explanation to the temporary Section 817 diversification
regulations, the Treasury Department noted that the temporary
regulations "do not provide guidance concerning the circumstances in
which investor control of the investments of a segregated asset account
may cause the investor, rather than the insurance company, to be treated
as the owner of the assets in the account." The explanation further
indicates that "the temporary regulations provide that in appropriate
cases a segregated asset account may include multiple sub-accounts, but
do not specify the extent to which policyholders may direct their
investments to particular sub-accounts without being treated as the
owners of the underlying assets. Guidance on this and other issues will
be provided in regulations or revenue rulings under Section 817(d),
relating to the definition of variable contract." The final regulations
issued under Section 817 did not provide guidance regarding investor
control, and as of the date of this prospectus, no other such guidance
has been issued. Further, the Company does not know if or in what form
such guidance will be issued. In addition, although regulations are
generally issued with prospective effect, it is possible that
regulations may be issued with retroactive effect. Due to the lack of
specific guidance regarding the issue of investor control, there is
necessarily some uncertainty regarding whether a Contract Owner could be
considered the owner of the assets for tax purposes. The Company
reserves the right to modify the contracts, as necessary, to prevent
Contract Owners from being considered the owners of the assets in the
separate accounts.
D. FEDERAL INCOME TAX WITHHOLDING
The portion of a distribution which is taxable income to the recipient will
be subject to federal income tax withholding, pursuant to Section 3405 of the
Code. The application of this provision is summarized below:
1. NON-PERIODIC DISTRIBUTIONS. The portion of a non-periodic distribution
which constitutes taxable income will be subject to federal income tax
withholding unless the recipient elects not to have taxes withheld. If
an election not to have taxes withheld is not provided, 10% of the
taxable distribution will be withheld as federal income tax. Election
forms will be provided at the time distributions are requested. If the
necessary election forms are not submitted to the Company, the Company
will automatically withhold 10% of the taxable distribution.
2. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN
ONE YEAR). The portion of a periodic distribution which constitutes
taxable income will be subject to federal income tax withholding as if
the recipient were married claiming three exemptions. A recipient may
elect not to have income taxes withheld or have income taxes withheld at
a different rate by providing a completed election form. Election forms
will be provided at the time distributions are requested.
E. GENERAL PROVISIONS AFFECTING QUALIFIED RETIREMENT PLANS
The Contract may be used for a number of qualified retirement plans. If the
Contract is being purchased with respect to some form of qualified retirement
plan, please refer to Appendix I commencing on page 27 for information relative
to the types of plans for which it may be used and the general explanation of
the tax features of such plans.
F. ANNUITY PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
The discussion above provides general information regarding U.S. federal
income tax consequences to annuity purchasers that are U.S. citizens or
residents. Purchasers that are not U.S. citizens or residents will generally be
subject to U.S. federal income tax and withholding on annuity distributions at a
30% rate, unless a lower treaty rate applies. In addition, purchasers may be
subject to state premium tax, other state and/or municipal taxes, and taxes that
may be imposed by the purchaser's country of citizenship or residence.
Prospective purchasers are advised to consult with a qualified tax adviser
regarding U.S., state, and foreign taxation with respect to an annuity purchase.
MISCELLANEOUS
VOTING RIGHTS
American Maturity is the legal owner of all Fund shares held in the Separate
Account. As the owner, American Maturity has the right to vote at the Funds'
shareholder meetings. However, to the extent required by federal securities laws
or regulations, American Maturity will:
- Vote all Fund shares attributable to a Certificate according to
instructions received from the Certificate Owner, and
- Vote shares attributable to a Certificate for which no voting instructions
are received in the same portion as shares for which instructions are
received.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 25
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If any federal securities laws or regulations, or their present
interpretation change to permit American Maturity to vote Fund shares in its own
right, American Maturity may elect to do so.
American Maturity will notify you of any Fund shareholders' meeting if the
shares held for your account may be voted at such meetings. American Maturity
will also send proxy materials and a form of instruction by means of which you
can instruct American Maturity with respect to the voting of the Fund shares
held for your account.
In connection with the voting of Fund shares held by it, American Maturity
will arrange for the handling and tallying of proxies received from Certificate
Owners. American Maturity as such, shall have no right, except as hereinafter
provided, to vote any Fund shares held by it hereunder which may be registered
in its name or the names of its nominees. American Maturity will, however, vote
the Fund shares held by it in accordance with the instructions received from the
Certificate Owners for whose accounts the Fund shares are held. If a Certificate
Owner desires to attend any meeting at which shares held for the Certificate
Owner's benefit may be voted, the Certificate Owner may request American
Maturity to furnish a proxy or otherwise arrange for the exercise of voting
rights with respect to the Fund shares held for such Certificate Owner's
account. American Maturity will vote shares for which no instructions have been
given and shares which are not attributable to Certificate Owners (i.e., shares
owned by American Maturity) in the same proportion as it votes shares of that
Fund for which it has received instructions. During the Annuity period under a
Certificate the number of votes will decrease as the assets held to fund Annuity
benefits decrease.
HOW THE CERTIFICATES ARE SOLD
Hartford Securities Distribution Company, Inc. ("HSD") serves as principal
underwriter for the securities issued with respect to the Separate Account. HSD
is a wholly-owned subsidiary of Hartford Life Insurance Company. The principal
business address of HSD is 200 Hopmeadow Street, Simsbury, CT 06089. HSD is
registered with the SEC under the Securities Exchange Act of 1934 as a
Broker-Dealer and is a member of the National Association of Securities Dealers,
Inc.
The securities will be sold by salespersons of HSD, who represent American
Maturity as insurance and variable annuity agents and who are registered
representatives. These salespersons will be supervised by American Maturity who
will respond to telephone inquiries as a result of national advertising.
CUSTODIAN OF SEPARATE ACCOUNT ASSETS
The assets of the Separate Account are held by American Maturity under a
safekeeping arrangement.
ASSIGNMENT
Ownership of a Certificate described herein is generally assignable.
However, if the Certificates are issued pursuant to some form of Qualified Plan,
it is possible that the ownership of the Certificates may not be transferred or
assigned depending on the type of qualified retirement plan involved. An
assignment of a Non-Qualified Certificate may subject the assignment proceeds to
income taxes and certain penalty taxes.
RIGHTS OF ANNUITANT AND CERTIFICATE OWNER(S)
The Certificate does not allow the Annuitant to be changed.
The designations of Certificate Owner and Contingent Annuitant will remain
in effect until changed by the Certificate Owner. Changes in the designation of
the Certificate Owner may be made during the lifetime of the Annuitant by
written notice to the Company. Changes in the designation of Contingent
Annuitant may be made at any time prior to the Annuity Commencement Date by
written notice to the Company. Notwithstanding the foregoing, if no Contingent
Annuitant has been named and the Certificate Owner/ Annuitant's spouse is the
Beneficiary, it will be assumed that the Certificate Owner/Annuitant's spouse is
the Contingent Annuitant.
The Certificate Owner has the sole power to exercise all the rights, options
and privileges granted by the Certificate or permitted by the Company and to
agree with the Company to any change in or amendment to the Certificate. The
rights of the Certificate Owner shall be subject to the rights of any assignee
of record with the Company and of any irrevocably designated Beneficiary. In the
case of joint Certificate Owners, each Certificate Owner alone may exercise all
rights, options and privileges, except with respect to the Surrender Provisions
and change of ownership or beneficiary.
MODIFICATION OF GROUP CONTRACT AND
CERTIFICATES THEREUNDER
American Maturity reserves the right to modify the Group Contract and
Certificates, but only if such modification: (i) is necessary to make the
Contract or the Separate Account comply with any law or regulation issued by a
governmental agency to which American Maturity is subject; (ii) is necessary to
assure continued qualification of the Contract under the Code or other federal
or state laws relating to retirement annuities or annuity Certificates;
<PAGE>
26 AMERICAN MATURITY LIFE INSURANCE COMPANY
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(iii) is necessary to reflect a change in the operation of the Separate Account
or the Sub-Account(s); (iv) provides additional Sub-Account or Fixed Account
options; or (v) withdraws Sub-Account or Fixed Account options. In the event of
any such modification, American Maturity will provide notice to the Contract
Owner and Certificate Owner, or to the payee(s) during the annuity period.
American Maturity may also make appropriate endorsement in the Contract and
Certificates to reflect such modification.
CHANGE IN THE OPERATION OF
THE SEPARATE ACCOUNT
The Company reserves the right to substitute the shares of any other
registered investment company for the shares of any Fund already purchased or to
be purchased in the future by the Separate Account provided that the
substitution has been approved by the SEC.
At the Company's election and subject to any necessary vote by persons
having the right to give instructions with respect to the voting of the Fund
shares held by the Sub-Accounts, the Separate Account may be operated as a
management company under the Investment Company Act of 1940 or it may be
deregistered under the Investment Company Act of 1940 in the event registration
is no longer required. Deregistration of the Separate Account requires an order
by the SEC.
LEGAL MATTERS AND EXPERTS
There are no material legal proceedings affecting the Separate Account.
Counsel with respect to federal laws and regulations applicable to the issue and
sale of the Certificates and with respect to Connecticut law is Lynda Godkin,
Senior Vice President, General Counsel, and Corporate Secretary, American
Maturity Life Insurance Company, 200 Hopmeadow Street, Simsbury Connecticut
06089.
The audited financial statements included in this prospectus and elsewhere
in the registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports. Reference is made to the report on the
statutory-basis financial statements of American Maturity Life Insurance Company
which states the statutory-basis financial statements are presented in
accordance with statutory accounting practices prescribed or permitted by the
National Association of Insurance Commissioners and the State of Connecticut
Insurance Department, and are not presented in accordance with generally
accepted accounting principles. The principal business address of Arthur
Andersen LLP is One Financial Plaza, Hartford, Connecticut 06103.
ADDITIONAL INFORMATION
You may reach our service representatives at 1-800-923-3334 between the
hours of 6:00 a.m. and 5:00 p.m., Pacific time.
If you are submitting a payment by mail, please send it, along with your
Enrollment Form (if it is your first payment), to:
American Maturity Life Insurance Company
P.O. Box 100194
Pasadena, CA 91189-0194
Please send your other forms and written requests or questions to:
American Maturity Life Insurance Company
P.O. Box 7005
Pasadena, CA 91109-7005
If you are using an overnight delivery service to send payments, please send
them to:
American Maturity Life Insurance Company
c/o FCNPC
1111 South Arroyo Parkway, First Floor
Pasadena, CA 91109-7122
The effective day of your instructions to Us is determined by the date and
time on which American Maturity receives the instructions. We receive your
instructions only when it arrives, in good form, at the correct mailing address
set out above. Please call us at 1-800-923-3334 if you have any questions
regarding the address you should use.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 27
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APPENDIX I
INFORMATION REGARDING TAX-QUALIFIED PLANS
The tax rules applicable to tax-qualified contract owners, including
restrictions on contributions and distributions, taxation of distributions and
tax penalties, vary according to the type of plan as well as the terms and
conditions of the plan itself. Various tax penalties may apply to contributions
in excess of applicable limits, distributions prior to age 59 1/2 (subject to
certain exceptions), distributions which do not conform to applicable
commencement and minimum distribution rules, and certain other transactions with
respect to tax-qualified plans. Therefore, this summary does not attempt to
provide more than general information about the tax rules associated with use of
a Contract by a tax-qualified retirement plan. Contract owners, plan
participants and beneficiaries are cautioned that the rights and benefits of any
person to benefits may be controlled by the terms and conditions of the
tax-qualified retirement plan itself, regardless of the terms and conditions of
a Contract, but that Hartford is not bound by the terms and conditions of such
plans to the extent such terms conflict with a Contract, unless Hartford
specifically consents to be bound. Additionally, some tax-qualified retirement
plans are subject to distribution and other requirements which are not
incorporated into Hartford's administrative procedures. Contract owners,
participants and beneficiaries are responsible for determining that
contributions, distributions and other transactions comply with applicable law.
Because of the complexity of these rules, owners, participants and beneficiaries
are encouraged to consult their own tax advisors as to specific tax
consequences.
A. TAX-QUALIFIED PENSION OR PROFIT-SHARING PLANS
Provisions of the Code permit eligible employers to establish tax-qualified
pension or profit sharing plans (described in Section 401(a) and 401(k), if
applicable, and exempt from taxation under Section 501(a) of the Code), and
Simplified Employee Pension Plans (described in Section 408(k)). Such plans are
subject to limitations on the amount that may be contributed, the persons who
may be eligible to participate and the time when distributions must commence.
Employers intending to use these contracts in connection with tax-qualified
pension or profit-sharing plans should seek competent tax and other legal
advice.
B. TAX SHELTERED ANNUITIES UNDER SECTION 403(b)
Section 403(b) of the Code permits public school employees and employees of
certain types of charitable, educational and scientific organizations, as
specified in Section 501(c)(3) of the Code, to purchase annuity contracts, and,
subject to certain limitations, to exclude such contributions from gross income.
Generally, such contributions may not exceed the lesser of $10,000 (indexed) or
20% of an employee's "includable compensation" for such employee's most recent
full year of employment, subject to other adjustments. Special provisions under
the Code may allow some employees to elect a different overall limitation.
Tax-sheltered annuity programs under Section 403(b) are subject to a
PROHIBITION AGAINST DISTRIBUTIONS FROM THE CONTRACT ATTRIBUTABLE TO
CONTRIBUTIONS MADE PURSUANT TO A SALARY REDUCTION AGREEMENT, unless such
distribution is made:
(1) after the participating employee attains age 59 1/2;
(2) upon separation from service;
(3) upon death or disability; or
(4) in the case of hardship (and in the case of hardship, any income
attributable to such contributions may not be distributed).
Generally, the above restrictions do not apply to distributions attributable
to cash values or other amounts held under a Section 403(b) contract as of
December 31, 1988.
C. DEFERRED COMPENSATION PLANS UNDER SECTION 457
Employees and independent contractors performing services for eligible
employers may have contributions made to an Eligible Deferred Compensation Plan
of their employer in accordance with the employer's plan and Section 457 of the
Code. Section 457 places limitations on contributions to Eligible Deferred
Compensation Plans maintained by a State or other tax-exempt organization. For
these purposes, the term "State" means a State, a political sub-division of a
State, and an agency or instrumentality of a State or political sub-division of
a State. Generally, the limitation is 33 1/3% of includable compensation
(typically 25% of gross compensation) or, for 1998, $8,000 (indexed), whichever
is less. Such a plan may also provide for additional "catch-up" deferrals during
the three taxable years ending before a Participant attains normal retirement
age.
An employee electing to participate in an Eligible Deferred Compensation
Plan should understand that his or her rights and benefits are governed strictly
by the terms of the plan and that the employer is the legal owner of any
contract issued with respect to the plan. The employer, as owner of the
contract(s), retains all voting and redemption rights which may accrue to the
contract(s) issued with respect to the plan. The participating employee should
look to the terms of his or her plan for any charges in regard to participating
therein other than those disclosed in this Prospectus. Participants should also
be aware that effective
<PAGE>
28 AMERICAN MATURITY LIFE INSURANCE COMPANY
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August 20, 1996, the Small Business Job Protection Act of 1996 requires that all
assets and income of an Eligible Deferred Compensation Plan established by a
governmental employer which is a State, a political subdivision of a State, or
any agency or instrumentality of a State or political subdivision of a State,
must be held in trust (or under certain specified annuity contracts or custodial
accounts) for the exclusive benefit of participants and their beneficiaries.
Special transition rules apply to such Eligible governmental Deferred
Compensation Plans already in existence on August 20, 1996, and provide that
such plans need not establish a trust before January 1, 1999. However, this
requirement of a trust does not apply to amounts under an Eligible Deferred
Compensation Plan of a tax-exempt (non-governmental) organization, and such
amounts will be subject to the claims of such tax-exempt employer's general
creditors.
In general, distributions from an Eligible Deferred Compensation Plan are
prohibited under Section 457 of the Code unless made after the participating
employee attains age 70 1/2, separates from service, dies, or suffers an
unforeseeable financial emergency. Present federal tax law does not allow
tax-free transfers or rollovers for amounts accumulated in a Section 457 plan
except for transfers to other Section 457 plans in limited cases.
D. INDIVIDUAL RETIREMENT ANNUITIES UNDER SECTION 408
Section 408 of the Code permits eligible individuals to establish individual
retirement programs through the purchase of Individual Retirement Annuities
("IRAs"). IRAs are subject to limitations on the amount that may be contributed,
the contributions that may be deducted from taxable income, the persons who may
be eligible and the time when distributions may commence. Also, distributions
from certain qualified plans may be "rolled-over" on a tax-deferred basis into
an IRA.
The Contracts may be offered as SIMPLE IRAs in connection with a SIMPLE IRA
plan of an employer. Special rollover rules apply to SIMPLE IRAs. Amounts can be
rolled over from one SIMPLE IRA to another SIMPLE IRA. However, amounts can be
rolled over from a SIMPLE IRA to a regular IRA only after two years have expired
since the participant first commenced participation in your employer's SIMPLE
IRA plan. Amounts cannot be rolled over to a SIMPLE IRA from a qualified plan or
a regular IRA. Hartford is a non-designated financial institution.
Beginning in 1998, the Contracts may be offered as ROTH IRAs under Section
408A of the Code. Contributions to a ROTH IRA are not deductible. Subject to
special limitations, a regular IRA may be converted into a ROTH IRA or a
distribution from a regular IRA may be rolled over to a ROTH IRA. However, a
conversion or a rollover from a regular IRA to a ROTH IRA is not excludable from
gross income. If certain conditions are met, qualified distributions from a ROTH
IRA are tax-free.
E. FEDERAL TAX PENALTIES AND WITHHOLDING
Distributions from retirement plans are generally taxed under Section 72 of
the Code. Under these rules, a portion of each distribution may be excludable
from income. The excludable amount is the portion of the distribution which
bears the same ratio as the after-tax contributions bear to the expected return.
1. PREMATURE DISTRIBUTION
Distributions from a tax-qualified plan before the Participant attains
age 59 1/2 are generally subject to an additional penalty tax equal to
10% of the taxable portion of the distribution. The 10% penalty does not
apply to distributions made after the employee's death, on account of
disability, for eligible medical expenses and distributions in the form
of a life annuity and, except in the case of an IRA, certain
distributions after separation from service after age 55. For these
purposes, a life annuity means a scheduled series of substantially equal
periodic payments for the life or life expectancy of the Participant (or
the joint lives or life expectancies of the Participant and
Beneficiary).
In addition, effective for distributions made from an IRA after December
31, 1997, there is no such penalty tax on distributions that do not
exceed the amount of certain qualifying higher education expenses, as
defined by Section 72(t)(7) of the Code, or which are qualified
first-time homebuyer distributions meeting the requirements of Section
72(t)(8) of the Code.
If you are a participant in a SIMPLE IRA plan, you should be aware that
the 10% penalty tax discussed above is increased to 25% with respect to
non-exempt premature distributions made from your SIMPLE IRA during the
first two years following the date you first commenced participation in
any SIMPLE IRA plan of your employer.
2. MINIMUM DISTRIBUTION TAX
If the amount distributed is less than the minimum required distribution
for the year, the Participant is subject to a 50% tax on the amount that
was not properly distributed.
An individual's interest in a tax-qualified retirement plan generally
must be distributed, or begin to be distributed, not later than April 1
of the calendar year following the later of (i) the calendar year in
which the individual attains age 70 1/2 or (ii) the calendar year in
which the individual retires from service with the employer sponsoring
the plan ("required beginning date").
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 29
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However, the required beginning date for an individual who is a five (5)
percent owner (as defined in the Code), or who is the owner of an IRA,
is April 1 of the calendar year following the calendar year in which the
individual attains age 70 1/2. The entire interest of the Participant
must be distributed beginning no later than the required beginning date
over a period which may not extend beyond a maximum of the life
expectancy of the Participant and a designated Beneficiary. Each annual
distribution must equal or exceed a "minimum distribution amount" which
is determined by dividing the account balance by the applicable life
expectancy. This account balance is generally based upon the account
value as of the close of business on the last day of the previous
calendar year. In addition, minimum distribution incidental benefit
rules may require a larger annual distribution.
If an individual dies before reaching his or her required beginning
date, the individual's entire interest must generally be distributed
within five years of the individual's death. However, this rule will be
deemed satisfied, if distributions begin before the close of the
calendar year following the individual's death to a designated
Beneficiary (or over a period not extending beyond the life expectancy
of the beneficiary). If the Beneficiary is the individual's surviving
spouse, distributions may be delayed until the individual would have
attained age 70 1/2.
If an individual dies after reaching his or her required beginning date
or after distributions have commenced, the individual's interest must
generally be distributed at least as rapidly as under the method of
distribution in effect at the time of the individual's death.
3. WITHHOLDING
In general, distributions from IRAs and plans described in Section 457
of the Code are subject to regular wage withholding rules. Periodic
distributions from other tax-qualified retirement plans that are made
for a specified period of 10 or more years or for the life or life
expectancy of the participant (or the joint lives or life expectancies
of the participant and beneficiary) are generally subject to federal
income tax withholding as if the recipient were married claiming three
exemptions. The recipient of periodic distributions may generally elect
not to have withholding apply or to have income taxes withheld at a
different rate by providing a completed election form.
Other distributions from such other tax-qualified retirement plans are
generally subject to mandatory income tax withholding at the flat rate
of 20% unless such distributions are:
a) the non-taxable portion of the distribution;
b) required minimum distributions; or
c) direct transfer distributions.
Direct transfer distributions are direct payments to an IRA or to
another eligible retirement plan under Code section 401(a)(31).
<PAGE>
30 AMERICAN MATURITY LIFE INSURANCE COMPANY
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TABLE OF CONTENTS
TO
STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<S> <C>
INTRODUCTION..........................................................
DESCRIPTION OF AMERICAN MATURITY LIFE INSURANCE COMPANY...............
SAFEKEEPING OF ASSETS.................................................
INDEPENDENT PUBLIC ACCOUNTANTS........................................
DISTRIBUTION OF THE CERTIFICATES......................................
ANNUITY PERIOD........................................................
A. Annuity Payments.................................................
B. Electing the Annuity Commencement Date and Form of Annuity.......
C.Optional Annuity Forms............................................
Option 1: Life Annuity............................................
Option 2: Life Annuity with 120, 180 or 240 Monthly Payments
Certain...........................................................
Option 3: Cash Refund Life Annuity................................
Option 4: Joint and Last Survivor Annuity.........................
Option 5: Payments for a Designated Period........................
D. The Annuity Unit and Valuation...................................
E. Determination of Amount of First Monthly Annuity Payment -- Fixed
and Variable.......................................................
F. Amount of Second and Subsequent Monthly Annuity Payments.........
G. Date and Time of Annuity Payments................................
CALCULATION OF YIELD AND RETURN.......................................
PERFORMANCE COMPARISONS...............................................
FINANCIAL STATEMENT...................................................
</TABLE>
<PAGE>
-1-
PART B
<PAGE>
-2-
STATEMENT OF ADDITIONAL INFORMATION
AMERICAN MATURITY LIFE INSURANCE COMPANY
SEPARATE ACCOUNT AMLVA
THE AARP VARIABLE ANNUITY
This Statement of Additional Information is not a prospectus. The information
contained herein should be read in conjunction with the Prospectus.
To obtain a Prospectus, send a written request to American Maturity Life
Insurance Company, 700 Newport Center Drive, Newport Beach, CA 92660.
Date of Prospectus: May 1, 1998
Date of Statement of Additional Information: May 1, 1998
<PAGE>
-3-
TABLE OF CONTENTS
SECTION PAGE
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
DESCRIPTION OF AMERICAN MATURITY LIFE INSURANCE CO.. . . . . . . . . . . . . 3
SAFEKEEPING OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . 4
DISTRIBUTION OF THE CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . 4
ANNUITY PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
A. Annuity Payments . . . . . . . . . . . . . . . . . . . . . . . . . 5
B. Electing the Annuity Commencement Date and Form of Annuity . . . . 5
C. Optional Annuity Forms . . . . . . . . . . . . . . . . . . . . . . 6
OPTION 1: Life Annuity. . . . . . . . . . . . . . . . . . . . . . 6
OPTION 2: Life Annuity With 120, 180 or
240 Monthly Payments Certain. . . . . . . . . . . . . . 6
OPTION 3: Cash Refund Life Annuity . . . . . . . . . . . . . . . . 7
OPTION 4: Joint and Last Survivor Annuity . . . . . . . . . . . . 7
OPTION 5: Payments for a Designated Period. . . . . . . . . . . . 7
D. The Annuity Unit and Valuation . . . . . . . . . . . . . . . . . . 8
E. Determination of Amount of First Monthly Annuity
Payment-Fixed and Variable . . . . . . . . . . . . . . . . . . 8
F. Amount of Second and Subsequent Monthly Annuity Payments . . . . . 9
G. Date and Time of Annuity Payments. . . . . . . . . . . . . . . . . 9
CALCULATION OF YIELD AND RETURN. . . . . . . . . . . . . . . . . . . . . . . 9
PERFORMANCE COMPARISONS. . . . . . . . . . . . . . . . . . . . . . . . . . .11
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
<PAGE>
-4-
INTRODUCTION
This Statement of Additional Information is to be read in conjunction with
the Prospectus of American Maturity Life Insurance Company's Separate Account
AMLVA (the AARP Variable Annuity). This Statement of Additional Information
contains information that may be of some interest to some investors.
DESCRIPTION OF AMERICAN MATURITY LIFE INSURANCE COMPANY
American Maturity Life Insurance Company (AAmerican Maturity"), is
domiciled in Connecticut. Its principal office is at 200 Hopmeadow Street,
Simsbury, Connecticut 06089. However its mailing address is 700 Newport Center
Drive, Newport Beach, California 92660.
American Maturity is a stock insurance company engaged in the business of
writing annuities. American Maturity was originally incorporated under the
name of First Equicor Life Insurance Company under the laws of California on
October 24, 1972. On July 29, 1994 First Equicor Life Insurance Company
redomesticated to Connecticut and changed its name to American Maturity Life
Insurance Company. American Maturity is owned 60% by Hartford Life and Accident
Insurance Company (domiciled in Connecticut) and 40% by Pacific Mutual Life
Insurance Company (domiciled in California). Hartford Life and Accident
Insurance Company is a subsidiary of Hartford Fire Insurance Company. Pacific
Mutual serves as the administrator of the Certificates.
The American Association of Retired Persons ("AARP") granted American
Maturity the exclusive right to offer annuity products to the membership of AARP
pursuant to an agreement established July 6, 1994. The agreement requires
American Maturity to maintain minimum capital surplus levels, minimum ratings
from nationally recognized rating services, and generally to obtain AARP's
consent in all matters relating to the offering of annuities to AARP members.
The agreement also includes a shareholder's agreement of American Maturity's
shareholders. In return for the exclusive right to offer annuity products to
AARP members, American Maturity pays AARP a royalty fee. The agreement is
effective until December 31, 2004, at which time AARP and American Maturity may
or may not renew the agreement.
Based on its financial soundness and operating performance, American
Maturity has earned an A+ (Superior) rating from A.M. Best Company, Inc., and an
(AA+) (Excellent) rating from Standard & Poor's. Based on claims paying
ability, American Maturity has earned an (AA+) (Very High) rating from Duff and
Phelps.
These ratings do not apply to the performance of the Separate Account.
However, the contractual obligations under this variable annuity are the general
corporate obligations of American Maturity. These ratings do apply to American
Maturity's ability to meet its insurance obligations under the Certificate.
<PAGE>
-5-
SAFEKEEPING OF ASSETS
The assets of the Separate Account are held by American Maturity under a
safekeeping arrangement.
INDEPENDENT PUBLIC ACCOUNTANTS
The audited financial statements included in this prospectus and elsewhere in
the registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm
as experts in giving said reports. Reference is made to the report on the
statutory-basis financial statements of American Maturity Life Insurance
Company which states the statutory-basis financial statements are presented
in accordance with statutory accounting practices prescribed or permitted by
the National Association of Insurance Commissioners and the State of
Connecticut Insurance Department, and are not presented in accordance with
generally accepted accounting principles. The principal business address of
Arthur Andersen LLP is One Financial Plaza, Hartford, Connecticut 06103.
DISTRIBUTION OF CERTIFICATES
Hartford Securities Distribution Company, Inc. ("HSD") serves as
Principal Underwriter for the securities issued with respect to the Separate
Account. HSD is a wholly-owned subsidiary of Hartford Life Insurance
Company. The principal business address of HSD is 200 Hopmeadow Street,
Simsbury, CT 06089. HSD is registered with the SEC under the Securities
Exchange Act of 1934 as a Broker-Dealer and is a member of the National
Association of Securities Dealers, Inc. ("NASD").
The securities will be sold by salespersons of HSD, who represent American
Maturity as insurance and variable annuity agents and who are NASD registered
representatives. These salespersons will be supervised by American Maturity who
will respond to telephone inquires as a result of national advertising.
American Maturity is obligated to reimburse HSD for all operating expenses
associated with HSD's services provided.
American Maturity may pay a consultation service fee to the American
Association of Retired Persons for demographic, administrative, record keeping
and marketing consultation services provided. In no event will such service fee
exceed 0.07% of the premiums deposited in the Certificate.
The offering of Certificates is continuous.
<PAGE>
-6-
ANNUITY PERIOD
A. Annuity Payments
Variable annuity payments are determined on the basis of (1) a mortality
table set forth in the Certificates and the type of annuity payment option
selected, and (2) the investment performance of the investment medium selected.
Fixed annuity payments are based on the Annuity tables contained in the
Certificates, and will remain level for the duration of the annuity.
The amount of the annuity payments will not be affected by adverse
mortality experience or by an increase in expenses in excess of the expense
deduction for which provision has been made (see "Charges Under the
Certificates," on page 15 of the Prospectus).
For a variable annuity, the Annuitant will be paid according to the value
of a fixed number of Annuity Units. However, the value of the Annuity Units,
and the amounts of the variable annuity payments, will vary with the investment
experience of the Fund shares selected.
B. Electing the Annuity Commencement Date and Form of Annuity
The Certificate Owner selects an Annuity Commencement Date and an Annuity
Option which may be on a fixed or variable basis, or a combination thereof. The
Annuity Commencement Date will not be deferred beyond the Annuitant's 90th
birthday (85th in Pennsylvania).
The Annuity Commencement Date and/or the Annuity Option may be changed from
time to time, but any such change must be made in writing at least 30 days
before the scheduled Annuity Commencement Date.
The Certificate contains the five Annuity Options. Options 5 is available
with respect to Qualified Certificates only if the guaranteed payment period is
less than the life expectancy of the Annuitant at the time the option becomes
effective. Such life expectancy shall be computed on the basis of the mortality
table prescribed by the IRS, or if none is prescribed, the mortality table then
in use by American Maturity.
If you do not elect otherwise, payments will automatically begin at the
Annuitant's age 90 (85 in Pennsylvania) under Option 5, Designated Period for 5
years.
<PAGE>
-7-
When an Annuity is effected under a Certificate, unless otherwise
specified, variable values will be applied to provide a variable annuity based
on Certificate Values as they are held in the various Sub-Accounts under the
Certificates. Fixed Account Certificate Values will be applied to provide a
fixed annuity. The Certificate Owner should consider the question of allocation
of Certificate Values among Sub-Accounts of the Separate Account and the General
Account of American Maturity to make certain that Annuity payments are based on
the investment alternative best suited to the Certificate Owner's needs for
retirement.
If at any time annuity payments are or become less than the minimum payment
amount according to Company rules then in effect, American Maturity has the
right to change the frequency of payment to such intervals as will result in a
payment at least equal to the minimum.
There may be other annuity options available offered by American Maturity
from time to time.
C. Optional Annuity Forms
OPTION 1: Life Annuity
A life annuity is an annuity payable during the lifetime of the Annuitant and
terminating with the last payment preceding the death of the Annuitant. This
option offers the maximum level of monthly payments of any of the life annuity
options since there is no guarantee of a minimum number of payments nor a
provision for a death benefit payable to a Beneficiary.
It would be possible under this option for an Annuitant to receive only one
annuity payment if he died prior to the due date of the second annuity payment,
two if he died before the due date of the third annuity payment, etc.
OPTION 2: Life Annuity with 120, 180 or 240 Monthly Payments Certain
This annuity option is an annuity payable monthly during the lifetime of an
Annuitant with the provision that if, at the death of the Annuitant, payments
have been made for less than 120, 180 or 240 months, as elected, then the
present value as of the date of the Annuitant's death of the current dollar
amount at the date of death, of any remaining guaranteed monthly payments will
be paid in one sum to the Beneficiary or Beneficiaries designated.
<PAGE>
-8-
Illustration of Annuity Payments
Male Individual Age 65, Life Annuity
With 120 Payments Certain
1. Net amount applied. . . . . . . . . . . . . . . . . . . . . . . 10,000.00
2. Initial monthly income per $1,000 of payment applied. . . . . . . . .6.78
3. Initial monthly payment (1x2 DIVIDED BY 1,000). . . . . . . . . . . 67.80
4. Annuity Unit value. . . . . . . . . . . . . . . . . . . . . . . .0.995995
5. Number of monthly Annuity Units (3 DIVIDED BY 4). . . . . . . . . .68.073
6. Assume Annuity Unit value for second month equal to . . . . . . . 1.00704
7. Second monthly payment (5x6). . . . . . . . . . . . . . . . . . . . 68.55
8. Assume Annuity Unit value for third month equal to. . . . . . . 0.964917
9. Third monthly payment (5x8) . . . . . . . . . . . . . . . . . . . . 65.68
For the purpose of this illustration, purchase is assumed to have been made on
the fifth business day preceding the first payment date. In determining the
second and subsequent payments, the Annuity Unit Value of the fifth business day
preceding the annuity due date is used.
OPTION 3: Cash Refund Life Annuity
An annuity payable monthly during the lifetime of the Annuitant ceasing with the
last payment due prior to the death of the Annuitant provided that, at the death
of the Annuitant, the Beneficiary will receive an additional payment equal to
the excess, if any, of (a) minus (b) where: (a) is the Net Surrender Value
applied on the Annuity Commencement Date under this option: and (b) is the
dollar amount of annuity payments already paid. This option is not available
for variable payouts.
OPTION 4: Joint and Last Survivor Annuity
An annuity payable monthly during the joint lifetime of the Annuitant and a
designated second person, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
It would be possible under this option for an Annuitant and designated second
person in the event of the common or simultaneous death of the parties to
receive only one payment in the event of death prior to the due date for the
second payment and so on.
OPTION 5: Payments for a Designated Period
An amount payable monthly for the number of years selected which may be from 5
to 30 years. In the event of the Annuitant's death prior to the end of the
designated period, the present value as of the date of the Annuitant's death, of
the current dollar amount of any remaining guaranteed monthly payments will be
paid in one sum to the Beneficiary or Beneficiaries designated.
Under any of the annuity options above, no surrenders are permitted after
the Annuity Commencement Date.
<PAGE>
-9-
Option 5 is an option that does not involve life contingencies and thus no
mortality guarantee, thus the Mortality and Expense Risk Charge provides no
real benefit to a Certificate Owner.
D. The Annuity Unit and Valuation
The value of an Annuity Unit Value for each Sub-Account will vary to
reflect the investment experience of the applicable Funds and will be determined
by multiplying the value of the Annuity Unit for that particular Subaccount on
the preceding Business Day by the product of (1) the net investment factor for
that Sub-Account for the day for which the Annuity Unit value is being
calculated, and (2) 0.999866 which is a factor that neutralizes an assumed
interest rate of 5.00%.
ILLUSTRATION OF CALCULATION OF ANNUITY UNIT VALUE
1. Net Investment Factor for period. . . . . . . . . . . . . . . . .1.011225
2. Adjustment for 5% Assumed Rate of Investment Return . . . . . . .0.999866
3. 2x1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01109
4. Annuity Unit value, beginning of period . . . . . . . . . . . . . .995995
5. Annuity Unit value, end of period (3x4) . . . . . . . . . . . . . 1.00704
E. Determination of Amount of First Monthly Annuity Payment-Fixed and Variable
When annuity payments are to commence, the value of the Certificate is
determined as the sum of the value of the Fixed Account plus the product of the
value of the Accumulation Unit of each Sub-Account and the number of
Accumulation Units credited to each Sub-Account as of the date the annuity
option is to commence. The Annuity Unit will be determined no earlier than the
close of business on the fifth Business Day preceding the date the first annuity
payment is due.
The Certificate contains tables indicating the minimum dollar amount of the
first monthly payment under the optional forms of annuity for each $1,000 of
value of a Sub-Account under a Certificate. The first monthly payment varies
according to the form and type of annuity selected. The certificate contains
annuity tables derived from the 1983a Individual Annuity Mortality table with
ages set back one year with an assumed investment rate ("A.I.R.") of 5% per
annum. The total first monthly variable annuity payment is determined by
multiplying the value (expressed in thousands of dollars) of a Sub-Account (less
any applicable Premium Taxes) by the amount of the first monthly payment per
$1,000 of value obtained from the tables in the Certificates.
<PAGE>
-10-
Fixed annuity payments are determined at annuitization by multiplying the values
allocated to the Fixed Account by a rate to be determined by American Maturity
which is no less than the rate specified in the annuity tables in the
Certificate. The annuity payment will remain level for the duration of the
annuity.
F. Amount of Second and Subsequent Monthly Variable Annuity Payments
The amount of the first monthly variable annuity payment, determined as
described above, is divided by the value of an Annuity Unit for the appropriate
Sub-Account no earlier than the close of business on the fifth Business Day
preceding the day on which the payment is due in order to determine the number
of Annuity Units represented by the first payment. This number of Annuity Units
remains fixed during the Annuity Period, and in each subsequent month the dollar
amount of the variable annuity payment is determined by multiplying this fixed
number of Annuity Units by the then current Annuity Unit Value.
Level variable annuity payments would be produced if the investment rate
remained constant and equal to the A.I.R. In fact, payments will vary up or
down as the investment rate varies up or down from the A.I.R.
G. Date and Time of Annuity Payments
The first annuity payment under any Option shall be made one month, (or the
period selected for periodic payments: annual, semi-annual, quarterly, or
monthly), following the Annuity Commencement Date. Subsequent payments shall be
made on the same calendar day of the month as was the first payment, or
preceding day if no such day exists (e.g. September 31), in accordance with the
payment period selected. The Annuity Unit Value used in calculating the amount
of the variable annuity payments will be based on an Annuity Unit Value
determined as of the close of business on a day no earlier than the fifth
Business Day preceding the date of the annuity payment.
CALCULATION OF YIELD AND RETURN
From time to time, quotations of a Sub-Account's performance may be
included in advertisements, sales literature or reports to shareholders or
prospective investors. These performance figures may be calculated in the
following manner:
YIELD CALCULATION: MONEY MARKET PORTFOLIO SUB-ACCOUNT
A. YIELD is the net annualized yield based on a specified seven calendar
days calculated at simple interest rates. Yield is calculated by determining
the net change, exclusive of capital changes, in the value of a hypothetical
pre-existing
<PAGE>
-11-
account having a balance of one share at the beginning of the period
subtracting a hypothetical charge reflecting deductions from shareholder
accounts and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return. The yield is
annualized by multiplying the base period return by 365/7. The yield figure
is stated to the nearest hundredth of one percent.
B. EFFECTIVE YIELD is the net annualized yield for a specified seven
calendar days assuming a reinvestment of the income compounding. Effective
yield is calculated by the same method as yield except the yield figure is
compounded by adding 1, raising the sum to a power equal to 365 divided by 7,
and subtracting one from the result, according to the following formula:
SUB-ACCOUNTS YIELD EFFECTIVE YIELD
- ------------ ----- ---------------
Money Market Portfolio* 4.15% 4.24%
* Yield and effectIve yield for the seven day period ending December 31, 1997.
For purposes of the yield and effective yield computations, the
hypothetical charge reflects recurring charges on the the Separate Account
level, including the annual policy fee.
As described above, yield and effective yield are based on historical
earnings and show the performance of a hypothetical investment and are not
intended to indicate future performance. Yield and effective yield will vary
based on changes in market conditions and the level of expenses.
YIELD CALCULATION: BOND PORTFOLIO SUB-ACCOUNT
YIELD is the net annualized yield based on a specified 30-day (or one
month) period assuming a semiannual compounding of income. Yield is
calculated by dividing the net investment income per unit earned during the
period by the maximum offering price per unit on the last day of the
period, according to the following formula:
SUB-ACCOUNTS YIELD
- ------------ -----
Bond Portfolio** 5.36%
** Yield quotation based on a 30 day period ended December 31, 1997.
<PAGE>
-12-
TOTAL RETURN CALCULATIONS
A. AVERAGE ANNUAL TOTAL RETURN is the average annual compound rate of
return for the periods of one, five, or ten years (or such shorter periods as
may be applicable dating from the commencement of the Sub-Account's operations)
all ended on the date of a recent calendar quarter.
Average total return quotations reflect changes in the price of a
Portfolio's shares and assume that all dividends and capital gains distributions
during the respective periods were reinvested in Portfolio shares. Average
annual return is calculated by finding the average annual compound rates of
return over the relevant periods that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FOR YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
10 YEAR OR SINCE
SUB-ACCOUNTS INCEPTION DATE 1 YEAR 5 YEAR INCEPTION*
- ------------ -------------- ------ ------ ----------
<S> <C> <C> <C> <C>
Money Market Portfolio (Scudder) 7/16/85 (3.14%) .89% 2.41%
Bond Portfolio (Scudder) 7/16/85 .67% 3.83% 5.67%
Balanced Portfolio (Janus) 9/13/93 13.57% na 12.53%
Capital Growth Portfolio (Scudder) 7/16/85 27.11% 14.75% 14.23%
Growth & Income Portfolio (Scudder) 5/2/94 21.98% na 20.27%
AMT Partners Portfolio (Neuberger &
Berman Management) 3/22/94 22.64% na 20.38%
</TABLE>
<PAGE>
-13-
<TABLE>
<S> <C> <C> <C> <C>
Capital Appreciation Portfolio
(Dreyfus) 4/5/93 19.47% na 16.35%
Small Cap Portfolio (Dreyfus) 8/31/90 7.19% 23.27% 41.84%
Worldwide Growth Portfolio (Janus) 9/13/93 13.62% na 19.45%
</TABLE>
Figures represent performance since inception for Sub-Accounts in existence
for less than 10 years, or performance for 10 years for Sub-Accounts in
existence for more than 10 years.
NON-STANDARDIZED ANNUALIZED TOTAL RETURN FOR YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
10 YEAR OR SINCE
SUB-ACCOUNTS INCEPTION DATE 1 YEAR 5 YEAR INCEPTION*
- ------------ -------------- ------ ------ ----------
<S> <C> <C> <C> <C>
Money Market Portfolio (Scudder) 7/16/85 4.36% 3.56% 4.61%
Bond Portfolio (Scudder) 7/16/85 8.17% 6.33% 7.63%
Balanced Portfolio (Janus) 9/13/93 21.07% n/a 15.30%
Capital Growth Portfolio (Scudder) 7/16/85 34.61% 17.03% 15.79%
Growth & Income Portfolio (Scudder) 5/2/94 29.48% na 23.00%
AMT Partners Portfolio (Neuberger
& Berman Management) 3/22/94 30.14% na 23.13%
Capital Appreciation Portfolio
(Dreyfus) 4/5/93 26.97% na 18.85%
Small Cap Portfolio (Dreyfus) 8/31/90 15.76% 25.08 42.75%
Worldwide Growth Portfolio (Janus) 9/13/93 21.12% na 21.86%
</TABLE>
Figures represent performance since inception for Sub-Accounts in existence for
less than 10 years, or performance for 10 years for Sub-Accounts in existence
for more than 10 years.
<PAGE>
-14-
PERFORMANCE COMPARISONS
YIELD AND TOTAL RETURN. Each Sub-Account may from time to time include its
performance in advertising and other sales literature furnished to present or
prospective shareholders. Each Sub-Account may from time to time include in
advertisements its total return (and yield in the case of certain Sub-Accounts),
and the ranking of those performance figures relative to such figures for groups
of other annuities analyzed by Lipper Analytical Services and Morningstar, Inc.
as having the same investment objectives.
The total return and yield may also be used to compare the performance of the
Sub-Accounts against certain widely acknowledged outside standards or indices
for stock and bond market performance. The Standard & Poor's Composite Index
of 500 Stocks (the "S&P 500") is a market value-weighted and unmanaged index
showing the changes in the aggregate market value of 500 stocks relative to
the base period 1941-43. The S&P 500 is composed almost entirely of common
stocks of companies listed on the New York Stock Exchange, although the
common stocks of a few companies listed on the American Stock Exchange or
traded over-the-counter are included. The 500 companies represented include
400 industrial, 60 transportation and 40 financial services concerns. The
S&P 500 represents about 80% of the market value of all issues traded on the
New York Stock Exchange.
The NASDAQ-OTC Price Index (The "NASDAQ Index") is a market value-weighted and
unmanaged index showing the changes in the aggregate market value of
approximately 3,500 stocks relative to the base measure of 100.00 on February 5,
1971. The NASDAQ Index is composed entirely of common stocks of companies
traded over-the-counter and often through the National Association of Securities
Dealers Automated Quotations ("NASDAQ") system. Only those over-the-counter
stocks having only one market maker or traded on exchanges are excluded.
The Morgan Stanley Capital International EAFE Index (the "EAFE Index") is an
unmanaged index, which includes over 1,000 companies representing the stock
markets of Europe, Australia, New Zealand, and the Far East. The EAFE Index is
weighted by market capitalization, and therefore, it has a heavy representation
in countries with large stock markets, such as Japan.
The Lehman Government Bond Index (the "Lehman Government Index") is a measure of
the market value of all public obligations of the U.S. Treasury; all publicly
issued debt of all
<PAGE>
-15-
agencies of the U.S. Government and all quasi-federal corporations; and all
corporate debt guaranteed by the U.S. Government. Mortgage backed securities,
flower bonds and foreign targeted issues are not included in the Lehman
Government Index.
The Lehman Government/Corporate Bond Index (the "Lehman Government/Corporate
Index") is a measure of the market value of approximately 5,300 bonds with a
face value currently in excess of $1.3 trillion. To be included in the Lehman
Government/Corporate Index, an issue must have amounts outstanding in excess of
$1 million, have at least one year to maturity and be rated "Baa" or higher
("investment grade") by a nationally recognized rating agency.
The manner in which total return and yield will be calculated for public use is
described above.
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
TO AMERICAN MATURITY LIFE INSURANCE COMPANY
SEPARATE ACCOUNT AMLVA AND TO THE
OWNERS OF UNITS OF INTEREST THEREIN:
- --------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities of American
Maturity Life Insurance Company Separate Account AMLVA (the Account) as of
December 31, 1997, and the related statements of operations and changes in net
assets for the period from inception, March 17, 1997, to December 31, 1997.
These financial statements are the responsibility of the Account's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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 Maturity Life
Insurance Company Separate Account AMLVA as of December 31, 1997 and the results
of its operations and the changes in its net assets for the period from
inception, March 17, 1997, to December 31, 1997, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
February 16, 1998
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT AMLVA
- --------------------------------------------------------------------------------
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCUDDER SCUDDER SCUDDER
VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT
FUND MONEY MARKET FUND BOND FUND CAPITAL
PORTFOLIO PORTFOLIO GROWTH PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
ASSETS:
Investments:
Scudder Variable Life Investment Fund Money
Market Portfolio
Shares 342,165
Cost $342,165
Market Value . . . . . . . . . . . . . . . . $ 342,165 -- --
Scudder Variable Life Investment Fund Bond
Portfolio
Shares 81,246
Cost $549,421
Market Value . . . . . . . . . . . . . . . . -- $ 558,160 --
Scudder Variable Life Investment Fund Capital
Growth Portfolio
Shares 27,321
Cost $553,571
Market Value . . . . . . . . . . . . . . . . -- -- $ 563,641
Scudder Variable Life Investment Fund Growth
and Income Portfolio
Shares 179,296
Cost $1,999,818
Market Value . . . . . . . . . . . . . . . . -- -- --
Neuberger & Berman Partners Advisers Management
Trust Portfolio
Shares 42,626
Cost $846,914
Market Value . . . . . . . . . . . . . . . . -- -- --
Dreyfus Variable Investment Fund Capital
Appreciation Portfolio
Shares 46,411
Cost $1,271,683
Market Value . . . . . . . . . . . . . . . . -- -- --
Dreyfus Variable Investment Fund Small Cap
Portfolio
Shares 7,314
Cost $437,966
Market Value . . . . . . . . . . . . . . . . -- -- --
Janus Aspen Series Balanced Portfolio
Shares 17,100
Cost $287,875
Market Value . . . . . . . . . . . . . . . . -- -- --
Janus Aspen Series Worldwide Growth Portfolio
Shares 56,443
Cost $1,315,752
Market Value . . . . . . . . . . . . . . . . -- -- --
Due from American Maturity Life
Insurance Company . . . . . . . . . . . . . . . . -- -- 4,430
Receivable from fund shares sold . . . . . . . . . 8 13 --
----------- ----------- -----------
Total Assets . . . . . . . . . . . . . . . . . . . 342,173 558,173 568,071
----------- ----------- -----------
LIABILITIES:
Due to American Maturity Life Insurance Company . 8 13 --
Payable for fund shares purchased . . . . . . . . -- -- 4,430
----------- ----------- -----------
Total Liabilities . . . . . . . . . . . . . . . . 8 13 4,430
----------- ----------- -----------
Net Assets (variable annuity contract
liabilities) . . . . . . . . . . . . . . . . . . . $ 342,165 $ 558,160 $ 563,641
----------- ----------- -----------
----------- ----------- -----------
DEFERRED ANNUITY CONTRACTS IN THE ACCUMULATION PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units owned by participants . . . . . . . . . . . 33,066 51,585 45,151
Unit values . . . . . . . . . . . . . . . . . . . $10.347924 $10.820260 $12.483490
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
<PAGE>
<TABLE>
<CAPTION>
SCUDDER NEUBERGER DREYFUS
VARIABLE LIFE INVESTMENT & BERMAN VARIABLE INVESTMENT FUND
FUND GROWTH PARTNERS CAPITAL
AND INCOME ADVISERS MANAGEMENT APPRECIATION
PORTFOLIO TRUST PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
ASSETS:
Investments:
Scudder Variable Life Investment Fund Money
Market Portfolio
Shares 342,165
Cost $342,165
Market Value . . . . . . . . . . . . . . . . -- -- --
Scudder Variable Life Investment Fund Bond
Portfolio
Shares 81,246
Cost $549,421
Market Value . . . . . . . . . . . . . . . . -- -- --
Scudder Variable Life Investment Fund Capital
Growth Portfolio
Shares 27,321
Cost $553,571
Market Value . . . . . . . . . . . . . . . . -- -- --
Scudder Variable Life Investment Fund Growth
and Income Portfolio
Shares 179,296
Cost $1,999,818
Market Value . . . . . . . . . . . . . . . . $ 2,058,322 -- --
Neuberger & Berman Partners Advisers Management
Trust Portfolio
Shares 42,626
Cost $846,914
Market Value . . . . . . . . . . . . . . . . -- $ 878,092 --
Dreyfus Variable Investment Fund Capital
Appreciation Portfolio
Shares 46,411
Cost $1,271,683
Market Value . . . . . . . . . . . . . . . . -- -- $ 1,294,868
Dreyfus Variable Investment Fund Small Cap
Portfolio
Shares 7,314
Cost $437,966
Market Value . . . . . . . . . . . . . . . . -- -- --
Janus Aspen Series Balanced Portfolio
Shares 17,100
Cost $287,875
Market Value . . . . . . . . . . . . . . . .
Janus Aspen Series Worldwide Growth Portfolio -- -- --
Shares 56,443
Cost $1,315,752
Market Value . . . . . . . . . . . . . . . . -- -- --
Due from American Maturity Life
Insurance Company . . . . . . . . . . . . . . . . -- 1,409 10,020
Receivable from fund shares sold . . . . . . . . . 8 -- --
----------- ----------- -----------
Total Assets . . . . . . . . . . . . . . . . . . . 2,058,330 879,501 1,304,888
----------- ----------- -----------
LIABILITIES:
Due to American Maturity Life Insurance Company . 8 -- --
Payable for fund shares purchased . . . . . . . . -- 1,409 10,020
----------- ----------- -----------
Total Liabilities . . . . . . . . . . . . . . . . 8 1,409 10,020
----------- ----------- -----------
Net Assets (variable annuity contract
liabilities) . . . . . . . . . . . . . . . . . . . $ 2,058,322 $ 878,092 $ 1,294,868
----------- ----------- -----------
----------- ----------- -----------
DEFERRED ANNUITY CONTRACTS IN THE ACCUMULATION PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units owned by participants . . . . . . . . . . . 169,811 71,192 109,859
Unit values . . . . . . . . . . . . . . . . . . . $12.121271 $12.334172 $11.786664
<CAPTION>
DREYFUS JANUS
VARIABLE INVESTMENT FUND JANUS ASPEN SERIES
SMALL ASPEN SERIES WORLDWIDE
CAPITAL BALANCED GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
ASSETS:
Investments:
Scudder Variable Life Investment Fund Money
Market Portfolio
Shares 342,165
Cost $342,165
Market Value . . . . . . . . . . . . . . . . -- -- --
Scudder Variable Life Investment Fund Bond
Portfolio
Shares 81,246
Cost $549,421
Market Value . . . . . . . . . . . . . . . . -- -- --
Scudder Variable Life Investment Fund Capital
Growth Portfolio
Shares 27,321
Cost $553,571
Market Value . . . . . . . . . . . . . . . . -- -- --
Scudder Variable Life Investment Fund Growth
and Income Portfolio
Shares 179,296
Cost $1,999,818
Market Value . . . . . . . . . . . . . . . . -- -- --
Neuberger & Berman Partners Advisers Management
Trust Portfolio
Shares 42,626
Cost $846,914
Market Value . . . . . . . . . . . . . . . . -- -- --
Dreyfus Variable Investment Fund Capital
Appreciation Portfolio
Shares 46,411
Cost $1,271,683
Market Value . . . . . . . . . . . . . . . . -- -- --
Dreyfus Variable Investment Fund Small Cap
Portfolio
Shares 7,314
Cost $437,966
Market Value . . . . . . . . . . . . . . . . $ 417,930 -- --
Janus Aspen Series Balanced Portfolio
Shares 17,100
Cost $287,875
Market Value . . . . . . . . . . . . . . . .
Janus Aspen Series Worldwide Growth Portfolio -- $ 298,735 --
Shares 56,443
Cost $1,315,752
Market Value . . . . . . . . . . . . . . . . -- -- $ 1,320,210
Due from American Maturity Life
Insurance Company . . . . . . . . . . . . . . . . -- 12,832 --
Receivable from fund shares sold . . . . . . . . . 2,972 -- 5,658
----------- ----------- -----------
Total Assets . . . . . . . . . . . . . . . . . . . 420,902 311,567 1,325,868
----------- ----------- -----------
LIABILITIES:
Due to American Maturity Life Insurance Company . 2,972 -- 5,658
Payable for fund shares purchased . . . . . . . . -- 12,832 --
----------- ----------- -----------
Total Liabilities . . . . . . . . . . . . . . . . 2,972 12,832 5,658
----------- ----------- -----------
Net Assets (variable annuity contract
liabilities) . . . . . . . . . . . . . . . . . . . $ 417,930 $ 298,735 $ 1,320,210
----------- ----------- -----------
----------- ----------- -----------
DEFERRED ANNUITY CONTRACTS IN THE ACCUMULATION PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units owned by participants . . . . . . . . . . . 35,318 25,899 115,748
Unit values . . . . . . . . . . . . . . . . . . . $11.833201 $11.534865 $11.405913
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
SEPARATE ACCOUNT AMLVA
- -------------------------------------------------------------------------------
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION, MARCH 17, 1997 TO DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCUDDER SCUDDER SCUDDER
VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT
FUND MONEY MARKET FUND BOND FUND CAPITAL
PORTFOLIO PORTFOLIO GROWTH PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends . . . . . . . . . . . . . . . . . . . $ 7,456 $ 6,904 $ 1,033
EXPENSES:
Mortality and expense undertakings. . . . . . . (1,217) (1,263) (1,131)
------- ------- -------
Net investment income (loss). . . . . . . . . . 6,239 5,641 (98)
------- ------- -------
CAPITAL GAINS INCOME . . . . . . . . . . . . . . . -- -- --
------- ------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on security
transactions . . . . . . . . . . . . . . . . -- 7 16
Net unrealized appreciation (depreciation) of
investments during the period. . . . . . . . -- 8,739 10,070
------- ------- -------
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . -- 8,746 10,086
------- ------- -------
Net increase in net assets resulting from
operations:. . . . . . . . . . . . . . $ 6,239 $14,387 $ 9,988
------- ------- -------
------- ------- -------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
<PAGE>
<TABLE>
<CAPTION>
SCUDDER NEUBERGER DREYFUS
VARIABLE LIFE INVESTMENT & BERMAN VARIABLE INVESTMENT FUND
FUND GROWTH PARTNERS CAPITAL
AND INCOME ADVISERS MANAGEMENT APPRECIATION
PORTFOLIO TRUST PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends . . . . . . . . . . . . . . . . . . . $8,946 $ -- $ 8,960
EXPENSES:
Mortality and expense undertakings. . . . . . . (4,154) (1,934) (2,881)
------- ------- -------
Net investment income (loss). . . . . . . . . . 4,792 (1,934) 6,079
------- ------- -------
CAPITAL GAINS INCOME . . . . . . . . . . . . . . . -- -- 752
------- ------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on security
transactions . . . . . . . . . . . . . . . . (7,527) 48 397
Net unrealized appreciation (depreciation) of
investments during the period. . . . . . . . 58,504 31,178 23,185
------- ------- -------
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . 50,977 31,226 23,582
------- ------- -------
Net increase in net assets resulting from
operations:. . . . . . . . . . . . . . $55,769 $29,292 $30,413
------- ------- -------
------- ------- -------
<CAPTION>
DREYFUS JANUS
VARIABLE INVESTMENT FUND JANUS ASPEN SERIES
SMALL ASPEN SERIES WORLDWIDE
CAPITAL BALANCED GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends . . . . . . . . . . . . . . . . . . . $ 453 $ 3,615 $ 5,047
EXPENSES:
Mortality and expense undertakings. . . . . . . (934) (724) (2,976)
------- ------- -------
Net investment income (loss). . . . . . . . . . (481) 2,891 2,071
------- ------- -------
CAPITAL GAINS INCOME . . . . . . . . . . . . . . . 23,882 -- --
------- ------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on security
transactions . . . . . . . . . . . . . . . . (2,631) 28 (191)
Net unrealized appreciation (depreciation) of
investments during the period. . . . . . . . (20,036) 10,860 4,458
------- ------- -------
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . (22,667) 10,888 4,267
------- ------- -------
Net increase in net assets resulting from
operations:. . . . . . . . . . . . . . $ 734 $13,779 $ 6,338
------- ------- -------
------- ------- -------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT AMLVA
- --------------------------------------------------------------------------------
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM INCEPTION, MARCH 17, 1997 TO DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCUDDER SCUDDER SCUDDER
VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT
FUND MONEY MARKET FUND BOND FUND CAPITAL
PORTFOLIO PORTFOLIO GROWTH PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss). . . . . . . . . . $ 6,239 $ 5,641 $ (98)
Capital gains income. . . . . . . . . . . . . . -- -- --
Net realized gain (loss) on security
transactions . . . . . . . . . . . . . . . . -- 7 16
Net unrealized appreciation (depreciation)
of investments during the period . . . . . . -- 8,739 10,070
---------- ---------- ----------
Net increase in net assets resulting
from operations. . . . . . . . . . . . . . . 6,239 14,387 9,988
---------- ---------- ----------
UNIT TRANSACTIONS:
Purchases . . . . . . . . . . . . . . . . . . . 1,398,582 465,764 478,755
Net transfers . . . . . . . . . . . . . . . . . (1,031,362) 79,564 75,274
Surrenders. . . . . . . . . . . . . . . . . . . (31,277) (1,544) (128)
Other activity. . . . . . . . . . . . . . . . . (17) (11) (248)
---------- ---------- ----------
Net increase in net assets resulting from
unit transactions. . . . . . . . . . . . . . 335,926 543,773 553,653
---------- ---------- ----------
Total increase in net assets. . . . . . . . . . 342,165 558,160 563,641
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . -- -- --
---------- ---------- ----------
End of period . . . . . . . . . . . . . . . . . $ 342,165 $ 558,160 $ 563,641
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
<PAGE>
<TABLE>
<CAPTION>
SCUDDER NEUBERGER DREYFUS
VARIABLE LIFE INVESTMENT & BERMAN VARIABLE INVESTMENT FUND
FUND GROWTH PARTNERS CAPITAL
AND INCOME ADVISERS MANAGEMENT APPRECIATION
PORTFOLIO TRUST PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss). . . . . . . . . . $ 4,792 $ (1,934) $ 6,079
Capital gains income. . . . . . . . . . . . . . -- -- 752
Net realized gain (loss) on security
transactions . . . . . . . . . . . . . . . . (7,527) 48 397
Net unrealized appreciation (depreciation)
of investments during the period . . . . . . 58,504 31,178 23,185
---------- -------- ----------
Net increase in net assets resulting
from operations. . . . . . . . . . . . . . . 55,769 29,292 30,413
---------- -------- ----------
UNIT TRANSACTIONS:
Purchases . . . . . . . . . . . . . . . . . . . 1,774,328 741,365 1,080,754
Net transfers . . . . . . . . . . . . . . . . . 216,036 108,605 185,964
Surrenders. . . . . . . . . . . . . . . . . . . (2,468) (1,032) (2,276)
Other activity. . . . . . . . . . . . . . . . . 14,657 (138) 13
---------- -------- ----------
Net increase in net assets resulting from
unit transactions. . . . . . . . . . . . . . 2,002,553 848,800 1,264,455
---------- -------- ----------
Total increase in net assets. . . . . . . . . . 2,058,322 878,092 1,294,868
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . -- -- --
---------- -------- ----------
End of period . . . . . . . . . . . . . . . . . $2,058,322 $878,092 $1,294,868
---------- -------- ----------
---------- -------- ----------
<CAPTION>
DREYFUS JANUS
VARIABLE INVESTMENT FUND JANUS ASPEN SERIES
SMALL ASPEN SERIES WORLDWIDE
CAPITAL BALANCED GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss). . . . . . . . . . $ (481) $ 2,891 $ 2,071
Capital gains income. . . . . . . . . . . . . . 23,882 -- --
Net realized gain (loss) on security
transactions . . . . . . . . . . . . . . . . (2,631) 28 (191)
Net unrealized appreciation (depreciation)
of investments during the period . . . . . . (20,036) 10,860 4,458
-------- -------- ----------
Net increase in net assets resulting
from operations. . . . . . . . . . . . . . . 734 13,779 6,338
-------- -------- ----------
UNIT TRANSACTIONS:
Purchases . . . . . . . . . . . . . . . . . . . 361,150 252,727 1,132,151
Net transfers . . . . . . . . . . . . . . . . . 55,933 32,780 184,710
Surrenders. . . . . . . . . . . . . . . . . . . (25) (325) (2,078)
Other activity. . . . . . . . . . . . . . . . . 138 (226) (911)
-------- -------- ----------
Net increase in net assets resulting from
unit transactions. . . . . . . . . . . . . . 417,196 284,956 1,313,872
-------- -------- ----------
Total increase in net assets. . . . . . . . . . 417,930 298,735 1,320,210
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . -- -- --
-------- -------- ----------
End of period . . . . . . . . . . . . . . . . . $417,930 $298,735 $1,320,210
-------- -------- ----------
-------- -------- ----------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT AMLVA
- --------------------------------------------------------------------------------
AMERICAN MATURITY LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
1. ORGANIZATION:
Separate Account AMLVA (the Account) is a separate investment account
within American Maturity Life Insurance Company (the Company) and is
registered with the Securities and Exchange Commission (SEC) as a unit
investment trust under the Investment Company Act of 1940, as amended. Both
the Company and the Account are subject to supervision and regulation by
the Department of Insurance of the State of Connecticut and the SEC. The
Account invests deposits by variable annuity contractholders of the Company
in various mutual funds (the Funds) as directed by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Security gains and
losses are determined on the basis of identified cost. Dividend and
capital gains income are accrued as of the ex-dividend date. Capital
gains income represents dividends from the Funds which are
characterized as capital gains under federal income tax regulations.
b) SECURITY VALUATION--The investment in shares of the Scudder Variable
Life Investment Fund Portfolios, Janus Aspen Series Portfolios,
Neuberger & Berman Advisers Management Trust Partners Portfolio and
Dreyfus Variable Investment Fund Portfolios are valued at the closing
net asset value per share as determined by the appropriate Fund as of
December 31, 1997.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of,
and are taxed with, the total operations of the Company, which is
taxed as an insurance company under the Internal Revenue Code. Under
current law, no federal income taxes are payable with respect to the
operations of the Account.
d) USE OF ESTIMATES--The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities as of the date of the financial
statements and the reported amounts of income and expenses during the
period. Operating results in the future could vary from the amounts
derived from management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
a) MORTALITY AND EXPENSE UNDERTAKINGS--The Company, as issuer of variable
annuity contracts, provides the mortality and expense undertakings
and, with respect to the Account, receives a maximum annual fee of up
to .65% of the Account's average daily net assets. The Company also
provides administrative services and receives an annual fee of 0.20%
of the Account's average daily net assets.
b) DEDUCTION OF ANNUAL MAINTENANCE FEE--Annual maintenance fees are
deducted through termination of units of interest from the applicable
contractholders' accounts, in accordance with the terms of the
contracts.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
American Maturity Life Insurance Company:
We have audited the accompanying statutory-basis balance sheets of American
Maturity Life Insurance Company (a Connecticut corporation) (the Company) as of
December 31, 1997 and 1996, and the related statutory-basis statements of
operations, changes in capital and surplus and cash flows for each of the three
years in the period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these statutory-basis financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
The Company presents its financial statements in conformity with statutory
accounting practices as described in Note 1 of notes to statutory-basis
financial statements. When statutory-basis financial statements are presented
for purposes other than for filing with a regulatory agency, generally accepted
auditing standards require that an auditors' report on them state whether they
are presented in conformity with generally accepted accounting principles. The
accounting practices used by the Company vary from generally accepted accounting
principles as explained and quantified in Note 1.
In our opinion, because the differences in accounting practices as described in
Note 1 are material, the statutory-basis financial statements referred to above
do not present fairly, in accordance with generally accepted accounting
principles, the financial position of the Company as of December 31, 1997 and
1996, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1997.
However, in our opinion, the statutory-basis financial statements referred to
above present fairly, in all material respects, the financial position of the
Company as of December 31, 1997 and 1996, and the results of its operations and
its cash flows for each of the three years in the period ended December 31, 1997
in conformity with statutory accounting practices as described in Note 1.
/s/ Arthur Anderson LLP
Hartford, Connecticut
January 27, 1998
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATUTORY-BASIS BALANCE SHEETS
AS OF DECEMBER 31, 1997 AND 1996
(in thousands)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
ASSETS:
Bonds $ 13,310 $10,009
Cash and short-term investments 40,654 7,415
-------- -------
Total cash and invested assets 53,964 17,424
Investment income due and accrued 223 166
Other assets 387 419
Separate account assets 122,694 54,241
-------- -------
Total assets $177,268 $72,250
-------- -------
-------- -------
LIABILITIES:
Aggregate reserves for future benefits $ 3,290 $ 1,655
Liability for premium and other deposit
funds 4,707 2,034
Asset valuation reserve 478 249
Payable to affiliates 1,212 883
Transfers to separate accounts due
or accrued (792) 1,291
Other liabilities 1,816 1,423
Separate account liabilities 122,594 54,241
-------- -------
Total liabilities 133,305 61,776
-------- -------
COMMITMENTS AND CONTINGENCIES (Note 7)
CAPITAL AND SURPLUS:
Common stock 2,500 2,500
Gross paid-in and contributed surplus 57,500 17,500
Unassigned funds (16,037) (9,526)
-------- -------
Total capital and surplus 43,963 10,474
-------- -------
Total liabilities and capital
and surplus $177,268 $72,250
-------- -------
-------- -------
</TABLE>
The accompanying notes are an integral
part of these statutory-basis financial statements.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(in thousands)
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
REVENUES:
Premiums and annuity considerations $ 4,342 $ 3,290 $ 746
Annuity and other fund deposits 64,872 39,041 18,043
Net investment income 1,390 968 1,181
Other revenues 10 - -
------- ------- -------
Total revenues 70,614 43,299 19,970
------- ------- -------
BENEFITS AND EXPENSES:
Surrenders and other benefit payments 4,904 3,540 789
General insurance expenses 10,592 6,110 6,376
Increase in aggregate reserve for future
benefits and liability for premium and
other deposit funds 4,308 3,005 684
Net transfers to separate accounts 57,081 35,303 16,842
Other expenses 19 - -
------- ------- -------
Total benefits and expenses 76,904 47,958 24,691
------- ------- -------
LOSS FROM OPERATIONS BEFORE FEDERAL
INCOME TAXES (6,290) (4,659) (4,721)
FEDERAL INCOME TAXES - - -
------- ------- -------
LOSS FROM OPERATIONS (6,290) (4,659) (4,721)
REALIZED CAPITAL GAINS, NET OF FEDERAL
INCOME TAXES 8 - -
------- ------- -------
NET LOSS $(6,282) $(4,659) $(4,721)
------- ------- -------
------- ------- -------
</TABLE>
The accompanying notes are an integral
part of these statutory-basis financial statements.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(in thousands)
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
CAPITAL AND SURPLUS - beginning of year $10,474 $15,280 $20,065
------- ------- -------
Net loss (6,282) (4,659) (4,721)
Change in asset valuation reserve (229) (147) (64)
Paid-in capital 40,000 - -
------- ------- -------
Changes in capital and surplus 33,489 (4,806) (4,785)
------- ------- -------
CAPITAL AND SURPLUS - end of year $43,963 $10,474 $15,280
------- ------- -------
------- ------- -------
</TABLE>
The accompanying notes are an integral
part of these statutory-basis financial statements.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(in thousands)
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Premiums, annuity considerations and
fund deposits $69,215 $42,331 $18,789
Investment income 1,423 1,189 983
------- ------- -------
Total revenues 70,638 43,520 19,772
------- ------- -------
Benefits paid 4,904 3,540 789
Net transfers to separate accounts 59,165 33,881 16,973
Other expenses 10,415 5,557 5,633
------- ------- -------
Total benefits and expenses 74,484 42,978 23,395
------- ------- -------
Net cash (used for) provided by
operations (3,846) 542 (3,623)
------- ------- -------
PROCEEDS FROM INVESTMENTS:
Bonds 2,488 1,000 3,310
------- ------- -------
Net investment proceeds 2,488 1,000 3,310
OTHER CASH PROVIDED:
Capital and surplus paid-in 40,000 - -
Other sources 528 2,533 353
------- ------- -------
Total proceeds 43,016 3,533 3,663
------- ------- -------
COST OF INVESTMENTS ACQUIRED:
Bonds 5,886 6,018 3,255
------- ------- -------
Total investments acquired 5,886 6,018 3,255
------- ------- -------
TOTAL OTHER CASH APPLIED 45 85 1,989
------- ------- -------
Total applications 5,931 6,103 5,244
------- ------- -------
NET CHANGE IN CASH AND SHORT-TERM INVESTMENTS 33,239 (2,028) (5,204)
CASH AND SHORT-TERM INVESTMENTS,
beginning of year 7,415 9,443 14,647
------- ------- -------
CASH AND SHORT-TERM INVESTMENTS,
end of year $40,654 $ 7,415 $ 9,443
------- ------- -------
------- ------- -------
</TABLE>
The accompanying notes are an integral
part of these statutory-basis financial statements.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
(Dollar amounts in thousands unless otherwise stated)
1. SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION -
American Maturity Life Insurance Company (AML or the Company), formerly
First Equicor Life Insurance Company (FELIC), is a sixty percent owned
subsidiary of Hartford Life and Accident Insurance Company (HLA), which is
a direct subsidiary of Hartford Life, Inc. (HLI). HLI is an indirect
subsidiary of Hartford Financial Services Group, Inc. (The Hartford).
Forty percent of the common stock of the Company is owned by Pacific Mutual
Life Insurance Company (PMLIC).
AML offers annuities exclusively to members of The American Association of
Retired Persons (AARP).
BASIS OF PRESENTATION -
The financial statements are prepared in conformity with statutory
accounting practices prescribed or permitted by the National Association of
Insurance Commissioners (NAIC) and the State of Connecticut Department of
Insurance.
Statutory accounting practices and generally accepted accounting principles
(GAAP) differ in certain significant respects. These differences
principally involve:
1. Treatment of policy acquisition costs (commissions, underwriting and
selling expenses, premium taxes, etc.), which are charged to expense
when incurred for statutory purposes rather than on a pro-rata basis
over the expected life of the policies for GAAP purposes;
2. Recognition of premium revenues, which for statutory purposes are
generally recorded as collected or when due during the premium paying
period of the contract, and which for GAAP purposes are only recorded
for policy charges for contract administration and surrender charges
assessed to policy account balances;
3. Development of reserves for future benefits, which for statutory
purposes predominantly use methods prescribed by the NAIC which vary
considerably from interest and mortality assumptions used for GAAP
financial reporting;
4. Providing for income taxes based on current taxable (tax return)
income only for statutory purposes, rather than establishing
additional assets or liabilities for deferred income taxes to
recognize the tax effect related to reporting revenues and expenses in
different periods for financial reporting and tax return purposes;
<PAGE>
-2-
5. Excluding certain GAAP assets designated as non-admitted assets (e.g.,
agents' balances and furniture and equipment) from the balance sheet
for statutory purposes by directly charging surplus;
6 Establishing accruals for post-retirement and post-employment health
care benefits on an option basis, using a twenty year phase-in
approach, whereas GAAP liabilities are required to be recorded;
7. Establishing a formula reserve for realized and unrealized losses due
to default and equity risk associated with certain invested assets
(Asset Valuation Reserve) and the deferral and amortization of
realized gains and losses, motivated by changes in interest rates
during the period the asset is held, into income over the remaining
life to maturity of the asset sold (Interest Maintenance Reserve),
whereas on a GAAP basis, no such formula reserve is required and
realized gains and losses are recognized in the statement of
operations in the period the asset is sold;
8. The reporting of bonds at amortized cost, whereas GAAP requires that
fixed maturities be classified as "held-to-maturity," "available-for-
sale" or "trading" based on the Company's intentions with respect to
the ultimate disposition of the security and its ability to effect
those intentions. The Company's fixed maturities were classified on a
GAAP basis as "available-for-sale" and accordingly, these investments
were reflected at fair value on a GAAP basis with the corresponding
impact included as a component of Capital and Surplus; and
9. No re-evaluation of assets and liabilities upon the acquisition of
FELIC by HLA, whereas on a GAAP basis the assets and liabilities were
re-valued to their fair values on the purchase date, with the excess
of the purchase price over the net fair value recorded as goodwill.
The significant differences between statutory and GAAP basis net loss for
the years ended December 31, 1997, 1996 and 1995 are summarized as follows:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
GAAP net loss: $(6,977) $(4,678) $(4,365)
Amortization and deferral
of policy acquisition costs (1,294) (485) (220)
Capitalized software 40 40 (160)
Reserves and deposit liabilities 2,139 414 52
Deferred taxes, excluding deferred
taxes on unrealized gains - - 122
Amortization of goodwill 55 54 54
Other, net (245) (4) (204)
------- ------- -------
Statutory net loss $(6,282) $(4,659) $(4,721)
------- ------- -------
------- ------- -------
</TABLE>
<PAGE>
-3-
The significant differences between statutory and GAAP basis capital and
surplus as of December 31, 1997 and 1996 are summarized as follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
GAAP capital and surplus: $46,229 $13,046
Amortization and deferral
of policy acquisition costs (1,999) (705)
Capitalized software (80) (120)
Reserves and deposit liabilities 2,605 466
Asset valuation reserve (478) (249)
Deferred taxes, excluding deferred
taxes on unrealized gains 91 91
Net unrealized gain on securities (256) (96)
Goodwill (2,025) (2,080)
Other, net (124) 121
------- -------
Statutory capital and surplus $43,963 $10,474
------- -------
------- -------
</TABLE>
AGGREGATE RESERVES FOR FUTURE BENEFITS AND LIABILITIES FOR PREMIUM AND
OTHER DEPOSIT FUNDS -
Aggregate reserves for payment of annuity benefits were computed in
accordance with actuarial standards. On-benefit annuity reserves were
based principally on Group Annuity Tables at an interest rate of 6.75% for
both 1997 and 1996 and 7.25% for 1995 policy issues. Premium and deposit
funds were generally valued on the Commissioner's Annuity Reserve Valuation
Method (CARVM).
SEPARATE ACCOUNTS -
The Company maintains separate account assets and liabilities which are
reported at fair value. Separate accounts reflect two categories of risk
assumption: non-guaranteed separate accounts, wherein the policyholder
assumes the investment risk, and guaranteed separate accounts, wherein the
Company contractually guarantees either a minimum return or account value
to the policyholder. Non-guaranteed separate account assets are segregated
from other investments, and investment income and gains and losses accrue
directly to the policyholders.
INVESTMENTS -
Investments include bonds carried at amortized cost. Bonds which are
deemed ineligible to be held at amortized cost by the NAIC Securities
Valuation Office (SVO) are carried at the appropriate SVO published value.
When a permanent reduction in the value of publicly traded securities
occurs, the decrease is reported as a realized loss in the statutory-basis
statements of operations and the carrying value is adjusted accordingly.
The Company uses derivative financial instruments as part of an overall
risk management strategy. These instruments, consisting primarily of
exchange traded financial futures, are used as a means of hedging exposure
to price and/or interest rate risk on anticipated investment
<PAGE>
-4-
purchases or existing assets and liabilities. The Company does not hold or
issue derivative financial instruments for trading purposes. Gains or
losses on financial futures contracts entered into in anticipation of the
investment of future receipt of product cash flows are deferred and, at the
time of the ultimate investment purchase, reflected as an adjustment to the
cost basis of the purchased asset. Gains or losses on futures used in
invested asset risk management are deferred and adjusted into the cost
basis of the hedged asset when the contract futures are closed, except for
futures used in duration hedging, which are deferred and basis adjusted on
a quarterly basis. The basis adjustments are amortized into net investment
income over the remaining asset life.
Realized capital gains and losses, net of taxes and amounts transferred to
the Interest Maintenance Reserve (IMR), are reported in the statutory-basis
statements of operations. The Asset Valuation Reserve (AVR) is designed to
provide a standardized reserve process for realized and unrealized losses
due to the default and equity risks associated with invested assets. The
AVR was increased by $229, $147 and $64 in 1997, 1996 and 1995,
respectively. The IMR captures realized capital gains and losses, net of
applicable income taxes, resulting from changes in interest rates and
amortizes these gains or losses into income over the remaining life of the
asset sold. Realized capital gains and losses, net of taxes, not included
in IMR are reported in the statutory-basis statements of operations. In
1997, 1996 and 1995, no capital gains or losses were reclassified to the
IMR. There was also no amortization. Realized gains and losses are
determined on a specific identification basis.
USE OF ESTIMATES -
The preparation of financial statements in conformity with statutory
accounting practices 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 revenues and expenses during the
reporting period. Actual results could differ from those estimates. The
most significant estimates include those used in determining the liability
for premium and other deposit funds and aggregate reserves for future
benefits. Although some variability is inherent in these estimates,
management believes the amounts provided are adequate.
2. INVESTMENTS:
COMPONENTS OF NET INVESTMENT INCOME -
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Interest income from bonds and short-term
investments $1,477 $968 $1,181
------ ---- ------
Gross investment income 1,477 968 1,181
Less: investment expenses 87 - -
------ ---- ------
Net investment income $1,390 $968 $1,181
------ ---- ------
------ ---- ------
</TABLE>
<PAGE>
-5-
UNREALIZED CAPITAL GAINS (LOSSES) ON BONDS AND SHORT TERM INVESTMENTS -
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Gross unrealized capital gains at end of year $256 $ 68 $132
Gross unrealized capital losses
at end of year - (27) -
---- ---- ----
Net unrealized capital gains 256 41 132
Balance at beginning of year 41 132 (133)
---- ---- ----
Net change in net unrealized gains $215 $(91) $265
---- ---- ----
---- ---- ----
</TABLE>
BONDS AND SHORT-TERM INVESTMENTS -
<TABLE>
<CAPTION>
December 31, 1997
-------------------------------------------
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
<S> <C> <C> <C> <C>
U.S. government and
government agencies and
authorities - guaranteed
and sponsored $ 6,558 $136 $ - $ 6,694
All other corporate 6,752 120 - 6,872
Short-term investments 40,511 - - 40,511
------- ---- ----- -------
Total $53,821 $256 $ - $54,077
------- ---- ----- -------
------- ---- ----- -------
<CAPTION>
December 31, 1996
-------------------------------------------
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
<S> <C> <C> <C> <C>
U.S. government and
government agencies and
authorities - guaranteed
and sponsored $ 8,074 $ 65 $ (10) $ 8,129
All other corporate 1,935 3 (17) 1,921
Short-term investments 7,173 - - 7,173
------- ---- ----- -------
Total $17,182 $ 68 $ (27) $17,223
------- ---- ----- -------
------- ---- ----- -------
</TABLE>
The amortized cost and estimated market value of bonds and short-term
investments at December 31, 1997 and 1996 by anticipated maturity are listed in
the table below. Actual maturities will vary from contractual maturities due to
the right to call or prepay.
<PAGE>
-6-
<TABLE>
<CAPTION>
1997 1996
-------------------- -------------------
Estimated Estimated
Amortized Fair Amortized Fair
Maturity Cost Value Cost Value
-------- ---- ----- ---- -----
<S> <C> <C> <C> <C>
Due in one year or less $43,476 $43,485 $ 7,173 $ 7,173
Due after one year through
five years 4,432 4,482 5,606 5,635
Due after five years through
ten years 3,667 3,767 3,472 3,481
Due after ten years 2,246 2,343 931 934
------- ------- ------- -------
Total $53,821 $54,077 $17,182 $17,223
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
Proceeds from the sales and maturities of long-term fixed maturity
investments were $2,488, $1,000 and $3,310 in 1997, 1996 and 1995,
respectively. For the year ended December 31, 1997 there were $8 of net
realized gains. There were no gross realized gains or losses in 1996 or
1995.
CONCENTRATION OF CREDIT RISK -
Excluding U.S. government and government agencies and authorities
investments, the Company is not exposed to any significant concentration of
credit risk.
SECURITIES ON DEPOSIT -
The Company has approximately $6.5 million of U.S. Treasury securities on
deposit with various state insurance departments, as required by state law.
3. RELATED PARTY TRANSACTIONS:
Transactions between the Company and its affiliates within The Hartford
relate principally to rental and service fees. Rental and service fees
allocated by HLA to the Company were $2,409, $1,601 and $1,414 for the
years ended December 31, 1997, 1996 and 1995, respectively.
The Company has a capital maintenance agreement with HLA and PMLIC whereby
if, during the term of the Company's contract with AARP, the total adjusted
capital of the Company falls below 150% of the company action level
risk-based capital (RBC), HLA and PMLIC are required to make capital
contributions, in proportion to their respective ownership percentages, so
that the Company's total adjusted capital meets 150% of the company action
level RBC. Also, after termination of the Company's contract with the
AARP, HLA and PMLIC are required to make capital contributions, in
proportion to their respective ownership percentages, so that the Company
meets 100% of the company action level RBC. As of December 31, 1997, the
Company's total adjusted capital exceeded 150% of the company action level
RBC.
<PAGE>
-7-
4. FEDERAL INCOME TAXES:
The Company files its own Federal income tax return. No Federal income
taxes were paid or payable for the years ended December 31, 1997, 1996 and
1995. The primary difference between applying the statutory rate to the
pre-tax loss and the Federal income tax expense relates to the Company's
inability to carryback the 1997 tax return loss to receive a benefit
currently.
5. CAPITAL AND SURPLUS AND SHAREHOLDER DIVIDEND RESTRICTIONS:
The maximum amount of dividends which can be paid without prior approval by
State of Connecticut domiciled insurance companies to shareholders is
restricted to the greater of 10% of surplus as of the preceding December 31
or the net gain from operations of the previous year. Dividends are paid
as determined by the Company's Board of Directors and are not cumulative.
There were no dividends declared or paid for the years ended December 31,
1997, 1996 and 1995.
6. PENSION PLANS AND OTHER POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS:
The Company's employees are included in The Hartford's non-contributory
defined benefit pension plans. These plans provide pension benefits that
are based on years of service and the employee's compensation during the
last ten years of employment. The Hartford's funding policy is to
contribute annually an amount between the minimum funding requirements set
forth in the Employee Retirement Income Security Act of 1974, as amended,
and the maximum amount that can be deducted for Federal income tax
purposes. The Company also participates in an Investment and Savings Plan
sponsored by The Hartford which is available to substantially all
employees. This Plan includes a deferred contribution option under IRC
Section 401(k). The liabilities for these plans are included in the
financial statements of The Hartford, and a portion of the expenses were
allocated to the Company by HLA as part of rental and service fees (see
Note 3).
The Company's employees are included in The Hartford's contributory
post-retirement defined health care and life insurance benefit plans.
These plans provide health care and life insurance benefits for eligible
retired employees. Substantially all employees may become eligible for
those benefits if they reach normal or early retirement age while still
working for the Company. The Hartford has prefunded a portion of the
health care and life insurance obligations through trust funds where such
prefunding can be accomplished on a tax effective basis.
Post-retirement liabilities and expenses are allocated to the Company by
The Hartford. The assumed rate of future increases in the per capita cost
of health care (the health care trend rate) was 8.5% and 9.3% for 1997 and
1996, respectively, decreasing ratably to 6% in the year 2001. Increasing
the health care trend rates by one percent per year would have an
immaterial impact on the accumulated post-retirement benefit obligation and
the annual expense. The post-retirement benefit expense allocated to the
Company was not significant in 1997, 1996 and 1995.
<PAGE>
-8-
Post-employment benefits are primarily comprised of obligations to provide
medical and life insurance to employees on long-term disability. The
post-employment benefit expense was not significant in 1997, 1996 and 1995.
7. COMMITMENTS AND CONTINGENCIES:
Under Insurance Guaranty Fund laws in most states, insurers doing business
therein can be assessed up to prescribed limits for policyholder losses
incurred by insolvent companies. The amount of any future assessments on
the Company under these laws cannot be reasonably estimated. Most of these
laws do provide, however, that an assessment may be excused or deferred if
it would threaten an insurer's own financial strength. Additionally,
Guaranty Fund assessments are used to reduce state premium taxes paid by
the Company in certain states.
8. SEPARATE ACCOUNTS:
The Company maintained separate account assets totaling $122.7 million and
$54.2 million and liabilities totaling $122.6 million and $54.2 million as
of December 31, 1997 and December 31, 1996, respectively, which are
reported at fair value. Separate accounts reflect two categories of risk
assumption: non-guaranteed separate accounts totaling $7.7 million and $0
million at December 31, 1997 and 1996, respectively, wherein the
policyholder assumes the investment risk, and guaranteed separate accounts
totaling $115 million and $54.2 million at December 31, 1997 and 1996,
respectively, wherein the Company contractually guarantees either a minimum
return or account value to the policyholder. Net investment income
(including net realized capital gains and losses) and interest credited to
policyholders on separate account assets are not reflected in the
statutory-basis statements of operations.
Non-guaranteed separate account assets are segregated from other
investments and net investment income and net realized capital gains and
losses accrue directly to the policyholder. The separate accounts also
include guaranteed individual annuity contracts. The average credited
interest rate on these contracts was 6.3% at December 31, 1997. The assets
that support these liabilities were comprised of $53.8 million in bonds at
December 31, 1997. The portfolios are segregated from other investments
and are managed so as to minimize liquidity and interest rate risk. To
minimize the risk of disintermediation associated with early withdrawals,
guaranteed individual annuity contracts carry a graded surrender charge as
well as a market value adjustment. Additional investment risk is hedged
using futures contracts which have a notional amount of $6,400 as of
December 31, 1996. As of December 31, 1997, there were no futures
contracts outstanding.
<PAGE>
PART C
<PAGE>
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) All financial statements are included in Part A and Part B of the
Registration Statement.
(b) (1) Resolution of the board of directors of American Maturity Life
Insurance Company ("American Maturity") authorizing the
establishment of the Separate Account.(1)
(2) Not applicable.
(3) (a) Principal Underwriter Agreement between American Maturity and
Hartford Securities Distribution Company, Inc. (1)
(b) Not applicable.
(4) Copy of the Group Flexible Premium Variable Annuity Contract and the
Flexible Premium Variable Annuity Certificate. (2)
(5) Copy of the Enrollment Form. (2)
(6) (a) Certificate of Incorporation of American
Maturity.(3)
(b) Bylaws of American Maturity. (1)
(7) Not applicable.
(8) Fund Participation agreements between Neuberger&Berman Advisors
Management Trust and American Maturity; and Dreyfus Variable
Investment Fund and American Maturity. (2)
Fund Participation agreements between Janus Aspen Series and American
Maturity; and Scudder Variable Life Investment Fund and American
Maturity. (1)
___________________
(1) Incorporated by reference to the Initial Submission, to the
Registration Statement File No. 333-10105, filed on August 12,
1996.
(2) Incorporated by reference to the Post-Effective Amendment No. 1, to
the Registration Statement File No. 333-10105, filed on December 11,
1996.
(3) Incorporated by reference to the Post-Effective Amendment No. 2 to
the Registration Statement File No. 333-10105, filed on April 15,
1997.
<PAGE>
(9) Opinion and Consent of Lynda Godkin, General Counsel.
(10) Consent of Arthur Andersen LLP, Independent Public Accountants.
(11) No financial statements are omitted.
(12) Not applicable.
(13) Not applicable.
(14) Not applicable.
(15) Copy of Power of Attorney.
(16) Organizational Chart.
Item 25. Directors and Officers of the Depositor
NAME, AGE POSITION WITH HARTFORD
--------- ----------------------
Joseph J. Noto Executive Vice President, Chief Operating
Officer, and Treasurer, Director*
Thomas J. Lupinacci Executive Vice President and Chief Marketing
Officer
Lynda Godkin Senior Vice President, General Counsel, and
Corporate Secretary, Director*
Michael J. Loparco Vice President
Thomas M. Marra Director*
Robert C. Mayne Vice President
George W. Tang Vice President and Actuary
Glenn S. Schafer (1) Director*
Lowndes A. Smith Director*
Thomas C. Sutton (1) Director*
David M. Znamierowski Vice President, and Chief Financial Officer,
Director*
___________________
*Denotes election to Board of Directors.
(1) The principal business address is: 700 Newport Center Drive, Newport
Beach, CA 92660-6307.
<PAGE>
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
Item 26. Persons Controlled By or Under Common Control with the Depositor or
Registrant
Filed herewith as Exhibit 16.
Item 27. Number of Certificate Owners
As of March 9, 1998, there were 482 Certificate Owners.
Item 28. Indemnification
Under Section 33-772 of the Connecticut General Statutes, unless limited by
its certificate of incorporation, the Registrant must indemnify a director
who was wholly successful, on the merits or otherwise, in the defense of
any proceeding to which he was a party because he is or was a director of
the corporation against reasonable expenses incurred by him in connection
with the proceeding.
The Registrant may indemnify an individual made a party to a proceeding
because he is or was a director against liability incurred in the
proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Registrant, and, with
respect to any criminal proceeding, had no reason to believe his conduct
was unlawful. Conn. Gen. Stat. Section 33-771(a). Additionally, pursuant to
Conn. Gen. Stat. Section 33-776, the Registrant may indemnify officers and
employees or agents for liability incurred and for any expenses to which
they becomes subject by reason of being or having been an employees or
officers of the Registrant. Connecticut law does not prescribe standards
for the indemnification of officers, employees and agents and expressly
states that their indemnification may be broader than the right of
indemnification granted to directors.
The foregoing statements are specifically made subject to the detailed
provisions of Section 33-770 et seq.
<PAGE>
Notwithstanding the fact that Connecticut law obligates the Registrant to
indemnify a only a director that was successful on the merits in a suit,
under Article VIII, Section 1 of the Registrant's bylaws, the Registrant
must indemnify both directors and officers of the Registrant for (1)
any claims and liabilities to which they become subject by reason of being
or having been a directors or officers of the company and legal and (2)
other expenses incurred in defending against such claims, in each case, to
the extent such is consistent with statutory provisions.
Additionally, the directors and officers of Hartford and Hartford
Securities Distribution Company, Inc. ("HSD") are covered under a directors
and officers liability insurance policy issued to The Hartford Financial
Services Group, Inc. and its subsidiaries. Such policy will reimburse the
Registrant for any payments that it shall make to directors and officers
pursuant to law and will, subject to certain exclusions contained in the
policy, further pay any other costs, charges and expenses and settlements
and judgments arising from any proceeding involving any director or officer
of the Registrant in his past or present capacity as such, and for which he
may be liable, except as to any liabilities arising from acts that are
deemed to be uninsurable.
Insofar as indemnification for liabilities 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) HSD acts as principal underwriter for the following companies:
Hartford Life Insurance Company - Separate Account One
Hartford Life Insurance Company - Separate Account Two
Hartford Life Insurance Company - Separate Account Two (DC
Variable Account I)
Hartford Life Insurance Company - Separate Account Two (DC
Variable Account II)
Hartford Life Insurance Company - Separate Account Two (Variable
Account "A")
Hartford Life Insurance Company - Separate Account Two (NQ
Variable Account)
<PAGE>
Hartford Life Insurance Company - Separate Account Two (QP
Variable Account)
Hartford Life Insurance Company - Putnam Capital Manager Trust
Separate Account
Hartford Life Insurance Company - Separate Account Three
Hartford Life Insurance Company - Separate Account Five
Hartford Life and Annuity Insurance Company - Separate Account
One
Hartford Life and Annuity Insurance Company - Putnam Capital
Manager Trust Separate Account Two
Hartford Life and Annuity Insurance Company - Separate Account
Three
Hartford Life and Annuity Insurance Company - Separate Account
Five
Hartford Life and Annuity Insurance Company - Separate Account
Six
American Maturity Life Insurance Company - Separate Account AMLVA
(b) Directors and Officers of HSD
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER
------------------ ---------------------
Lowndes A. Smith President, Director
John P. Ginnetti Executive Vice President, Director
Thomas M. Marra Executive Vice President, Director
Peter W. Cummins Senior Vice President
Lynda Godkin Senior Vice President, General Counsel
and Corporate Secretary
Donald E. Waggaman, Jr. Treasurer
George R. Jay Controller
Item 30. Location of Accounts and Records
All of the accounts, books, records or other documents required to be kept
by Section 31(a) of the Investment Company Act of 1940 and rules
thereunder, are maintained by American Maturity at 200 Hopmeadow Street,
Simsbury, Connecticut 06089.
Item 31. Management Services
All management contracts are discussed in Part A and Part B of this
Registration Statement.
Item 32. Undertakings
(a) The Registrant hereby undertakes to 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 so long as payments under the variable annuity
contracts may be accepted.
<PAGE>
(b) The Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the Prospectus, a space that
an applicant can check to request a Statement of Additional Information, or
(2) a post card or similar written communication affixed to or included in
the Prospectus that the applicant can remove to send for a Statement of
Additional Information.
(c) The Registrant hereby undertakes to deliver any Statement of
Additional Information and any financial statements required to be made
available under this Form promptly upon written or oral request.
(d) American Maturity hereby represents that the aggregate fees and
charges under the Contract are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed by
American Maturity.
The Registrant is relying on the no-action letter issued by the Division of
Investment Management to American Council of Life Insurance, Ref. No.
IP-6-88, November 28, 1988. The Registrant has complied with conditions
one through four of the no-action letter.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485(b) for effectiveness of this Registration Statement and has caused this
Registration Statement to be signed on its behalf, in the City of Hartford, and
State of Connecticut on this 10th day of April, 1998.
AMERICAN MATURITY LIFE INSURANCE COMPANY
SEPARATE ACCOUNT AMLVA
(Registrant)
*By: /s/ Joseph J. Noto *By: /s/ Lynda Godkin
------------------------------------------- -----------------
Joseph J. Noto Lynda Godkin
Executive Vice President, Chief Attorney-in-Fact
Operating Officer and Treasurer
AMERICAN MATURITY LIFE INSURANCE COMPANY
(Depositor)
*By: /s/ Joseph J. Noto
-------------------------------------------
Joseph J. Noto
Executive Vice President, Chief
Operating Officer and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons and in the capacities and on
the dates indicated.
Joseph J. Noto, Executive Vice President, Chief
Operating Officer and Treasurer, Director*
Lynda Godkin, Senior Vice President, *By: /s/ Lynda Godkin
General Counsel and Corporate ----------------
Secretary, Director* Lynda Godkin
Thomas M. Marra, Director* Attorney-in-Fact
Lowndes A. Smith, Director*
Thomas C. Sutton, Director* Dated: April 10, 1998
Glenn S. Schafer, Director*
David M. Znamierowski, Vice President, and Chief
Financial Officer, Director*
<PAGE>
EXHIBIT INDEX
(9) Opinion and Consent of Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary
(10) Consent of Arthur Andersen LLP, Independent Public Accountants.
(15) Copy of Power of Attorney
(16) Organizational Chart
<PAGE>
EXHIBIT 9
April 10, 1998 Lynda Godkin
Senior Vice President, General
Counsel & Corporate Secretary
Law Department
Board of Directors
American Maturity Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: Separate Account AMLVA
American Maturity Insurance Company
File No. 333-10105
Dear Sir/Madam:
I have acted as General Counsel to American Maturity Insurance Company (the
"Company"), a Connecticut insurance company, and American Maturity Insurance
Company Separate Account AMLVA (the "Account") in connection with the
registration of an indefinite amount of securities in the form of variable
annuity contracts (the "Contracts") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended. I have examined such documents
(including the Form N-4 Registration Statement) and reviewed such questions of
law as I considered necessary and appropriate, and on the basis of such
examination and review, it is my opinion that:
1. The Company is a corporation duly organized and validly existing as a stock
life insurance company under the laws of the State of Connecticut and is
duly authorized by the Insurance Department of the State of Connecticut to
issue the Contracts.
2. The Account is a duly authorized and validly existing separate account
established pursuant to the provisions of Section 38a-433 of the
Connecticut Statutes.
3. To the extent so provided under the Contracts, that portion of the assets
of the Account equal to the reserves and other contract liabilities with
respect to the Account will not be chargeable with liabilities arising out
of any other business that the Company may conduct.
<PAGE>
Board of Directors
American Maturity Insurance Company
April 10, 1998
Page 2
4. The Contracts, when issued as contemplated by the Form N-4 Registration
Statement, will constitute legal, validly issued and binding obligations of
the Company.
I hereby consent to the filing of this opinion as an exhibit to the Form N-4
Registration Statement for the Contracts and the Account.
Sincerely,
Lynda Godkin
<PAGE>
EXHIBIT 10
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of
this Registration Statement File No. 333-10105 for American Maturity Life
Insurance Company Separate Account AMLVA on Form N-4.
/s/ Arthur Andersen LLP
Hartford, Connecticut
April 13, 1998
<PAGE>
EXHIBIT 15
AMERICAN MATURITY LIFE INSURANCE COMPANY
POWER OF ATTORNEY
-----------------
Lynda Godkin
Thomas M. Marra
Glenn S. Schafer
Lowndes A. Smith
Thomas C. Sutton
David M. Znamierowski
do hereby jointly and severally authorize Lynda Godkin, Marianne O'Doherty,
and Leslie T. Soler to sign as their agent, any Registration Statement,
pre-effective amendment, post-effective amendment and any application for
exemptive relief of the Hartford Life and Annuity Insurance Company under the
Securities Act of 1933 and/or the Investment Company Act of 1940.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for
the purpose herein set forth.
/s/ Lynda Godkin Dated as of March 19, 1998
- --------------------------------------
Lynda Godkin
/s/ Thomas M. Marra Dated as of March 19, 1998
- --------------------------------------
Thomas M. Marra
/s/ Joseph J. Noto Dated as of March 19, 1998
- --------------------------------------
Joseph J. Noto
/s/ Glenn S. Schafer Dated as of March 19, 1998
- --------------------------------------
Glenn S. Schafer
/s/ Lowndes A. Smith Dated as of March 19, 1998
- --------------------------------------
Lowndes A. Smith
/s/ Thomas C. Sutton Dated as of March 19, 1998
- --------------------------------------
Thomas C. Sutton
/s/ David M. Znamierowski Dated as of March 19, 1998
- --------------------------------------
David M. Znamierowski
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
THE HARTFORD
The Hartford Financial Services Group, Inc.
(Delaware)
|
- -------------------------------------------------------------------------------------------------------------
Nutmeg Insurance Company The Hartford Investment
(Connecticut) Management Company
| (Delaware)
Hartford Fire Insurance Company |
(Connecticut) Hartford Investment
| Services, Inc.
Hartford Accident and Indemnity Company (Connecticut)
(Connecticut)
|
Hartford Life, Inc.
(Delaware)
|
Hartford Life and Accident Insurance Company
(Connecticut)
|
|
|
- -------------------------------------------------------------------------------------------------------------
Alpine Life Hartford Financial Hartford Life American Maturity ITT Hartford Canada
Insurance Services Life Insurance Company Life Insurance Holdings, Inc.
Company Insurance Co. (Connecticut) Company (Canada)
(New Jersey) (Connecticut) | (Connecticut) |
| | |
| AML Financial, Inc. |
| (Connecticut) Hartford Life
| Insurance Company
| of Canada
| (Canada)
|
|
- -------------------------------------------------------------------------------------------------------------
Hartford Life and Annuity ITT Hartford International Hartford Financial Services Royal Life
Insurance Company Life Reassurance Corporation Corporation Insurance
(Connecticut) (Connecticut) (Delaware) Company of
| | America
| | (Connecticut)
| |
ITT Hartford Life, Ltd. |
(Bermuda) |
|
|
- -------------------------------------------------------------------------------------------------------------
MS Fund HL Funding HL Investment Hartford Hartford Securities Hartford-Comp. Emp.
America Company, Inc. Advisors, Inc. Equity Sales Distribution Benefit Service
1993-K, Inc. (Connecticut) (Connecticut) Company, Inc. Company, Inc. Company
(Delaware) | (Connecticut) (Connecticut) (Connecticut)
|
Hartford Investment
Financial Services
Company
(Delaware)
</TABLE>
