<PAGE>
As filed with the Securities and Exchange Commission on April 11, 2000.
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. 6 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 7 [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) 843-6320
(Depositor's Telephone Number, Including Area Code)
THOMAS S. CLARK, ESQ.
AMERICAN MATURITY LIFE INSURANCE COMPANY
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, 2000 pursuant to paragraph (b) of Rule 485
-----
60 days after filing pursuant to paragraph (a)(1) of Rule 485
-----
on ________ 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)
<TABLE>
<CAPTION>
N-4 Item No. Prospectus Heading
------------ ------------------
<S> <C> <C>
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 Life Insurance
Company, the Separate
Account, the Funds
6. Deductions Charges Under the Certificate
7. General Description of Variable The Certificate; American
Annuity Contracts Maturity, the Separate Account,
the Funds
8. Annuity Benefits Annuity Options
9. Death Benefits Death Benefits
10. Purchases and Contract Value The Certificate
11. Redemptions Surrenders
12. Taxes Federal Tax Considerations
13. Legal Proceedings Legal Matters and Experts
14. Table of Contents of the Statement Table of Contents to the
of Additional Information Statement 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
Insurance Company Life
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 Depositor Directors and Officers of the
Depositor
26. Persons Controlled by or Under Persons Controlled by or Under
Common Control with the Depositor Common Control with the
or the Registrant with the Depositor or the
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
</TABLE>
<PAGE>
PART A
<PAGE>
THE AARP VARIABLE ANNUITY
SEPARATE ACCOUNT AMLVA
AMERICAN MATURITY LIFE INSURANCE COMPANY
P.O. BOX 7005
PASADENA, CA 91109-7005
TELEPHONE: 1-800-923-3334
This Prospectus describes information you should know before you purchase The
AARP Variable Annuity. Please read it carefully.
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, where you agree to make at least one
Premium Payment to us and we agree to make a series of Annuity Payments at a
later date. This Annuity is a flexible premium, tax-deferred, variable annuity.
It is:
x Flexible, because you may add Premium Payments at any time.
x Tax-deferred, which means you don't pay taxes until you take money out or
until we start to make Annuity Payments.
x Variable, because the value of your Annuity will fluctuate with the
performance of the underlying funds.
At the time you purchase your Annuity, you allocate your Premium Payment to
"Sub-Accounts." These are subdivisions of our Separate Account, an account that
keeps your Annuity assets separate from our company assets. The Sub-Accounts
then purchase shares of mutual funds set up exclusively for variable annuity or
variable life insurance products. These are not the same mutual funds that you
buy through your stockbroker or through a retail mutual fund. They may have
similar investment strategies and the same portfolio managers as retail mutual
funds. This Annuity offers you Funds with investment strategies ranging from
conservative to aggressive and you may pick those Funds that meet your
investment goals and risk tolerance. The Sub-Accounts and the Funds are listed
below:
- - 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
- - 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
You may also allocate some or all of your Premium Payment to the "Fixed
Account," which pays an interest rate guaranteed for a certain time period from
the time the Premium Payment is made. Premium Payments allocated to the Fixed
Account are not segregated from our company assets like the assets of the
Separate Account.
If you decide to buy this Annuity, you should keep this prospectus for your
records. You can also call us at 1-800-923-3334 to get a Statement of Additional
Information, free of charge. The Statement of Additional Information contains
more information about this Annuity and, like this prospectus, is filed with the
Securities and Exchange Commission ("SEC"). We have included the Table of
Contents for the Statement of Additional Information at the end of this
prospectus. Although we file the prospectus and the Statement of Additional
information with the SEC, the SEC doesn't approve or disapprove these securities
or determine if the information is truthful or complete. Anyone who represents
that the SEC does these things may be guilty of a criminal offense.
<PAGE>
This Prospectus and the Statement of Additional Information can also be obtained
from the SEC's website (HTTP:// WWW.SEC.GOV).
This Annuity IS NOT:
- - A bank deposit or obligation
- - Federally insured
- - Endorsed by any bank or governmental agency
This Annuity may not be available for sale in all states.
- --------------------------------------------------------------------------------
PROSPECTUS DATED: MAY 1, 2000
STATEMENT OF ADDITIONAL INFORMATION DATED: MAY 1, 2000
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 3
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
DEFINITIONS................................................. 4
FEE TABLE................................................... 6
ANNUAL FUND OPERATING EXPENSES.............................. 6
ACCUMULATION UNIT VALUES.................................... 8
HIGHLIGHTS.................................................. 9
GENERAL CERTIFICATE INFORMATION............................. 10
American Maturity Life Insurance Company.................. 10
The Separate Account...................................... 10
The Funds................................................. 10
Investment Advisers to the Fund........................... 10
PERFORMANCE RELATED INFORMATION............................. 12
THE FIXED ACCOUNT........................................... 12
THE CERTIFICATE............................................. 13
Purchases and Certificate Value........................... 13
Charges and Fees.......................................... 15
Death Benefit............................................. 16
Surrenders................................................ 18
ANNUITY OPTIONS............................................. 19
OTHER PROGRAMS AVAILABLE.................................... 21
OTHER INFORMATION........................................... 21
Legal Matters and Experts................................. 21
More Information.......................................... 21
FEDERAL TAX CONSIDERATIONS.................................. 22
A. General................................................ 22
B. Taxation of American Maturity and the Separate
Account.................................................. 22
C. Taxation of Annuities -- General Provisions Affecting
Purchasers Other Than Qualified Retirement Plans......... 22
D. Federal Income Tax Withholding......................... 25
E. General Provisions Affecting Qualified Retirement
Plans.................................................... 25
F. Annuity Purchases By Nonresident Aliens................ 25
G. Generation-Skipping Transfers.......................... 25
TABLE OF CONTENTS TO STATEMENT OF ADDITIONAL INFORMATION.... 26
APPENDIX I -- INFORMATION REGARDING TAX-QUALIFIED RETIREMENT
PLANS..................................................... 27
</TABLE>
<PAGE>
4 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
DEFINITIONS
These terms are capitalized when used throughout this Prospectus. Please
refer to these defined terms if you have any questions as you read your
prospectus.
ACCOUNT: Any of the Sub-Accounts or Fixed Account.
ACCUMULATION UNITS: If you allocate your Premium Payment to any of the
Sub-Accounts, we will convert those payments into Accumulation Units in the
selected Sub-Accounts. Accumulation Units are valued at the end of each Business
Day and are used to calculate the value of your Certificate prior to
Annuitization.
ACCUMULATION UNIT VALUE: The daily price of Accumulation Units on any Business
Day.
ADMINISTRATION CHARGE: The dollar amount that 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: Our location and overnight mailing address
is: American Maturity Life Insurance Company, c/o FCNPC, 1111 South Arroyo
Parkway, First Floor, Pasadena, California 91109-7122. Our standard mailing
address is: American Maturity Life Insurance Company, P.O. Box 7005, Pasadena,
California 91109-7005.
AMERICAN MATURITY LIFE INSURANCE COMPANY: American Maturity Life, we, us or our.
We do not capitalize "we," "us," or "our" in the prospectus.
ANNIVERSARY VALUE: The value equal to the Certificate Value as of a Certificate
Anniversary, increased by the dollar amount of any Premium Payments made since
that anniversary and reduced by the dollar amount of any partial Surrenders
since that anniversary.
ANNUAL FEE: An annual $25 charge deducted the day before the Certificate
Anniversary or upon full Surrender if the Certificate Value at either of those
times is less than $50,000. The charge is deducted proportionately from each
Account in which you are invested.
ANNUAL WITHDRAWAL AMOUNT: This is the amount you can Surrender per Certificate
Year without paying a Contingent Deferred Sales Charge. This amount is
non-cumulative, meaning that it cannot be carried over from one year to the
next.
ANNUITANT: The person on whose life the Certificate is based. The Annuitant may
not be changed after your Certificate is issued.
ANNUITIZATION: The time when regularly scheduled Annuity Payments begin.
ANNUITY: This is a Certificate issued by us that provides, in exchange for
Premium Payments, a series of Annuity Payments. This Certificate allows your
Premium Payments and earnings to accumulate tax deferred until Surrenders are
taken or Annuity Payments are made.
ANNUITY COMMENCEMENT DATE: The date we start to make Annuity Payments.
ANNUITY PAYMENT: The money we pay out after the Annuity Commencement Date for
the duration and frequency you select.
ANNUITY PAYMENT OPTION: Any of the options available for payment after the
Annuity Commencement Date or death of the Certificate Owner or Annuitant.
ANNUITY UNIT(S): The unit of measure we use to calculate the value of your
Annuity Payments under a variable dollar amount Annuity Payment Option.
ANNUITY UNIT VALUE: The daily price of Annuity Units on any Business Day.
BENEFICIARY: The person(s) entitled to receive a Death Benefit upon the death of
the Contract Owner or Annuitant.
BUSINESS DAY: Every day the New York Stock Exchange is open for trading. Values
of the Separate Account are determined as of the close of the New York Stock
Exchange, generally 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 to us by the AARP Group Annuity Trust.
CERTIFICATE ANNIVERSARY: The anniversary of the date we issued your Certificate.
If the Certificate Anniversary falls on a Non-Business Day, then the Certificate
Anniversary will be the next Business Day.
CERTIFICATE OWNER OR YOU: The owner or holder of this Annuity. We do not
capitalize "you" in the prospectus.
CERTIFICATE VALUE: The total value of the Accounts on any Business Day.
CERTIFICATE YEAR: Any 12 month period between Certificate Anniversaries,
beginning with the date the Certificate was issued.
CODE: The Internal Revenue Code of 1986, as amended.
CONTINGENT ANNUITANT: The person you may designate to become the Annuitant if
the original Annuitant dies before the Annuity Commencement Date. You must name
a Contingent Annuitant before the original Annuitant's death.
CONTINGENT DEFERRED SALES CHARGE: The deferred sales charge that may apply when
you make a full or partial Surrender.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 5
- --------------------------------------------------------------------------------
DEATH BENEFIT: The amount payable after the Certificate Owner or the Annuitant
dies.
DOLLAR COST AVERAGING: A program that allows you to systematically make
transfers between Accounts available in your Certificate.
FIXED ACCOUNT: Part of our General Account, where you may allocate all or a
portion of your Certificate Value.
GENERAL ACCOUNT: The General Account includes our company assets and any money
you have invested in the Fixed Account.
JOINT ANNUITANT: The person on whose life Annuity Payments are based if the
Annuitant dies after Annuitization. You may name a Joint Annuitant only if your
Annuity Payment Option provides for a survivor. The Joint Annuitant may not be
changed.
NET INVESTMENT FACTOR: This is used to measure the investment performance of a
Sub-Account from one Business Day to the next, and is also used to calculate
your Annuity Payment amount.
NON-QUALIFIED CERTIFICATE: A Certificate that is not defined as a tax-qualified
retirement plan by the Code.
NON-BUSINESS DAY: Any day the New York Stock Exchange is not open for trading.
PORTFOLIOS: The investment options described in this prospectus or any
supplements to the prospectus.
PREMIUM PAYMENT: Money sent to us to be invested in your Annuity.
PREMIUM TAX: A tax charged by a state or municipality on Premium Payments.
REQUIRED MINIMUM DISTRIBUTION: A federal requirement that individuals age 70 1/2
and older must take a distribution from their tax-qualified retirement account
by December 31, each year.
SEPARATE ACCOUNT: An account that we established to separate the assets of the
variable Sub-Accounts from the assets of the company.
SUB-ACCOUNT: A division of the Separate Account that purchases the Funds
available in this Certificate.
SUB-ACCOUNT VALUE: The value on or before the Annuity Commencement Date, which
is determined on any day by multiplying the number of Accumulation Units by the
Accumulation Unit Value for that Sub-Account.
SURRENDER: A complete or partial withdrawal from your Certificate.
SURRENDER VALUE: The amount we pay you if you terminate your Certificate before
the Annuity Commencement Date. The Surrender Value is equal to the Certificate
Value minus any applicable charges.
VALUATION PERIOD: The time span between the close of trading on the New York
Stock Exchange from one Business Day to the next.
<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 Certificate 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
Certificate -- Transfers Between the Sub-Accounts/Fixed Account."
(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."
(4) This fee will be charged on the day before each Certificate Anniversary
prior to your Annuity Commencement Date and at the time of a full surrender
unless your Certificate Value is at least $50,000 on that date.
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average daily Sub-Account value)
<TABLE>
<S> <C>
Mortality and Expense Risk Charge................................. 0.65%
Administration Fee................................................ 0.20%
Total Separate Account Expenses................................... 0.85%
</TABLE>
The purpose of the Fee Table and Example is to assist you in understanding
various costs and expenses that you will pay directly or indirectly. The Fee
Table and Example reflect expenses of the Separate Account and underlying Funds.
We will deduct any Premium Taxes that apply.
The Examples should not be considered a representation of past or future
expenses and actual expenses may be greater or less than those shown. The Annual
Maintenance Fee has been reflected in the Example by a method intended to show
the "average" impact of the Annual Maintenance Fee on an investment in the
Separate Account. We do this by approximating an "average" 0.06% annual charge.
ANNUAL FUND OPERATING EXPENSES
as of the Fund's Year End
(as a percentage of net assets)
<TABLE>
<CAPTION>
TOTAL FUND
OPERATING
OTHER EXPENSES
MANAGEMENT FEES EXPENSES (WITH WAIVERS)
--------------- -------- --------------
<S> <C> <C> <C>
Scudder VLIF -- Money Market Portfolio.......... 0.37% 0.06% 0.43%
Scudder VLIF -- Bond Portfolio.................. 0.48% 0.09% 0.57%
Janus Aspen -- Balanced Portfolio (1)........... 0.65% 0.02% 0.67%
Scudder VLIF -- Capital Growth Portfolio........ 0.46% 0.03% 0.49%
Scudder VLIF -- Growth & Income Portfolio....... 0.47% 0.08% 0.55%
Neuberger Berman AMT -- Partners Portfolio...... 0.80% 0.07% 0.87%
Dreyfus VIF -- Appreciation Portfolio........... 0.75% 0.03% 0.78%
Dreyfus VIF -- Small Cap Portfolio.............. 0.75% 0.03% 0.78%
Janus Aspen -- Worldwide Growth Portfolio (1)... 0.65% 0.05% 0.70%
</TABLE>
(1) Janus Aspen Series. Expenses are based upon expenses for the fiscal year
ended December 31, 1999, restated to reflect a reduction in the management
fee for Worldwide Growth and Balanced Portfolios. All expenses are shown
without the effect of expense offset arrangements.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 7
- --------------------------------------------------------------------------------
EXAMPLE
<TABLE>
<CAPTION>
If you Surrender your Contract at If you annuitize your Contract at
the end of the applicable time the end of the applicable time
period you would pay the period you would pay the
following expenses on a $1,000 following expenses on a $1,000
investment, assuming a 5% investment, assuming a 5%
annual return on assets: annual return on assets:
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Scudder VLIF -- Money Market
Portfolio.................. $60 $72 $ 83 $161 $ 13 $42 $73 $160
Scudder VLIF -- Bond
Portfolio.................. $61 $77 $ 91 $177 $ 15 $46 $80 $176
Janus Aspen -- Balanced
Portfolio.................. $62 $80 $ 96 $188 $ 16 $49 $86 $187
Scudder VLIF -- Capital
Growth Portfolio........... $60 $74 $ 87 $168 $ 14 $44 $76 $167
Scudder VLIF -- Growth &
Income Portfolio........... $61 $76 $ 90 $174 $ 14 $46 $79 $174
Neuberger Berman AMT --
Partners Portfolio......... $64 $86 $ 107 $210 $ 18 $56 $96 $209
Dreyfus VIF -- Appreciation
Portfolio.................. $63 $83 $ 102 $200 $ 17 $53 $91 $199
Dreyfus VIF -- Small Cap
Portfolio.................. $63 $83 $ 102 $200 $ 17 $53 $91 $199
Janus Aspen -- Worldwide
Growth Portfolio........... $63 $81 $ 98 $191 $ 16 $50 $87 $190
<CAPTION>
If you do not Surrender your
Contract, you would pay the
following expenses on a $1,000
investment, assuming a 5%
annual return on assets:
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Scudder VLIF -- Money Market
Portfolio.................. $ 14 $42 $73 $161
Scudder VLIF -- Bond
Portfolio.................. $ 15 $47 $81 $177
Janus Aspen -- Balanced
Portfolio.................. $ 16 $50 $86 $188
Scudder VLIF -- Capital
Growth Portfolio........... $ 14 $44 $77 $168
Scudder VLIF -- Growth &
Income Portfolio........... $ 15 $46 $80 $174
Neuberger Berman AMT --
Partners Portfolio......... $ 18 $56 $97 $210
Dreyfus VIF -- Appreciation
Portfolio.................. $ 17 $53 $92 $200
Dreyfus VIF -- Small Cap
Portfolio.................. $ 17 $53 $92 $200
Janus Aspen -- Worldwide
Growth Portfolio........... $ 16 $51 $88 $191
</TABLE>
<PAGE>
8 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
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 public accountants, as indicated in their report with respect
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 1999 1998 1997
- ------------ ------- ------- -------
<S> <C> <C> <C>
SCUDDER VLIF -- MONEY MARKET PORTFOLIO (INCEPTION DATE
MARCH 17, 1997)
Accumulation unit value at beginning of period.............. $10.804 $10.348 $10.000
Accumulation unit value at end of period.................... $11.247 $10.804 $10.348
Number accumulation units outstanding at end of period (in
thousands)................................................. 428 370 33
SCUDDER VLIF -- BOND PORTFOLIO (INCEPTION DATE MARCH 17,
1997)
Accumulation unit value at beginning of period.............. $11.434 $10.820 $10.000
Accumulation unit value at end of period.................... $11.230 $11.434 $10.820
Number accumulation units outstanding at end of period (in
thousands)................................................. 769 617 52
JANUS ASPEN -- BALANCED PORTFOLIO (INCEPTION DATE MARCH 17,
1997)
Accumulation unit value at beginning of period.............. $15.359 $11.535 $10.000
Accumulation unit value at end of period.................... $19.303 $15.359 $11.535
Number accumulation units outstanding at end of period (in
thousands)................................................. 435 253 26
SCUDDER VLIF -- CAPITAL GROWTH PORTFOLIO (INCEPTION DATE
MARCH 17, 1997)
Accumulation unit value at beginning of period.............. $15.252 $12.483 $10.000
Accumulation unit value at end of period.................... $20.453 $15.252 $12.483
Number accumulation units outstanding at end of period (in
thousands)................................................. 245 188 45
SCUDDER VLIF -- GROWTH & INCOME PORTFOLIO (INCEPTION DATE
MARCH 17, 1997)
Accumulation unit value at beginning of period.............. $12.848 $12.121 $10.000
Accumulation unit value at end of period.................... $13.514 $12.848 $12.121
Number accumulation units outstanding at end of period (in
thousands)................................................. 897 805 170
NEUBERGER BERMAN AMT -- PARTNERS PORTFOLIO (INCEPTION DATE
MARCH 17, 1997)
Accumulation unit value at beginning of period.............. $12.745 $12.334 $10.000
Accumulation unit value at end of period.................... $13.568 $12.745 $12.334
Number accumulation units outstanding at end of period (in
thousands)................................................. 519 467 71
DREYFUS VIF -- APPRECIATION PORTFOLIO (INCEPTION DATE
MARCH 17, 1997)
Accumulation unit value at beginning of period.............. $15.217 $11.787 $10.000
Accumulation unit value at end of period.................... $16.817 $15.217 $11.787
Number accumulation units outstanding at end of period (in
thousands)................................................. 939 755 110
DREYFUS VIF -- SMALL CAP PORTFOLIO (INCEPTION DATE
MARCH 17, 1997)
Accumulation unit value at beginning of period.............. $11.329 $11.833 $10.000
Accumulation unit value at end of period.................... $13.833 $11.329 $11.833
Number accumulation units outstanding at end of period (in
thousands)................................................. 142 144 35
JANUS ASPEN -- WORLDWIDE GROWTH PORTFOLIO (INCEPTION DATE
MARCH 17, 1997)
Accumulation unit value at beginning of period.............. $14.580 $11.406 $10.000
Accumulation unit value at end of period.................... $23.775 $14.580 $11.406
Number accumulation units outstanding at end of period (in
thousands)................................................. 689 588 116
</TABLE>
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
HIGHLIGHTS
HOW DO I PURCHASE THIS ANNUITY?
You must complete an Enrollment Form and submit it to us for approval with your
first Premium Payment. Your first Premium Payment must be at least $5,000 and
subsequent Premium Payments must be at least $250, unless you take advantage of
our Pre-Authorized Checking Program ("PAC").
- - For a limited time, usually within ten days after you receive your
Certificate, you may cancel your Annuity without paying a Contingent Deferred
Sales Charge. You may bear the investment risk for your Premium Payment prior
to our receipt of your written request for cancellation.
WHAT TYPE OF SALES CHARGE WILL I PAY?
- - You don't pay a sales charge when you purchase your Annuity. We may charge
you a Contingent Deferred Sales Charge when you partially or fully Surrender
your Annuity. The Contingent Deferred Sales Charge will depend on the length
of time from your Certificate Date to the time of surrender.
<TABLE>
<CAPTION>
CERTIFICATE YEAR CHARGE
- ---------------- --------
<S> <C>
1 5%
2 4%
3 3%
4 2%
5 1%
6 or greater 0%
</TABLE>
You won't be charged a Contingent Deferred Sales Charge on:
x The Annual Withdrawal Amount
x Premium Payments or earnings that have been in your Annuity for more than
five years.
x Distributions made due to death
x Payments we make to you as part of your Annuity Payment
x While you are confined to a nursing home (See "Nursing Home Waiver" on
page 15)
x To meet IRS minimum distribution requirements on a qualified contract
x While you are under age 65 and totally disabled (See "Disability Waiver" on
page 15)
x While you have a terminal illness (See "Terminal Illness" on page 15)
IS THERE AN ANNUAL MAINTENANCE FEE?
We deduct this $25.00 fee each year on the day before your Certificate
Anniversary or when you fully Surrender your Annuity, if, on either of those
dates, the value of your Annuity is less than $50,000.
WHAT CHARGES WILL I PAY ON AN ANNUAL BASIS?
You pay three different types of charges each year. The first type of charge is
the fee you pay for insurance. This charge is:
A mortality and expense risk charge that is subtracted daily and is equal to
an annual charge of .65% of your Certificate Value invested in the Funds.
The second type of charge is the fee you pay for the Funds.
The third type of charge is an Administration charge of .20% of your
Certificate Value in the invested Funds. See Annual Fund Operating Expenses
table for more complete information and the Funds' prospectuses accompanying
this prospectus.
CAN I TAKE OUT ANY OF MY MONEY?
You may Surrender all or part of the amounts you have invested at any time
before we start making Annuity Payments.
- - You may have to pay tax on the money you take out and, if you Surrender
before you are age 59 1/2, you may have to pay an income tax penalty.
- - You may have to pay a Contingent Deferred Sales Charge on the money you
Surrender.
WILL AMERICAN MATURITY PAY A DEATH BENEFIT?
There is a Death Benefit if the Certificate Owner, joint owner or the Annuitant
die before we begin to make Annuity Payments. The Death Benefit will be
calculated as of the date we receive a certified death certificate or other
legal documents acceptable to us and will be the greater of:
- - The total Premium Payments you have made to us minus any amounts you have
Surrendered, or
- - The Certificate Value of your Annuity.
This Death Benefit amount will remain invested in the Sub-Accounts according
to your last instructions until we receive your settlement instructions and will
fluctuate with the performance of the underlying Funds.
WHAT ANNUITY PAYMENT OPTIONS ARE AVAILABLE?
When it comes time for us to make payments, you may choose one of the following
Annuity Payment Options: Option 1 -- Life Annuity; Option 2 -- Life Annuity with
120, 180 or 240 Monthly Payments Certain; Option 3 -- Cash Refund Life Annuity
(This option is not available for variable annuity payments); Option 4 -- Joint
and Last Survivor Life Annuity; and Option 5 -- Payments For a Designated
Period.
You must begin to take payments by the end of the Annuitant's 90th year. If
you do not tell us what Annuity Payment Option you want before that time, we
will make payments under Option 5 -- Payments For a Designated Period.
<PAGE>
10 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
GENERAL CERTIFICATE
INFORMATION
AMERICAN MATURITY LIFE INSURANCE COMPANY
American Maturity is a stock insurance company engaged in the business of
writing annuities. American Maturity was 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.
AMERICAN MATURITY'S RATINGS
<TABLE>
<CAPTION>
EFFECTIVE DATE
RATING AGENCY OF RATING RATING BASIS OF RATING
- ------------- -------------- -------- --------------------------
<S> <C> <C> <C>
A.M. Best and
Company, Inc. 1/1/99 A+ Financial performance
Standard & Poor's 8/1/99 AA Insurer financial strength
Duff & Phelps 7/1/99 AA+ Claims paying ability
</TABLE>
THE SEPARATE ACCOUNT
The Separate Account is where we set aside and invest the assets of this
Certificate. The Separate Account was established on February 28, 1996 and is
registered as a unit investment trust under the Investment Company Act of 1940.
This registration does not involve supervision by the SEC of the management or
the investment practices of the Separate Account or American Maturity Life. The
Separate Account meets the definition of "Separate Account" under federal
securities law. This Separate Account holds only assets for variable annuity
contracts. The Separate Account:
- - Holds assets for your benefit and the benefit of other Certificate Owners, and
the persons entitled to the payments described in the Certificate.
- - Is not subject to the liabilities arising out of any other business American
Maturity Life may conduct.
- - Is not affected by the rate of return of American Maturity Life's General
Account.
- - Is credited with income and gains, and takes losses, whether or not realized,
from the assets it holds.
We do not guarantee the investment results of the Separate Account. There is
no assurance that the value of your Annuity will equal the total of the payments
you make to us.
THE FUNDS
The underlying variable investments for the Certificates are certain shares
of the Dreyfus Variable Investment Fund ("Dreyfus VIF"), Janus Aspen Series
("Janus Aspen"), Neuberger Berman Advisers Management Trust ("Neuberger Berman
AMT"), and Scudder Variable Life Investment Fund ("Scudder VLIF"), 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.
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.
SCUDDER VLIF -- MONEY MARKET PORTFOLIO: Seeks to maintain the stability of
capital and, consistent therewith, to maintain the liquidity of capital and to
provide current income. The portfolio is advised by Scudder Kemper Investments,
Inc.
SCUDDER VLIF -- BOND PORTFOLIO: Pursues a policy of investing for a high
level of income consistent with a high quality portfolio of debt securities. The
portfolio is advised by Scudder Kemper Investments, Inc.
JANUS ASPEN -- BALANCED PORTFOLIO: Seeks long-term capital growth, balanced
by current income by investing in a balanced portfolio of stocks and bonds
selected primarily for their growth potential. The portfolio is advised by Janus
Capital Corporation.
SCUDDER VLIF -- CAPITAL GROWTH PORTFOLIO: Seeks to maximize long-term
capital growth through a broad and flexible investment program. The portfolio is
advised by Scudder Kemper Investments, Inc.
SCUDDER VLIF -- GROWTH & INCOME PORTFOLIO: Seeks long term capital growth,
current income and growth of income. The portfolio is advised by Scudder Kemper
Investments, Inc.
NEUBERGER BERMAN AMT -- PARTNERS PORTFOLIO: Seeks capital growth by
investing mainly in common stocks of mid to large-capitalization companies. The
portfolio is advised by Neuberger Berman Management Inc.
DREYFUS VIF -- APPRECIATION PORTFOLIO: Seeks long-term capital growth
consistent with the preservation of
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
capital; current income is a secondary goal. The portfolio invests in common
stocks focusing on "blue chip" companies with total market values of more than
$5 billion at the time of purchase. The portfolio is advised by The Dreyfus
Corporation and sub-advised by Fayez Sarofim & Co.
DREYFUS VIF -- SMALL CAP PORTFOLIO: Seeks to maximize capital appreciation
by generally investing at least 65% of its assets in common stock of U.S. and
foreign companies. The portfolio focuses on small-cap companies with total
market values of less than $1.5 billion. The portfolio is advised by The Dreyfus
Corporation.
JANUS ASPEN -- WORLDWIDE GROWTH PORTFOLIO: Seeks long term growth of
capital by investing primarily in common stocks of foreign and domestic
companies. The portfolio is advised by Janus Capital Corporation.
THE FIXED ACCOUNT: Seeks guaranteed current interest income.
INVESTMENT ADVISERS TO THE FUNDS
THE DREYFUS CORPORATION
200 Park Avenue
New York, New York 10166
FAYEZ SAROFIM & CO. (Sub-Adviser)
909 Fannin
Two Houston Center
Suite 2907
Houston, Texas 77010-1083
JANUS CAPITAL CORPORATION
100 Filmore Street
Denver, Colorado 80206-4923
NEUBERGER BERMAN MANAGEMENT INC.
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
SCUDDER, KEMPER INVESTMENTS, INC.
Two International Place
Boston, Massachusetts 02110-4103
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.
MIXED AND SHARED FUNDING -- Shares of the Funds may be sold to other
separate accounts and other insurance companies to serve as the underlying
investment for both variable annuity contracts and variable life insurance
policies, a practice known as "mixed funding." As a result, there is a
possibility that a material conflict may arise between the interests of
Certificate Owners, and of owners of other contracts whose contract values are
allocated to one or more of these other separate accounts investing in any one
of the Funds. In the event of any such material conflicts, we will consider what
action may be appropriate, including removing the Fund from the Separate Account
or replacing the Fund with another underlying fund. There are certain risks
associated with mixed funding, as disclosed in the Funds' prospectus.
VOTING RIGHTS -- We are the legal owners of all Fund shares held in the
Separate Account and we have the right to vote at the Fund's shareholder
meetings. To the extent required by federal securities laws or regulations, we
will:
- - Notify you of any Fund shareholders' meeting if the shares held for your
Certificate may be voted.
- - Send proxy materials and a form of instructions that you can use to tell us
how to vote the Fund shares held for your Certificate.
- - Arrange for the handling and tallying of proxies received from Certificate
Owners.
- - Vote all Fund shares attributable to your Certificate according to
instructions received from you, and
- - Vote all Fund shares for which no voting instructions are received in the same
proportion as shares for which instructions have been received.
If any federal securities laws or regulations, or their present
interpretation, change to permit us to vote Fund shares on our own, we may
decide to do so. You may attend any Shareholder Meeting at which shares held for
your Certificate may be voted. After we begin to make payments to you, the
number of votes you have will decrease.
SUBSTITUTIONS, ADDITIONS, OR DELETIONS OF FUNDS -- We reserve the right,
subject to any applicable law, to make certain changes to the Funds offered
under your Certificate. We may, in our sole discretion, establish new Funds. New
Funds will be made available to existing Certificate Owners as we determine
appropriate. We may also close one or more Funds to additional Payments or
transfers from existing Sub-Accounts.
We reserve the right to eliminate the shares of any of the Funds for any
reason and to substitute shares of another registered investment company for the
shares of any Fund already purchased or to be purchased in the future by the
Separate Account. To the extent required by the Investment Company Act of 1940
(the "1940 Act"), substitutions of shares attributable to your interest in a
Fund will not be made until we have the approval of the Securities and Exchange
Commission and we have notified you of the change.
In the event of any substitution or change, we may, by appropriate
endorsement, make any changes in the Certificate necessary or appropriate to
reflect the substitution or change. If we decide that it is in the best interest
of Certificate owners, the Separate Account may be operated as a
<PAGE>
12 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
management company under the 1940 Act or any other form permitted by law, may be
de-registered under the 1940 Act in the event such registration is no longer
required, or may be combined with one or more other Separate Accounts.
ADMINISTRATIVE SERVICES -- Hartford has entered into agreements with the
investment advisers or distributors of many of the Funds. Under the terms of
these agreements, Hartford provides administrative services and the Funds pay a
fee to Hartford that is usually based on an annual percentage of the average
daily net assets of the Funds. These agreements may be different for each Fund
or each Fund family.
PERFORMANCE RELATED INFORMATION
The Separate Account may advertise certain performance-related information
concerning the 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.
When a Sub-Account advertises its STANDARDIZED TOTAL RETURN, it will usually
be calculated for one year, five years, and ten years or some other relevant
periods if the Sub-Account has not been in existence for at least ten years.
Total return is measured by comparing the value of an investment in the
Sub-Account at the beginning of the relevant period to the value of the
investment at the end of the period.
The Separate Account may also advertise NON-STANDARD TOTAL RETURNS THAT
PRE-DATE THE INCEPTION DATE OF THE SEPARATE ACCOUNT. These non-standardized
total returns are calculated by assuming that the Sub-Accounts have been in
existence for the same periods as the underlying Funds and by taking deductions
for charges equal to those currently assessed against the Sub-Accounts. These
non-standardized returns must be accompanied by standardized total returns.
If applicable, the Sub-Accounts may advertise YIELD IN ADDITION TO TOTAL
RETURN.The yield will be computed in the following manner: The net investment
income per unit earned during a recent one month period is divided by the unit
value on the last day of the period. This figure includes the recurring charges
at the Separate Account level including the Annual Maintenance Fee.
The Money Market Fund Sub-Account may advertise YIELD AND EFFECTIVE YIELD.
The yield of a Sub-Account is based upon the income earned by the Sub-Account
over a seven-day period and then annualized, i.e. the income earned in the
period is assumed to be earned every seven days over a 52-week period and stated
as a percentage of the investment. Effective yield is calculated similarly but
when annualized, the income earned by the investment is assumed to be reinvested
in Sub-Account units and thus compounded in the course of a 52-week period.
Yield and effective yield include the recurring charges at the Separate Account
level including the Annual Maintenance Fee.
The Statement of Additional Information may also present 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.
We may provide information on various topics to Certificate Owners and
prospective Certificate Owners in advertising, sales literature or other
materials. These topics may include the relationship between sectors of the
economy and the economy as a whole and its effect on various securities markets,
investment strategies and techniques (such as systematic investing, Dollar Cost
Averaging and asset allocation), the advantages and disadvantages of investing
in tax-deferred and taxable instruments, customer profiles and hypothetical
purchase scenarios, financial management and tax and retirement planning, and
other investment alternatives, including comparisons between the Certificate and
the characteristics of and market for such alternatives.
THE FIXED ACCOUNT
IMPORTANT INFORMATION YOU SHOULD KNOW: THIS PORTION OF THE PROSPECTUS
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 1940 ACT. THE FIXED ACCOUNT OR ANY OF ITS INTERESTS ARE NOT SUBJECT TO
THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE 1940 ACT, AND THE STAFF OF
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT REVIEWED THE DISCLOSURE REGARDING
THE FIXED ACCOUNT. 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 Account assets. We invest the assets of the General
Account according to the laws governing the investments of insurance company
General Accounts.
Currently, we guarantee that we will credit interest at a rate of not less
than 3% per year, compounded annually, to amounts you allocate to the Fixed
Account. We reserve the right to change the rate subject only to applicable
state insurance law. We may credit interest at a rate in excess of 3% per year.
We will periodically publish the Fixed Account interest rates currently in
effect. There is no specific
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
formula for determining interest rates. Some of the factors that we may consider
in determining whether to credit excess interest are; general economic trends,
rates of return currently available and anticipated on our investments,
regulatory and tax requirements and competitive factors. We will account for any
deductions, Surrenders or transfers from the Fixed Account on a "first-in
first-out" basis.
IMPORTANT: ANY INTEREST CREDITED TO AMOUNTS YOU ALLOCATE TO THE FIXED
ACCOUNT IN EXCESS OF 3% PER YEAR WILL BE DETERMINED AT OUR SOLE DISCRETION. YOU
ASSUME THE RISK THAT INTEREST CREDITED TO FIXED ACCOUNT MAY NOT EXCEED THE
MINIMUM GUARANTEE OF 3% FOR ANY GIVEN YEAR.
From time to time, we may credit increased interest rates under certain
programs established in our sole discretion.
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.
THE CERTIFICATE
PURCHASES AND CERTIFICATE VALUE
WHAT TYPES OF CERTIFICATE IS AVAILABLE?
The Certificate is a group tax-deferred variable annuity contract. It is
designed for retirement planning purposes and may be purchased by any eligible
member of the AARP.
If you are purchasing the Contract for use in an IRA or other qualified
retirement plan, you should consider other features of the Contract besides tax
deferral, since any investment vehicle used within an IRA or other qualified
plan receives tax deferred treatment under the Code.
HOW DO I PURCHASE A CERTIFICATE?
You may purchase a Certificate by completing and submitting an the Enrollment
Form along with an initial Premium Payment. The minimum Premium Payment is
$5,000. For additional Premium Payments, the minimum Premium Payment is $250.00.
Under certain situations, we may allow smaller Premium Payments, for example, if
you enroll in our PAC program or are part of certain tax qualified retirement
plans. Prior approval is required for Premium Payments of $1,000,000 or more.
You and your Annuitant must not be older than age 90 (age 89 in New York) on
the date that your Certificate is issued. You must be of legal age in the state
where the Certificate is issued and you are subject to the eligibility and
membership requirements of the AARP.
We reserve the right to reject any Enrollment Form or premium payment for
any reason, subject to the applicable state nondiscrimination laws and to our
own standards and guidelines.
HOW ARE PREMIUM PAYMENTS APPLIED TO MY CERTIFICATE?
Your initial Premium Payment will be invested within two Business Days of our
receipt of a properly completed Enrollment Form and the Premium Payment.
Subsequent Premium Payments are priced on the same Business Day they are
received. If we receive your subsequent Premium Payment on a Non-Business Day,
the amount will be invested on the next Business Day. Unless we receive new
instructions, we will invest the Premium Payment based on your last allocation
instructions. We will send you a confirmation when we invest your Premium
Payment.
If the Enrollment Form accompanying the Premium Payment is incomplete when
received, we will hold the money in a non-interest bearing account for up to
five Business Days while we try to obtain complete information. If we cannot
obtain the information within five Business Days, we will return the Premium
Payment and explain why the Premium Payment could not be processed, unless you
authorize us to keep the Premium Payment until the necessary information is
received.
CAN I CANCEL MY CERTIFICATE AFTER I PURCHASE IT?
We want you to be satisfied with the Certificate you have purchased. We urge you
to closely examine its provisions. If for any reason you are not satisfied with
your Certificate, simply return it with a written request for cancellation
within ten days after you receive the Certificate. In some states, you may be
allowed more time to cancel your Certificate. We will not deduct any Contingent
Deferred Sales Charges during this time.
You bear the investment risk from the time the Certificate is issued until
we receive your complete cancellation request.
The amount we pay you upon cancellation depends on the requirements of the
state where you purchased your Certificate and the method of purchase.
HOW IS THE VALUE OF MY CERTIFICATE CALCULATED BEFORE THE ANNUITY COMMENCEMENT
DATE?
The Certificate Value is the sum of all Accounts. There are two things that
affect your Sub-Account value: (1) the number of Accumulation Units and (2) the
Accumulation
<PAGE>
14 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Unit Value. The Sub-Account value is determined by multiplying the number of
Accumulation Units by the Accumulation Unit Value. Therefore, on any Business
Day your Certificate Value, with the exception of any Premium Payments credited
to the Fixed Account, reflects the investment performance of the Sub-Accounts
and will fluctuate with the performance of the underlying Funds.
When Premium Payments are credited to your Sub-Accounts, they are converted
into Accumulation Units by dividing the amount of your Premium Payments, minus
any Premium Taxes, by the Accumulation Unit Value for that day. The more Premium
Payments you put into your Certificate, the more Accumulation Units you will
own. You decrease the number of Accumulation Units you have by requesting
Surrenders, transferring money out of a Sub-Account, submitting a Death Benefit
claim or by annuitizing your Certificate.
To determine the current Accumulation Unit Value, we take the prior Business
Day's Accumulation Unit Value and multiply it by the Net Investment Factor for
the current Business Day.
The Net Investment Factor is used to measure the investment performance of a
Sub-Account from one Business Day to the next. The Net Investment Factor for
each Sub-Account equals:
- - The net asset value per share of each Fund held in the Sub-Account at the end
of the current Business Day divided by
- - The net asset value per share of each Fund held in the Sub-Account at the end
of the prior Business Day; minus
- - The daily mortality and expense risk charge and Administrative Charge adjusted
for the number of days in the period, and any other applicable charge.
We will send you a statement in each calendar quarter, which tells you how
many Accumulation Units you have, their value and your total Certificate Value.
CAN I TRANSFER FROM ONE SUB-ACCOUNT TO ANOTHER?
TRANSFERS BETWEEN SUB-ACCOUNTS -- Before the Annuity Commencement Date, you may
transfer from one Sub-Account to another at no extra charge. After the Annuity
Commencement Date, you may transfer from one Sub-Account to another once each
quarter. Your transfer request will be processed on the day that it is received
as long as it is received on a Business Day before the close of the New York
Stock Exchange. Otherwise, your request will be processed on the following
Business Day. We will send you a confirmation when we process your transfer. You
are responsible for verifying transfer confirmations and promptly advising us of
any errors within 30 days of receiving the confirmation.
SUB-ACCOUNT TRANSFER RESTRICTIONS -- We reserve the right to limit the
number of transfers to 12 per Certificate Year, with no transfers occurring on
consecutive Business Days. We also have the right to restrict transfers if we
believe that the transfers could have an adverse effect on other Certificate
Owners. In all states, we may:
- - Require a minimum time period between each transfer,
- - Limit the dollar amount that may be transferred on any one Valuation Day, and
- - Not accept transfer requests from an agent acting under a power of attorney
for more than one Certificate Owner.
We also have a restriction in place that involves individuals who act as a
power of attorney for multiple Certificate Owners.
Some states may have different restrictions.
TELEPHONE TRANSFERS -- We 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 that we
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.
POWER OF ATTORNEY -- You may authorize another person to make transfers on
your behalf by submitting a
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 15
- --------------------------------------------------------------------------------
completed Power of Attorney form. Once we have the completed form on file, we
will accept transfer instructions from your designated third party until we
receive new instructions in writing from you. You will not be able to make
transfers or other changes to your Certificate if you have authorized someone
else to act under a power of attorney.
CHARGES AND FEES
There are 5 charges and fees associated with the Certificate:
1. THE CONTINGENT DEFERRED SALES CHARGE
The Contingent Deferred Sales Charge covers some of the expenses relating to the
sale and distribution of the Certificate, and the cost of preparing sales
literature and other promotional activities. We assess a Contingent Deferred
Sales Charge when you request a full or partial Surrender. The percentage of the
Contingent Deferred Sales Charge is based on the length of time from your
Certificate Date to the time of surrender. The Contingent Deferred Sales Charge
will not be assessed on amounts which exceed the total amount of the Premium
Payments made. For purposes of assessing the Contingent Deferred Sales Charge,
we assume that any Surrenders come first from Premium Payments and next from
earnings. Premium Payments are Surrendered in the order in which they were
received.
The Contingent Deferred Sales Charge is a percentage of Premium Payments
Surrendered and is equal to:
<TABLE>
<CAPTION>
CERTIFICATE YEAR CHARGE
- ---------------- --------
<S> <C>
1 5%
2 4%
3 3%
4 2%
5 1%
6 or greater 0%
</TABLE>
THE FOLLOWING SURRENDERS ARE NOT SUBJECT TO A CONTINGENT DEFERRED SALES
CHARGE:
- - ANNUAL WITHDRAWAL AMOUNT: During the five years from the date we issue your
Certificate, you may, each Certificate Year, take partial Surrenders up to 10%
of the Premium Payments remaining in the Certificate as of the last
Certificate Anniversary. If you do not take 10% one year, you may not take
more than 10% of the remaining Premium Payments the next year. Withdrawals in
excess of this amount will be subject to the Contingent Deferred Sales Charge.
- - SURRENDERS MADE AFTER FIVE YEARS FROM THE DATE WE ISSUE YOUR
CERTIFICATE. After the fifth Certificate Year, you may take the total of:
(a) all of your earnings, and (b) all Premium Payments held in your
Certificate.
UNDER THE FOLLOWING SITUATIONS, THE CONTINGENT DEFERRED SALES CHARGE IS WAIVED:
- - 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 expected to be permanent. 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 (2 years in Massachusetts). 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.
THE FOLLOWING SITUATIONS ARE NOT SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE:
- - Upon death of the Annuitant or Certificate Owner. No Contingent Deferred Sales
Charge will be deducted if the Annuitant or Certificate Owner dies, unless the
Certificate Owner is not a natural person (e.g. a trust).
<PAGE>
16 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
- - Upon Annuitization. The Contingent Deferred Sales Charge is not deducted when
you annuitize the Certificate.
- - Upon cancellation during the Right to Examine Period.
2. MORTALITY AND EXPENSE RISK CHARGE
For assuming mortality and expense risks under the Certificate, we deduct a
daily charge at the rate of .65% per year of Sub-Account Value (estimated at
.47% for mortality and .18% for expenses). The mortality and expense risk charge
is broken into charges for mortality risks and for an expense risk:
- - MORTALITY RISK -- There are two types of mortality risks that we assume, those
made while your Premium Payments are accumulating and those made once Annuity
Payments have begun.
During the period your Premium Payments are accumulating, we are required to
cover any difference between the Death Benefit paid and the Surrender Value.
These differences may occur during periods of declining value or in periods
where the Contingent Deferred Sales Charges would have been applicable. The
risk that we bear during this period is that actual mortality rates, in
aggregate, may exceed expected mortality rates.
Once Annuity Payments have begun, we may be required to make Annuity Payments
as long as the Annuitant is living, regardless of how long the Annuitant
lives. We would be required to make these payments if the Payment Option
chosen is the Life Annuity, Life Annuity With 120, 180 or 240 Monthly Payments
Period Certain, Cash Refund Life Annuity, or Joint and Last Survivor Life
Annuity Payment Option. The risk that we bear during this period is that the
actual mortality rates, in aggregate, may be lower than the expected mortality
rates.
- - EXPENSE RISK -- We also bear an expense risk that the Contingent Deferred
Sales Charges and the Annual Maintenance Fee collected before the Annuity
Commencement Date may not be enough to cover the actual cost of selling,
distributing and administering the Certificate.
Although variable Annuity Payments will fluctuate with the performance of
the underlying Fund selected, your Annuity Payments will not be affected by
(a) the actual mortality experience of our Annuitants, or (b) our actual
expenses if they are greater than the deductions stated in the Contract. Because
we cannot be certain how long our Annuitants will live, we charge this
percentage fee based on the mortality tables currently in use. The mortality and
expense risk charge enables us to keep our commitments and to pay you as
planned.
3. ANNUAL MAINTENANCE FEE
The Annual Maintenance Fee is a flat fee that is deducted from your Certificate
Value to reimburse us for expenses relating to the administrative maintenance of
the Certificate and the Accounts. The annual $25 charge is deducted the day
before the Certificate Anniversary or when the Certificate is fully Surrendered
if the Certificate Value at either of those times is less than $50,000. The
charge is deducted proportionately from each Account in which you are invested.
WHEN IS THE ANNUAL MAINTENANCE FEE WAIVED?
We will waive the Annual Maintenance Fee if your Certificate Value is $50,000 or
more the day before your Certificate Anniversary or when you fully Surrender
your Contract.
4. ADMINISTRATION CHARGE
We charge 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.
This Administration Charge is charged at an annual rate of 0.20% 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.
5. PREMIUM TAXES
We deduct Premium Taxes, if required, by a state or other government agency.
Some states collect the taxes when Premium Payments are made; others collect at
Annuitization. Since we pay Premium Taxes when they are required by applicable
law, we may deduct them from your Certificate when we pay the taxes, upon
Surrender, or on the Annuity Commencement Date. The Premium Tax rate varies by
state or municipality. Currently, the maximum rate charged by any state is 3.5%.
DEATH BENEFIT
WHAT IS THE DEATH BENEFIT AND HOW IS IT CALCULATED?
The Death Benefit is the amount we will pay upon the death of the Certificate
Owner or the Annuitant. The Death Benefit is calculated when we receive a
certified death certificate or other legal document acceptable to us.
The calculated Death Benefit will remain invested in the same Accounts,
according to the Certificate Owner's last instructions until we receive complete
written settlement instructions from the Beneficiary. Therefore, the Death
Benefit amount will fluctuate with the performance of the
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 17
- --------------------------------------------------------------------------------
underlying Funds. When there is more than one Beneficiary, we will calculate the
Accumulation Units for each Sub-account and the dollar amount for the Fixed
Account for each Beneficiary's portion of the proceeds.
If death occurs before the Annuity Commencement Date, the Death Benefit is
the greater of:
- - The Certificate Value on the date the death certificate or other legal
document acceptable to us is received; or
- - 100% of all Premium Payments paid into the Certificate minus any partial
Surrenders;
WHO WILL RECEIVE THE DEATH BENEFIT?
The distribution of the Death Benefit is based on whether death is before, on or
after the Annuity Commencement Date.
IF DEATH OCCURS BEFORE THE ANNUITY COMMENCEMENT DATE:
<TABLE>
<S> <C> <C> <C>
IF THE DECEASED IS THE... AND... AND... THEN THE...
- --------------------------------------------------------------------------------------------------------------
Certificate Owner There is a surviving joint The Annuitant is living or Joint Certificate Owner
Certificate Owner deceased receives the Death
Benefit.
- --------------------------------------------------------------------------------------------------------------
Certificate Owner There is no surviving The Annuitant is living or Designated Beneficiary
joint Certificate Owner deceased receives the Death
Benefit.
- --------------------------------------------------------------------------------------------------------------
Certificate Owner There is no surviving The Annuitant is living or Certificate Owner's estate
joint Certificate Owner deceased receives the Death
and the Beneficiary Benefit.
predeceases the Contract
Owner
- --------------------------------------------------------------------------------------------------------------
Annuitant The Certificate Owner is There is no named Death Benefit is paid to
still living Contingent Annuitant the Certificate Owner(s)
and not the designated
Beneficiary.
- --------------------------------------------------------------------------------------------------------------
Annuitant The Certificate Owner is The Contingent Annuitant Contingent Annuitant
alive is alive becomes the Annuitant, and
the Certificate continues.
</TABLE>
IF DEATH OCCURS ON OR AFTER THE ANNUITY COMMENCEMENT DATE:
<TABLE>
<S> <C> <C>
IF THE DECEASED IS THE... AND... THEN THE...
- -------------------------------------------------------------------------------------------------------------
Certificate Owner The Annuitant is living Annuitant becomes the Certificate
Owner
- -------------------------------------------------------------------------------------------------------------
Annuitant The Certificate Owner is living Certificate Owner receives the
Death Benefit.
- -------------------------------------------------------------------------------------------------------------
Annuitant The Annuitant is also the Designated Beneficiary receives the
Certificate Owner Death Benefit.
</TABLE>
THESE ARE THE MOST COMMON DEATH BENEFIT SCENARIOS, HOWEVER, THERE ARE
OTHERS. SOME OF THE ANNUITY PAYMENT OPTIONS MAY NOT RESULT IN A DEATH BENEFIT
PAYMENT. IF YOU HAVE QUESTIONS ABOUT THESE AND ANY OTHER SCENARIOS, PLEASE
CONTACT OUR CUSTOMER SERVICE SPECIALISTS AT OUR CUSTOMER SERVICE CENTER
1-800-923-3334.
HOW IS THE DEATH BENEFIT PAID?
The Death Benefit may be taken in one lump sum or under any of the Annuity
Payment Options then being offered by us. On the date we receive written
notification of due proof of death, we will compute the Death Benefit as of the
end of the Business Day in which we receive this written notification. The Death
Benefit will be paid out or applied to a selected Annuity Payment Option in
accordance the completed settlement instructions received by us. When there is
more than one Beneficiary, we will calculate the Death Benefit payable for each
Beneficiary's portion of the proceeds as of the end of the Business Day in which
we receive the Beneficiary's written settlement instructions. The Death Benefit
will be paid out or applied it to a selected Annuity Payment Option according to
each Beneficiary's settlement instructions. If we receive the complete
settlement instructions on a Non-Business Day, computations will take place on
the next Business Day.
The Beneficiary may elect under the Annuity Payment Option "Annuity Proceeds
Settlement Option" and leave proceeds from the Death Benefit with us for up to
five years
<PAGE>
18 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
from the date of the Certificate Owner's death if the Certificate Owner died
before the Annuity Commencement Date. Once we receive a certified death
certificate or other legal documents acceptable to us, the Beneficiary can:
(a) make Sub-Account transfers and (b) take Surrenders without paying Contingent
Deferred Sales Charges. If there are multiple Beneficiaries, Subsequent
Sub-Account transfers and Surrenders may be elected by having one beneficiary,
with a power of attorney from the remaining beneficiaries, provide us with
instructions.
REQUIRED DISTRIBUTIONS: If the Certificate Owner dies before the Annuity
Commencement Date, the Death Benefit must be distributed within five years after
death. The Beneficiary can choose any Annuity Payment Option that results in
complete Annuity Payment within five years.
If the Certificate Owner dies on or after the Annuity Commencement Date and
before the entire interest in the Certificate has been distributed, the
remaining portion of this interest shall be distributed at least as rapidly as
under the method of distribution chosen by the Certificate Owner at the time of
the Certificate Owner's death.
If the Certificate Owner is not an individual (e.g. a trust), then the
original Annuitant will be treated as the Certificate Owner in the situations
described above and any change in the original Annuitant will be treated as the
death of the Certificate Owner.
WHAT SHOULD THE BENEFICIARY CONSIDER?
ALTERNATIVES TO THE REQUIRED DISTRIBUTIONS: The selection of an Annuity Payment
Option and the timing of the selection will have an impact on the tax treatment
of the Death Benefit. To receive favorable tax treatment, the Annuity Payment
Option selected: (a) cannot extend beyond the Beneficiary's life or life
expectancy, and (b) must begin within one year of the date of death. 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.
If these conditions are not met, the Death Benefit will be treated as a lump
sum payment for tax purposes. This sum will be taxable in the year in which it
is considered received.
SPOUSAL CONTINUATION -- If the sole Beneficiary is the Certificate Owner's
spouse, the Beneficiary may elect to continue the Certificate as the Certificate
Owner in lieu of receiving the death benefit payment, receive the death benefit
in one lump sum payment or elect an Annuity Payment Option.
SURRENDERS
WHAT KINDS OF SURRENDERS ARE AVAILABLE?
FULL SURRENDERS BEFORE THE ANNUITY COMMENCEMENT DATE: When you Surrender your
Certificate before the Annuity Commencement Date, the Surrender Value of the
Certificate will be made in a lump sum payment. The Surrender Value is the
Certificate Value minus any applicable Premium Taxes, Contingent Deferred Sales
Charges and the Annual Maintenance Fee. The Surrender Value may be more or less
than the amount of the Premium Payments made to a Certificate.
PARTIAL SURRENDERS BEFORE THE ANNUITY COMMENCEMENT DATE: You may request a
partial Surrender of Certificate Values at any time before the Annuity
Commencement Date. There are two restrictions:
- - The partial Surrender amount must be at least equal to $500, our current
minimum for partial Surrenders, and
- - The Certificate must have a minimum Certificate Value of $5,000 after the
Surrender. The minimum Certificate Value in New York and Massachusetts must be
$2,000 after the Surrender. We reserve the right to close your Certificate and
pay the full Surrender Value if the Certificate Value is under $5,000 after
the Surrender.
PARTIAL SURRENDERS AFTER THE ANNUITY COMMENCEMENT DATE: Partial Surrenders
are permitted after the Annuity Commencement Date if you elect the Payment for a
Designated Period Annuity Option (variable annuitization only), but check with
your tax advisor because there might be adverse tax consequences.
HOW DO I REQUEST A SURRENDER?
Requests for full and partial Surrenders must be in writing. We will send your
money within seven days of receiving completed instructions. However, we may
postpone payment of Surrenders whenever: (a) the New York Stock Exchange is
closed, except for holidays or weekends, or trading on the New York Stock
Exchange is restricted by the Securities and Exchange Commission (the "SEC"),
(b) the SEC permits postponement and so orders, or (c) the SEC determines that
an emergency exists to restrict valuation.
WRITTEN REQUESTS -- To request a full or partial Surrender, complete a
Surrender Request Form or send us a letter, signed by you, stating:
- - the dollar amount that you want to receive, either before or after we withhold
taxes and deduct for any applicable charges,
- - your tax withholding amount or percentage, if any, and
- - your mailing address.
If there are joint Certificate Owners, both must authorize all Surrenders.
For a partial Surrender, specify the Accounts that you want your Surrender to
come from,
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 19
- --------------------------------------------------------------------------------
otherwise, the Surrender will be taken in proportion to the value in each
Account.
WHAT SHOULD BE CONSIDERED ABOUT TAXES?
There are certain tax consequences associated with Surrenders:
PRIOR TO AGE 59 1/2: If you make a Surrender prior to age 59 1/2, there may
be adverse tax consequences including a 10% federal income tax penalty on the
taxable portion of the Surrender payment.
WE DO NOT MONITOR SURRENDER REQUESTS. TO DETERMINE WHETHER A SURRENDER IS
PERMISSIBLE, WITH OR WITHOUT FEDERAL INCOME TAX PENALTY, PLEASE CONSULT YOUR
PERSONAL TAX ADVISER.
WE ENCOURAGE YOU TO CONSULT WITH YOUR QUALIFIED TAX ADVISER BEFORE MAKING
ANY SURRENDERS. PLEASE SEE THE "FEDERAL TAX CONSIDERATIONS" SECTION FOR MORE
INFORMATION.
ANNUITY OPTIONS
THIS SECTION DESCRIBES WHAT HAPPENS WHEN WE BEGIN TO MAKE REGULAR ANNUITY
PAYMENTS FROM YOUR CERTIFICATE. YOU, AS THE CERTIFICATE OWNER, SHOULD ANSWER
FOUR QUESTIONS:
1. When do you want Annuity Payments to begin?
2. What Annuity Payment Option do you want to use?
3. How often do you want to receive Annuity Payments?
4. Do you want Annuity Payments to be fixed or variable or a combination?
Please check with your financial advisor to select the Annuity Payment
Option that best meets your income needs.
1. WHEN DO YOU WANT ANNUITY PAYMENTS TO BEGIN?
You select an Annuity Commencement Date when you purchase your Certificate or at
any time before you begin receiving Annuity Payments. The Annuity Commencement
Date must be no earlier than your first Certificate Anniversary. You may change
the Annuity Commencement Date by notifying us thirty days prior to the date. The
Annuity Commencement Date cannot be deferred beyond the Annuitant's/Owner's 90th
year.
All Annuity Payments, regardless of frequency, will occur on the same day of
the month as the Annuity Commencement Date. After the initial payment, if an
Annuity Payment date falls on a Non-Business Day, the Annuity Payment is
computed on the prior Business Day. If the Annuity Payment date does not occur
in a given month due to a leap year or months with only 28 days (i.e. the 31st),
the Annuity Payment will be computed on the last Business Day of the month.
2. WHICH ANNUITY PAYMENT OPTION DO YOU WANT TO USE?
Your Certificate contains the Annuity Payment Options described below. The
Annuity Proceeds Settlement Option is an option that can be elected by the
Beneficiary after the death of the Certificate Owner and is described in the
"Death Benefit" section. We may at times offer other Annuity Payment Options.
Once we begin to make Annuity Payments, the Annuity Payment Option cannot be
changed.
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.
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 Life.
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 payments.
JOINT AND LAST SURVIVOR LIFE ANNUITY
An annuity payable monthly during the joint lifetime of the Annuitant and a
Joint 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 Joint Annuitant
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.
<PAGE>
20 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
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 Life.
Payment for a Designated Period option 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.
- - If you do not elect an Annuity Payment Option, fixed Annuity Payments will
automatically begin on the Annuity Commencement Date under the Payment for a
Designated Period option. You will receive Annuity Payments over a period of
five years.
3. HOW OFTEN DO YOU WANT THE PAYEE TO RECEIVE ANNUITY PAYMENTS?
In addition to selecting an Annuity Commencement Date and an Annuity Payment
Option, you must also decide how often you want the Payee to receive Annuity
Payments. You may choose to receive Annuity Payments:
- - monthly,
- - quarterly,
- - semi-annually, or
- - annually.
Once you select a frequency, it cannot be changed. If you do not make a
selection, the Payee will receive monthly Annuity Payments. You must select a
frequency that results in an Annuity Payment of at least $50. If the amount
falls below $50, we have the right to change the frequency to bring the Annuity
Payment up to at least $50. For Certificates issued in New York and
Massachusetts, the minimum monthly Annuity Payment is $20.
THE ASSUMED INVESTMENT RETURN
The Assumed Investment Return is the investment return used to calculate
variable Annuity Payments. The Assumed Investment Return for your Annuity is 5%.
The first Annuity Payment will be based upon a 5% Assumed Investment Return. The
remaining Annuity Payments will fluctuate based on the actual investment results
of the Sub-Accounts.
4. DO YOU WANT ANNUITY PAYMENTS TO BE FIXED OR VARIABLE?
You may choose an Annuity Payment Option with fixed-dollar amounts or
variable-dollar amounts, or a combination of both depending on your income
needs.
FIXED-DOLLAR AMOUNT ANNUITY PAYMENTS -- Once a fixed-dollar amount Annuity
Payment begins, you cannot change your selection to receive a variable-dollar
amount Annuity Payment. You will receive equal fixed-dollar amount Annuity
Payments throughout the Annuity Payment period. Fixed-dollar amount Annuity
Payment amounts are determined by multiplying the Certificate Value, minus any
applicable Premium Taxes, by an Annuity rate. The annuity rate is set by us and
is not less than the rate specified in the fixed-dollar amount Annuity Payment
Option tables in your Certificate.
VARIABLE-DOLLAR AMOUNT ANNUITY PAYMENTS -- A variable-dollar amount Annuity
Payment is based on the investment performance of the Sub-Accounts. The
variable-dollar amount Annuity Payments may fluctuate with the performance of
the underlying Funds. To begin making variable-dollar amount Annuity Payments,
we convert the first Annuity Payment amount to a set number of Annuity Units and
then price those units to determine the Annuity Payment amount. The number of
Annuity Units that determines the Annuity Payment amount remains fixed unless
you transfer units between Sub-Accounts.
The dollar amount of the first variable Annuity Payment depends on:
- - the Annuity Payment Option chosen,
- - the Annuitant's attained age and gender (if applicable), and,
- - the applicable annuity purchase rates based on the 1983a Individual Annuity
Mortality table.
The total amount of the first variable-dollar amount Annuity Payment is the
sum of the values of each Sub-Account. This is determined by dividing the
Certificate Value minus any applicable Premium Taxes, by $1,000 and multiplying
the result by the payment factor defined in the Contract for the selected
Annuity Payment Option.
The dollar amount of each subsequent variable-dollar amount Annuity Payment
is equal to:
Sub-Account Annuity Units, determined from the first Annuity Payment,
multiplied by Annuity Unit Value.
The Annuity Unit Value of each Sub-Account for any Valuation Period is equal
to the Accumulation Unit Value Net Investment Factor for the current Valuation
Period multiplied by the Annuity Unit factor, multiplied by the Annuity Unit
Value for the preceding Valuation Period.
TRANSFER OF ANNUITY UNITS: After the Annuity Commencement Date, you may
transfer the dollar amount associated with Annuity Units from one Sub-Account to
another once a quarter. On the day you make a transfer, the dollar amounts are
equal for both Sub-Accounts and the number of Annuity Units will be different.
We will transfer the dollar amount of your Annuity Units the day we receive your
written request if received before the close of the New York Stock Exchange
(1:00 p.m. Pacific Time).
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 21
- --------------------------------------------------------------------------------
OTHER PROGRAMS AVAILABLE
PRE-AUTHORIZED CHECKING PROGRAM ("PAC") -- PAC is an electronic transfer
program that allows you to have money automatically withdrawn from your checking
or savings account, and invested in your Certificate. It is available for
Premium Payments made after your initial Premium Payment. The minimum amount for
each transfer is $100. You can elect to have transfers occur either monthly or
quarterly, and they can be made into any Account available in your Certificate.
ELECTRONIC FUND TRANSFERS: Electronic Fund Transfers allow you to Surrender
up to 10% of your remaining Premium Payments each Certificate Year. We can
Surrender from the Accounts you select systematically on a monthly, quarterly,
semiannual, or annual basis. Electronic Fund Transfers may change based on your
instructions after your fifth Certificate Year.
ASSET ALLOCATION PROGRAM: The AARP Variable Annuity Asset Allocation
feature matches risk tolerance and investment objective to a professionally
designed portfolio built from various available Sub-Accounts. There are five
"standard" models (conservative, moderate-conservative, moderate,
moderate-aggressive, and aggressive) that represent different levels of risk.
Custom models are available that allow risk tolerance and investment objectives
to be more closely matched.
REBALANCING -- Asset Rebalancing is another type of asset allocation program
available to you. You select the Sub-Accounts and the percentages you want
allocated to each Sub-Account. Based on the frequency you select, your model
will automatically rebalance to the original percentages chosen. You can
transfer freely between models up to twelve times per year. You can also
allocate a portion of your investment to Sub-Accounts that are not part of the
model. You can only participate in one asset rebalancing model at a time.
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 INFORMATION
ASSIGNMENT -- Ownership of this Certificate is generally assignable. An
assignment of a Non-Qualified Certificate may subject the Certificate Values or
Surrender Value to income taxes and certain penalty taxes.
CERTIFICATE MODIFICATION -- The Annuitant may not be changed. However, if
the Annuitant is still living, the Contingent Annuitant may be changed at any
time prior to the Annuity Commencement Date by sending us written notice. We may
modify the Certificate, but no modification will effect the amount or term of
any Certificate unless a modification is required to conform the Certificate to
applicable Federal or State law. No modification will effect the method by which
Certificate Values are determined.
HOW 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 an affiliate of American Maturity Life. HSD and American Maturity Life are
ultimately controlled by The Hartford Financial Services Group, Inc. 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 Life as insurance and variable annuity agents and who are registered
representatives. These salespersons will be supervised by American Maturity Life
who will respond to telephone inquiries as a result of national advertising.
LEGAL MATTERS AND EXPERTS
There are no material legal proceedings pending to which the Separate
Account is a party.
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, P.O. Box 2999, Hartford, Connecticut
06104-2999.
The audited financial statements included in this 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 financial statements of
American Maturity Life Insurance Company which states the statutory 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.
MORE INFORMATION
You may call one of our Customer Service representatives if you have any
questions or write or call us at the address below:
American Maturity Life Insurance Company
P.O. Box 7005
Pasadena, California 91109-7005
Telephone: (800) 923-3334
<PAGE>
22 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FEDERAL TAX CONSIDERATIONS
What are some of the federal tax consequences which affect these Contracts?
A. GENERAL
Since federal tax law is complex, the tax consequences of purchasing this
contract will vary depending on your situation. You may need tax or legal advice
to help you determine whether purchasing this contract is right for you.
Our general discussion of the tax treatment of this contract is based on our
understanding of federal income tax laws as they are currently interpreted. A
detailed description of all federal income tax consequences regarding the
purchase of this contract cannot be made in the prospectus. We also do not
discuss state, municipal or other tax laws that may apply to this contract. For
detailed information, you should consult with a qualified tax adviser familiar
with your situation.
B. TAXATION OF AMERICAN MATURITY
AND THE SEPARATE ACCOUNT
The Separate Account is taxed as part of American Maturity 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"). 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.
Code Section 72 contains provisions for contract owners which are not
natural persons. Non-natural persons include corporations, trusts, limited
liability companies, partnerships and other types of legal entities. The tax
rules for contracts owned by non-natural persons are different from the
rules for contracts owned by individuals. For example, the annual net increase
in the value of the contract is currently includible 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:
- - certain annuities held by structured settlement companies,
- - certain annuities held by an employer with respect to a terminated qualified
retirement plan and
- - 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.
If the contract owner is a non-natural person, the primary annuitant is
treated as the contract owner in applying mandatory distribution rules. These
rules require that certain distributions be made upon the death of the contract
owner. A change in the primary annuitant is also 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
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 23
- --------------------------------------------------------------------------------
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.
ii. 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, 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. American Maturity 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 (not less frequently than annually) for the life (or
life expectancy) of the recipient (or the joint lives or life
expectancies of the recipient and the recipient's designated
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
<PAGE>
24 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
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 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 payment 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. Distributions must
begin within a year of the Certificate Owner's 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. This spousal continuation shall apply only
once for this contract.
3. DIVERSIFICATION REQUIREMENTS.
The Code requires that investments supporting your contract be adequately
diversified. Code Section 817 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.
If a contract is not treated as an annuity contract, the contract owner will be
subject to income tax on annual increases in cash value.
The Treasury Department's diversification regulations 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 the
case of government securities, each government agency or instrumentality is
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 still 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.
We monitor the diversification of investments in the separate accounts and
test for diversification as required by the Code. We intend to administer all
contracts subject to the diversification requirements in a manner that will
maintain adequate diversification.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 25
- --------------------------------------------------------------------------------
4. OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT.
In order for a variable annuity contract to qualify for tax deferral, assets
in the separate accounts supporting the contract must be considered to be owned
by the insurance company and not by the contract owner. It is unclear under what
circumstances an investor is considered to have enough control over the assets
in the separate account to be considered the owner of the assets for tax
purposes.
The IRS has issued several rulings discussing investor control. These
rulings say 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.
In its explanation of the diversification regulations, the Treasury
Department recognized 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, guidance has
yet to be issued. We do not know if additional guidance will be issued. If
guidance is issued, we do not know if it will have a retroactive effect.
Due to the lack of specific guidance on investor control, there is some
uncertainty about when a contract owner is considered the owner of the assets
for tax purposes. We reserve the right to modify the contract, as necessary, to
prevent you from being considered the owner of assets in the separate account.
D. FEDERAL INCOME TAX WITHHOLDING
Any portion of a distribution that is (or is deemed to be) current taxable
income to the Contract Owner will be subject to federal income tax withholding
and reporting under the Code. Generally, however, a Contract Owner may elect not
to have income taxes withheld or to have income taxes withheld at a different
rate by filing a completed election form with us. 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 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.
G. GENERATION-SKIPPING TRANSFERS
Under certain circumstances, the Internal Revenue Code may impose a
"generation skipping transfer tax" when all or part of an annuity is transferred
to, or a death benefit is paid to, an individual two or more generations younger
than the owner. Federal tax law may require us to deduct the tax from your
contract, or from any applicable payment, and pay it directly to the Internal
Revenue Service.
<PAGE>
26 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
TO
STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
SECTION PAGE
- ------- --------
<S> <C>
INTRODUCTION................................................
DESCRIPTION OF AMERICAN MATURITY LIFE INSURANCE COMPANY.....
SAFEKEEPING OF ASSETS.......................................
INDEPENDENT PUBLIC ACCOUNTANTS..............................
DISTRIBUTION OF THE CERTIFICATES............................
ANNUITY PERIOD..............................................
CALCULATION OF YIELD AND RETURN.............................
PERFORMANCE COMPARISONS.....................................
FINANCIAL STATEMENTS........................................
</TABLE>
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 27
- --------------------------------------------------------------------------------
APPENDIX I
INFORMATION REGARDING TAX-QUALIFIED RETIREMENT PLANS
This summary does not attempt to provide more than general information about
the federal income tax rules associated with use of a Contract by a
tax-qualified retirement plan. Because of the complexity of the federal tax
rules, owners, participants and beneficiaries are encouraged to consult their
own tax advisors as to specific tax consequences.
The federal tax rules applicable to owners of Contracts under tax-qualified
retirement plans vary according to the type of plan as well as the terms and
conditions of the plan itself. Contract owners, plan participants and
beneficiaries are cautioned that the rights and benefits of any person may be
controlled by the terms and conditions of the tax-qualified retirement plan
itself, regardless of the terms and conditions of a Contract. We are not bound
by the terms and conditions of such plans to the extent such terms conflict with
a Contract, unless we specifically consent to be bound.
Some tax-qualified retirement plans are subject to distribution and other
requirements that are not incorporated into our administrative procedures.
Contract owners, participants and beneficiaries are responsible for determining
that contributions, distributions and other transactions comply with applicable
law. Tax penalties may apply to transactions with respect to tax-qualified
retirement plans if applicable federal income tax rules and restrictions are not
carefully observed.
We do not currently offer the Contracts in connection with all of the types
of tax-qualified retirement plans discussed below and may not offer the
Contracts for all types of tax-qualified retirement plans in the future.
1. TAX-QUALIFIED PENSION OR PROFIT-SHARING PLANS -- Eligible employers can
establish certain tax-qualified pension and profit-sharing plans under
section 401 of the Code. Rules under section 401(k) of the Code govern certain
"cash or deferred arrangements" under such plans. Rules under section 408(k)
govern "simplified employee pensions". Tax-qualified pension and profit-sharing
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 the Contracts in connection with
tax-qualified pension or profit-sharing plans should seek competent tax and
other legal advice.
2. TAX SHELTERED ANNUITIES UNDER SECTION 403(b) -- Public schools and
certain types of charitable, educational and scientific organizations, as
specified in section 501(c)(3) of the Code, can purchase tax-sheltered annuity
contracts for their employees. Tax-deferred contributions can be made to
tax-sheltered annuity contracts under section 403(b) of the Code, subject to
certain limitations. Generally, such contributions may not exceed the lesser of
$10,500 (indexed) or 20% of the 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:
- - after the participating employee attains age 59 1/2;
- - upon separation from service;
- - upon death or disability; or
- - 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.
3. DEFERRED COMPENSATION PLANS UNDER SECTION 457 -- A governmental employer
or a tax-exempt employer other than a governmental unit can establish a Deferred
Compensation Plan under section 457 of the Code. For these purposes, a
"governmental employer" is a State, a political subdivision of a State, or an
agency or an instrumentality of a State or political subdivision of a State.
Employees and independent contractors performing services for a governmental or
tax-exempt employer can elect to have contributions made to a Deferred
Compensation Plan of their employer in accordance with the employer's plan and
section 457 of the Code.
Deferred Compensation Plans that meet the requirements of section 457(b) of
the Code are called "eligible" Deferred Compensation Plans. Section 457(b)
limits the amount of contributions that can be made to an eligible Deferred
Compensation Plan on behalf of a participant. Generally, the limitation on
contributions is 33 1/3% of a participant's includable compensation (typically
25% of gross compensation) or, for 2000, $8,000 (indexed), whichever is less.
The plan may provide for additional "catch-up" contributions during the three
taxable years ending before the year in which the participant attains normal
retirement age.
<PAGE>
28 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
All of the assets and income of an eligible Deferred Compensation Plan of a
governmental employer must be held in trust for the exclusive benefit of
participants and their beneficiaries. For this purpose, custodial accounts and
certain annuity contracts are treated as trusts. The requirement of a trust does
not apply to amounts under a Deferred Compensation Plan of a tax-exempt
(non-governmental) employer. In addition, the requirement of a trust does not
apply to amounts under a Deferred Compensation Plan of a governmental employer
if the Deferred Compensation Plan is not an eligible plan within the meaning of
section 457(b) of the Code. In the absence of such a trust, amounts under the
plan will be subject to the claims of the 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 as defined in the Code.
Under present federal tax law, amounts accumulated in a Deferred
Compensation Plan under section 457 of the Code cannot be transferred or rolled
over on a tax-deferred basis except for certain transfers to other Deferred
Compensation Plans under section 457 in limited cases.
4. INDIVIDUAL RETIREMENT ANNUITIES ("IRAS") UNDER SECTION 408
TRADITIONAL IRAS. Eligible individuals can establish individual retirement
programs under section 408 of the Code through the purchase of an IRA.
Section 408 imposes limits with respect to IRAs, including limits on the amount
that may be contributed to an IRA, the amount of such contributions that may be
deducted from taxable income, the persons who may be eligible to contribute to
an IRA, and the time when distributions commence from an IRA. Distributions from
certain tax-qualified retirement plans may be "rolled-over" to an IRA on a
tax-deferred basis.
SIMPLE IRAS. Eligible employees may establish SIMPLE IRAs in connection with
a SIMPLE IRA plan of an employer under section 408(p) of the Code. 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 Traditional IRA only after two years have expired since the employee first
commenced participation in the employer's SIMPLE IRA plan. Amounts cannot be
rolled over to a SIMPLE IRA from a qualified plan or a Traditional IRA. American
Maturity is a non-designated financial institution for purposes of the SIMPLE
IRA rules.
ROTH IRAS. Eligible individuals may establish Roth IRAs under section 408A
of the Code. Contributions to a Roth IRA are not deductible. Subject to special
limitations, a Traditional IRA may be converted into a Roth IRA or a
distribution from a Traditional IRA may be rolled over to a Roth IRA. However, a
conversion or a rollover from a Traditional 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.
5. FEDERAL TAX PENALTIES AND WITHHOLDING
Distributions from tax-qualified retirement plans are generally taxed as
ordinary income 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 that bears the same ratio as the after-tax
contributions bear to the expected return.
(a) PENALTY TAX ON EARLY DISTRIBUTIONS
Section 72(t) of the Code imposes an additional penalty tax equal to 10% of
the taxable portion of a distribution from certain tax-qualified retirement
plans. However, the 10% penalty tax does not apply to a distributions that is:
- Made on or after the date on which the employee reaches age 59 1/2;
- Made to a beneficiary (or to the estate of the employee) on or after the
death of the employee;
- Attributable to the employee's becoming disabled (as defined in the Code);
- Part of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
employee or the joint lives (or joint life expectancies) of the employee and
his or her designated beneficiary;
- Except in the case of an IRA, made to an employee after separation from
service after reaching age 55; or
- Not greater than the amount allowable as a deduction to the employee for
eligible medical expenses during the taxable year.
In addition, the 10% penalty tax does not apply to a distribution from an
IRA that is:
- Made after separation from employment to an unemployed IRA owner for health
insurance premiums, if certain conditions are met;
- Not in excess of the amount of certain qualifying higher education expenses,
as defined by section 72(t)(7) of the Code; or
- A qualified first-time homebuyer distribution meeting the requirements
specified at section 72(t)(8) of the Code.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 29
- --------------------------------------------------------------------------------
If you are a participant in a SIMPLE IRA plan, you should be aware that the
10% penalty tax is increased to 25% with respect to non-exempt early
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.
(b) MINIMUM DISTRIBUTION PENALTY TAX
If the amount distributed is less than the minimum required distribution for
the year, the Participant is subject to a 50% penalty 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 the Required
Beginning Date. Generally, the Required Beginning Date is April 1 of the
calendar year following the later of:
- the calendar year in which the individual attains age 70 1/2; or
- the calendar year in which the individual retires from service with the
employer sponsoring the plan.
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:
- the life of the Participant or the lives of the Participant and the
Participant's designated beneficiary, or
- over a period not extending beyond the life expectancy of the Participant or
the joint life expectancy of the Participant and the Participant's
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 and distribution is over the life
of such 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.
(c) WITHHOLDING
In general, regular wage withholding rules apply to distributions from IRAs
and plans described in section 457 of the Code. 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.
Mandatory federal income tax withholding at a flat rate of 20% will
generally apply to other distributions from such other tax-qualified retirement
plans unless such distributions are:
- the non-taxable portion of the distribution;
- required minimum distributions; or
- direct transfer distributions.
Direct transfer distributions are direct payments to an IRA or to another
eligible retirement plan under Code section 401(a)(31).
Certain states require withholding of state taxes when federal income tax is
withheld.
<PAGE>
30 AMERICAN MATURITY LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
This form must be completed for all tax sheltered annuities.
SECTION 403(b)(11) ACKNOWLEDGMENT FORM
The variable annuity Certificate which you have recently purchased is
subject to certain restrictions imposed by the Tax Reform Act of 1986.
Contributions to the Certificate after December 31, 1988 and any increases in
cash value after December 31, 1988 may not be distributed to you unless you
have:
a. attained age 59 1/2,
b. separated from service,
c. died, or
d. become disabled.
Distributions of post December 31, 1988 contributions (excluding any income
thereon) may also be made if you have experienced a financial hardship.
Also, there may be a 10% penalty tax for distributions made prior to age
59 1/2 because of financial hardship or separation from service.
Also, please be aware that your 403(b) Plan may also offer other financial
alternatives other than your annuity. Please refer to your Plan.
Please complete the following and return to:
American Maturity Life Insurance Company
P.O. Box 7005
Pasadena, California 91109-7005
Name of Contract Owner/Participant: ___________________________________________
Address: ______________________________________________________________________
City or Plan/School District: _________________________________________________
Date: _________________________________________________________________________
Contract No.: _________________________________________________________________
Signature: ____________________________________________________________________
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY 31
- --------------------------------------------------------------------------------
To obtain a Statement of Additional Information, please complete the form
below and mail to:
American Maturity Life Insurance Company
P.O. Box 7005
Pasadena, California 91109-7005
Please send a Statement of Additional Information to me at the following
address:
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City/State Zip Code
<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, P.O. Box, Pasadena, California 91109-7005.
Date of Prospectus: May 1, 2000
Date of Statement of Additional Information: May 1, 2000
<PAGE>
-3-
<TABLE>
<CAPTION>
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
<S> <C>
INTRODUCTION........................................................ 4
DESCRIPTION OF AMERICAN MATURITY LIFE INSURANCE COMPANY............. 4
SAFEKEEPING OF ASSETS............................................... 5
INDEPENDENT PUBLIC ACCOUNTANTS...................................... 5
DISTRIBUTION OF THE CERTIFICATES.................................... 5
ANNUITY PERIOD...................................................... 6
CALCULATION OF YIELD AND RETURN..................................... 11
PERFORMANCE COMPARISONS............................................. 15
FINANCIAL STATEMENTS................................................ SA-1
</TABLE>
<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 ("American 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
ultimately controlled by The Hartford Financial Services Group, Inc. 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.
<PAGE>
-5-
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.
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 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 financial statements of
American Maturity Life Insurance Company which states the statutory 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 and
will offer the Certificates on a continued basis.
HSD is an affiliate of American Maturity. Both HSD and American Maturity
are ultimately controlled by The Hartford Financial Services Group, Inc. The
principal business address of HSD is 200 Hopmeadow Street, Simsbury, CT 06089.
HSD is registered with the Securities and Exchange Commission under the
Securities 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
<PAGE>
-6-
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 AARP 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.
American Maturity currently does not pay HSD underwriting commissions for
its role as Principal Underwriter of all variable annuities associated with
this Separate Account.
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," in 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.
<PAGE>
-7-
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 Internal Revenue Service, 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 under Option 5, Designated Period for 5 years.
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
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.
<PAGE>
-8-
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.
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.
<TABLE>
Illustration of Annuity Payments
Male Individual Age 65, Life Annuity
With 120 Payments Certain
-------------------------
<S> <C>
1. Net amount applied.................................................... ..$10,000.00
2. Initial monthly income per $1,000 of payment applied.................. ........6.78
3. Initial monthly payment (1x2/1,000)................................... .......67.80
4. Annuity Unit value.................................................... ....0.995995
5. Number of monthly Annuity Units (3/4)................................. ......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
</TABLE>
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.
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.
<PAGE>
-9-
Joint and Last Survivor Life 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.
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
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.
Payment for a Designated Period option 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%.
<TABLE>
Illustration of Calculation of Annuity Unit Value
-------------------------------------------------
<S> <C>
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
</TABLE>
<PAGE>
-10-
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.
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.
<PAGE>
-11-
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
YIELD OF A MONEY MARKET SUB-ACCOUNT. As summarized in the prospectus under the
heading "Performance Related Information," the yield of a Money Market
Sub-Account for a seven day period (the "base period") will be computed by
determining the "net change in value" (calculated as set forth below) of a
hypothetical account having a balance of one accumulation unit of the
Sub-Account at the beginning of the period, subtracting a hypothetical charge
reflecting deductions from Contract Owner accounts, and dividing the difference
by the value of the account at the beginning of the base period to obtain the
base period return, and then multiplying the base period return by 365/7 with
the resulting yield figure carried to the nearest hundredth of one percent. Net
changes in value of a hypothetical account will include net investment income of
the account (accrued daily dividends as declared by the underlying funds, less
daily expense charges of the account) for the period, but will not include
realized gains or losses or unrealized appreciation or depreciation on the
underlying fund shares.
The effective yield is calculated by compounding the base period return by
adding 1, raising the sum to a power equal to 365/7 and subtracting 1 from the
result, according to the following formula:
365/7
Effective Yield = [(Base Period Return + 1) ] - 1
A MONEY MARKET SUB-ACCOUNT'S YIELD AND EFFECTIVE YIELD WILL VARY IN RESPONSE TO
FLUCTUATIONS IN INTEREST RATES AND IN THE EXPENSES OF THE SUB-ACCOUNT. THE
CURRENT YIELD AND EFFECTIVE YIELD REFLECT RECURRING CHARGES ON THE SEPARATE
ACCOUNT LEVEL, INCLUDING THE MAXIMUM ANNUAL MAINTENANCE FEE.
<PAGE>
-12-
<TABLE>
<CAPTION>
YIELD AND EFFECTIVE YIELD FOR THE SEVEN DAY PERIOD ENDING DECEMBER 31, 1999
- ---------------------------------------- ------------------------------------- -------------------------------------
SUB-ACCOUNT YIELD EFFECTIVE YIELD
- ---------------------------------------- ------------------------------------- -------------------------------------
<S> <C> <C>
Money Market Portfolio 4.80% 4.92%
- ---------------------------------------- ------------------------------------- -------------------------------------
</TABLE>
YIELD OF SUB-ACCOUNTS. As summarized in the prospectus under the heading
"Performance Related Information," yields of Sub-Accounts will be computed by
annualizing a recent month's net investment income, divided by a Fund share's
net asset value on the last trading day of that month. Net changes in the value
of a hypothetical account will assume the change in the underlying mutual fund's
"net asset value per share" for the same period in addition to the daily expense
charge assessed, at the sub-account level for the respective period. The
Sub-Accounts' yields will vary from time to time depending upon market
conditions and, the composition of the underlying funds' portfolios. Yield
should also be considered relative to changes in the value of the Sub-Accounts'
shares and to the relative risks associated with the investment objectives and
policies of the underlying Fund.
THE YIELD REFLECTS RECURRING CHARGES ON THE SEPARATE ACCOUNT LEVEL, INCLUDING
THE ANNUAL MAINTENANCE FEE.
Yield calculations of the Sub-Accounts used for illustration purposes reflect
the interest earned by the Sub-Accounts, less applicable asset charges assessed
against a Contract Owner's account over the base period. Yield quotations based
on a 30 day period were computed by dividing the dividends and interest earned
during the period by the maximum offering price per unit on the last day of the
period, according to the following formula:
Example:
6
Current Yield Formula for the Sub-Account 2[((A-B)/(CD) + 1) - 1]
Where A = Dividends and interest earned during the period.
B = Expenses accrued for the period (net of reimbursements).
C = The average daily number of units outstanding during the
period that were entitled to receive dividends.
D = The maximum offering price per unit on the last day of the
period.
<PAGE>
-13-
<TABLE>
<CAPTION>
YIELD QUOTATION BASED ON A 30 DAY PERIOD ENDED DECEMBER 31, 1999
- ----------------------------------------------------------------------------- --------------------------------------
SUB-ACCOUNT YIELD
- ----------------------------------------------------------------------------- --------------------------------------
<S> <C>
Bond Portfolio 3.74%
- ----------------------------------------------------------------------------- --------------------------------------
</TABLE>
At any time in the future, yields and total return may be higher or lower than
past yields and there can be no assurance that any historical results will
continue.
CALCULATION OF TOTAL RETURN. As summarized in the prospectus under the heading
"Performance Related Information," total return is a measure of the change in
value of an investment in a Sub-Account over the period covered and assumes that
the Optional Death Benefit has not been elected. The formula for total return
used herein includes three steps: (1) calculating the value of the hypothetical
initial investment of $1,000 as of the end of the period by multiplying the
total number of units owned at the end of the period by the unit value per unit
on the last trading day of the period; (2) assuming redemption at the end of the
period and deducting any applicable contingent deferred sales charge and (3)
dividing this account value for the hypothetical investor by the initial $1,000
investment and annualizing the result for periods of less than one year.
Standardized total return will be calculated since the inception of the Separate
Account for one year, five years and ten years or some other relevant periods if
a Sub-Account has not been in existence for at least ten years.
The following are the standardized average annual total return quotations for
the Sub-Accounts.
<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FOR YEAR ENDED DECEMBER 31, 1999
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
SEPARATE SINCE INCEPTION
SUB-ACCOUNT ACCOUNT 1 YEAR 5 YEAR 10 YEAR OF THE SEPARATE
INCEPTION ACCOUNT
DATE
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
Appreciation (Dreyfus) 2/28/96 3.01% N/A N/A 19.74%
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
Small Cap (Dreyfus) 2/28/96 14.61% N/A N/A 8.65%
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
Balanced (Janus Aspen) 2/28/96 18.19% N/A N/A 21.43%
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
Worldwide Growth (Janus Aspen) 2/28/96 55.56% N/A N/A 31.65%
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
AMT Partners (Neuberger Berman 2/28/96 -1.04% N/A N/A 13.22%
Management)
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
Bond (Scudder) 2/28/96 -9.29% N/A N/A 1.06%
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
Capital Growth (Scudder) 2/28/96 26.59% N/A N/A 24.40%
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
<PAGE>
-14-
<CAPTION>
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
SEPARATE SINCE INCEPTION
SUB-ACCOUNT ACCOUNT 1 YEAR 5 YEAR 10 YEAR OF THE SEPARATE
INCEPTION ACCOUNT
DATE
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
Growth & Income (Scudder) 2/28/96 -2.32% N/A N/A 11.96%
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
Money Market (Scudder) 2/28/96 -3.39% N/A N/A 1.22%
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
</TABLE>
Performance figures above do not reflect any deductions for Optional Death
Benefit charges. Performance would have been lower had the Optional Death
Benefit been available and been chosen.
In addition to the standardized total return, the Sub-Account may advertise a
non-standardized total return. This figure will usually be calculated since the
inception of the underlying fund for one year, five years, and ten years or
other periods. Non-standardized total return is measured in the same manner as
the standardized total return described above, except that the contingent
deferred sales charge and the Annual Maintenance Fee are not deducted.
Therefore, non-standardized total return for a Sub-Account is higher than
standardized total return for a Sub-Account. The following are the
non-standardized annualized total return quotations for the Sub-Accounts.
<TABLE>
<CAPTION>
NON-STANDARDIZED ANNUALIZED TOTAL RETURN THAT PRE-DATE THE INCEPTION DATE OF THE SEPARATE ACCOUNT
FOR YEAR ENDED DECEMBER 31, 1999
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
SUB-ACCOUNT FUND 1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION
INCEPTION OF THE FUND
DATE
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
Appreciation (Dreyfus) 4/5/93 10.51% 24.46% N/A 19.02%
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
Small Cap (Dreyfus) 8/31/90 22.11% 14.95% N/A 34.50%
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
Balanced (Janus Aspen) 9/13/93 25.69% 23.63% N/A 19.59%
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
Worldwide Growth (Janus Aspen) 9/13/93 63.06% 32.47% N/A 28.60%
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
AMT Partners (Neuberger Berman 3/22/94 6.46% 20.00% N/A 16.48%
Management)
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
Bond (Scudder) 7/16/85 -1.79% 6.04% 6.46% N/A
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
Capital Growth (Scudder) 7/16/85 34.09% 27.36% 17.03% N/A
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
Growth & Income (Scudder) 5/2/94 5.18% 17.96% N/A 16.55%
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
Money Market (Scudder) 7/16/85 4.11% 4.37% 4.05% N/A
- --------------------------------- -------------- -------------- --------------- ---------------- ------------------
</TABLE>
<PAGE>
-15-
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 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
<PAGE>
-16-
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 statements of assets and liabilities of
American Maturity Life Insurance Company Separate Account AMLVA (Scudder
Variable Life Investment Fund Money Market Portfolio, Scudder Variable Life
Investment Fund Bond Portfolio, Scudder Variable Life Investment Fund Capital
Growth Portfolio, Scudder Variable Life Investment Fund Growth and Income
Portfolio, Neuberger & Berman Advisers Management Trust Partners Portfolio,
Dreyfus Variable Investment Fund Capital Appreciation Portfolio, Dreyfus
Variable Investment Fund Small Cap Portfolio, Janus Aspen Series Balanced
Portfolio, and Janus Aspen Series Worldwide Growth Portfolio sub-accounts),
(collectively, the Account) as of December 31, 1999, and the related statements
of operations and the statements of changes in net assets for the periods
presented. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Account as of December 31,
1999, and the results of its operations and the changes in its net assets for
the periods presented in conformity with generally accepted accounting
principles.
Hartford, Connecticut
February 17, 2000 ARTHUR ANDERSEN LLP
_____________________________________SA-1_____________________________________
<PAGE>
SEPARATE ACCOUNT AMLVA
- --------------------------------------------------------------------------------
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
SCUDDER SCUDDER SCUDDER
VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT
FUND MONEY MARKET FUND BOND FUND CAPITAL 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 4,808,340
Cost $4,808,340
Market Value........................... $4,808,340 -- --
Scudder Variable Life Investment Fund
Bond Portfolio
Shares 1,330,302
Cost $9,083,110
Market Value........................... -- $ 8,633,660 --
Scudder Variable Life Investment Fund
Capital Growth Portfolio
Shares 172,092
Cost $3,826,624
Market Value........................... -- -- $5,013,036
Scudder Variable Life Investment Fund
Growth and Income Portfolio
Shares 1,105,547
Cost $12,497,202
Market Value........................... -- -- --
Neuberger & Berman Advisers Management
Trust Partners Portfolio
Shares 358,360
Cost $6,869,142
Market Value........................... -- -- --
Dreyfus Variable Investment Fund Capital
Appreciation Portfolio
Shares 395,896
Cost $12,981,387
Market Value........................... -- -- --
Dreyfus Variable Investment Fund Small
Cap Portfolio
Shares 29,630
Cost $1,708,608
Market Value........................... -- -- --
Janus Aspen Series Balanced Portfolio
Shares 300,541
Cost $6,385,725
Market Value........................... -- -- --
Janus Aspen Series Worldwide Growth
Portfolio
Shares 343,244
Cost $9,300,587
Market Value........................... -- -- --
Due from American Maturity Life Insurance
Company................................... -- -- --
Receivable from fund shares sold........... 7,188 17,971 13,039
---------- ----------- ----------
Total Assets............................... 4,815,528 8,651,631 5,026,075
---------- ----------- ----------
LIABILITIES:
Due to American Maturity Life Insurance
Company................................... 6,839 17,979 13,028
Payable for fund shares purchased.......... -- -- --
---------- ----------- ----------
Total Liabilities.......................... 6,839 17,979 13,028
---------- ----------- ----------
Net Assets (variable annuity contract
liabilities).............................. $4,808,689 $ 8,633,652 $5,013,047
========== =========== ==========
DEFERRED ANNUITY CONTRACTS IN THE
ACCUMULATION PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by Participants................ 427,541 768,838 245,103
Unit Values................................ $11.247317 $ 11.229484 $20.452818
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
_____________________________________SA-2_____________________________________
<PAGE>
<TABLE>
<CAPTION>
SCUDDER NEUBERGER & BERMAN DREYFUS
VARIABLE LIFE INVESTMENT ADVISERS MANAGEMENT VARIABLE INVESTMENT FUND
FUND GROWTH AND INCOME TRUST PARTNERS CAPITAL APPRECIATION
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------- ------------------------
<S> <C> <C> <C>
ASSETS:
Investments:
Scudder Variable Life Investment Fund Money
Market Portfolio
Shares 4,808,340
Cost $4,808,340
Market Value................................ -- -- --
Scudder Variable Life Investment Fund Bond
Portfolio
Shares 1,330,302
Cost $9,083,110
Market Value................................ -- -- --
Scudder Variable Life Investment Fund Capital
Growth Portfolio
Shares 172,092
Cost $3,826,624
Market Value................................ -- -- --
Scudder Variable Life Investment Fund Growth
and Income Portfolio
Shares 1,105,547
Cost $12,497,202
Market Value................................ $12,116,794 -- --
Neuberger & Berman Advisers Management Trust
Partners Portfolio
Shares 358,360
Cost $6,869,142
Market Value................................ -- $ 7,038,196 --
Dreyfus Variable Investment Fund Capital
Appreciation Portfolio
Shares 395,896
Cost $12,981,387
Market Value................................ -- -- $15,784,361
Dreyfus Variable Investment Fund Small Cap
Portfolio
Shares 29,630
Cost $1,708,608
Market Value................................ -- -- --
Janus Aspen Series Balanced Portfolio
Shares 300,541
Cost $6,385,725
Market Value................................ -- -- --
Janus Aspen Series Worldwide Growth Portfolio
Shares 343,244
Cost $9,300,587
Market Value................................ -- -- --
Due from American Maturity Life Insurance
Company........................................ -- -- --
Receivable from fund shares sold................ 30,126 25,728 37,743
----------- ----------- -----------
Total Assets.................................... 12,146,920 7,063,924 15,822,104
----------- ----------- -----------
LIABILITIES:
Due to American Maturity Life Insurance
Company........................................ 30,132 25,730 37,757
Payable for fund shares purchased............... -- -- --
----------- ----------- -----------
Total Liabilities............................... 30,132 25,730 37,757
----------- ----------- -----------
Net Assets (variable annuity contract
liabilities)................................... $12,116,788 $ 7,038,194 $15,784,347
=========== =========== ===========
DEFERRED ANNUITY CONTRACTS IN THE ACCUMULATION
PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by Participants..................... 896,633 518,735 938,600
Unit Values..................................... $ 13.513659 $ 13.568003 $ 16.816911
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DREYFUS JANUS JANUS
VARIABLE INVESTMENT ASPEN SERIES ASPEN SERIES
FUND SMALL CAP BALANCED WORLDWIDE 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 4,808,340
Cost $4,808,340
Market Value................................ -- -- --
Scudder Variable Life Investment Fund Bond
Portfolio
Shares 1,330,302
Cost $9,083,110
Market Value................................ -- -- --
Scudder Variable Life Investment Fund Capital
Growth Portfolio
Shares 172,092
Cost $3,826,624
Market Value................................ -- -- --
Scudder Variable Life Investment Fund Growth
and Income Portfolio
Shares 1,105,547
Cost $12,497,202
Market Value................................ -- -- --
Neuberger & Berman Advisers Management Trust
Partners Portfolio
Shares 358,360
Cost $6,869,142
Market Value................................ -- -- --
Dreyfus Variable Investment Fund Capital
Appreciation Portfolio
Shares 395,896
Cost $12,981,387
Market Value................................ -- -- --
Dreyfus Variable Investment Fund Small Cap
Portfolio
Shares 29,630
Cost $1,708,608
Market Value................................ $ 1,965,677 -- --
Janus Aspen Series Balanced Portfolio
Shares 300,541
Cost $6,385,725
Market Value................................ -- $8,391,114 --
Janus Aspen Series Worldwide Growth Portfolio
Shares 343,244
Cost $9,300,587
Market Value................................ -- -- $16,389,904
Due from American Maturity Life Insurance
Company........................................ -- -- --
Receivable from fund shares sold................ 363 7,095 35,231
----------- ---------- -----------
Total Assets.................................... 1,966,040 8,398,209 16,425,135
----------- ---------- -----------
LIABILITIES:
Due to American Maturity Life Insurance
Company........................................ 363 7,064 35,223
Payable for fund shares purchased............... -- -- --
----------- ---------- -----------
Total Liabilities............................... 363 7,064 35,223
----------- ---------- -----------
Net Assets (variable annuity contract
liabilities)................................... $ 1,965,677 $8,391,145 $16,389,912
=========== ========== ===========
DEFERRED ANNUITY CONTRACTS IN THE ACCUMULATION
PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by Participants..................... 142,098 434,696 689,383
Unit Values..................................... $ 13.833259 $19.303459 $ 23.774743
</TABLE>
_____________________________________SA-3_____________________________________
<PAGE>
SEPARATE ACCOUNT AMLVA
- --------------------------------------------------------------------------------
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
SCUDDER SCUDDER SCUDDER
VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT
FUND MONEY MARKET FUND BOND FUND CAPITAL GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends....................................... $234,286 $ 265,929 $ 9,017
EXPENSES:
Mortality and expense undertakings.............. (31,254) (56,472) (24,225)
-------- --------- ----------
Net investment income (loss).................. 203,032 209,457 (15,208)
-------- --------- ----------
CAPITAL GAINS INCOME.............................. -- 144,921 332,916
-------- --------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized (loss) gain on security
transactions................................... -- (6,702) 11,665
Net unrealized (depreciation) appreciation of
investments during the period.................. -- (490,361) 912,571
-------- --------- ----------
Net (loss) gain on investments................ -- (497,063) 924,236
-------- --------- ----------
Net increase (decrease) in net assets
resulting from operations.................... $203,032 $(142,685) $1,241,944
======== ========= ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
_____________________________________SA-4_____________________________________
<PAGE>
<TABLE>
<CAPTION>
SCUDDER NEUBERGER & BERMAN DREYFUS
VARIABLE LIFE INVESTMENT ADVISERS MANAGEMENT VARIABLE INVESTMENT FUND
FUND GROWTH AND INCOME TRUST PARTNERS CAPITAL APPRECIATION
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------- ------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends....................................... $ 127,464 $ 75,441 $ 88,160
EXPENSES:
Mortality and expense undertakings.............. (76,795) (43,739) (95,483)
--------- -------- ----------
Net investment income (loss).................. 50,669 31,702 (7,323)
--------- -------- ----------
CAPITAL GAINS INCOME.............................. 864,986 131,201 58,938
--------- -------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized (loss) gain on security
transactions................................... (18,067) 3,883 5,717
Net unrealized (depreciation) appreciation of
investments during the period.................. (281,828) 262,669 1,397,346
--------- -------- ----------
Net (loss) gain on investments................ (299,895) 266,552 1,403,063
--------- -------- ----------
Net increase (decrease) in net assets
resulting from operations.................... $ 615,760 $429,455 $1,454,678
========= ======== ==========
<CAPTION>
DREYFUS JANUS JANUS
VARIABLE INVESTMENT ASPEN SERIES ASPEN SERIES
FUND SMALL CAP BALANCED WORLDWIDE GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------- ------------ ----------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends....................................... $ 1,165 $ 167,665 $ 21,847
EXPENSES:
Mortality and expense undertakings.............. (10,947) (45,007) (75,477)
-------- ---------- ----------
Net investment income (loss).................. (9,782) 122,658 (53,630)
-------- ---------- ----------
CAPITAL GAINS INCOME.............................. -- -- --
-------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized (loss) gain on security
transactions................................... 5,861 17,925 169,970
Net unrealized (depreciation) appreciation of
investments during the period.................. 357,621 1,438,496 6,315,221
-------- ---------- ----------
Net (loss) gain on investments................ 363,482 1,456,421 6,485,191
-------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations.................... $353,700 $1,579,079 $6,431,561
======== ========== ==========
</TABLE>
_____________________________________SA-5_____________________________________
<PAGE>
SEPARATE ACCOUNT AMLVA
- --------------------------------------------------------------------------------
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
SCUDDER SCUDDER SCUDDER
VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT
FUND MONEY MARKET FUND BOND FUND CAPITAL GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 203,032 $ 209,457 $ (15,208)
Capital gains income.................. -- 144,921 332,916
Net realized (loss) gain on security
transactions......................... -- (6,702) 11,665
Net unrealized (depreciation)
appreciation of investments during
the period........................... -- (490,361) 912,571
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations............ 203,032 (142,685) 1,241,944
----------- ---------- ----------
UNIT TRANSACTIONS:
Purchases............................. 2,804,214 1,980,360 816,055
Net transfers......................... (1,904,451) 244,508 399,493
Surrenders for benefit payments and
fees................................. (293,387) (502,365) (312,789)
Net annuity transactions.............. -- -- --
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions..... 606,376 1,722,503 902,759
----------- ---------- ----------
Total increase in net assets.......... 809,408 1,579,818 2,144,703
NET ASSETS:
Beginning of period................... 3,999,281 7,053,834 2,868,344
----------- ---------- ----------
End of period......................... $ 4,808,689 $8,633,652 $5,013,047
=========== ========== ==========
</TABLE>
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
SCUDDER SCUDDER SCUDDER
VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT VARIABLE LIFE INVESTMENT
FUND MONEY MARKET FUND BOND FUND CAPITAL GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss).................. $ 97,480 $ 146,880 $ (2,035)
Capital gains income..... -- 3,650 42,529
Net realized gain (loss)
on security
transactions............ -- 629 (5,726)
Net unrealized
appreciation
(depreciation) of
investments during the
period.................. -- 32,172 263,771
----------- ---------- ----------
Net increase (decrease)
in net assets resulting
from operations......... 97,480 183,331 298,539
----------- ---------- ----------
UNIT TRANSACTIONS:
Purchases................ 10,698,733 5,222,099 1,667,990
Net transfers............ (7,086,472) 1,174,593 426,611
Surrenders for benefit
payments and fees....... (52,625) (84,349) (88,437)
----------- ---------- ----------
Net increase (decrease)
in net assets resulting
from unit
transactions............ 3,559,636 6,312,343 2,006,164
----------- ---------- ----------
Total increase (decrease)
in net assets........... 3,657,116 6,495,674 2,304,703
NET ASSETS:
Beginning of period...... 342,165 558,160 563,641
----------- ---------- ----------
End of period............ $ 3,999,281 $7,053,834 $2,868,344
=========== ========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
_____________________________________SA-6_____________________________________
<PAGE>
<TABLE>
<CAPTION>
SCUDDER NEUBERGER & BERMAN DREYFUS
VARIABLE LIFE INVESTMENT ADVISERS MANAGEMENT VARIABLE INVESTMENT FUND
FUND GROWTH AND INCOME TRUST PARTNERS CAPITAL APPRECIATION
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------- ------------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 50,669 $ 31,702 $ (7,323)
Capital gains income.................. 864,986 131,201 58,938
Net realized (loss) gain on security
transactions......................... (18,067) 3,883 5,717
Net unrealized (depreciation)
appreciation of investments during
the period........................... (281,828) 262,669 1,397,346
----------- ---------- -----------
Net increase (decrease) in net assets
resulting from operations............ 615,760 429,455 1,454,678
----------- ---------- -----------
UNIT TRANSACTIONS:
Purchases............................. 2,117,964 1,214,096 3,729,452
Net transfers......................... (284,325) (174,104) (28,950)
Surrenders for benefit payments and
fees................................. (677,795) (379,759) (893,569)
Net annuity transactions.............. -- -- 34,245
----------- ---------- -----------
Net increase (decrease) in net assets
resulting from unit transactions..... 1,155,844 660,233 2,841,178
----------- ---------- -----------
Total increase in net assets.......... 1,771,604 1,089,688 4,295,856
NET ASSETS:
Beginning of period................... 10,345,184 5,948,506 11,488,491
----------- ---------- -----------
End of period......................... $12,116,788 $7,038,194 $15,784,347
=========== ========== ===========
<CAPTION>
DREYFUS JANUS JANUS
VARIABLE INVESTMENT ASPEN SERIES ASPEN SERIES
FUND SMALL CAP BALANCED WORLDWIDE GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------- ------------ ----------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ (9,782) $ 122,658 $ (53,630)
Capital gains income.................. -- -- --
Net realized (loss) gain on security
transactions......................... 5,861 17,925 169,970
Net unrealized (depreciation)
appreciation of investments during
the period........................... 357,621 1,438,496 6,315,221
---------- ---------- -----------
Net increase (decrease) in net assets
resulting from operations............ 353,700 1,579,079 6,431,561
---------- ---------- -----------
UNIT TRANSACTIONS:
Purchases............................. 242,511 2,419,617 2,645,030
Net transfers......................... (154,332) 1,006,638 (451,507)
Surrenders for benefit payments and
fees................................. (117,676) (503,665) (811,901)
Net annuity transactions.............. 15,768 -- --
---------- ---------- -----------
Net increase (decrease) in net assets
resulting from unit transactions..... (13,729) 2,922,590 1,381,622
---------- ---------- -----------
Total increase in net assets.......... 339,971 4,501,669 7,813,183
NET ASSETS:
Beginning of period................... 1,625,706 3,889,476 8,576,729
---------- ---------- -----------
End of period......................... $1,965,677 $8,391,145 $16,389,912
========== ========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCUDDER NEUBERGER & BERMAN DREYFUS DREYFUS
VARIABLE LIFE INVESTMENT ADVISERS MANAGEMENT VARIABLE INVESTMENT FUND VARIABLE INVESTMENT
FUND GROWTH AND INCOME TRUST PARTNERS CAPITAL APPRECIATION FUND SMALL CAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------- ------------------------ -------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss).................. $ 76,351 $ (24,149) $ 12,503 $ (8,774)
Capital gains income..... 177,059 159,547 843 26,295
Net realized gain (loss)
on security
transactions............ (14) (1,286) (983) (5,037)
Net unrealized
appreciation
(depreciation) of
investments during the
period.................. (157,083) (124,793) 1,382,443 (80,516)
----------- ---------- ----------- ----------
Net increase (decrease)
in net assets resulting
from operations......... 96,313 9,319 1,394,806 (68,032)
----------- ---------- ----------- ----------
UNIT TRANSACTIONS:
Purchases................ 7,063,101 4,250,056 7,506,702 1,181,613
Net transfers............ 1,254,596 929,649 1,443,526 150,817
Surrenders for benefit
payments and fees....... (127,148) (118,610) (151,411) (56,622)
----------- ---------- ----------- ----------
Net increase (decrease)
in net assets resulting
from unit
transactions............ 8,190,549 5,061,095 8,798,817 1,275,808
----------- ---------- ----------- ----------
Total increase (decrease)
in net assets........... 8,286,862 5,070,414 10,193,623 1,207,776
NET ASSETS:
Beginning of period...... 2,058,322 878,092 1,294,868 417,930
----------- ---------- ----------- ----------
End of period............ $10,345,184 $5,948,506 $11,488,491 $1,625,706
=========== ========== =========== ==========
<CAPTION>
JANUS JANUS
ASPEN SERIES ASPEN SERIES
BALANCED WORLDWIDE GROWTH
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------ ----------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss).................. $ 66,851 $ 89,681
Capital gains income..... 10,381 49,802
Net realized gain (loss)
on security
transactions............ 512 (1,726)
Net unrealized
appreciation
(depreciation) of
investments during the
period.................. 556,033 769,638
---------- -----------
Net increase (decrease)
in net assets resulting
from operations......... 633,777 907,395
---------- -----------
UNIT TRANSACTIONS:
Purchases................ 2,272,711 5,236,711
Net transfers............ 798,826 1,274,902
Surrenders for benefit
payments and fees....... (114,573) (162,489)
---------- -----------
Net increase (decrease)
in net assets resulting
from unit
transactions............ 2,956,964 6,349,124
---------- -----------
Total increase (decrease)
in net assets........... 3,590,741 7,256,519
NET ASSETS:
Beginning of period...... 298,735 1,320,210
---------- -----------
End of period............ $3,889,476 $ 8,576,729
========== ===========
</TABLE>
_____________________________________SA-7_____________________________________
<PAGE>
SEPARATE ACCOUNT AMLVA
- --------------------------------------------------------------------------------
AMERICAN MATURITY LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,1999
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 contractowners of the Company in various mutual
funds (the Funds) as directed by the contractowners.
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). Realized gains and
losses on the sales of securities are computed on the basis of identified
cost of the fund shares sold. Dividend and capital gains income is
accrued as of the ex-dividend date. Capital gains income represents
dividends from the Funds which are characterized as capital gains under
tax regulations.
b) SECURITY VALUATION--The investments in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate
Fund as of December 31, 1999.
c) UNIT TRANSACTIONS--Unit transactions are executed based on the unit
values calculated at the close of the business day.
d) 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.
e) 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 applicable contract owners'
accounts, in accordance with the terms of the contracts. These charges
are reflected in Surrenders for benefit payments and fees on the
accompanying statements of changes in net assets.
_____________________________________SA-8_____________________________________
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Board of Directors of
American Maturity Life Insurance Company:
We have audited the accompanying statutory balance sheets of American Maturity
Life Insurance Company (a Connecticut Corporation) (the Company) as of December
31, 1999 and 1998, and the related statutory statements of operations, changes
in capital and surplus, and cash flows for each of the three years in the period
ended December 31, 1999. These statutory financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these statutory financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
The Company presents its financial statements in conformity with statutory
accounting practices as described in Note 1 of notes to statutory financial
statements. When financial statements are presented for purposes other than for
filing with a regulatory agency, auditing standards generally accepted in the
United States require that an auditors' report on them state whether they are
presented in conformity with accounting principles generally accepted in the
United States. The accounting practices used by the Company vary from accounting
principles generally accepted in the United States as explained and quantified
in Note 1.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the statutory financial statements referred to above do not present
fairly, in conformity with accounting principles generally accepted in the
United States, the financial position of the Company as of December 31, 1999 and
1998, or the results of its operations or its cash flows for each of the three
years in the period ended December 31, 1999.
<PAGE>
-2-
In our opinion, the statutory financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999 in conformity
with statutory accounting practices as described in Note 1.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
January 31, 2000
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATUTORY BALANCE SHEETS
AS OF DECEMBER 31, 1999 AND 1998
(in thousands, except for share data)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
ASSETS:
Bonds $ 21,504 $ 18,173
Cash and short-term investments 40,185 45,679
-------- --------
Total cash and invested assets 61,689 63,852
Investment income due and accrued 335 305
Other assets 463 279
Separate account assets 196,972 175,305
-------- --------
Total assets $259,459 $239,741
======== ========
LIABILITIES:
Aggregate reserves for future benefits $ 7,457 $ 6,791
Liability for premium and other deposit
funds 20,425 17,757
Asset valuation reserve 948 725
Payable to affiliates 181 719
Transfers from separate accounts due
or accrued (1,854) (2,312)
Other liabilities 1,203 1,654
Separate account liabilities 196,972 175,305
-------- --------
Total liabilities 225,332 200,639
-------- --------
COMMITMENTS AND CONTINGENCIES (Note 7)
CAPITAL AND SURPLUS:
Common stock, $200 par value; 15,000
shares authorized, 12,500 shares
issued and outstanding 2,500 2,500
Gross paid-in and contributed surplus 57,500 57,500
Unassigned funds (25,873) (20,898)
-------- --------
Total capital and surplus 34,127 39,102
-------- --------
Total liabilities and capital
and surplus $259,459 $239,741
======== ========
</TABLE>
The accompanying notes are an integral
part of these statutory financial statements.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATUTORY STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(in thousands)
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
REVENUES:
Premiums and annuity considerations $ 3,350 $ 7,553 $ 4,342
Annuity and other fund deposits 21,107 60,610 64,872
Net investment income 3,351 3,215 1,390
Other revenues 932 303 10
------- ------- -------
Total revenues 28,740 71,681 70,614
------- ------- -------
BENEFITS AND EXPENSES:
Surrenders and other benefit payments 15,451 10,358 4,904
General insurance expenses 3,938 10,622 10,592
Increase in aggregate reserve for future
benefits and liability for premium and
other deposit funds 3,334 16,551 4,308
Net transfers to separate accounts 10,765 38,770 57,081
Other expenses 4 12 19
------- ------- -------
Total benefits and expenses 33,492 76,313 76,904
------- ------- -------
LOSS FROM OPERATIONS BEFORE FEDERAL
INCOME TAXES (4,752) (4,632) (6,290)
FEDERAL INCOME TAXES - - -
------- ------- -------
LOSS FROM OPERATIONS (4,752) (4,632) (6,290)
REALIZED CAPITAL GAINS, NET OF FEDERAL
INCOME TAXES - 18 8
------- ------- -------
NET LOSS $(4,752) $(4,614) $(6,282)
======= ======= =======
</TABLE>
The accompanying notes are an integral
part of these statutory financial statements.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATUTORY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(in thousands)
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
CAPITAL AND SURPLUS - beginning of year $39,102 $43,963 $10,474
------- ------- -------
Net loss (4,752) (4,614) (6,282)
Change in asset valuation reserve (223) (247) (229)
Contribution of capital - - 40,000
------- ------- -------
Changes in capital and surplus (4,975) (4,861) 33,489
------- ------- -------
CAPITAL AND SURPLUS - end of year $34,127 $39,102 $43,963
======= ======= =======
</TABLE>
The accompanying notes are an integral
part of these statutory financial statements.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY
STATUTORY STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(in thousands)
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Premiums, annuity considerations and
fund deposits $24,456 $68,163 $69,215
Investment income 3,373 3,213 1,423
Investment management fees 931 302 -
Other income (4) 87 -
------- ------- -------
Total revenues 28,756 71,765 70,638
------- ------- -------
Benefits paid 15,451 10,357 4,904
Net transfers to separate accounts 10,307 40,290 59,165
Other expenses 4,045 10,928 10,415
------- ------- -------
Total benefits and expenses 29,803 61,575 74,484
------- ------- -------
Net cash (used for) provided by
operations (1,047) 10,190 (3,846)
------- ------- -------
PROCEEDS FROM INVESTMENTS:
Bonds 1,063 4,770 2,488
Other - 17 -
------- ------- -------
Net investment proceeds 1,063 4,787 2,488
OTHER CASH PROVIDED:
Capital and surplus paid-in - - 40,000
Other sources 127 312 528
------- ------- -------
Total proceeds 1,190 5,099 43,016
------- ------- -------
COST OF INVESTMENTS ACQUIRED:
Bonds 4,447 9,710 5,886
------- ------- -------
Total investments acquired 4,447 9,710 5,886
------- ------- -------
TOTAL OTHER CASH APPLIED 1,190 554 45
------- ------- -------
Total applications 5,637 10,264 5,931
------- ------- -------
NET CHANGE IN CASH AND SHORT-TERM INVESTMENTS (5,494) 5,025 33,239
CASH AND SHORT-TERM INVESTMENTS,
beginning of year 45,679 40,654 7,415
------- ------- -------
CASH AND SHORT-TERM INVESTMENTS,
end of year $40,185 $45,679 $40,654
======= ======= =======
</TABLE>
The accompanying notes are an integral
part of these statutory financial statements.
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY
NOTES TO STATUTORY FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
(Dollar amounts in thousands unless otherwise noted)
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 The Hartford Financial Services Group, Inc. (The Hartford).
Forty percent of the common stock of the Company is owned by Pacific Life
Insurance Company (PLIC).
AML offered annuities exclusively to members of The American Association
of Retired Persons (AARP). On April 12, 1999, the Board of Directors
decided to suspend the marketing and acceptance of new applications for
the annuity program.
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 (SAP) and generally accepted accounting
principles (GAAP) differ in certain material respects. These differences
principally involve:
a. Treatment of policy acquisition costs (commissions, underwriting
and selling expenses, premium taxes, etc.), which are charged to
expense when incurred under SAP rather than on a pro-rata basis
over the expected life of the policies for GAAP;
b. Recognition of premium revenues, which for SAP are generally
recorded as collected or when due during the premium paying period
of the contract, and which for GAAP are only recorded for policy
charges for contract administration and surrender charges assessed
to policy account balances;
c. Development of reserves for future benefits, which for SAP
predominantly use methods prescribed by the NAIC which vary
considerably from interest and mortality assumptions used for
GAAP;
d. Providing for income taxes based on current taxable (tax return)
income only for SAP, 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-
e. Excluding certain GAAP assets designated as non-admitted assets
(e.g., past due agents' balances and furniture and equipment) from
the balance sheet for SAP by directly charging surplus;
f. Accruals are established for post-retirement and post-employment
health care benefits currently or using a twenty year phase-in
approach, whereas GAAP liabilities are required to be recorded as
incurred;
g. For SAP a formula reserve is established for realized and
unrealized losses due to default and equity risk associated with
certain invested assets (Asset Valuation Reserve or AVR) 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 or IMR), 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;
h. The reporting of bonds at amortized cost under SAP, 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, those investments were
reflected at fair value with the corresponding impact included as
a component of Capital and Surplus; and
i. No re-evaluation of assets and liabilities upon the acquisition of
FELIC by HLA under SAP, 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 the SAP and GAAP net loss for the
years ended December 31, 1999, 1998 and 1997 is summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
GAAP net loss: $ (962) $(4,553) $(6,977)
Deferral of policy acquisition
costs, net of amortization (398) (1,785) (1,294)
Capitalized software 40 40 40
Reserves and deposit liabilities (3,729) 1,859 2,139
Amortization of goodwill 55 55 55
Other, net 242 (230) (245)
------- ------- -------
Statutory net loss $(4,752) $(4,614) $(6,282)
======= ======= =======
</TABLE>
<PAGE>
-3-
The significant differences between SAP and GAAP capital and surplus as
of December 31, 1999 and 1998 are summarized as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
GAAP capital and surplus: $39,820 $42,009
Deferral of policy acquisition costs (4,142) (3,784)
Capitalized software (40) (40)
Reserves and deposit liabilities 724 4,453
Asset valuation reserve (948) (725)
Net unrealized loss (gain) on securities 637 (589)
Goodwill (1,915) (1,970)
Other, net (9) (252)
------- -------
Statutory capital and surplus $34,127 $39,102
======= =======
</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 6.25%,
6.25% and 6.75% for 1999, 1998 and 1997 policy issues, respectively.
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 securities occurs, the
decrease is reported as a realized loss in the statutory statements of
operations and the carrying value is adjusted accordingly.
<PAGE>
-4-
Realized capital gains and losses, net of taxes and amounts transferred
to the IMR, are reported in the statutory statements of operations. The
AVR is designed to provide a standardized reserving process for realized
and unrealized losses due to default and equity risks associated with
invested assets. The AVR was increased by $224, $247, and $229 in 1999,
1998, and 1997, respectively. The IMR captures realized capital gains and
losses, net of applicable income taxes, resulting from changes in
interest rates and amortizes those gains or losses into income over the
remaining life of the assets sold. Capital gains and losses of $2, $2,
and $10, for 1999, 1998, and 1997, respectively, were reclassified to the
IMR. There was also amortization of $2, $1, and $1, for 1999, 1998, and
1997, respectively. Realized gains and losses are determined on a
specific identification basis.
CODIFICATION -
The NAIC adopted the Codification of Statutory Accounting principles in
March 1998. The proposed effective date for this statutory accounting
guidance is January 1, 2001. It is expected that Connecticut, the
Company's domicilliary state, will adopt these accounting standards and
therefore, the Company will make the necessary accounting and reporting
changes required for implementation. The Company has not yet determined
the impact that these new accounting standards will have on its statutory
basis financial statements.
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.
<TABLE>
<CAPTION>
2. INVESTMENTS:
COMPONENTS OF NET INVESTMENT INCOME -
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Interest income from bonds and short-term
investments $3,597 $3,285 $1,477
------ ------ ------
Gross investment income 3,597 3,285 1,477
Less: investment expenses 246 70 87
------ ------ ------
Net investment income $3,351 $3,215 $1,390
====== ====== ======
</TABLE>
<PAGE>
-5-
UNREALIZED CAPITAL GAINS (LOSSES) ON BONDS AND SHORT TERM INVESTMENTS -
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Gross unrealized capital gains at end
of year $ 20 $604 $256
Gross unrealized capital losses
at end of year (657) (15) -
------- ---- ----
Net unrealized capital (losses) gains (637) 589 256
Balance at beginning of year 589 256 41
------- ---- ----
Net change in net unrealized gains $(1,226) $333 $215
======= ==== ====
</TABLE>
BONDS AND SHORT-TERM INVESTMENTS -
<TABLE>
<CAPTION>
DECEMBER 31, 1999
--------------------------------------------------------
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- --------
<S> <C> <C> <C> <C>
U.S. government and
government agencies and
authorities - guaranteed
and sponsored $ 6,476 $ 16 $ (52) $ 6,440
All other corporate 15,028 4 (605) 14,427
Short-term investments 40,105 - - 40,105
------- ---- ----- -------
Total $61,609 $ 20 $(657) $60,972
======= ==== ===== =======
DECEMBER 31, 1998
--------------------------------------------------------
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- --------
U.S. government and
government agencies and
authorities - guaranteed
and sponsored $ 6,594 $310 $ - $ 6,904
All other corporate 11,579 294 (15) 11,858
Short-term investments 45,521 - - 45,521
------- ---- ---- -------
Total $63,694 $604 $(15) $64,283
======= ==== ==== =======
</TABLE>
<PAGE>
-6-
The amortized cost and estimated market value of bonds and short-term
investments at December 31, 1999 by anticipated maturity are listed in
the table below. Actual maturities will vary from contractual maturities
due to the right to call or prepay.
<TABLE>
<CAPTION>
1999
-------------------------
Estimated
Amortized Fair
MATURITY Cost Value
---- -----
<S> <C> <C>
Due in one year or less $42,045 $41,988
Due after one year through five years 9,783 9,493
Due after five years through ten years 7,562 7,338
Due after ten years 2,219 2,153
------- -------
Total $61,609 $60,972
======= =======
</TABLE>
Proceeds from the sales and maturities of long-term fixed maturity
investments were $1,063, $4,770 and $2,488 in 1999, 1998 and 1997,
respectively. For the year ended December 31, 1999, 1998 and 1997 there
were $0, $18 and $8 of net realized gains, respectively.
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 rent and salaries. Rent and salaries allocated by
HLA to the Company were $1,855, $2,896 and $2,409 for the years ended
December 31, 1999, 1998 and 1997, respectively. Investment management
fees were allocated by Hartford Investment Management Company (HIMCO) and
are a component of net investment income.
The Company has a capital maintenance agreement with HLA and PLIC 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 PLIC 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 PLIC 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, 1999, 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, 1999, 1998
and 1997. 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 1998 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. During 2000, the
maximum amount of dividends which may be paid approximates $3.9 million.
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, 1999, 1998 and 1997.
6. PENSION PLANS AND OTHER POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS:
HLI's employees, which include those allocated to the Company, 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 rent and salaries (see Note 3).
HLI'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 7.1% and 7.8% for 1999
and 1998, respectively, decreasing ratably to 5% in the year 2003.
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 1999, 1998 and 1997.
<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 1999, 1998,
and 1997.
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. 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. The Company paid guaranty fund assessments of
approximately $13 and $52 in 1999 and 1998, respectively, of which $5 in
1999 and $41 in 1998 were estimated to be creditable against premium
taxes.
8. SEPARATE ACCOUNTS:
The Company maintained separate account assets totaling $197.0 million
and $175.3 million and liabilities totaling $197.0 million and $175.3
million as of December 31, 1999 and December 31, 1998, respectively,
which are reported at fair value. Separate accounts reflect two
categories of risk assumption: non-guaranteed separate accounts totaling
$80.1 million and $55.8 million at December 31, 1999 and 1998,
respectively, wherein the policyholder assumes the investment risk, and
guaranteed separate accounts totaling $116.9 million and $119.5 million
at December 31, 1999 and 1998, 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 separately reflected in the statutory statements of
operations, but are recorded net, as a component of net transfers to
separate accounts.
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 6.29% at December 31, 1999. The
assets that support these liabilities were comprised of $114.8 million
and $117.5 million in bonds at December 31, 1999 and 1998. 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.
<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
- -----------------------
(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>
Fund Participation agreements between Janus Aspen Series and
American Maturity; and Scudder Variable Life Investment Fund and
American Maturity.1
(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
- --------------------------- ---------------------------------------------------
POSITION WITH AMERICAN MATURITY LIFE
NAME INSURANCE COMPANY
- --------------------------- ---------------------------------------------------
David A. Carlson Vice President
- --------------------------- ---------------------------------------------------
Lynda Godkin Senior Vice President, General Counsel and
Corporate Secretary, Director*
- --------------------------- ---------------------------------------------------
Kristine Curcio Vice President and Actuary
- --------------------------- ---------------------------------------------------
Thomas M. Marra Director*
- --------------------------- ---------------------------------------------------
Joseph J. Noto Executive Vice President, Chief Operating Officer
and Treasurer, Director*
- --------------------------- ---------------------------------------------------
Glenn S. Schafer(1) Director*
- --------------------------- ---------------------------------------------------
Lowndes A. Smith Director*
- --------------------------- ---------------------------------------------------
Thomas C. Sutton(1) Director*
- --------------------------- ---------------------------------------------------
David M. Znamierowski Senior Vice President and Chief Investment Officer,
Director*
- --------------------------- ---------------------------------------------------
*Denotes election to Board of Directors.
(1) The principal business address is: 700 Newport Center Drive, Newport Beach,
CA 92660-6307.
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 January 31, 2000, there were 2,628 Certificate Owners.
Item 28. Indemnification
<PAGE>
Sections 33-770 to 33-778, inclusive, of the Connecticut General
Statutes ("CGS") provide that a corporation may provide indemnification
of or advance expenses to a director, officer, employee or agent.
Reference is hereby made to Section 33-771(e) of CGS regarding
indemnification of directors and Section 33-776(d) of CGS regarding
indemnification of officers, employees and agents of Connecticut
corporations. These statutes provide, in general, that Connecticut
corporations incorporated prior to January 1, 1997 shall, except to the
extent that their certificate of incorporation expressly provides
otherwise, indemnify their directors, officers, employees and agents
against "liability" (defined as the obligation to pay a judgment,
settlement, penalty, fine, including an excise tax assessed with
respect to an employee benefit plan, or reasonable expenses incurred
with respect to a proceeding) when (1) a determination is made pursuant
to Section 33-775 that the party seeking indemnification has met the
standard of conduct set forth in Section 33-771 or (2) a court has
determined that indemnification is appropriate pursuant to Section
33-774. Under Section 33-775, the determination of and the
authorization for indemnification are made (a) by the disinterested
directors, as defined in Section 33-770(3); (b) by special counsel; (c)
by the shareholders; or (d) in the case of indemnification of an
officer, agent or employee of the corporation, by the general counsel
of the corporation or such other officer(s) as the board of directors
may specify. Also, Section 33-772 provides that a corporation shall
indemnify an individual who was wholly successful on the merits or
otherwise against reasonable expenses incurred by him in connection
with a proceeding to which he was a party because he was a director of
the corporation. In the case of a proceeding by or in the right of the
corporation or with respect to conduct for which the director, officer,
agent or employee was adjudged liable on the basis that he received a
financial benefit to which he was not entitled, indemnification is
limited to reasonable expenses incurred in connection with the
proceeding against the corporation to which the individual was named a
party.
Under the Depositor's bylaws, the Depositor must indemnify both
directors and officers of the Depositor for (1) any claims and
liabilities to which they become subject by reason of being or having
been directors or officers of the Depositor and (2) legal and other
expenses incurred in defending against such claims, in each case, to
the extent such is consistent with statutory provisions.
Section 33-777 of CGS specifically authorizes a corporation to procure
indemnification insurance on behalf of an individual who was a
director, officer, employer or agent of the corporation. Consistent
with the statute, the directors and officers of the Depositor and
Hartford Securities Distribution Company, Inc. ("HSD") are covered
under a directors and
<PAGE>
officers liability insurance policy issued to The Hartford Financial
Services Group, Inc. and its subsidiaries.
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.
<PAGE>
Item 29. Principal Underwriters
(a) HSD acts as principal underwriter for the following companies:
<TABLE>
<S><C>
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 (QP Variable Account)
Hartford Life Insurance Company - Separate Account Two (Variable Account "A")
Hartford Life Insurance Company - Separate Account Two (NQ 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 Insurance Company - Separate Account Seven
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
Hartford Life and Annuity Insurance Company - Separate Account Seven
Hart Life Insurance Company - Separate Account One
Hart Life Insurance Company - Separate Account Two
American Maturity Life Insurance Company - Separate Account AMLVA
Servus Life Insurance Company - Separate Account One
Servus Life Insurance Company - Separate Account Two
</TABLE>
(b) Directors and Officers of HSD
Name and Principal Positions and Offices
Business Address With Underwriter
---------------- ---------------------
David A. Carlson Vice President
Peter W. Cummins Senior Vice President
David T. Foy Treasurer
Lynda Godkin Senior Vice President, General Counsel
and Corporate Secretary
George R. Jay Controller
Robert A. Kerzner Executive Vice President
Thomas M. Marra Executive Vice President, Director
Paul E. Olson Supervising Registered Principal
Lowndes A. Smith President and Chief Executive Officer,
Director
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.
<PAGE>
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.
(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 Simsbury, and
State of Connecticut on this 7th day of April, 2000.
AMERICAN MATURITY LIFE INSURANCE COMPANY
SEPARATE ACCOUNT AMLVA
(Registrant)
*By: Joseph J. Noto *By: /s/ Thomas S. Clark
---------------------- --------------------
Joseph J. Noto Thomas S. Clark
Executive Vice President, Chief Attorney-in-Fact
Operating Officer and Treasurer, Director
AMERICAN MATURITY LIFE INSURANCE COMPANY
(Depositor)
*By: Joseph J. Noto
---------------------------
Joseph J. Noto
Executive Vice President, Chief
Operating Officer and Treasurer, Director
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.
Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary, Director*
Thomas M. Marra, Director* *By: /s/ Thomas S. Clark
--------------------
Joseph J. Noto, Executive Vice President, Chief Thomas S. Clark
Operating Officer & Treasurer, Director* Attorney-In-Fact
Glenn S. Schafer, Director*
Lowndes A. Smith, Director * Dated: April 7, 2000
Thomas C. Sutton, Director*
David M. Znamierowski, Senior Vice President and
Chief Investment 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>
[LOGO]
[COMPANY]
April 6, 2000 LYNDA GODKIN
SENIOR VICE PRESIDENT,
GENERAL COUNSEL &
CORPORATE SECRETARY
Board of Directors
American Maturity Life Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: SEPARATE ACCOUNT AMLVA
AMERICAN MATURITY LIFE INSURANCE COMPANY
FILE NO. 333-10105
Dear Sir/Madam:
I have acted as General Counsel to American Maturity Life Insurance Company (the
"Company"), a Connecticut insurance company, and American Maturity Life
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.
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,
/s/ Lynda Godkin
Lynda Godkin
<PAGE>
EXHIBIT 10
<PAGE>
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 7, 2000
<PAGE>
AMERICAN MATURITY LIFE INSURANCE COMPANY
POWER OF ATTORNEY
Lynda Godkin
Thomas M. Marra
Joseph J. Noto
Glenn S. Schafer
Lowndes A. Smith
Thomas C. Sutton
David M. Znamierowski
do hereby jointly and severally authorize Lynda Godkin, Christine Repasy,
Marianne O'Doherty, Thomas S. Clark and Marta Czekajewski to sign as their agent
any Registration Statement, pre-effective amendment, post-effective amendment
and any application for exemptive relief of the American Maturity Life Insurance
Company under the Securities Act of 1933 and/or the Investment Company Act of
1940, and do hereby ratify such signatures heretofore made by such persons.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
/s/ Lynda Godkin
- -------------------------------- Dated as of January 15, 2000
Lynda Godkin
/s/ Thomas M. Marra
- -------------------------------- Dated as of January 15, 2000
Thomas M. Marra
/s/ Joseph J. Noto
- -------------------------------- Dated as of January 15, 2000
Joseph J. Noto
/s/ Glenn S. Schafer
- -------------------------------- Dated as of January 15, 2000
Glenn S. Schafer
/s/ Lowndes A. Smith
- -------------------------------- Dated as of January 15, 2000
Lowndes A. Smith
/s/ Thomas C. Sutton
- -------------------------------- Dated as of January 15, 2000
Thomas C. Sutton
/s/ David M. Znamierowski
- -------------------------------- Dated as of January 15, 2000
David M. Znamierowski
<PAGE>
ORGANIZATIONAL CHART
<TABLE>
<CAPTION>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
---------------------------------------------
NUTMEG INSURANCE COMPANY |
(CONNECTICUT) THE HARTFORD INVESTMENT
| MANAGEMENT COMPANY
HARTFORD FIRE INSURANCE COMPANY (DELAWARE)
(CONNECTICUT) |
| |
HARTFORD ACCIDENT AND INDEMNITY COMPANY HARTFORD INVESTMENT
(CONNECTICUT) SERVICES, INC.
| (CONNECTICUT)
HARTFORD LIFE, INC.
(DELAWARE)
|
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
(CONNECTICUT)
|
|
|
-------------------------------------------------------------------------------------------------------------------------
| | | | | | | | |
HARTFORD LIFE | | | | | | PLANCO PLANCO
INTERNATIONAL, LTD.| | | | | | FINANCIAL INCORPORATED
(CONNECTICUT) | | | | | | SERVICES, (PENNSYLVANIA)
| | | | | | INCORPORATED
| | | | | | (PENNSYLVANIA)
| | | | | |
| HART LIFE HARTFORD FINANCIAL HARTFORD LIFE HARTFORD AMERICAN
| INSURANCE SERVICES LIFE INSURANCE COMPANY FINANCIAL MATURITY LIFE
| COMPANY INSURANCE COMPANY (CONNECTICUT) SERVICES, LLC INSURANCE COMPANY
| (CONNECTICUT) (CONNECTICUT) | (DELAWARE) (CONNECTICUT)
| | | |
| ------------------------------------- | AML FINANCIAL, INC.
| | | | | (CONNECTICUT)
|SERVUS LIFE HARTFORD HARTFORD |
| INSURANCE INTERNATIONAL LIFE AND |
| COMPANY LIFE REASSURANCE ANNUITY INSURANCE |
|(CONNECTICUT) CORPORATION COMPANY |
| (CONNECTICUT) (CONNECTICUT) |
| | |
| | |
| HARTFORD |
| LIFE, LTD. |
| (BERMUDA) |
| |
| |
----------| -----------------------------------------------------------------------
| | | | |
INTERNATIONAL HL INVESTMENT HARTFORD HARTFORD SECURITIES HARTFORD-COMPREHENSIVE
CORPORATE ADVISORS, LLC EQUITY SALES DISTRIBUTION EMPLOYEE
MARKETING GROUP, INC. (CONNECTICUT) COMPANY, INC. COMPANY, INC. BENEFIT SERVICE
(CONNECTICUT) | (CONNECTICUT) (CONNECTICUT) COMPANY
| | (CONNECTICUT)
| |
THE EVERGREEN HARTFORD INVESTMENT
GROUP, INC. FINANCIAL SERVICES
(NEW YORK) COMPANY
(DELAWARE)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
----------------------------------------------------------------------------------------------------------------------------
| | |
| | Hartford Accidental and Indemnity Company
| | (Connecticut)
| | |
| | Hartford Life, Inc
| | (Delaware)
| | |
| | Hartford Life and Accident Insurance Company
| | (Connecticut)
| | |
| | HARTFORD LIFE
| | -------INTERNATIONAL LTD.
| | | (CONNECTICUT)
| | | |
| | | ITT HARTFORD
| | | ----SUDAMERICANA
| | | | HOLDING S.A.
| | | | (ARGENTINA)
| | | |------------------------------------------------------
| | | | | |
| | | | ITT HARTFORD GALICIA INSTITUTO DE
| | | | SEGUROS VIDA COMPANIA SALTA COMPANIA DE
| | | |------DE VIDA S.A. DE SEGUROS S.A. SEGUROS DE VIDA S.A.
| | | | (URUGUAY) (ARGENTINA) (ARGENTINA)
| | | |
| | ICATU | | HARTFORD
| | HARTFORD | |---SEGUROS DE VIDA S.A.
| | SEGUROS S.A.----------| | (ARGENTINA)
| | (BRAZIL) |
| | | |
| | | | HARTFORD
| | -- ----------| |-------SEGUROS DE
| | | | | RETIRO S.A.
| | | | | (ARGENTINA)
|-----------|----------------|-------------------|--------------------------------------------------------------------------
| | | | |
| | | ICATU HARTFORD | CONSULTORA DE CAPITALES
| | | FUNDO DE PENSAO | S.A. SOCIEDAD GERENTE
| | | (BRAZIL) |----DE FONDOS COMUNES
| | | | | DE ENVERSION
| | | | | (ARGENTINA)
| | | ICATU HARTFORD |
| | | CAPITALIZACAO S.A. | CLARIDAD
| | | (BRAZIL) | ADMINISTRADORA DE
| | | | |---FONDOS DE JUBILACIONES
| | | BRAZILCAP | Y PENSIONES S.A.
| | | CAPITALIZACAO S.A. | (ARGENTINA)
| | | (BRAZIL) |
| | | |
| | -------------------------- |
| |--------------- | |
| | | |
HARTFORD FIRE HARTFORD FIRE | |------- SEGPOOL S.A.
INTERNATIONAL------------INTERNATIONAL, LTD. | | (ARGENTINA)
(GERMANY) GMBH (CONNECTICUT) | |
(WEST GERMANY) | |
| |
ICATU HARTFORD | | THESIS S.A.
ADMINISTRACAO | |-------- (ARGENTINA)
DE BENEFICIOS LTDA-- | |
(BRAZIL) |
|
|
|
|--------- U.O.R., S.A.
(ARGENTINA)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
- --------------------------------------------------------------------------------------------------------------------------------|
| |
THE HARTFORD INTERNATIONAL |
|-----------------------------------------------------------------------FINANCIAL SERVICES GROUP, INC. |
| | | (DELAWARE) |
| | | ----------------------|----------------- |
| | | | | | | |
ZWOLSCHE | | ITT HARTFORD LONDON AND | HARTFORD |
ALGEMEENE N.V. | | INTERNATIONAL, LTD. EDINBURGH | EUROPE, INC. |
(NETHERLANDS) | | (U.K.) INSURANCE GROUP, LTD.| (DELAWARE) |
| | | (U.K.) | |
| | | | | |
| | | ------------- | |
| | | | | |
| ITT ASSURANCES HARTFORD INTERNATIONAL | LONDON AND -THE HARTFORD |
| S.A. INSURANCE CO., N.V. |--- EDINBURGH INTERNATIONAL |
| ZWOLSCHE ALGEMEENE (FRANCE) (BELGIUM) | INSURANCE CO., LTD. FINANCIAL |
|----SCHADEVERZEKERING | | (U.K.) SERVICES |
--------| N.V.----------------------------------- | | | GROUP CIA |
| | (NETHERLANDS) | | | | DE SEGUROS Y |
Z.A. | | | | EXCESS INSURANCE REASEGUROS S.A.|
- --VERZEKERINGEN | | | | COMPANY LTD. (SPAIN) |
| N.V. | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| (BELGIUM) |------HERVERZEKERING B.V. | | | |
| | -----| (NETHERLANDS) | | | LONDON AND |
| | | | | | |--- EDINBURGH LIFE |
| Z.A. LUX S.A. | | | | ASSURANCE CO., LTD. |
| (LUXEMBURG) | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| |--LEVENS-VERZEKERING N.V.------------ | | | |
| | (NETHERLANDS) | | | | |
- ----------------|------------------------------------|------------|------|--------------|---------------------------------------|
| | | | | | |
| -------- | | | | |
| | | | | | | |
| ZWOLSCHE | ZWOLSCHE ALGEMEENE ZWOLSCHE ALGEMEENE | | | |
| ALGEMEENE |-----HYPOTHEKEN N.V. BELEGGINGEN III B.V. | | | |
| EUROPA B.V. | (NETHERLANDS) (NETHERLANDS) | | | |
| (NETHERLANDS) | ---------- | | |
- --------| | | | | |
| EXPLOITATIEMAAT- BELEGGINGSMAAT- | | |
|----- SCHAPPIJ SCHAPPIJ | | |
| BUIZERDLAAN B.V. BUIZERDLAAN B.V. | | |
| (NETHERLANDS) (NETHERLANDS) | | |
| | | |
| | | -----
| HOLLAND | |-------------------------- |
|---- BELEGGINGSGROEP B.V. | | | |
(NETHERLANDS) | |----------------- | |
| -------| | | |
| | | | | |
| | | | | |
F.A. KNIGHT | MACALISTER & LONDON AND | HARTFORD FIRE
& SON N.V. | DUNDAS, LTD. EDINBURGH | INTERNATIONAL
(BELGIUM) | (SCOTLAND) TRUSTEES, LTD. | SERVICIOS
| (U.K.) | (SPAIN)
------------------------- -----------
| | |
FENCOURT QUOTEL LONDON AND
PRINTERS, LTD. INSURANCE EDINBURGH
(U.K.) SYSTEMS, LTD. SERVICES, LTD.
(U.K.) (U.K.)
|
EUROSURE
INSURANCE
MARKETING, LTD.
(U.K.)
</TABLE>
