AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 18, 1996.
REGISTRATION NO.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. 1 [ ]
POST-EFFECTIVE AMENDMENT NO. [ ]
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. [ ]
(Check appropriate box or boxes)
----------
PRUCO LIFE OF NEW JERSEY FLEXIBLE PREMIUM
VARIABLE ANNUITY ACCOUNT
(Exact Name of Registrant)
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
(Name of Depositor)
213 WASHINGTON STREET
NEWARK, NEW JERSEY 07102-2992
(800) 445-4571
(Address and telephone number of principal executive offices)
----------
THOMAS C. CASTANO
ASSISTANT SECRETARY
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
213 WASHINGTON STREET
NEWARK, NEW JERSEY 07102-2992
(Name and address of agent for service)
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INDIVIDUAL VARIABLE ANNUITY CONTRACTS--The Registrant has registered an
indefinite amount of securities pursuant to Rule 24f-2 under the Investment
Company Act of 1940.
----------
Approximate date of proposed public offering: As soon as practicable after
the effective date of this Registration Statement.
----------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>
<TABLE>
CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 495(A) UNDER THE 1933 ACT)
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<CAPTION>
N-4 ITEM NUMBER AND CAPTION LOCATION
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<S> <C>
PART A
1. Cover Page .................................. Cover Page
2. Definitions ................................. Definitions of Special Terms Used in This Prospectus
3. Synopsis .................................... Brief Description of the Contract
4. Condensed Financial Information ............. N/A
5. General Description of Registrant,
Depositor, and Portfolio Companies .......... General Information About Pruco Life of New Jersey, The
Pruco Life of New Jersey Flexible Premium Variable Annuity
Account, and The Investment Options Available Under the
Contract; The Interest-Rate Investment Options and
Investments by Pruco Life of New Jersey
6. Deductions and Expenses ..................... Brief Description of the Contract; Charges, Fees, and
Deductions
7. General Description of Variable
Annuity Contracts ........................... Part A: Brief Description of the Contract; Allocation of
Purchase Payments; Transfers; Death Benefit; The
Interest-Rate Investment Options and Investments by Pruco
Life of New Jersey; Voting Rights; Ownership of the Contract;
State Regulation
8. Annuity Period .............................. Brief Description of the Contract; Effecting an Annuity
9. Death Benefit ............................... Death Benefit; Effecting an Annuity
10. Purchases and Contract Value ................ Brief Description of the Contract; Pruco Life Insurance
Company of New Jersey; Requirements for Issuance of a
Contract; Valuation of a Contract Owner's Contract Fund
11. Redemptions ................................. Brief Description of the Contract; Short-Term
Cancellation Right or "Free Look"; Withdrawals; Charges,
Fees and Deductions; Effecting an Annuity
12. Taxes ....................................... Premium Taxes and Taxes Attributable to Purchase
Payments; Federal Tax Status
13. Legal Proceedings ........................... Litigation
14. Table of Contents of the Statement of
Additional Information ...................... Additional Information
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
N-4 ITEM NUMBER AND CAPTION LOCATION
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<S> <C>
PART B
15. Cover Page .................................. Cover Page
16. Table of Contents ........................... Contents
17. General Information and History ............. Not Applicable
18. Services .................................... Part A: Experts
19. Purchase of Securities Being Offered ........ Part A: Brief Description of the Contract; Charges, Fees
and Deductions; Sale of the Contract and Sales Commissions
20. Underwriters ................................ Part A: Sale of the Contract and Sales Commissions
Part B: Principal Underwriters
21. Calculation of Performance Data ............. Performance Information
22. Annuity Payments ............................ Part A: Valuation of a Contract Owner's Contract Fund;
Effecting an Annuity
23. Financial Statements ........................ Part A: Consolidated Financial Statements of Pruco Life
Insurance Company of New Jersey
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered in Part C to this Registration Statement.
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
<PAGE>
PROSPECTUS
___________, 1996
PRUCO LIFE OF NEW JERSEY FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT
VARIABLE ANNUITY CONTRACTS
PRUCO LIFE OF NEW JERSEY MARKET-VALUE ADJUSTMENT ANNUITY CONTRACTS
DISCOVERY SELECT
This prospectus describes the DISCOVERY SELECT(SM) Annuity Contract*, an
individual variable annuity contract offered by Pruco Life Insurance Company of
New Jersey ("Pruco Life of New Jersey", "we" or "us"), a stock life insurance
company that is an indirect wholly-owned subsidiary of The Prudential Insurance
Company of America ("The Prudential").
This prospectus describes the Discovery Select(SM) Annuity Contract that is
available to residents of New York only.
The Contract is purchased by making an initial payment of $10,000 or more.
Additional payments of $1,000 or more may also be made. Following the deduction
for any applicable taxes, the purchase payments may be allocated as you direct
in one or more of the following ways.
o They may be allocated to one or more of nineteen subaccounts, each of which
invests in one of the following portfolios of The Prudential Series Fund,
Inc. (the "Prudential Series Fund") or other listed portfolios
(collectively, the "Funds"):
<TABLE>
<CAPTION>
THE PRUDENTIAL SERIES FUND, INC.
<S> <C> <C>
Money Market Portfolio Stock Index Portfolio Prudential Jennison Portfolio
Diversified Bond Portfolio Equity Income Portfolio Global Portfolio
High Yield Bond Portfolio Equity Portfolio
AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Growth and Income Fund AIM V.I. Value Fund
JANUS ASPEN SERIES MFS VARIABLE INSURANCE TRUST
Growth Portfolio International Growth Portfolio Emerging Growth Series Research Series
OCC ACCUMULATION TRUST T. ROWE PRICE EQUITY SERIES, INC.
Managed Portfolio Small Cap Portfolio Equity Income Portfolio
T. ROWE PRICE INTERNATIONAL SERIES, INC. WARBURG PINCUS TRUST
International Stock Portfolio Post-Venture Capital Portfolio
</TABLE>
o They may be allocated to a fixed-rate option which guarantees a stipulated
rate of interest for a one year period.
o They may be allocated to a market-value adjustment option which guarantees
a stipulated rate of interest if held for a seven year period.
Continued on next page
----------
PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE. IT IS ACCOMPANIED
BY A CURRENT PROSPECTUS FOR EACH OF THE FUNDS. EACH OF THESE PROSPECTUSES SHOULD
BE READ CAREFULLY AND RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY PRUDENTIAL ANNUITY SERVICE CENTER
213 Washington Street 300 Columbus Circle
Newark, New Jersey 07102-2992 Edison, New Jersey 08837
Telephone: 1-888-PRU-2888
(toll free)
* DISCOVERY SELECT is a service mark of The Prudential.
<PAGE>
Continued from front cover
The value allocated to the subaccounts will vary daily with the investment
performance of those accounts. If amounts allocated to a market-value adjustment
option are withdrawn or transferred prior to the expiration of the interest rate
period, the contract value will be subject to a Market-Value Adjustment, which
could result in receipt of more or less than the original amount allocated to
that option. On the annuity date, the cash value will be applied to effect a
fixed-dollar annuity. Upon annuitization, your participation in the investment
options ceases. Prior to that annuity date, you may withdraw in whole or in part
the cash value of the Contract.
This prospectus provides information a prospective investor should know before
investing. Additional information about the Contract has been filed with the
Securities and Exchange Commission in a Statement of Additional Information,
dated ___________, 1996, which information is incorporated herein by reference,
and is available without charge upon written request to Prudential Annuity
Service Center, 300 Columbus Circle, Edison, New Jersey 08837, or by telephoning
1-888-PRU-2888 (toll free).
The accompanying prospectuses for the Funds and the related statements of
additional information describe the investment objectives and risks of investing
in the portfolios. Additional portfolios and subaccounts may be offered in the
future.
The Contents of the Statement of Additional Information with respect to the
Contract appear on page 29 of this prospectus.
<PAGE>
PROSPECTUS CONTENTS
PAGE
----
DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS ...................... 1
BRIEF DESCRIPTION OF THE CONTRACT ......................................... 2
FEE TABLE ................................................................. 4
GENERAL INFORMATION ABOUT PRUCO LIFE OF NEW JERSEY, THE PRUCO LIFE
OF NEW JERSEY FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT, AND
THE INVESTMENT OPTIONS AVAILABLE UNDER THE CONTRACT ...................... 9
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY ............................. 9
PRUCO LIFE OF NEW JERSEY FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT ..... 9
THE FUNDS .............................................................. 9
THE INTEREST-RATE INVESTMENT OPTIONS AND INVESTMENTS BY
PRUCO LIFE OF NEW JERSEY ............................................. 11
DETAILED INFORMATION ABOUT THE CONTRACT ................................... 12
REQUIREMENTS FOR ISSUANCE OF A CONTRACT ................................ 12
SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK" ........................... 12
ALLOCATION OF PURCHASE PAYMENTS ........................................ 12
ASSET ALLOCATION PROGRAM ............................................... 12
CASH VALUE ............................................................. 13
GUARANTEED INTEREST RATE PERIODS ....................................... 13
WHAT HAPPENS WHEN AN INTEREST CELL REACHES ITS MATURITY DATE? .......... 13
TRANSFERS .............................................................. 13
DOLLAR COST AVERAGING .................................................. 13
AUTO-REBALANCING ....................................................... 14
WITHDRAWALS ............................................................ 14
AUTOMATED WITHDRAWALS .................................................. 14
MARKET-VALUE ADJUSTMENT ................................................ 15
DEATH BENEFIT .......................................................... 15
VALUATION OF A CONTRACT OWNER'S CONTRACT FUND .......................... 15
CHARGES, FEES AND DEDUCTIONS .............................................. 16
PREMIUM TAXES AND TAXES ATTRIBUTABLE TO PURCHASE PAYMENTS .............. 16
ADMINISTRATIVE CHARGE .................................................. 16
CHARGE FOR ASSUMING MORTALITY AND EXPENSE RISKS ........................ 17
EXPENSES INCURRED BY THE FUNDS ......................................... 17
WITHDRAWAL CHARGE ...................................................... 17
TRANSACTION CHARGE ..................................................... 18
CRITICAL CARE ACCESS ................................................... 18
FEDERAL TAX STATUS ........................................................ 18
DIVERSIFICATION AND INVESTOR CONTROL ................................... 18
TAXES PAYABLE BY CONTRACT OWNERS ....................................... 18
WITHHOLDING ............................................................ 19
IMPACT OF FEDERAL INCOME TAXES ......................................... 19
IRS REQUIRED DISTRIBUTIONS ON DEATH OF OWNER ........................... 20
TAXES ON PRUCO LIFE OF NEW JERSEY ...................................... 20
CONTRACTS USED IN CONNECTION WITH TAX FAVORED PLANS .................... 20
IRAS ................................................................... 21
SEPS ................................................................... 21
TDAS ................................................................... 21
ELIGIBLE DEFERRED COMPENSATION PLANS OF STATE OR LOCAL
GOVERNMENTS AND TAX EXEMPT ORGANIZATIONS ............................. 22
QUALIFIED PENSION AND PROFIT SHARING PLANS ............................. 22
MINIMUM DISTRIBUTION OPTION ............................................ 22
WITHHOLDING ON TAX FAVORED PLANS ....................................... 23
ERISA DISCLOSURE ....................................................... 23
ADDITIONAL ERISA REQUIREMENTS .......................................... 23
i
<PAGE>
EFFECTING AN ANNUITY ...................................................... 24
ANNUITY PAYMENTS FOR A FIXED PERIOD .................................... 24
LIFE ANNUITY WITH 120 PAYMENTS CERTAIN ................................. 24
INTEREST PAYMENT OPTION ................................................ 24
LEGAL CONSIDERATIONS RELATING TO SEX-DISTINCT ANNUITY
PURCHASE RATES ....................................................... 24
OTHER INFORMATION ......................................................... 25
MISSTATEMENT OF AGE OR SEX ............................................. 25
SALE OF THE CONTRACT AND SALES COMMISSIONS ............................. 25
VOTING RIGHTS .......................................................... 25
SUBSTITUTION OF FUND SHARES ............................................ 26
OWNERSHIP OF THE CONTRACT .............................................. 26
PERFORMANCE INFORMATION ................................................ 26
REPORTS TO CONTRACT OWNERS ............................................. 26
STATE REGULATION ....................................................... 26
EXPERTS ................................................................ 27
LITIGATION ............................................................. 27
STATEMENT OF ADDITIONAL INFORMATION .................................... 27
ADDITIONAL INFORMATION ................................................. 27
FINANCIAL STATEMENTS ................................................... 27
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS ................................................. 29
DIRECTORS AND OFFICERS .................................................... 35
EXECUTIVE COMPENSATION .................................................... 36
CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE OF NEW JERSEY
INSURANCE COMPANY ...................................................... B-1
MARKET-VALUE ADJUSTMENT FORMULA ........................................... C-1
ii
<PAGE>
DEFINITIONS OF SPECIAL TERMS USED IN THIS
PROSPECTUS
ACCOUNT--See the Pruco Life of New Jersey Flexible Premium Variable Annuity
Account (the "Account"), below.
ANNUITANT--The person or persons, designated by the Contract owner, upon whose
life or lives monthly annuity payments are based after an annuity is effected.
ANNUITY CONTRACT--A contract designed to provide an annuitant with an income,
which may be a lifetime income, beginning on the annuity date.
ANNUITY DATE--The date, specified in the Contract, when annuity payments begin.
BOARD--Either the Board of Directors or Board of Trustees of a Fund.
CASH VALUE--The surrender value of the Contract, which equals the Contract Fund
plus or minus any Market-Value Adjustments less any withdrawal charge and any
administrative charge due upon surrender.
CHARGE-FREE AMOUNT--The amount of purchase payments in your Contract Fund that
is not subject to a withdrawal charge.
CONTRACT ANNIVERSARY--The same day and month as the Contract date in each later
year.
CONTRACT DATE--The date Pruco Life of New Jersey received the initial purchase
payment and necessary documentation for the Contract.
CONTRACT FUND--The total value attributable to a specific Contract representing
amounts invested in all the subaccounts and in the interest-rate investment
options.
CONTRACT OWNER--you. the person who purchases a DISCOVERY SELECTSM Contract and
makes the purchase payments. The owner will usually also be an annuitant, but
need not be. The owner has all rights in the Contract before the annuity date.
Subject to certain limitations and requirements described in this prospectus,
these rights include the right to make withdrawals or surrender the Contract, to
designate and change the beneficiaries who will receive the proceeds at the
death of the annuitant before the annuity date, to transfer funds among the
investment options, and to designate a mode of settlement for the annuitant on
the annuity date.
CONTRACT YEAR--A year that starts on the Contract Date or on a Contract
anniversary.
FIXED-RATE OPTION--An investment option under which Pruco Life of New Jersey
credits interest to the amount allocated at a guaranteed interest rate
periodically declared in advance by Pruco Life of New Jersey but not less than
3%.
GUARANTEED INTEREST RATE--The effective annual interest rate credited during the
interest rate period.
INTEREST CELL--A division of the interest-rate investment options which is
established whenever you allocate or transfer money into an interest-rate
investment option. The amount in the interest cell is credited with a guaranteed
interest rate, declared in advance by Pruco Life of New Jersey and never less
than 3%, if held for the duration of the cell's interest rate period.
INTEREST-RATE INVESTMENT OPTIONS--The fixed-rate option and the market-value
adjustment option.
INTEREST RATE PERIOD--The period for which the guaranteed interest rate is
credited.
MARKET-VALUE ADJUSTMENT--If amounts are withdrawn or transferred from a
market-value adjustment option before the end of the interest rate period, a
Market-Value Adjustment will occur. A Market-Value Adjustment may result in an
increase, decrease or no change in the value of the money that was in the
interest cell. For the formula used to calculate the adjustment, see
MARKET-VALUE ADJUSTMENT FORMULA, on page C-1.
MARKET-VALUE ADJUSTMENT OPTION ("MVA OPTION") --An interest-rate investment
option subject to a Market-Value Adjustment.
THE PRUCO LIFE OF NEW JERSEY FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT (THE
"ACCOUNT")--A separate account of Pruco Life of New Jersey registered as a unit
investment trust under the Investment Company Act of 1940.
SUBACCOUNT--A division of the Account, the assets of which are invested in
shares of the corresponding portfolio of the funds.
VALUATION PERIOD--The period of time from one determination of the value of the
amount invested in a subaccount to the next. Such determinations are made when
the net asset values of the portfolios are calculated, which is generally at
4:15 p.m. New York City time on each day during which the New York Stock
Exchange is open.
VARIABLE INVESTMENT OPTIONS--The subaccounts.
1
<PAGE>
BRIEF DESCRIPTION OF THE CONTRACT
The DISCOVERY SELECT(SM) Annuity Contract offers you a way to invest on a
tax-deferred basis in a variety of investment options and provide income
protection for later life by financing annuity payments commencing on the
annuity date. The Contract is a variable annuity contract. The value of the
Contract depends upon investment results of the investment option[s]. Currently,
you may place the invested portion of your purchase payments into one or a
combination of variable and interest-rate investment options. Amounts held under
the Contract may be withdrawn, in whole or in part, prior to the annuity date.
The Contract also provides for a death benefit.
The Contract is purchased by making an initial payment of at least $10,000.
Additional payments of $1,000 or more may also be made. After the deduction of
any charge for taxes attributable to purchase payments is made, purchase
payments are allocated to the subaccounts and/or the fixed-rate investment or
Market-Value Adjustment Options in accordance with your instructions.
Currently, there are nineteen variable investment options, each of which is
called a subaccount. The assets of each subaccount are invested in a
corresponding portfolio of one of the Funds.
The FIXED-RATE OPTION guarantees a stipulated rate of interest for a one-year
period. The MARKET-VALUE ADJUSTMENT OPTION (the "MVA option") guarantees a
stipulated rate of interest if held for a seven-year period.
The quoted interest rates will be expressed as an effective annual yield.
Interest will be credited daily throughout the interest rate period at a rate
that will provide the guaranteed annual effective yield over the period of one
year. The MVA and fixed-rate options are made up of individual "interest cells"
each of which is established whenever you allocate or transfer money into those
options. Your Pruco Life of New Jersey representative will tell you the rates of
interest currently in effect. This rate will never be below 3%.
The value of each Market-Value Adjustment interest cell, prior to its maturity
date, varies with changes in interest rates in the same way that the value of a
bond changes. If interest rates have risen since the interest cell was
established, its value will have decreased. If you make a withdrawal or transfer
prior to the maturity date, the value of the interest cell will be adjusted up
or down or not at all, depending upon the difference in interest rates between
the date when the cell was established and the date of withdrawal or transfer.
The maximum value of the factor used in determining the amount of adjustment,
either positive or negative, is 0.40. See MARKET-VALUE ADJUSTMENT, page C-1.
Pruco Life of New Jersey makes charges under the Contract for the costs of
selling and distributing the Contract, for administering the Contract, and for
assuming mortality and expense risks under the Contract. Moreover, a charge may
be deducted for taxes attributable to purchase payments, including premium tax.
In the case of premium tax, Pruco Life of New Jersey will deduct the tax, as
provided by applicable law, either from the purchase payment when received, or
from the Contract Fund at the time the annuity is effected. The deduction may be
lower, or not made at all, for larger purchase payments. See PREMIUM TAXES AND
TAXES ATTRIBUTABLE TO PURCHASE PAYMENTS, page 16. A charge against each of the
Fund's assets is made by the investment adviser for providing investment
advisory and management services.
A mortality and expense risk charge equal to an annual rate of 1.25% is deducted
from the assets held in the variable investment options. An administrative
charge is deducted from the assets held in the variable investment options at an
annual rate of 0.15%. There will be an additional administrative charge of $30
on each Contract anniversary and at the time of a full withdrawal for Contracts
with Contract Funds less than $50,000. A withdrawal charge may be imposed upon
withdrawals made in the first seven Contract years. The maximum withdrawal
charge is 7% of the amount withdrawn. Further detail about charges may be found
under CHARGES, FEES AND DEDUCTIONS, page 16.
In the event that the sole or last surviving annuitant dies prior to the annuity
date or the surrender of the Contract for its cash value, Pruco Life of New
Jersey will pay a death benefit to the stated beneficiary. If the annuitant was
the sole owner of the Contract and the sole beneficiary is the annuitant's
spouse, the spouse may be able to continue the Contract. See DEATH BENEFIT, page
15. In the event that the annuitant dies after an annuity has been effected but
before the entire value of the Contract is distributed, special distribution
rules apply. See EFFECTING AN ANNUITY, page 24.
Amounts may be transferred out of an investment option into any combination of
other investment options available under the Contract. There are no minimum
transfer dollar amount requirements. Market-Value Adjustments may apply.
Restrictions apply on transfers made from the fixed-rate option. See TRANSFERS,
page 13.
For a limited time, a Contract may be returned for a refund in accordance with
the terms of its "free look" provision. See SHORT-TERM CANCELLATION RIGHT OR
"FREE LOOK", page 12.
2
<PAGE>
You may withdraw all or part of the Contract Fund prior to the annuity date,
subject to the possible withdrawal charge mentioned above. See WITHDRAWALS, page
14. If a full or partial withdrawal is requested, it may be wholly or partially
taxable. Certain withdrawals may be subject to a federal penalty tax as well as
a federal income tax. See TAXES PAYABLE BY CONTRACT OWNERS, page 18. If a lump
sum is requested, it will generally be paid within 7 days and deducted from the
Contract Fund. See WITHDRAWALS, page 14. If an annuity option is selected,
annuity payments will be in installments of guaranteed amounts. See EFFECTING AN
ANNUITY, page 24.
This Brief Description of the Contract is intended to provide a broad overview
of the more significant features of the Contract. More detailed information will
be found in subsequent sections of this prospectus and in the Contract document.
3
<PAGE>
FEE TABLE
CONTRACT OWNER TRANSACTION EXPENSES
Sales Charge Imposed on Purchase Payments ................................ None
Maximum Withdrawal Charge:
- --------------------------------------------------------------------------------
| THE WITHDRAWAL CHARGE WILL BE EQUAL
FOR WITHDRAWALS DURING THE CONTRACT | TO THE FOLLOWING PERCENTAGE OF THE
YEAR INDICATED | AMOUNT WITHDRAWN*
- ----------------------------------------|---------------------------------------
First Contract Year | 7%
Second Contract Year | 6%
Third Contract Year | 5%
Fourth Contract Year | 4%
Fifth Contract Year | 3%
Sixth Contract Year | 2%
Seventh Contract Year | 1%
Eighth and Subsequent Contract Years | No Charge
- -------------------------------------------------------------------------------
* The withdrawal charge is not imposed on any charge-free withdrawal amounts,
withdrawals made under Critical Care Access, see page 19, or any amount
used to provide income under the Life Annuity with 120 Payments Certain
Option.
There will be a reduction in such withdrawal charge in the case of
contracts issued to Contract owners issue age 84 and older.
Annual Contract Fee and Fee upon Full Withdrawal ........................ $30**
** This charge will be apportioned over all the accounts making up the
Contract Fund as of the effective date of that deduction. Amounts
apportioned to the two interest-rate investment options will reduce
the interest cells on a FIFO (first in/first out) basis determined
by the age of the cell. The charge will not be made upon withdrawals
under Critical Care Access or if the Contract Fund is $50,000 or more.
TRANSFER CHARGE
Imposed only for transfers in excess of twelve transfers in a
Contract year (excluding transfers in connection with dollar cost
averaging and auto-rebalancing) ....................................... $25
SEPARATE ACCOUNT ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE CONTRACT FUND)
ALL SUBACCOUNTS
---------------
Mortality and Expense Risk Fee ........................ 1.25%
Administrative Fee .................................... 0.15%
-----
Total Separate Account Annual Expenses ................ 1.40%
=====
ANNUAL EXPENSES OF THE FUNDS
(AS A PERCENTAGE OF PORTFOLIO AVERAGE NET ASSETS)
TOTAL FUND
INVESTMENT ANNUAL EXPENSES
MANAGEMENT OTHER (AFTER EXPENSE
FEE EXPENSES REIMBURSEMENTS)
---------- -------- ---------------
THE PRUDENTIAL SERIES FUND(1)
Money Market Portfolio ................ 0.40% 0.04% 0.44%
Diversified Bond Portfolio ............ 0.40% 0.04% 0.44%
High Yield Bond Portfolio ............. 0.55% 0.06% 0.61%
Stock Index Portfolio ................. 0.35% 0.03% 0.38%
Equity Income Portfolio ............... 0.40% 0.03% 0.43%
Equity Portfolio ...................... 0.45% 0.03% 0.48%
Prudential Jennison Portfolio ......... 0.60% 0.19% 0.79%
Global Portfolio ...................... 0.75% 0.31% 1.06%
4
<PAGE>
TOTAL FUND
INVESTMENT ANNUAL EXPENSES
MANAGEMENT OTHER (AFTER EXPENSE
FEE EXPENSES REIMBURSEMENTS)
---------- -------- ---------------
AIM VARIABLE INSURANCE FUNDS, INC.(2)
AIM V.I. Growth and Income Fund ....... 0.65% 0.52% 1.17%
AIM V.I. Value Fund ................... 0.65% 0.10% 0.75%
JANUS ASPEN SERIES(3)
Growth Portfolio ...................... 0.65% 0.13% 0.78%
International Growth Portfolio ........ 0.00% 1.27% 1.27%
MFS VARIABLE INSURANCE TRUST(4)
Emerging Growth Series ................ 0.75% 0.25% 1.00%
Research Series ....................... 0.75% 0.25% 1.00%
OCC ACCUMULATION TRUST(5)
Managed Portfolio ..................... 0.80% 0.14% 0.94%
Small Cap Portfolio ................... 0.80% 0.20% 1.00%
T. ROWE PRICE (6)
T. Rowe Price Equity Series, Inc.,
Equity Income Portfolio ............. 0.85% 0.00% 0.85%
T. Rowe Price International
Series, Inc., International
Stock Portfolio ..................... 1.05% 0.00% 1.05%
WARBURG PINCUS TRUST(7)
Post-Venture Capital Portfolio ........ 0.64% 0.76% 1.40%
The purpose of the foregoing tables is to assist Contract owners in
understanding the expenses that they bear, directly or indirectly of the Pruco
Life of New Jersey Flexible Premium Variable Annuity Account and the Funds. The
expenses relating to the Funds (other than those in the Prudential Series Fund)
have been provided to Pruco Life of New Jersey by the Funds and have not been
independently verified by Pruco Life of New Jersey. See the sections on charges
in this prospectus and the accompanying prospectuses for the Funds. The above
tables do not include any taxes attributable to purchase payments nor any
premium taxes. Currently, there is no deduction for such taxes at the time
purchase payments are made, but in some states, a deduction is made when an
annuity is effected.
(1.) The Prudential Series Fund. With respect to The Prudential Series Fund
portfolios, except for the Global Portfolio, The Prudential reimburses a
portfolio when its ordinary operating expenses, excluding taxes, interest, and
brokerage commissions exceed 0.75% of the portfolio's average daily net assets.
The amounts listed for the portfolios under "Other Expenses" are based on
amounts incurred in the last fiscal year. The Prudential Jennison Portfolio
commenced operations in 1995. Consequently, for the fee table above and the
examples that follow, the figures shown as "Other Expenses" and total expenses
are based on actual amounts from May 1, 1995 through May 1, 1996. It is
anticipated that as average net assets of the portfolio grow, the magnitude of
"Other Expenses" will decrease and become comparable to that of other
portfolios.
(2.) AIM Variable Insurance Funds, Inc. AIM may from time to time voluntarily
waive or reduce their respective fees. Fee waivers or reductions, other than
those contained in the agreement with the adviser, may be modified or terminated
at any time. Management fees and other expenses have been restated to reflect
current agreements which do not include waivers or reductions for the AIM V.I.
Growth and Income Fund.
(3.) Janus Aspen Series. The fees and expenses for the Janus Aspen Series Growth
Portfolio and International Growth Portfolio in the table above are based on
gross expenses before expense offset arrangements for the fiscal year ended
December 31, 1995, net of fee waivers or reductions from Janus Capital. Janus
Capital has agreed to reduce each Portfolio's advisory fee to the extent such
fee exceeds the effective rate of the Janus retail fund corresponding to such
Portfolio. Janus Capital may terminate this fee reduction or any of the expense
limitations set forth herein at any time upon 90 days' notice to the Trustees of
the Janus Aspen Series. The fees and expenses for the International Growth
Portfolio have been restated to reflect the 1.25% expense limitation in effect
from June 3, 1996 through April 30, 1997. Without fee waivers or reductions, the
Management Fee, Other Expenses and Total Fund Annual Expenses would have been
0.85%, 0.13% and 0.98% for the Growth Portfolio and 1.00%, 2.57% and 3.57% for
the International Growth Portfolio.
(4.) MFS Variable Insurance Trust. With respect to the MFS Trust Emerging Growth
Series and Research Series the adviser has agreed to bear, subject to
reimbursement, expenses for each of the MFS Funds such that each
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aggregate Funds' operating expenses shall not exceed, on an annualized basis,
1.00% of the average daily net assets of the MFS Funds from November 2, 1994
through December 31, 1996, 1.25% of the average daily net assets of the Series
from January 1, 1997 through December 31, 1998, and 1.50% of the average daily
net assets of the Series from January 1, 1999 through December 31, 2004;
provided however, that this obligation may be terminated or revised at any time.
Absent this expense arrangement, "Other Expenses" and "Total Fund Annual
Expenses" would be 2.16% and 2.91%, respectively for the Emerging Growth Series
and 3.15% and 3.90% respectively for the Research Series.
(5.) OCC Accumulation Trust. The annual expenses of the OCC Accumulation Trust
Portfolios as of December 31, 1995 have been restated to reflect new management
fee and expense limitation arrangements in effect as of May 1, 1996. Effective
May 1, 1996, the expenses of the Managed and Small Cap Portfolios of the OCC
Accumulation Trust are contractually limited by OpCap Advisors so that their
respective annualized operating expenses do not exceed 1.25% of their respective
average daily net assets. Furthermore, through April 30, 1997, the annualized
operating expenses of the Managed and Small Cap Portfolios will be voluntarily
limited by OpCap Advisors so that annualized operating expenses of these
Portfolios do not exceed 1.00% of their respective average daily net assets.
Without such voluntary expense limitations, and taking into account the revised
contractual provisions effective May 1, 1996 concerning management fees and
expense limitations, the Management Fees, Other Expenses and Total Portfolio
Annual Expenses incurred for the fiscal year ended December 31, 1995 would have
remained unchanged for the Managed Portfolio and would have been .80%, .39% and
1.19%, respectively, for the Small Cap Portfolio.
(6.) T. Rowe Price Equity Series, Inc. and T. Rowe Price International Series,
Inc. With respect to the T. Rowe Price Funds, the Investment Management Fees
include the ordinary expenses of operating the Funds.
(7.) Warburg Pincus Trust. With respect to the Warburg Trust Post-Venture
Capital Portfolio, absent the anticipated waiver of fees by the Fund's
investment adviser and co-administrator, the Investment Management Fee would
equal 1.25%; Other Expenses would equal 0.81%, and Total Fund Annual Expenses
would equal 2.06%. Other Expenses for the Fund are based on annualized estimates
of expenses for the fiscal year ending December 31, 1996, net of any fee waivers
or expense reimbursements. The investment adviser has undertaken to limit the
Fund's Total Fund Annual Expenses through December 31, 1996.
EXAMPLES OF FEES AND EXPENSES
The following examples illustrate the cumulative dollar amount of all the above
expenses that would be incurred on each $1,000 of your investment.
o The examples assume a consistent 5% annual return on invested assets;
o The examples do not take into consideration any taxes attributable to
purchase payments nor any premium taxes which may be payable at the time
of annuitization or at the time of purchase payments;
For a term less than 10 years, the expenses shown in Table I describe applicable
charges for the withdrawal of your entire Contract Fund or if you use your
Contract Fund to effect an annuity assuming, in each case, that your Contract
Fund is invested entirely in the designated portfolio. THE EXAMPLES SHOULD NOT
BE CONSIDERED TO BE A REPRESENTATION OF PAST OR FUTURE EXPENSES; ACTUAL EXPENSES
INCURRED IN ANY GIVEN YEAR MAY BE MORE OR LESS THAN THOSE SHOWN IN THE EXAMPLES.
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TABLE I
If you withdraw your entire Contract Fund just prior to the end of the
applicable time period or if you use your Contract Fund to effect an annuity at
the end of the applicable time period, you would pay the following cumulative
expenses on each $1,000 invested. (Note: The 1, 3 and 5 Year columns reflect the
imposition of the withdrawal charge; however, if you choose certain annuity
options after the first year this charge will not be made. Where this is the
case, the expenses shown in Table II below would be applicable. see WITHDRAWAL
CHARGE, on page 17.)
1 3 5 10
YEAR YEARS YEARS YEARS
---- ----- ----- -----
The Prudential Series Fund
Money Market Portfolio ................... $ 82 $ 94 $117 $220
Diversified Bond Portfolio ............... $ 82 $ 94 $117 $220
High Yield Bond Portfolio ................ $ 84 $ 99 $126 $238
Stock Index Portfolio .................... $ 82 $ 92 $114 $214
Equity Income Portfolio .................. $ 82 $ 94 $116 $219
Equity Portfolio ......................... $ 83 $ 95 $119 $225
Prudential Jennison Portfolio ............ $ 86 $105 $135 $257
Global Portfolio ......................... $ 88 $113 $148 $284
AIM Variable Insurance Funds, Inc.
AIM V.I. Growth And Income Fund .......... $ 89 $116 $154 $294
AIM V.I. Value Fund ...................... $ 85 $104 $133 $252
Janus Aspen Series
Growth Portfolio ......................... $ 86 $105 $134 $255
International Growth Portfolio ........... $ 90 $119 $159 $304
MFS Variable Insurance Trust
Emerging Growth Series ................... $ 88 $111 $145 $278
Research Series .......................... $ 88 $111 $145 $278
OCC Accumulation Trust
Managed Portfolio ........................ $ 87 $109 $142 $272
Small Cap Portfolio ...................... $ 88 $111 $145 $278
T. Rowe Price
T. Rowe Price Equity Series, Inc., Equity
Income Portfolio ....................... $ 86 $107 $138 $263
T. Rowe Price International Series, Inc.,
International Stock Portfolio .......... $ 88 $113 $148 $283
Warburg Pincus Trust
Post-Venture Capital Portfolio ........... $ 92 $123 $165 $317
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TABLE II
If you do not withdraw any portion of your Contract Fund as of the end of the
applicable time period, you would pay the following cumulative expenses on each
$1,000 invested.
1 3 5 10
YEAR YEARS YEARS YEARS
---- ----- ----- -----
The Prudential Series Fund
Money Market Portfolio ................... $ 19 $ 59 $102 $220
Diversified Bond Portfolio ............... $ 19 $ 59 $102 $220
High Yield Bond Portfolio ................ $ 21 $ 64 $111 $238
Stock Index Portfolio .................... $ 19 $ 57 $ 99 $214
Equity Income Portfolio .................. $ 19 $ 59 $101 $219
Equity Portfolio ......................... $ 20 $ 60 $104 $225
Prudential Jennison Portfolio ............ $ 23 $ 70 $120 $257
Global Portfolio ......................... $ 25 $ 78 $133 $284
AIM Variable Insurance Funds, Inc. .........
AIM V.I. Growth And Income Fund .......... $ 26 $ 81 $139 $294
AIM V.I. Value Fund ...................... $ 22 $ 69 $118 $252
Janus Aspen Series
Growth Portfolio ......................... $ 23 $ 70 $119 $255
International Growth Portfolio ........... $ 27 $ 84 $144 $304
MFS Variable Insurance Trust
Emerging Growth Series ................... $ 25 $ 76 $130 $278
Research Series .......................... $ 25 $ 76 $130 $278
OCC Accumulation Trust
Managed Portfolio ........................ $ 24 $ 74 $127 $272
Small Cap Portfolio ...................... $ 25 $ 76 $130 $278
T. Rowe Price
T. Rowe Price Equity Series, Inc., Equity
Income Portfolio ....................... $ 23 $ 72 $123 $263
T. Rowe Price International Series, Inc.,
International Stock Portfolio .......... $ 25 $ 78 $133 $283
Warburg Pincus Trust
Post-Venture Capital Portfolio ......... $ 29 $ 88 $150 $317
Notice that in both of the above tables, the level of cumulative charges is
identical for the 10 year column. This is because at that point there are no
withdrawal charges taken by Pruco Life of New Jersey upon surrender or
annuitization.
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GENERAL INFORMATION ABOUT PRUCO LIFE OF NEW JERSEY,
THE PRUCO LIFE OF NEW JERSEY FLEXIBLE PREMIUM
VARIABLE ANNUITY ACCOUNT, AND THE
INVESTMENT OPTIONS AVAILABLE UNDER THE
CONTRACT
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Pruco Life Insurance Company of New Jersey ("Pruco Life of New Jersey") is a
stock life insurance company, organized in 1982 under the laws of the State of
New Jersey. It is licensed to sell life insurance and annuities only in the
States of New Jersey and New York.
Pruco Life of New Jersey is a wholly-owned subsidiary of Pruco Life Insurance
Company, which in turn is a wholly-owned subsidiary of The Prudential, a mutual
insurance company founded in 1875 under the laws of the State of New Jersey. As
of December 31, 1995, The Prudential has invested $127 million in Pruco Life of
New Jersey through its subsidiary Pruco Life Insurance Company in connection
with Pruco Life of New Jersey's organization and operation. The Prudential
intends from time to time to make additional capital contributions to Pruco Life
of New Jersey as needed to enable it to meet its reserve requirements and
expenses in connection with its business. However, The Prudential is under no
obligation to make such contributions and its assets do not back the benefits
payable under the Contract. Pruco Life of New Jersey's financial statements
begin on page ___ and should be considered only as bearing upon Pruco Life of
New Jersey's ability to meet its obligations under the Contracts.
PRUCO LIFE OF NEW JERSEY FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT
The Pruco Life of New Jersey Flexible Premium Variable Annuity Account (the
"Account") was established on May 20, 1996 under New Jersey law as a separate
investment account. The Account meets the definition of a "separate account"
under federal securities laws. Pruco Life of New Jersey is the legal owner of
the assets in the Account and is obligated to provide all benefits under the
Contracts. Pruco Life of New Jersey will at all times maintain assets in the
Account with a total market value at least equal to the reserve and other
liabilities relating to the variable benefits attributable to the Account. These
assets are segregated from all of Pruco Life of New Jersey's other assets and
may not be charged with liabilities which arise from any other business Pruco
Life of New Jersey conducts. In addition to these assets, the Account's assets
may include funds contributed by Pruco Life of New Jersey to commence operation
of the Account and may include accumulations of the charges Pruco Life of New
Jersey makes against the Account. From time to time these additional assets will
be transferred to Pruco Life of New Jersey's general account. Before making any
such transfer, Pruco Life of New Jersey will consider any possible adverse
impact the transfer might have on the Account.
The Account is registered with the Securities and Exchange Commission ("SEC")
under the Investment Company Act of 1940 ("1940 Act") as a unit investment
trust, which is a type of investment company. This does not involve any
supervision by the SEC of the management or investment policies or practices of
the Account. For state law purposes, the Account is treated as a part or
division of Pruco Life of New Jersey. There are currently nineteen subaccounts
within the Account which invest in corresponding portfolios of the Funds
available under the Contracts. There are additional subaccounts which invest in
other portfolios of the Prudential Series Fund which are not available under the
Contracts. Additional subaccounts may be added in the future. Pursuant to the
terms of the Contract, Pruco Life of New Jersey has the right to modify
unilaterally the Contract to limit the number and/or type of funds.
THE FUNDS
The following is a list of each Fund, its investment objectives and its
investment adviser:
THE PRUDENTIAL SERIES FUND, INC.
MONEY MARKET PORTFOLIO. The maximum current income that is consistent with
stability of capital and maintenance of liquidity through investment in
high-quality short-term debt obligations. There are no assurances that this
portfolio will maintain a stable net asset value.
DIVERSIFIED BOND PORTFOLIO. A high level of income over the longer term while
providing reasonable safety of capital through investment primarily in readily
marketable intermediate and long-term fixed income securities that provide
attractive yields but do not involve substantial risk of loss of capital through
default.
HIGH YIELD BOND PORTFOLIO. Achievement of a high total return through investment
in high yield/high risk fixed income securities in the medium to lower quality
ranges.
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STOCK INDEX PORTFOLIO. Achievement of investment results that correspond to the
price and yield performance of publicly traded common stocks in the aggregate by
following a policy of attempting to duplicate the price and yield performance of
the Standard & Poor's 500 Composite Stock Price Index.
EQUITY INCOME PORTFOLIO. Both current income and capital appreciation through
investment primarily in common stocks and convertible securities that provide
favorable prospects for investment income returns above those of the Standard &
Poor's 500 Composite Stock Price Index or the New York Stock Exchange Composite
Index.
EQUITY PORTFOLIO. Capital appreciation through investment primarily in common
stocks of companies, including major established corporations as well as smaller
capitalization companies, that appear to offer attractive prospects of price
appreciation that is superior to broadly-based stock indices. Current income, if
any, is incidental.
PRUDENTIAL JENNISON PORTFOLIO. Long-term growth of capital through investment
primarily in equity securities of established companies with above-average
growth prospects. Current income, if any, is incidental.
GLOBAL PORTFOLIO. Long-term growth of capital through investment primarily in
common stock and common stock equivalents of foreign and domestic issues.
Current income, if any, is incidental.
The Prudential is the investment advisor for the assets of each of the
portfolios of the Prudential Series Fund. The Prudential has a Service Agreement
with its wholly-owned subsidiary The Prudential Investment Corporation ("PIC"),
which provides that, subject to The Prudential's supervision, PIC will furnish
investment advisory services in connection with the management of the Prudential
Series Fund. In addition, The Prudential has entered into a Subadvisory
Agreement with its wholly-owned subsidiary Jennison Associates Capital Corp.
("Jennison"), under which Jennison furnishes investment advisory services in
connection with the management of the Prudential Jennison Portfolio.
AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. GROWTH AND INCOME FUND. The Fund's investment objective is to seek
growth of capital, with current income as a secondary objective.
AIM V.I. VALUE FUND. The Fund's investment objective is to achieve long-term
growth of capital by investing primarily in equity securities judged by A I M
Advisors, Inc. to be undervalued relative to the current or projected earnings
of the companies issuing the securities, or relative market values of assets
owned by the companies issuing the securities or relative to the equity market
generally. Income is a secondary objective and would be satisfied principally
from the income (interest and dividends) generated by the common stocks,
convertible bonds and convertible preferred stocks that make up the Fund's
portfolio.
A I M Advisors, Inc., serves as the investment adviser to the AIM V.I. Value
Fund and the AIM V.I. Growth and Income Fund.
JANUS ASPEN SERIES
GROWTH PORTFOLIO. A diversified portfolio that seeks long-term growth of capital
by investing primarily in common stocks, with an emphasis on companies with
larger market capitalizations.
INTERNATIONAL GROWTH PORTFOLIO. A diversified portfolio that seeks long-term
growth of capital by investing primarily in common stocks of foreign issuers.
Janus Capital Corporation is the investment adviser to the Growth Portfolio and
the International Growth Portfolio and is responsible for the day-to-day
management of the portfolios and other business affairs of the portfolios.
MFS VARIABLE INSURANCE TRUST
EMERGING GROWTH SERIES. This Series seeks to provide long-term growth of
capital. Dividend and interest income from portfolio securities, if any, is
incidental to the Series' investment objective of long-term growth of capital.
RESEARCH SERIES. The Research Series' investment objective is to provide
long-term growth of capital and future income.
Massachusetts Financial Services Company, a Delaware corporation, is the
investment adviser to each MFS Series.
OCC ACCUMULATION TRUST (FORMERLY KNOWN AS QUEST FOR VALUE ACCUMULATION TRUST)
MANAGED PORTFOLIO. Growth of capital over time through investment in a portfolio
consisting of common stocks, bonds and cash equivalents, the percentages of
which will vary based on management's assessments of relative investment.
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SMALL CAP PORTFOLIO. Capital appreciation through investment in a diversified
portfolio of equity securities of companies with market capitalizations of under
$1 billion.
OpCap Advisors (formerly known as Quest for Value Advisors, the "OCC Manager")
is responsible for management of the OCC Accumulation Trust's business. Pursuant
to the investment advisory agreement with the OCC Accumulation Trust, and
subject to the authority of the Board of Trustees, the OCC Manager supervises
the investment operation of the Managed Portfolio and the Small Cap Portfolio,
furnishes advice and recommendations with respect to investments, investment
policies and the purchase and sale of securities and provides certain
administrative services for the OCC Accumulation Trust.
T. ROWE PRICE
T. ROWE PRICE EQUITY SERIES, INC., EQUITY INCOME PORTFOLIO. The fund's objective
is to provide substantial dividend income as well as long-term capital
appreciation through investment in common stocks of established companies.
T. ROWE PRICE INTERNATIONAL SERIES, INC., INTERNATIONAL STOCK PORTFOLIO. The
fund's objective is long-term growth of capital through investment primarily in
common stocks of established, non-U.S. companies.
T. Rowe Price Associates, Inc. is the Investment Manager for the Equity Income
Portfolio and Rowe Price-Fleming International, Inc. is the Investment Manager
for the International Stock Portfolio.
WARBURG PINCUS TRUST
POST-VENTURE CAPITAL PORTFOLIO. Seeks long-term growth of capital by investing
primarily in equity securities of issuers in their post-venture capital stage of
development and pursues an aggressive investment strategy.
The Warburg Pincus Trust employs Warburg, Pincus Counsellors, Inc. as investment
adviser and Abbott Capital Management, L.P. as its sub-investment adviser with
respect to a portion of the Post-Venture Capital Portfolio allocated to private
limited partnerships or other investment funds.
Further information about the Fund portfolios can be found in the accompanying
prospectuses for each Fund.
The investment advisors with respect to the various funds charge a daily
investment management fee as compensation for their services, as set forth in
the table beginning on page 4 and as more fully described in the prospectus for
each Fund.
It is conceivable that in the future it may become disadvantageous for both
variable life insurance and variable annuity contract separate accounts to
invest in the same underlying mutual fund. Although neither the companies which
invest in the Funds, nor the Funds currently foresees any such disadvantage, the
Funds' Boards intend to monitor events in order to identify any material
conflict between variable life insurance and variable annuity contract owners
and to determine what action, if any, should be taken in response thereto. This
might force a Fund to sell securities at disadvantageous prices. Material
conflicts could result from such things as: (1) changes in state insurance law;
(2) changes in federal income tax law; (3) changes in the investment management
of any portfolio of the Funds; or (4) differences between voting instructions
given by variable life insurance and variable annuity contract owners.
Pruco Life of New Jersey will be compensated by an affiliate of each of the
Funds (other than those in the Prudential Series Fund) based upon an annual
percentage of the average assets held in the Fund by Pruco Life of New Jersey
under the Contracts. These percentages vary by Fund, and reflect administrative
and other services provided by Pruco Life of New Jersey.
A FULL DESCRIPTION OF THE FUNDS, THEIR INVESTMENT OBJECTIVES, MANAGEMENT,
POLICIES, AND RESTRICTIONS, THEIR EXPENSES, THE RISKS ATTENDANT TO INVESTMENT
THEREIN, AND ALL OTHER ASPECTS OF THEIR OPERATION IS CONTAINED IN THE
ACCOMPANYING PROSPECTUSES FOR EACH FUND AND IN THE RELATED STATEMENTS OF
ADDITIONAL INFORMATION, WHICH SHOULD BE READ IN CONJUNCTION WITH THIS
PROSPECTUS. THERE IS NO ASSURANCE THAT THE INVESTMENT OBJECTIVES WILL BE MET.
THE INTEREST-RATE INVESTMENT OPTIONS AND INVESTMENTS
BY PRUCO LIFE OF NEW JERSEY
Purchase payments invested in the interest-rate investment options do not result
in participation in the investment gains or losses of any designated portfolio
of investments as is the case for payments invested in the variable investment
options. The amounts invested in the interest-rate investment options are
credited with interest at rates guaranteed by Pruco Life of New Jersey. All of
Pruco Life of New Jersey's assets stand behind those guarantees.
Assets of Pruco Life of New Jersey must be invested in accordance with
requirements established by applicable state laws regarding the nature and
quality of investments that may be made by life insurance companies and the
percentage
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of their assets that may be committed to any particular type of investment. In
general, these laws permit investments, within specified limits and subject to
certain qualifications, in federal, state, and municipal obligations, corporate
bonds, preferred and common stocks, real estate mortgages, real estate and
certain other investments.
DETAILED INFORMATION ABOUT THE CONTRACT
REQUIREMENTS FOR ISSUANCE OF A CONTRACT
The minimum initial purchase payment is $10,000. Purchase payments in excess of
$2 million require prior approval of Pruco Life of New Jersey. The Contract may
generally be issued on proposed annuitants below the age of 86. Contracts
purchased in connection with Individual Retirement Annuity plans (IRAs) will
generally be issued to annuitants below the age of 70. However, IRA Contracts
may be issued up to age 80 provided that the Minimum Distribution Option or
other appropriate IRS election is made. Before issuing any Contract, we require
submission of certain information. Following our review of the information and
approval of issuance, a Contract will be issued that sets forth precisely your
rights and Pruco Life of New Jersey's obligations. You may thereafter make
additional payments of $1,000 or more, but there is no obligation to do so.
The Contract date will be the date the initial purchase payment and required
information in good order are received at the Prudential Annuity Service Center.
If the current underwriting requirements are not met and the issuance of the
Contract is not approved, the purchase payment will promptly be returned. Pruco
Life of New Jersey reserves the right to change these requirements on a
non-discriminatory basis.
SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK"
Generally, you may return a Contract for refund within 10 days after you receive
it. Some states allow a longer period of time during which a Contract may be
returned for a refund. If you purchase the Contract as an IRA, federal law
requires that you return the Contract for refund within 7 days. A refund may be
requested by mailing or delivering the Contract to the representative who sold
it or to the Prudential Annuity Service Center. As required by applicable law,
you will then receive a refund of either (1) all purchase payments made, plus
any interest credited, plus or minus any change in cash value due to investment
experience or market value adjustment, which will include charges that have been
made against the account or the underlying variable investment funds or (2) all
purchase payments made.
ALLOCATION OF PURCHASE PAYMENTS
You determine how the initial purchase payment will be allocated among the
subaccounts and interest-rate investment options by specifying the desired
allocation on the application form for the Contract. You may choose to allocate
nothing to a particular subaccount or interest-rate option. Unless you tell us
otherwise, subsequent purchase payments will be allocated in the same
proportions as the most recent purchase payment made (unless that was a purchase
payment you directed us to allocate on a one time-only basis). You may change
the way in which subsequent purchase payments are allocated by providing Pruco
Life of New Jersey with proper written instruction or by telephoning the
Prudential Annuity Service Center, once you have provided the appropriate
identification to effect a telephone transfer. See TRANSFERS, page 13.
ASSET ALLOCATION PROGRAM
An Asset Allocation Program is available to assist you in determining how to
allocate your purchase payments. If you choose to participate in the program,
your registered representative will provide you with an investor profile
questionnaire. Based on your answers to the questionnaire, a software program,
designed by The Prudential with the assistance of Ibbotson Associates, will
identify an asset allocation model that is appropriate for investors that have
investment objectives, risk tolerance and time horizons comparable to yours. The
Asset Allocation Program is available at no charge to you. You are under no
obligation to participate in the program or to invest according to the program
recommendations. You may ignore, in whole or in part, the investment allocations
provided by the program.
The Asset Allocation Program is intended as an aid in making your purchase
payment allocations. It is not a guarantee of investment return and there can be
no assurance that any portfolio will attain its investment objectives. You
should consider reviewing your investor profile questionnaire annually, and each
time your investor profile changes.
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CASH VALUE
The cash value of the Contract is the amount you will receive if you withdraw
all of your Contract Fund. It is equal to the value of the Contract Fund plus or
minus any applicable Market-Value Adjustment of all amounts in MVA option
interest cells and minus any applicable withdrawal and administrative charges. A
withdrawal will generally have federal income tax consequences, which could
include tax penalties. You should consult with a tax adviser before making a
withdrawal. See WITHDRAWALS, on page 14 and FEDERAL TAX STATUS, on page 18.
GUARANTEED INTEREST RATE PERIODS
Pruco Life of New Jersey determines the effective guaranteed annual interest
rate ("guaranteed interest rate") that is available at any given time for the
one year fixed-rate option and for the MVA option. This is the rate that the
portion of the Contract Fund allocated to that option will earn throughout each
interest rate period. The rates change frequently and you may learn what rate[s]
are available from your Pruco Life of New Jersey representative. When you select
an interest-rate investment option, your payment will be allocated to an
interest rate cell and the interest rate will then not change until the cell's
maturity date. Interest will be added to the amount in the cell daily at a rate
that will provide the guaranteed effective yield over the period of one year.
Although the guaranteed interest rates offered may change, the minimum
guaranteed interest rate will never be less than an effective annual rate of 3%.
WHAT HAPPENS WHEN AN INTEREST CELL REACHES ITS MATURITY DATE?
On each maturity date, we will offer an election to transfer the amount maturing
into either of the available interest-rate investment options or the
subaccounts. A Market-Value Adjustment will not be made if this is done within
the first 30 days after an interest cell within the MVA option matures. Any
amount that you transfer into the same interest-rate investment option during
the 30-day period will receive the appropriate rate for that option, effective
as of the maturity date. Amounts that you withdraw or transfer into a variable
investment option or into a different interest-rate investment option during the
30-day period will receive interest for the period between the maturity date and
the date of withdrawal or transfer at the declared renewal rate for the matured
cell (i.e. as if you had taken no action within the 30-day period) and will be
effective on the date Pruco Life of New Jersey receives your request. If you do
not make an election to transfer within the 30-day period following the maturity
date, the amount maturing will ordinarily be transferred into a new interest
cell of the same duration as the maturing cell at the prevailing interest rate.
The transfer date will be the maturity date.
TRANSFERS
You may transfer out of an investment option into any combination of other
investment options available under the Contract. The transfer request may be in
dollars, such as a request to transfer $1,000 from one subaccount to another, or
may be in terms of a percentage reallocation among subaccounts. In the latter
case, the percentages must be whole numbers. You may make transfers by proper
written notice to the Prudential Annuity Service Center, or by telephone, once
you have provided appropriate identification to effect a telephone transfer.
You will automatically be enrolled to use the Telephone Transfer System. Pruco
Life of New Jersey has adopted procedures designed to ensure that requests by
telephone are genuine. We will not be held liable for following telephone
instructions that we reasonably believe to be genuine. We cannot guarantee that
you will be able to get through to complete a telephone transfer during peak
periods such as periods of drastic economic or market change.
Transfers among subaccounts will take effect as of the end of the valuation
period in which a proper transfer request is received at the Prudential Annuity
Service Center. Transfers from interest-rate investment options will take effect
on the day we receive your proper notice at the Prudential Annuity Service
Center. Transfers out of an interest cell in the fixed-rate option are permitted
only during the 30-day period following its maturity date. Amounts transferred
from a Market-Value Adjustment Option interest cell may be subject to a
Market-Value Adjustment if the transfer is not made in the 30-day period
following the maturity date of the interest cell.
You may make up to 12 transfers a year without charge. Thereafter, Pruco Life of
New Jersey will assess a charge of $25 for each subsequent transfer during that
Contract year. See TRANSACTION CHARGE, page 18. Dollar Cost Averaging and Auto-
Rebalancing transfers do not count towards the 12 transfers per year that can be
made without charge.
DOLLAR COST AVERAGING
Additionally, an administrative feature called Dollar Cost Averaging ("DCA") is
available to Contract owners. This feature allows you to transfer amounts out of
the fixed-rate option or one of the variable investment options
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(designated as the "DCA account") and into one or more other variable investment
options. Transfers may be in specific dollar amounts or percentages of the
amount in the DCA account at the time of the transfer. If the DCA account
balance drops below $250, the entire remaining balance of the account will be
transferred on the next transfer date. You may ask that transfers be made
monthly, quarterly, semi-annually or annually. You can add to the DCA account at
any time. Initial transfers must be at least 3% of the DCA account. These
amounts are subject to change at Pruco Life of New Jersey's discretion. Any
transfers made pursuant to DCA are not counted in determining the number of
transfers subject to the transfer charge.
Each automatic transfer will take effect as of the end of the valuation period
in monthly, quarterly, semi-annual or annual intervals as designated by you
based on the date the DCA account was established provided the New York Stock
Exchange is open on that date. If the New York Stock Exchange is not open on a
transfer date, the transfer will take effect as of the end of the valuation
period which immediately follows that date. Automatic transfers will continue
until the amount in the DCA account has been transferred, or until you notify us
and we process a change in allocation or cancellation of the feature.
AUTO-REBALANCING
This Contract offers another investment technique that you may find attractive.
The Auto-Rebalancing feature allows you to automatically rebalance subaccount
assets at specified intervals based on percentage allocations that you choose.
For example, suppose your initial investment allocation of variable investment
options A and B is split 40% and 60%, respectively. Then, due to investment
results, that split changes. You may instruct that those assets be rebalanced to
your original or different allocation percentages. Auto-Rebalancing can be
performed on a one-time basis or periodically, as you choose. You may select
that rebalancing occur in monthly, quarterly, semi-annual or annual intervals
based on your Contract year. Rebalancing will take effect as of the end of the
valuation period in the intervals you specify and will continue at those
intervals until you notify us otherwise. If the New York Stock Exchange is not
open on the rebalancing date, the transfer will take effect as of the end of the
valuation period which immediately follows that date. Any transfers made
pursuant to Auto-Rebalancing are not counted in determining the number of
transfers subject to the transfer charge. The interest-rate investment options
cannot participate in this administrative feature. In addition, you should not
include the DCA account as one of the subaccounts to be rebalanced.
WITHDRAWALS
You may at any time before the annuity date make a withdrawal from the Contract
Fund of all or part of the cash value of the Contract. However, Pruco Life of
New Jersey's consent will be required for a partial withdrawal if the amount
requested is less than $500. For federal income tax purposes, withdrawals from
Contracts other than IRAs are considered to have been made first from investment
income. See TAXES PAYABLE BY CONTRACT OWNERS, page 18.
You may specify from which investment options you would like the withdrawal
processed. The withdrawal amount may be specified as a dollar amount or as a
percentage of the Contract Fund. If you do not specify from where you would like
the withdrawal processed, a partial withdrawal will be withdrawn proportionally
from all investment options. Within the interest-rate investment options, we
will take the withdrawal first from the oldest eligible interest cell or cells.
A Market-Value Adjustment may apply. See MARKET-VALUE ADJUSTMENT, page C-1.
Only amounts withdrawn from purchase payments (including full withdrawals) are
subject to a withdrawal charge. For purposes of determining withdrawal charges,
withdrawals are considered as having been made first from purchase payments. See
WITHDRAWAL CHARGE, page 17. The withdrawal will be effected as of the end of the
valuation period in which a proper withdrawal request is received at the
Prudential Annuity Service Center.
Pruco Life of New Jersey will generally pay the amount of any withdrawal, less
any required tax withholding, within 7 days after we receive a properly
completed withdrawal request. We will adjust the Contract Fund to reflect any
applicable sales and/or administrative charge and Market-Value Adjustment. We
may delay payment of any withdrawal allocable to the subaccount[s] for a longer
period if the disposal or valuation of the Account's assets is not reasonably
practicable because the New York Stock Exchange is closed for other than a
regular holiday or weekend, trading is restricted by the SEC or the SEC declares
that an emergency exists. With respect to the amount of any withdrawal allocable
to the interest-rate investment options, we expect to pay the withdrawal
promptly upon request.
AUTOMATED WITHDRAWALS
Pruco Life of New Jersey also offers an Automated Withdrawal feature which
enables you to receive periodic withdrawals in monthly, quarterly, semi-annual
or annual intervals. Withdrawals will be processed as of the end of the
valuation
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period in the intervals you specify and will continue at those intervals until
you notify us otherwise. If the New York Stock Exchange is not open on the
processing date, the withdrawal will be processed as of the end of the valuation
period which immediately follows that date. Withdrawals may be made from a
designated investment option or proportionally from all investment options.
Withdrawals may be expressed as a specified dollar amount or as a percentage of
the Contract Fund. Market-Value adjustments may apply, and withdrawal charges
may apply if the withdrawals in any Contract year exceed the charge-free amount.
Additionally, Pruco Life of New Jersey's consent will be required for any
partial withdrawal of less than $500.
MARKET-VALUE ADJUSTMENT
An amount transferred or withdrawn from an MVA option before its maturity date
will be subject to a Market-Value Adjustment.
The amount of the Market-Value Adjustment depends upon the difference between
the guaranteed interest rate for the interest cell from which the withdrawal or
transfer is being made and the interest rate being declared on the date of the
withdrawal or transfer by Pruco Life of New Jersey for interest rate periods
approximately equal to one year longer than the time remaining until the
maturity date of the interest cell. Pruco Life of New Jersey may not always
offer MVA options at all durations. Rates for intermediate durations not
currently offered will be declared as often as rates for durations which are
offered. Such declared rates will be determined in a manner consistent with the
offered rates, but reflecting the different investment horizon of the
intermediate duration. If you specify your withdrawal or transfer as a dollar
amount, the Market-Value Adjustment may increase or decrease the amount
remaining in the MVA option. If you request the withdrawal or transfer as a
percentage of the Contract Fund, the Market-Value Adjustment may increase or
decrease the amount being withdrawn or transferred. If the current declared rate
is higher than the guaranteed rate, there will be a decrease. If the current
declared rate is lower than the guaranteed rate, there will be an increase. The
adjustment--whether up or down--will never be greater than 40% of each amount
subject to the adjustment. For a more precise description of how the
Market-Value Adjustment is determined, and an example of how it affects the
amount remaining after a partial withdrawal, see MARKET-VALUE ADJUSTMENT FORMULA
on page C-1.
DEATH BENEFIT
If the last surviving or sole annuitant dies prior to the annuity date, Pruco
Life of New Jersey will, upon receipt of all of the information necessary to
make the payment (including due proof of death and election of a payment
option), pay a death benefit to the beneficiary designated by the Contract
owner. The death benefit will equal the greatest of: (1) the Contract Fund as of
the date of due proof of death; (2) the sum of all invested purchase payments
made less total withdrawals made (including withdrawal charges); and (3) the
greatest of the Contract Fund values calculated on every third Contract
anniversary reduced by all subsequent withdrawals and withdrawal charges.
The beneficiary may receive this amount in one sum or under a payout option.
Unless the beneficiary has been irrevocably designated, you may change the
beneficiary at any time. If the annuitant dies after he or she has begun to
receive annuity payments, the death benefit, if any, will be determined by the
type[s] of payout provisions then in effect.
If the annuitant was the sole owner of the Contract, the annuitant's spouse was
the sole beneficiary, and the spouse had an unrestricted right to receive the
death benefit in one sum, then the spouse has the right to continue the Contract
as annuitant and owner.
VALUATION OF A CONTRACT OWNER'S CONTRACT FUND
The value of your Contract Fund is the sum of your interests in the variable
investment options and in the interest-rate investment options. The portion of
the Contract Fund allocated to the Account is the sum of the interests in each
subaccount. The values are measured in Units, for example, Money Market Units,
Diversified Bond Units or High Yield Bond Units. Every purchase payment made by
an owner is converted into Units of the subaccount or subaccounts selected by
dividing the amount of the purchase payment by the Unit Value for the subaccount
to which that amount has been allocated. The value of these Units changes each
valuation period to reflect the investment results, expenses, and charges of the
subaccount and the corresponding Fund. Further detail about Units is contained
in the Statement of Additional Information.
There is, of course, no guarantee that your Contract Fund will increase or that
it will not fall below the amount of your total purchase payments. However,
Pruco Life of New Jersey guarantees a minimum interest rate of 3% a year on that
portion of the Contract Fund allocated to the interest-rate investment options.
Excess interest on payments allocated to the interest-rate investment options
may be credited in addition to the guaranteed interest rate. A Market-Value
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Adjustment may apply to amounts held in the MVA option, which could reduce
effective annual yields below the guaranteed interest rate levels.
CHARGES, FEES AND DEDUCTIONS
PREMIUM TAXES AND TAXES ATTRIBUTABLE TO PURCHASE PAYMENTS
A charge may be deducted for premium taxes and any taxes attributable to
purchase payments. For these purposes, "premium taxes and taxes attributable to
purchase payments" shall include any state or local premium taxes and any
federal premium taxes and any federal, state or local income, excise, business
or any other type of tax (or component thereof) measured by or based upon the
amount of premium received by Pruco Life of New Jersey. If Pruco Life of New
Jersey pays a state or local tax at the time purchase payments are made, the
deduction will be made at the time based on the applicable rate. In many states,
Pruco Life of New Jersey pays a premium tax when an annuity is effected. In
those states, the tax will be deducted at that time. The tax rates currently in
effect in those states that impose a tax range from 1% to 5%. Prudential also
reserves the right to deduct from each purchase payment a charge up to a maximum
of 0.3% for federal income taxes measured by premiums in those states where
approval has been obtained. Currently, no such charge is being made in any
state.
A deduction for any such taxes imposed on purchase payments will not be made,
however, except to the extent that the total tax attributable to premiums is in
excess of 4% when: (1) your total purchase payments, less any purchase payments
withdrawn, equal or exceed $50,000; or (2) you purchase separate Contracts for
each of your children or grandchildren as annuitants, each Contract has purchase
payments totaling at least $25,000, and total purchase payments, less any
purchase payments withdrawn, equal or exceed $50,000. Special tax rules apply to
multiple annuity contracts issued by the same company (and affiliates) to the
same Contract owner during any calendar year. See FEDERAL TAX STATUS, page 18.
ADMINISTRATIVE CHARGE
There is an administrative charge to reimburse Pruco Life of New Jersey for the
expenses incurred in administering the Contracts. This includes such things as
issuing the Contract, establishing and maintaining records, and providing
reports to Contract owners. This charge is deducted daily from the assets in
each of the variable subaccounts and is equivalent to an effective annual rate
of 0.15% (.00041065% daily). There will be an additional charge of $30 annually
and upon surrender on Contracts with less than $50,000 in the Contract Fund.
This $30 charge will be apportioned over all investment options making up the
Contract Fund as of the effective date of that deduction. The administrative
charge contains no element of anticipated profit.
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CHARGE FOR ASSUMING MORTALITY AND EXPENSE RISKS
A deduction is made daily from the assets of each of the variable investment
options to reimburse Pruco Life of New Jersey for assuming the risk that our
estimates of longevity and of the expenses we expect to incur over the lengthy
periods that the Contract may be in effect will turn out to be incorrect. The
charge is made daily at an annual rate of 1.25% (.00340349% daily) of the assets
held in the subaccounts. This charge is not assessed against amounts allocated
to the interest-rate investment options.
To the extent that the charge for these risks exceeds the actual cost of
expenses and benefits, Pruco Life of New Jersey will realize a gain. These
proceeds will become part of Pruco Life of New Jersey's general account and will
be available to cover any deficiency to the extent to which withdrawal charges
are less than sales expenses under the Contracts.
EXPENSES INCURRED BY THE FUNDS
The charges and expenses of the Funds are indirectly borne by the Contract
owners. Detail about investment management fees and other underlying fund
expenses are provided in the fee table and in the accompanying prospectuses for
the Funds and the related statements of additional information.
WITHDRAWAL CHARGE
A withdrawal charge may be made upon full or partial withdrawals. The charge
compensates Pruco Life of New Jersey for paying all of the expenses of selling
and distributing the Contracts, including sales commissions, printing of
prospectuses, sales administration, preparation of sales literature, and other
promotional activities. No withdrawal charge is imposed whenever earnings are
withdrawn.
Withdrawals are deemed to be made first from purchase payments and then from
earnings. A portion of the purchase payments to be withdrawn in any Contract
year may be withdrawn without the imposition of any charge. That amount is
referred to as the "charge-free amount". It is equal to 10% of the total of all
purchase payments less all withdrawals of purchase payments previously made plus
any charge-free amount still available from the immediately preceding Contract
year. An example of how the charge-free amount and the withdrawal charge are
determined is given on page C-1 as part of the example of how the Market-Value
Adjustment works.
If your withdrawal exceeds the charge-free amount and it is made within the
first seven Contract years, a percentage charge will be applied. The following
table sets forth the rates that apply:
- --------------------------------------------------------------------------------
| THE WITHDRAWAL CHARGE WILL BE EQUAL
FOR WITHDRAWALS DURING THE CONTRACT | TO THE FOLLOWING PERCENTAGE OF THE
YEAR INDICATED | AMOUNT WITHDRAWN*
- ----------------------------------------|---------------------------------------
First Contract Year | 7%
Second Contract Year | 6%
Third Contract Year | 5%
Fourth Contract Year | 4%
Fifth Contract Year | 3%
Sixth Contract Year | 2%
Seventh Contract Year | 1%
Eighth and Subsequent Contract Years | No Charge
- -------------------------------------------------------------------------------
* SUBJECT TO CHARGE-FREE AMOUNT DESCRIBED ABOVE.
- --------------------------------------------------------------------------------
No withdrawal charge is made upon a withdrawal used to effect an annuity under
the Life Annuity with 120 Payments Certain option. See EFFECTING AN ANNUITY,
page 24. Also, at our discretion, we may reduce or waive withdrawal charges for
certain classes of contracts (e.g., contracts purchased by Prudential employees
or exchanged from existing contracts).
Contracts issued to annuitants aged 84 or older are subject to a reduced
withdrawal charge. The withdrawal charge will never be greater than permitted by
applicable law or regulation.
To the extent that the contingent deferred sales charge is insufficient to
recover all distribution expenses associated with the Contracts, the deficiency
will be met from Pruco Life of New Jersey's surplus which is, in part, derived
from the charges for the assumption of mortality and expense risks and from
mortality gains from Contracts under which annuity payments are being made.
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TRANSACTION CHARGE
There is a charge of $25 for each transfer you make after the first 12
(excluding DCA and Auto-Rebalancing transfers) in a Contract year. The charge is
taken pro-rata from the investment options from which the transfer is made. Any
affected MVA option cells will not undergo a Market-Value Adjustment as a result
of this processing.
CRITICAL CARE ACCESS
All or part of any withdrawal and annual administrative charges associated with
a full or partial withdrawal, or any withdrawal charge due on the annuity date,
will be waived following the receipt of due proof that the annuitant or (if
applicable) last surviving co-annuitant has been confined to an eligible nursing
home or hospital for a period of at least 3 months or a physician has certified
that the annuitant or co-annuitant has 6 months or less to live.
FEDERAL TAX STATUS
The following discussion is based on current law and interpretations which may
change. The discussion is general in nature. It is not intended as tax advice.
Nor does it consider any applicable state or other tax laws. A qualified tax
adviser should be consulted for complete information and advice. The following
rules do not generally apply to annuity contracts held by or for non-natural
persons (e.g., corporations) or to contracts held under tax-favored retirement
plans. Where a Contract is held by a non-natural person, unless the Contract
owner is a nominee or agent for a natural person (or in other limited
circumstances), the Contract will generally not be treated as an annuity for tax
purposes.
DIVERSIFICATION AND INVESTOR CONTROL
Section 817(h) of the Internal Revenue Code (the "Code") provides that the
underlying investments for a variable annuity must satisfy certain
diversification requirements. For further detail on diversification
requirements, see DIVIDENDS, DISTRIBUTIONS, AND TAXES in the accompanying
prospectus for the Prudential Series Fund.
IRS regulations issued to date do not provide guidance concerning the extent to
which Contract owners may direct their investments to particular subaccounts of
a separate account without causing the Contract owners instead of Pruco Life of
New Jersey to be considered the owners of the underlying assets. Such guidance
will be included in regulations or revenue rulings under Section 817(d) relating
to the definition of a variable contract. The ownership rights under the
Contract are similar to, but different in certain respects from, those addressed
by the Internal Revenue Service in Rulings in which it was determined that
Contract owners were not owners of separate account assets. For example, a
Contract owner has the choice of more Funds, including Funds with similar broad
investment strategies and different investment managers, and may be able to
reallocate amounts between subaccounts more frequently than in such rulings.
While Pruco Life of New Jersey believes it will be considered the owner of the
Account assets, these differences could result in a Contract owner being
considered the owner of the Account assets. Because of this uncertainty, Pruco
Life reserves the right to make such changes as it deems necessary to assure
that the Contract qualifies as an annuity for tax purposes. Any such changes
will apply uniformly to affected Contract owners and will be made with such
notice to affected Contract owners as is feasible under the circumstances.
TAXES PAYABLE BY CONTRACT OWNERS
Under current law, Pruco Life of New Jersey believes that the Contract will
be treated as an annuity for federal income tax purposes and that the issuing
insurance company, Pruco Life of New Jersey, and not the Contract owner,
will be treated as the owner of the underlying investments for the Contract.
Accordingly, generally no tax should be payable by any Contract owner as a
result of any increase in the value of the Contract until money is received by
him or her. It is important, however, to consider how amounts that are received
will be taxed.
The Code provides generally that amounts withdrawn by a Contract owner from his
or her Contract, before annuity payments begin, will be treated for tax purposes
as being first withdrawals of investment income, rather than withdrawals of
purchase payments, until all investment income has been withdrawn.
To the extent assignment is authorized by the Contract, the assignment or pledge
of (or agreement to assign or pledge) any portion of the value of the Contract
for a loan will be treated as a withdrawal subject to these rules. Amounts
withdrawn before annuity payments begin which represent a distribution of
investment income will be taxable as ordinary income and may be subject to a
penalty tax. Amounts which represent a withdrawal of purchase payments will not
be taxable as ordinary income or subject to a penalty tax. Moreover, all annuity
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contracts issued by the same company (and affiliates) to the same Contract owner
during any calendar year shall be treated as one annuity contract for purposes
of determining whether an amount is subject to tax under these rules.
Different tax rules apply to your receipt of annuity payments. For Contracts
other than individual retirement annuities, a portion of each annuity payment
you receive under a Contract will be treated as a partial return of your
purchase payments and will not be taxable. The remaining portion of the annuity
payment will be taxed as ordinary income. Exactly how an annuity payment is
divided into taxable and non-taxable portions depends upon the period over which
annuity payments are expected to be received, which in turn is governed by the
form of annuity selected and, where a lifetime annuity is chosen, by the life
expectancy of the annuitant. Annuity payments which are received after the
annuitant recovers the full amount of the purchase payments will be fully
includible in income. Should annuity payments cease on account of the death of
the annuitant before purchase payments have been fully recovered, the annuitant,
on his or her last tax return (or in certain cases the beneficiary) is allowed a
deduction for the unrecovered amount.
The Code provides that any amount received under an annuity contract which is
included in income may be subject to a penalty tax. The amount of the penalty is
equal to 10% of the amount that is includible in income. Some withdrawals will
be exempt from the penalty. They include amounts: (1) made on or after the
Contract owner reaches age 59 1/2, (2) made on or after the death of the
Contract owner, (3) attributable to the Contract owner becoming disabled within
the meaning of Code section 72(m)(7), (4) in the form of level annuity payments
made not less frequently than annually under a lifetime annuity, (5) under a
qualified funding asset (defined by Code section 130(d)), or (6) under an
immediate annuity contract (within the meaning of section 72(u)(4)).
Election of the interest pay option is not considered as an annuity payment for
tax purposes. Accordingly, unless the Contract is held by an individual
retirement annuity, such election will cause investment income under the
Contract to be taxable.
Generally, the same tax rules apply to amounts received by the beneficiary as
those set forth above with respect to the Contract owner, except that the early
withdrawal penalty tax does not apply. The election of an annuity payment option
may defer taxes otherwise payable upon the receipt of a lump sum death benefit.
Certain minimum distribution requirements apply in the case where the owner
dies. See IRS REQUIRED DISTRIBUTIONS ON DEATH OF OWNER, page 20.
In addition, a transfer of the Contract to or the designation of a beneficiary
who is either 37 1/2 years younger than the Contract owner or a grandchild of
the Contract owner may have Generation Skipping Transfer tax consequences under
section 2601 of the Code.
Certain transfers of a Contract for less than full consideration, such as a
gift, will trigger tax on the investment income in the Contract. This rule does
not apply to certain transfers between spouses or incident to divorce. See
OWNERSHIP OF THE CONTRACT, page 26.
WITHHOLDING
Generally, unless you elect to the contrary, the portion of any amounts you
receive under your Contract that are attributable to investment income will be
subject to withholding to meet federal income tax obligations. The rate of
withholding on annuity payments made to you will be determined on the basis of
the withholding certificate you may file with Pruco Life of New Jersey. If you
do not file such a certificate, you will be treated, for purposes of determining
your withholding rate, as a married person with three exemptions. The rate of
withholding on all other payments made to you under your Contract, such as
amounts you receive upon withdrawals, will be 10%. Thus, if you fail to elect
that Pruco Life of New Jersey not do so, it will withhold from withdrawal by, or
annuity payment to, you the appropriate percentage of the amount of the payment
that constitutes investment income and hence is taxable. Pruco Life of New
Jersey will provide you with forms and instructions concerning your right to
elect that no amount be withheld from payments to you. If you elect not to have
withholding made, you are liable for payment of federal income taxes on the
taxable portion of the distribution. You may be subject to penalties under the
estimated tax payment rules if your withholding and estimated tax payments are
not sufficient. If you do not provide a social security number or other taxpayer
identification number, you will not be permitted to elect out of withholding.
Special withholding rules apply for nonresident aliens. Generally, there will be
no withholding for taxes until you actually receive payments under your
Contract.
IMPACT OF FEDERAL INCOME TAXES
In general, if you expect to accumulate savings over a relatively long period of
time without making significant withdrawals, there should be tax advantages,
regardless of your tax bracket, in purchasing a Contract rather than,
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for example, a mutual fund with a similar investment policy and approximately
the same level of expected investment results. This is because little or no
income taxes are incurred by you or by Pruco Life of New Jersey while you
hold the Contract and it is generally advantageous to defer the payment of
income taxes, so that the investment return is compounded without any deduction
for income taxes. The advantage may be considerably greater if you decide to
liquidate your investment in the form of monthly annuity payments after your
retirement, and even more so if your income, and your tax rate, are lower at
that time than they were during your working years.
IRS REQUIRED DISTRIBUTIONS ON DEATH OF OWNER
If the Contract owner dies before the entire interest in the Contract is
distributed, the value of the Contract must be distributed to the designated
beneficiary as described in this section so that the Contract qualifies as an
annuity under the Internal Revenue Code.
If the death occurs on or after the annuity date, the remaining portion of the
interest in the Contract must be distributed at least as rapidly as under the
method of distribution being used as of the date of death. If the death occurs
before the annuity date, the entire interest in the Contract must be distributed
within 5 years after the date of death. However, if an annuity payment option is
selected by the designated beneficiary and if annuity payments begin within 1
year of the owner's death, the value of the Contract may be distributed over the
beneficiary's life or a period not exceeding the beneficiary's life expectancy.
The owner's designated beneficiary is the person to whom ownership of the
Contract passes by reason of death, and must be a natural person. Special
additional rules apply to Contracts issued in conjunction with plans subject to
Section 457 of the Code. For Contracts purchased in connection with a tax
favored plan where the owner's spouse is the beneficiary, annuity payments need
only begin on or before April 1 of the calendar year following the calendar year
in which the owner would have attained age 70 1/2 or in some instances the
remaining interest in the Contract may be rolled over to an IRA owned by the
spouse.
If any portion of the Contract owner's interest is payable to (or for the
benefit of) the surviving spouse of the owner, the Contract may be continued
with the surviving spouse as the owner. This rule does not apply to Contracts
issued in connection with tax favored plans other than IRAs.
TAXES ON PRUCO LIFE OF NEW JERSEY
The earnings of the Account are taxed as part of the operations of Pruco Life of
New Jersey. No charge is being made currently against the Account for company
federal income taxes. Pruco Life of New Jersey will review the question of a
charge to the Account for company federal income taxes periodically. Such a
charge may be made in future years for any federal income taxes that would be
attributable to the Contract.
Under current law, Pruco Life of New Jersey may incur state and local taxes (in
addition to premium taxes) in several states. At present, these taxes are not
significant and they are not charged against the Contract or the Account. If
there is a material change in applicable state or local tax laws, the imposition
of any such taxes upon Pruco Life of New Jersey that are attributable to the
Account may result in a corresponding charge against the Account.
CONTRACTS USED IN CONNECTION WITH TAX FAVORED PLANS
The Contract may be purchased for use in connection with various retirement
arrangements entitled to favorable federal income tax treatment ("tax favored
plans"). These are individual retirement accounts and annuities ("IRAs") subject
to Section 408(a) and 408(b) of the Code, simplified employee pension plans
("SEPs") under Section 408(k) of the Code, tax deferred annuities ("TDAs") under
Section 403(b) of the Code, deferred compensation plans of state and local
governments and tax exempt organizations under Section 457 of the Code, and
pension, profit sharing and annuity plans qualified under Sections 401(a) and
403(a) of the Code. Such plans, accounts, and annuities must satisfy certain
requirements of the Code in order to be entitled to the federal income tax
benefits accorded to these plans. A discussion of these requirements is beyond
the scope of this prospectus, and it is assumed that such requirements are met
with respect to a Contract purchased for use in connection with a tax favored
plan.
In general, assuming the requirements and limitations of the Code provisions
applicable to the particular type of tax favored plan involved are satisfied,
purchase payments (other than after-tax employee payments) under the Contract
will be deductible (or not includible in income) up to certain amounts each year
and federal income tax will not be imposed on the investment income and realized
gains of the subaccounts in which the purchase payments have been invested until
a distribution is received. Persons contemplating the purchase of a Contract in
connection with a tax favored plan should consult their tax advisor before
purchasing a Contract for such purposes.
The comments which follow concerning specific tax favored plans are intended
merely to call attention to certain of their features. No attempt has been made
to discuss in full the tax ramifications involved or to offer tax advice. As
suggested above, a qualified tax advisor should be consulted for advice and
answers to any questions.
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IRAS
Because the Contract's minimum initial payment of $10,000 is greater than the
maximum annual contribution permitted to be made to an IRA (generally, $2,000),
a Contract may be purchased as a Section 408(b) IRA only in connection with a
"rollover" of the proceeds of a qualified plan, TDA or IRA. The Code permits
persons who are entitled to receive certain qualifying distributions from a
qualified pension or profit-sharing plan described in section 401(a) or 403(a),
a tax-deferred section 403(b) annuity ("TDA"), or an IRA, to directly rollover
or make, within 60 days, a tax-free "rollover" of all or any part of the amount
of such distribution to an IRA which they establish. Additionally, the spouse of
a deceased employee may roll over to an IRA certain distributions received by
the spouse from a qualified pension or profit-sharing plan, TDA or IRA on
account of the employee's death. Once the Contract has been purchased, regular
IRA contributions will be accepted to the extent permitted by law. However, if
regular IRA contributions are made, the Funds in the Contract cannot be used as
a conduit IRA and may not later be placed in another plan that is qualified
under Sections 401(a), 403(a) or 403(b) of the Code.
In order to qualify as an IRA under Section 408(b) of the Code, a Contract (or
an endorsement made a part of the Contract) must contain certain additional
provisions: (1) the owner of the Contract must be the annuitant, except when a
transfer is made to a former spouse in accordance with a divorce decree as
provided in Section 408(d)(6) of the Code; (2) the rights of the owner cannot be
forfeitable; (3) the Contract may not be sold, assigned, discounted or pledged
for any purpose to any person except Pruco Life of New Jersey; and (4) annuity
and death benefit payments must satisfy certain minimum distribution
requirements. Contracts issued as Section 408(b) rollover IRAs will conform to
such requirements.
In general, the full amount distributed from an IRA (and not properly rolled
over to another IRA) is subject to federal income tax and to the withholding
rules described above. A 10% early distribution penalty applies to distributions
made before the Contract owner reaches age 59 1/2, subject to exceptions (1) -
(4) above (see TAXES PAYABLE BY CONTRACT OWNERS on page 18). If the owner
borrows against the IRA or engages in certain prohibited transactions, the
Contract ceases to qualify as an IRA and the full amount is deemed to be
distributed. In addition, any amount pledged as security for a loan is deemed to
be distributed. Payments generally must begin by April 1 of the year following
attainment of age 70 1/2 and are subject to certain minimum distribution
requirements.
SEPS
Under a SEP, annual employer contributions to an IRA established by an employee
are not includible in income up to the lesser of $30,000 or 15% of the
employee's earned income (excluding the employer's contribution to the SEP). In
addition, a SEP must satisfy certain minimum participation requirements and
contributions may not discriminate in favor of highly compensated employees.
Contracts issued as Section 408(b) IRAs established under a SEP must satisfy the
requirements described above for a Section 408(b) IRA.
Certain SEP arrangements are permitted to allow employees to elect to reduce
their salaries by as much as $9,500 (in 1996) and have their employer make
contributions on their behalf to the SEP. These arrangements, called salary
reduction SEPs, are available only if the employer maintaining the SEP has 25 or
fewer employees and at least 50% of the eligible employees elect to make salary
reduction contributions. Other limitations may reduce the permissible
contribution level for highly compensated employees. New salary reduction SEPs
may not be established after 1996.
In accordance with IRS regulations, persons who purchase a Contract used as an
IRA, including one established under a SEP arrangement, are given disclosure
material prepared by Pruco Life of New Jersey. The material includes this
prospectus, a copy of the Contract, and a brochure containing information about
eligibility, contribution limits, tax consequences, and other particulars
concerning IRAs. The regulations require that such persons be given 7 days after
making an initial contribution in which to affirm or reverse their decision to
participate. Therefore, within 7 days after establishing the Contract, a person
may cancel his or her Contract by notifying Pruco Life of New Jersey in writing,
and Pruco Life of New Jersey will refund all of the purchase payments under the
Contract or, if greater, the amount credited under the Contract (less any bonus)
computed as of the valuation period that Pruco Life of New Jersey receives the
notice for cancellation. This 7-day period may or may not coincide with any part
of the 10-day free look period described under SHORT-TERM CANCELLATION RIGHT OR
"FREE LOOK", page 12.
TDAS
Section 403(b) of the Code permits employers and employees of Section 501(c)(3)
tax-exempt organizations and public educational organizations to make, subject
to certain limitations, contributions to an annuity in which the employee's
rights are nonforfeitable (commonly referred to as a "tax deferred annuity").
The amounts contributed
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under a TDA and increments thereon are not taxable as income until distributed
as annuity income or otherwise. Generally, contributions to a TDA may be made
through a salary reduction arrangement up to a maximum of $9,500. However, under
certain special rules, the limit could be increased as much as $3,000. In
addition, the Code permits certain total distributions from a TDA to be "rolled
over" to another TDA or IRA. Certain partial distributions from a TDA may be
"rolled over" to an IRA.
An annuity contract will not qualify as a TDA, unless under such contract
distributions from salary reduction contributions and earnings thereon (other
than distributions attributable to assets held as of December 31, 1988) may be
paid only on account of attainment of age 59 1/2, severance of employment,
death, total and permanent disability and, in limited circumstances, hardship.
(Such hardship withdrawals are permitted, however, only to the extent of salary
reduction contributions and not earnings thereon.)
The Section 403(b)(11) withdrawal restrictions referred to above do not apply to
the transfer of all or part of a Contract owner's interest in his or her
Contract among the available investment options offered by Pruco Life of New
Jersey or to the direct transfer of all or part of the Contract owner's interest
in the Contract to a Section 403(b) tax-deferred annuity contract of another
insurance company or to a mutual fund custodial account under Section 403(b)(7)
of the Code.
In imposing the restrictions on withdrawals as described above, Pruco Life of
New Jersey is relying upon a no-action letter dated November 28, 1988 from the
Chief of the Office of Insurance Products and Legal Compliance of the Securities
and Exchange Commission to the American Council of Life Insurance.
Employer contributions are subject generally to the same coverage, minimum
participation and nondiscrimination rules applicable to qualified pension and
profit-sharing plans. Distributions must satisfy minimum distribution
requirements similar to those that apply to qualified plans generally.
ELIGIBLE DEFERRED COMPENSATION PLANS OF STATE OR LOCAL GOVERNMENTS
AND TAX EXEMPT ORGANIZATIONS
A Contract may be used to fund an eligible deferred compensation plan of a state
or local government or a tax-exempt organization. The amounts contributed under
such plans and increments thereon are not taxable as income until distributed or
otherwise made available to the employee or other beneficiary. If the
requirements of Section 457 of the Code are not met, however, employees may be
required to include in gross income all or part of the contributions and
earnings thereon. The assets of deferred compensation plans are part of the
employer's general assets. Contributions generally may not exceed the lesser of
$7,500 or 33 1/3% of the employee's compensation. Distributions must begin by
April 1 of the year following attainment of age 70 1/2. However, for
governmental and church plans, distributions may be delayed until April 1 of the
calendar year following the calendar year the participant retires if that is
later. Distributions are subject to special minimum distribution rules in
addition to the minimum distribution requirements for qualified plans. Rollovers
are not permitted.
QUALIFIED PENSION AND PROFIT SHARING PLANS
A Contract may be used to fund a qualified pension or profit-sharing plan. The
plan itself must satisfy the coverage, minimum participation, nondiscrimination
and minimum distribution and all other requirements applicable generally to
qualified pension and profit-sharing plans. The Code also imposes dollar
limitations on contributions that may be made to or benefits that may be
received from a qualified pension or profit-sharing plan (including a limitation
of $9,500 (in 1996) on the amount that an employee may contribute through a
salary reduction arrangement in the case of a plan with a qualified "cash or
deferred" arrangement). For self-employed individuals who establish qualified
plans, contributions are deductible within the limits prescribed by the Code.
Annual deductible contributions cannot exceed the lesser of $30,000 or 25% of
"earned income". For this purpose "earned income" is computed after the
deduction for contributions to the plan is considered. Distributions are subject
to certain minimum distribution requirements.
MINIMUM DISTRIBUTION OPTION
A Minimum Distribution Option is available under IRAs and certain other tax
favored plans. This option enables the owner to satisfy IRS minimum distribution
requirements without having to annuitize or cash surrender the Contract.
Distributions from tax favored plans generally must begin by April 1 of the year
following attainment of age 70 1/2. The owner can select either a "calculation"
or "recalculation" method to determine the minimum distribution payout. Pruco
Life of New Jersey will send the owner a check for the minimum distribution
amount less any partial withdrawals made during the year and less any applicable
withdrawal charges and plus or minus any applicable market value adjustment.
Pruco Life of New Jersey's calculations are based on the cash value of this
Contract, the calculation
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method chosen and the owner's age as specified on the application. Other
calculation methods may be available for an owner/spouse combination. If the
owner has other tax favored accounts, he or she will be responsible for taking
the minimum distribution from each.
WITHHOLDING ON TAX FAVORED PLANS
Certain distributions from qualified retirement plans and 403(b) annuities will
be subject to mandatory 20% federal income tax withholding unless the
distribution is an eligible rollover distribution that is "directly" rolled over
into another qualified plan, 403(b) annuity or IRA. Unless the Contract owner
may elect to the contrary, the portion of any taxable amounts received under the
Contract will be subject to withholding to meet federal income tax obligations.
The rate of withholding on annuity payments where mandatory withholding is not
required will be determined on the basis of the withholding certificate filed by
the Contract owner with Pruco Life of New Jersey. For annuity payments not
subject to mandatory withholding, if no such certificate is filed, the Contract
owner will be treated, for purposes of determining the withholding rate, as a
married person with three exemptions; the rate of withholding on all other
payments made under the Contract, such as amounts received upon withdrawals,
will be 10%. Thus, if the Contract owner fails to elect that there be no
withholding, Pruco Life of New Jersey will withhold from every withdrawal or
annuity payment the appropriate percentage of the amount of the payment that is
taxable. Pruco Life of New Jersey will provide the Contract owner with forms and
instructions concerning the right to elect that no amount be withheld from
payments. Recipients who elect not to have withholding made are liable for
payment of federal income taxes on the taxable portion of the distribution. All
recipients may be subject to penalties under the estimated tax payment rules if
withholding and estimated tax payments are not sufficient. Contract owners who
do not provide a social security number or other taxpayer identification number
will not be permitted to elect out of withholding. Generally, there will be no
withholding for taxes until payments are actually received under the Contract.
Distributions to Contract owners under an eligible deferred compensation plan
subject to Section 457 of the Code are treated as the payment of wages for
federal income tax purposes and thus are subject to the general withholding
requirements. Your employer, and not Pruco Life of New Jersey, is required to
withhold on wage payments.
ERISA DISCLOSURE
The Employee Retirement Income Security Act of 1974 ("ERISA") prevents a
fiduciary and other "parties in interest" with respect to a pension or
profit-sharing plan from receiving any benefit from any party dealing with the
plan as a result of the sale of the Contract (other than benefits that would
otherwise be provided in the plan).
Administrative exemptions issued by the Department of Labor under ERISA permit
transactions between insurance agents and qualified pension and profit sharing
plans under Section 401(a) and 403(a) of the Code and with SEPs or IRAs. To be
able to rely on the exemptions certain information must be disclosed to the plan
fiduciary purchasing the insurance contract. The information that must be
disclosed includes the relationship between the agent and the insurer, a
description of any charges, fees, discounts, penalties or adjustments that may
be imposed in connection with the purchase, holding, exchange or termination of
the Contract, as well as the commissions received by the agent. Information
about any applicable charges, fees, discounts, penalties or adjustments may be
found under CHARGES, FEES AND DEDUCTIONS, page 16. Information about sales
representatives and commissions may be found under SALE OF THE CONTRACT AND
SALES COMMISSIONS, page 25. Additional information relevant for qualified plan
or IRA investment may be found in the Contract and accompanying documentation.
In addition to disclosure, other conditions apply to the use of the exemption.
For example, a plan fiduciary may not be a partner or employee of The Prudential
representative making the sale. The fiduciary must not be a relative of the
representative (including spouse, direct descendant, spouse of a direct
descendant, ancestor, brother, sister, spouse of a brother or sister). The
representative may not be an employee, officer, director or partner of either
the independent fiduciary or the employer establishing the plan. No relative of
the representative may: (1) control, directly or indirectly, the corporation
establishing or maintaining the plan; (2) be either a partner with a 10% or more
interest in the partnership or the sole proprietor establishing or maintaining
the plan; or (3) be an owner of a 5% or more interest in a Subchapter S
Corporation establishing or maintaining the plan. In addition, no affiliate
(including relatives) of the representative may be a trustee, administrator or a
fiduciary with written authority to acquire, manage or dispose of the assets of
the plan.
ADDITIONAL ERISA REQUIREMENTS
If your retirement arrangement is part of a plan governed by ERISA, additional
requirements such as spousal consent to distributions may be necessary. Consult
the terms of your retirement arrangement.
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EFFECTING AN ANNUITY
Upon the annuity date, the cash value of the Contract will be converted into a
fixed-dollar annuity payable to the annuitant[s] named in the Contract. In
certain cases, any applicable withdrawal charge will be waived. If two
annuitants are named in the Contract, you may decide how much of the amount is
to be applied for each annuitant and under which form[s] of annuity. If the
Contract is not large enough to produce an initial monthly payment of $50, you
will be paid the cash value in a single sum. There is no minimum required
monthly payment in New Jersey.
When you choose to annuitize, all amounts held in the investment options will be
withdrawn. An amount equal to the premium tax, if any, imposed by the state in
which the Contract Owner resides is then deducted (unless deducted earlier).
Many states do not impose a premium tax. In other states the tax ranges from 1%
to 5% of the amount applied to effect an annuity. See PREMIUM TAXES, page 16.
Some local jurisdictions also impose a tax. The amount remaining is applied to
effect an annuity. This amount becomes part of Pruco Life of New Jersey's
general account.
The amount of the monthly payments will depend upon the amount applied and the
table of rates set forth in the Contract which we guarantee will be used even if
longevity has significantly improved since the Contract date. If Pruco Life of
New Jersey is offering more favorable rates at that time, then those rates will
be used.
The annuity will be in one of three forms listed below and other forms may be
available with our consent. All the annuity options under this Contract are
fixed annuity options. Your participation in the variable investment options
ceases when the annuity is effected. Unless we consent to a later date, an
annuity must begin no later than the Contract anniversary coinciding with or
next following the annuitant's 90th birthday (or the younger annuitant's if
there are two annuitants named in the Contract). We will then make payments to
the annuitant on the first day of each period determined by the form of annuity
selected. Unless applicable law states otherwise, if you have not selected an
annuity option to take effect by the annuity date, the Interest Payment Option
(see below) will become effective then. Special rules apply in the case of a
Contract issued in connection with an IRA.
ANNUITY PAYMENTS FOR A FIXED PERIOD
Payments will be to the annuitant during his or her lifetime for up to 25 years.
Payments may be in monthly, quarterly, semi-annual, or annual installments. If
the annuitant dies during the annuity certain period, unless you designate
otherwise, the beneficiary will receive a lump sum payment. The amount of the
lump sum payment is determined by discounting each remaining unpaid payment at
the interest rate used to compute the actual payments. If the payments were
based on the table of rates set forth in the Contract, the interest rate used is
3 1/2% a year.
LIFE ANNUITY WITH 120 PAYMENTS CERTAIN
Payments will be made to the annuitant monthly during his or her lifetime. If
the annuitant dies before the 120th monthly payment is due, monthly annuity
payments do not continue to the beneficiary designated by the annuitant unless
he or she so selects. Instead, the present value of the remaining unpaid
installments, up to and including the 120th monthly payment, is payable to the
beneficiary in one sum. In calculating the present value of the unpaid future
payments, we will discount each such payment at the interest rate used to
compute the amount of the actual 120 payments. If the payments were based on the
table of rates set forth in the Contract, an interest rate of 3 1/2% a year is
used. Once annuity payments have begun, an annuitant may withdraw the present
value of any of the 120 payments certain that have not been paid.
INTEREST PAYMENT OPTION
The annuitant may choose to have Pruco Life of New Jersey hold a designated
amount to accumulate at interest. Unless applicable law states otherwise, if no
option has been selected by the annuity date, this option will automatically
become effective. Pruco Life of New Jersey will pay interest at an effective
rate of at least 3% a year, and we may pay a higher rate of interest.
LEGAL CONSIDERATIONS RELATING TO SEX-DISTINCT ANNUITY PURCHASE RATES
Although the Contract generally provides for sex-distinct annuity purchase rates
for life annuities, those rates are not applicable to Contracts offered in
states that have adopted regulations prohibiting sex-distinct annuity purchase
rates. Rather, blended unisex annuity purchase rates for life annuities will be
provided under all Contracts issued in those states, whether the annuitant is
male or female. Other things being equal, such unisex annuity purchase rates
will result in the same monthly annuity payments for male and female annuitants.
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Special provisions may apply if the Contract is issued in connection with an
IRA. The necessary information will be provided by the plan sponsor or
administrator.
OTHER INFORMATION
MISSTATEMENT OF AGE OR SEX
If an annuitant's stated age or sex (except where unisex rates apply) or both
are incorrect in the Contract, we will change each benefit and the amount of
each annuity payment to that which the total purchase payment amounts would have
bought for the correct age and sex. Also, we will adjust for the amount of any
overpayments we have already made.
SALE OF THE CONTRACT AND SALES COMMISSIONS
Pruco Securities Corporation ("Prusec"), an indirect wholly-owned subsidiary of
The Prudential, acts as the principal underwriter of the Contract. Prusec,
organized in 1971 under New Jersey law, is registered as a broker and dealer
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. Prusec's principal business address is
1111 Durham Avenue, South Plainfield, New Jersey 07080. The Contract is sold by
registered representatives of Prusec who are also authorized by state insurance
departments to do so. The Contract may also be sold through other broker-dealers
authorized by Prusec and applicable law to do so. Registered representatives of
such other broker-dealers may be paid on a different basis than described below.
The maximum commission that will be paid to the representative is 3.5% of the
purchase payment received, and the amount paid to the broker-dealer to cover
both the individual representative's commission and other distribution expenses
will not exceed 6% of the purchase payment. In addition, trail commissions based
on the size of the Contract Fund may be paid. Such commissions will be subject
to reduction if Pruco Life of New Jersey issues a Contract on and after the
annuitant's 84th birthday. The representative may be required to return all of
the first year commission if the Contract is not continued through the first
year. Representatives who meet certain productivity, profitability, and
persistency standards with regard to the sale of the Contract will be eligible
for additional compensation.
Sales expenses in any year are not equal to the deduction for sales loads in
that year. Pruco Life of New Jersey expects to recover its total sales expenses
over the periods the Contracts are in effect. To the extent that the sales
charges are insufficient to cover total sales expenses, the sales expenses will
be recovered from Pruco Life of New Jersey's surplus.
VOTING RIGHTS
As stated above, all of the assets held in the subaccounts of the Account are
invested in shares of the corresponding portfolios of the Funds. Pruco Life of
New Jersey is the legal owner of those shares and as such has the right to vote
on any matter voted on at any shareholders meetings of the Funds. However, as
required by law, Pruco Life of New Jersey votes the shares of the Funds at any
regular and special shareholders meetings the Funds are required to hold in
accordance with voting instructions received from Contract owners. The Funds may
not hold annual shareholders meetings when not required to do so under the laws
of the state of their incorporation or the Investment Company Act of 1940. Fund
shares for which no timely instructions from Contract owners are received, and
any shares owned directly or indirectly by Pruco Life of New Jersey are voted in
the same proportion as shares in the respective portfolios for which
instructions are received. Should the applicable federal securities laws or
regulations, or their current interpretation, change so as to permit Pruco Life
of New Jersey to vote shares of the Funds in its own right, it may elect to do
so.
Generally, you may give voting instructions on matters that would be changes in
fundamental policies and any matter requiring a vote of the shareholders of the
Funds. With respect to approval of the investment advisory agreement or any
change in a portfolio's fundamental investment policy, Contract owners
participating in such portfolios will vote separately on the matter, pursuant to
the requirements of Rule 18f-2 under the Investment Company Act of 1940.
The number of Fund shares for which you may give instructions is determined by
dividing the portion of the value of the Contract derived from participation in
a subaccount, by the value of one share in the corresponding portfolio of the
applicable Fund. The number of votes for which you may give Pruco Life of New
Jersey instructions is determined as of the record date chosen by the Board of
the applicable Fund. We furnish you with proper forms and proxies to enable you
to give these instructions. We reserve the right to modify the manner in which
the weight to be given voting instructions is calculated where such a change is
necessary to comply with current federal regulations or interpretations of those
regulations.
Pruco Life of New Jersey may, if required by state insurance regulations,
disregard voting instructions if such instructions would require shares to be
voted so as to cause a change in the sub-classification or investment objectives
of one or more
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of the Funds' portfolios, or to approve or disapprove an investment advisory
contract for a Fund. In addition, Pruco Life of New Jersey itself may disregard
voting instructions that would require changes in the investment policy or
investment adviser of one or more of the Funds' portfolios, provided that we
reasonably disapprove such changes in accordance with applicable federal
regulations. If we do disregard voting instructions, we will advise you of that
action and our reasons for such action in the next annual or semi-annual report
to Contract owners.
SUBSTITUTION OF FUND SHARES
Although Pruco Life of New Jersey believes it to be unlikely, it is possible
that in the judgment of its management, one or more of the portfolios of the
Funds may become unsuitable for investment by Contract owners. This may occur
because of investment policy changes, tax law changes, the unavailability of
shares for investment or at the discretion of Pruco Life of New Jersey. In that
event, we may seek to substitute the shares of another portfolio or of an
entirely different mutual fund. Before this can be done, the approval of the
SEC, and possibly one or more state insurance departments, will be required. You
will be notified of such substitution.
OWNERSHIP OF THE CONTRACT
The Contract owner is entitled to exercise all the rights under the Contract.
The Contract owner is usually, but not always, an annuitant. Ownership of the
Contract may, however, be transferred to another person who need not be the
person who is to receive annuity payments. Transfer of the ownership of a
Contract may involve federal income tax consequences, or may be prohibited under
certain Contracts, and you should consult with a qualified tax adviser before
attempting any such transfer. Generally, ownership of the Contract is not
assignable to a tax-qualified retirement plan or program without Pruco Life of
New Jersey's consent.
PERFORMANCE INFORMATION
Performance information for the subaccounts may appear in advertising and
reports to current and prospective Contract owners. Performance information is
based on historical investment experience of the Funds, adjusted to take charges
under the Contract into account, and does not indicate or represent future
performance.
Total returns are based on the overall dollar or percentage change in value of a
hypothetical investment over a stipulated period, and assume a surrender of the
Contract at the end of the period. Total return quotations reflect changes in
unit values and the deduction of applicable charges including any applicable
withdrawal charges.
A cumulative total return reflects performance over a stated period of time. An
average annual total return reflects the hypothetical annually compounded return
that would have produced the same cumulative total return if the performance had
been constant over the entire period.
The Money Market Subaccount may advertise its current and effective yield.
Current yield reflects the income generated by an investment in the subaccount
over a specified seven-day period. Effective yield is calculated in a similar
manner except that income earned is assumed to be reinvested.
Reports or advertising may include comparative performance information,
including, but not limited to: comparisons to market indices; comparisons to
other investments; performance rankings; personalized illustrations of
historical performance; and data presented by analysts or included in
publications.
See PERFORMANCE INFORMATION in the Statement of Additional Information for
recent performance information.
REPORTS TO CONTRACT OWNERS
You will be sent quarterly statements that provide certain information pertinent
to your Contract. These statements provide Contract data that apply only to each
particular Contract, including Contract values and transactions during the
period. You may request current Contract information at any time, however, we
may limit the number of such requests or impose a reasonable charge if such
requests are made too frequently.
You will also be sent an annual report for the Account and annual and
semi-annual reports for the Funds.
STATE REGULATION
Pruco Life of New Jersey is subject to regulation and supervision by the New
Jersey Department of Banking and Insurance, which periodically examines its
operations and financial condition. It is also subject to the insurance laws and
regulations of all jurisdictions in which it is authorized to do business.
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Pruco Life of New Jersey is required to submit annual statements of its
operations, including financial statements, to the insurance departments of the
various jurisdictions in which it does business to determine solvency and
compliance with local insurance laws and regulations.
In addition to the annual statements referred to above, Pruco Life of New Jersey
is required to file with New Jersey and other jurisdictions a separate statement
with respect to the operations of all its variable contract accounts, in a form
promulgated by the National Association of Insurance Commissioners.
EXPERTS
The audited financial statements and the financial statements from which the
Condensed Financial Information included in this prospectus have been derived,
have been examined by Deloitte & Touche LLP, independent auditors, as stated in
their reports appearing herein. Such financial statements have been included
herein in reliance upon the reports of such firm given upon their authority as
experts in accounting and auditing. Deloitte & Touche LLP's principal business
address is Two Hilton Court, Parsipanny, New Jersey 07054-0319.
On March 12, 1996, Deloitte & Touche LLP was dismissed as the independent
accountants of Pruco Life. There have been no disagreements with Deloitte &
Touche LLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure which, if not resolved to
the satisfaction of the accountant, would have caused them to make a reference
to the matter in their reports.
LITIGATION
Several actions have been brought against the Company on behalf of those persons
who purchased life insurance policies based on complaints about sales practices
engaged in by The Prudential, the Company and agents appointed by The Prudential
and the Company. The Prudential has agreed to indemnify the Company for any and
all losses resulting from such litigation.
STATEMENT OF ADDITIONAL INFORMATION
The contents of the Statement of Additional Information include:
OTHER INFORMATION CONCERNING THE ACCOUNT
PRINCIPAL UNDERWRITER
DETERMINATION OF SUBACCOUNT UNIT VALUES
PERFORMANCE INFORMATION
COMPARATIVE PERFORMANCE INFORMATION
ADDITIONAL INFORMATION
A registration statement has been filed with the SEC under the Securities Act of
1933, relating to the offering described in this prospectus. This prospectus
does not include all of the information set forth in the registration statement.
Certain portions have been omitted pursuant to the rules and regulations of the
SEC. The omitted information may, however, be obtained from the SEC's principal
office in Washington, D.C., upon payment of a prescribed fee.
Further information, including statutory statements filed with the state
insurance departments, may also be obtained from Pruco Life of New Jersey's
office. The address and telephone number of Pruco Life of New Jersey are set
forth on the cover of this prospectus.
FINANCIAL STATEMENTS
The financial statements of Pruco Life of New Jersey should be distinguished
from the financial statements of the Account, and should be considered only as
bearing upon the ability of Pruco Life of New Jersey to meet its obligations
under the Contracts.
This prospectus does not contain financial statements for the Account because as
of the date of this prospectus, the Account had not yet commenced operations,
had no assets or liabilities, and had not received any income or incurred any
expenses.
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SELECTED FINANCIAL DATA
PAGES 28-34
TO BE FILED BY AMENDMENT
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DIRECTORS AND OFFICERS
The directors and major officers of Pruco Life of New Jersey, listed with their
principal occupations during the past 5 years, are shown below.
DIRECTORS OF PRUCO LIFE OF NEW JERSEY
WILLIAM M. BETHKE, Director. -- Chairman and Director, Prudential Investment
Advisory Company, Ltd. since 1988; President, Prudential Life Insurance Company,
Ltd. since 1987. Age 49.
IRA J. KLEINMAN, Director. -- Chief Marketing and Product Development Officer,
Prudential Individual Insurance Group since 1995; 1993 to 1995: President,
Prudential Select; Prior to 1993: Senior Vice President of The Prudential.
Age 49.
MENDEL MELZER, Director. -- Chief Financial Officer of the Money Management
Group of The Prudential since 1995; 1993 to 1995: Senior Vice President and
Chief Financial Officer of Prudential Preferred Financial Services; Prior to
1993: Managing Director, The Prudential Investment Corporation. Age 35.
ESTHER H. MILNES, President and Director. -- Vice President and Actuary,
Prudential Individual Insurance Group since 1996; 1993 to 1996: Senior Vice
President and Chief Actuary, Prudential Insurance and Financial Services; Prior
to 1993: Vice President and Associate Actuary of The Prudential. Age 45.
I. EDWARD PRICE, Vice Chairman and Director. -- Senior Vice President and
Actuary, Prudential Individual Insurance Group since 1995; 1994 to 1995: Chief
Executive Officer, Prudential International Insurance; 1993 to 1994: President,
Prudential International Insurance; Prior to 1993: Senior Vice President and
Company Actuary of The Prudential. Age 53.
WILLIAM F. YELVERTON, Chariman of the Board and Director. -- Chief Executive
Officer, Prudential Individual Insurance Group since 1995; Prior to 1995: Chief
Executive Officer, New York Life Worldwide. Age 54.
OFFICERS WHO ARE NOT DIRECTORS
BEVERLY R. BARNEY, Senior Vice President. -- Vice President and Re-Engineering
Officer, Prudential Individual Insurance Group since 1995; 1993 to 1995: Senior
Vice President and Associate Actuary, Prudential Direct; Prior to 1993: Senior
Vice President and Actuary of Pruco Life. Age 48.
SUSAN L. BLOUNT, Secretary.-- Vice President and Secretary of The Prudential
since 1995; Prior to 1995: Assistant General Counsel for Prudential Residential
Services Company. Age 38.
C. EDWARD CHAPLIN, Treasurer. -- Vice President and Treasurer of The Prudential
since 1995; 1993 to 1995: Managing Director and Assistant Treasurer of The
Prudential; 1992 to 1993: Vice President and Assistant Treasurer, Banking and
Cash Management for The Prudential; Prior to 1992: Regional Vice President of
Prudential Mortgage Capital Company. Age 39.
CLIFFORD E. KIRSCH, Chief Legal Officer. -- Chief Counsel, Variable Products,
Law Department of The Prudential since 1995; 1994 to 1995: Associate General
Counsel with Paine Webber; Prior to 1994: Assistant Director in the Division of
Investment Management with the Securities and Exchange Commission. Age 36.
SHIRLEY SHAO, Senior Vice President and Chief Actuary. -- Vice President and
Assistant Actuary, The Prudential and Executive Vice President and Chief
Financial Officer, Prudential of Taiwan since 1989. Age 41.
FRANK MARINO, Senior Vice President. -- Vice President, Policyholder Relations
Department, Prudential Individual Insurance Group since 1996; Prior to 1996:
Senior Vice President, Prudential Mutual Fund Services. Age 51.
KAREN SHAPIRO, Senior Vice President. -- Vice President, Individual Insurance
Group since 1996; Vice President and Associate General Counsel, Prudential
Securities Incorporated 1993 to 1996; 1990 to 1993: Senior Associate with Shaw,
Pittman, Potts and Trowbridge. Age 40.
MICHAEL R. SHAPIRO, Senior Vice President. -- Vice President, Marketing and
Product Development, Prudential Individual Insurance Group since 1996; Prior to
1996: Senior Vice President, Prudential Select Brokerage. Age 48.
LINDA DOUGHERTY, Vice President, Comptroller and Chief Accounting Officer. --
Vice President Accounting, The Prudential since 1988. Age 47.
The business address of all directors and officers of Pruco Life of New Jersey
is 213 Washington Street, Newark, New Jersey 07102-2992.
35
<PAGE>
EXECUTIVE COMPENSATION
Executive Officers of Pruco Life may also serve one or more affiliated companies
of Pruco Life. Pruco Life of New Jersey is a subsidiary of Pruco Life.
Allocations have been made as to each individual's time devoted to his duties as
an executive officer of Pruco Life and its subsidiaries. The following table
shows the cash compensation paid, based on these allocations, to the executive
officers of Pruco Life as a group for services rendered in all capacities in
Pruco Life and its subsidiaries during 1995. Directors of Pruco Life who are
also employees of The Prudential do not receive compensation in addition to
their compensation as employees of The Prudential.
- --------------------------------------------------------------------------------
NAME & PRINCIPAL | | ALLOCATED CASH
POSITION | YEAR | COMPENSATION ($)
- --------------------------------|-------------------|---------------------------
Esther H. Milnes | 1995 | $ 17,879
President | 1994 | $ 14,250
| 1993 | $ 9,846
| |
Beverly R. Barney | 1995 | $ 9,771
Senior Vice President | 1994 | $ 0
| 1993 | $126,142
| |
Helen M. Galt | **1995 | $_______
President | **1994 | $_______
| |
| **1993 | $ 13,382
- --------------------------------------------------------------------------------
** Resigned Position as of July, 1993.
- --------------------------------------------------------------------------------
36
<PAGE>
A-1
THROUGH
B-32
TO BE FILED
BY PRE-EFFECTIVE
AMENDMENT
<PAGE>
MARKET-VALUE ADJUSTMENT FORMULA
The Market-Value Adjustment, which is applied to withdrawals and transfers made
at any time other than the 30-day period following the end of an interest rate
period, involves three amounts:
1. The number of whole months remaining in the existing interest rate
period.
2. The guaranteed interest rate.
3. The interest rate that Pruco Life declares for a duration of one year
longer than the number of whole years remaining on the existing cell
being withdrawn from.
Stated as a formula, the Market Value Factor is equal to:
(M/12) x (R-C), not to exceed +0.40 or be less than -0.40;
Where,
M = the number of whole months (not to be less than one) remaining in the
interest rate period.
R = the Contract's guaranteed interest rate expressed as a decimal.
Thus 6.2% is converted to 0.062.
C = the interest rate, expressed as a decimal, that Pruco Life declares
for a duration equal to the number of whole years remaining in the
present interest rate period, plus 1 year as of the date the request for
a withdrawal or transfer is received.
The Market-Value Adjustment is then equal to the Market Value Factor multiplied
by the amount subject to a Market-Value Adjustment.
The steps below explain how a Market-Value Adjustment is calculated.
STEP 1: Divide the number of whole months left in the existing interest
rate period (not to be less than one)by 12.
STEP 2: Determine the interest rate Pruco Life declares on the date the
request for withdrawal or transfer is received for a duration of years
equal to the whole number of years determined in Step 1, plus 1 additional
year. Subtract this interest rate from the guaranteed interest rate. The
result could be negative.
STEP 3: Multiply the results of Step 1 and Step 2. Again, the result could
be negative. If the result is less than -0.4, use the value -0.4. If the
result is in between -0.4 and 0.4, use the actual value. If the result is
more than 0.4, use the value 0.4.
STEP 4: Multiply the result of Step 3 (which is the Market Value Factor) by
the value of the amount subject to a Market-Value Adjustment. The result is
the Market-Value Adjustment.
STEP 5: The result of Step 4 is added to the interest cell. If the
Market-Value Adjustment is positive, the interest cell will go up in value.
If the Market-Value Adjustment is negative, the interest cell will go down
in value.
Depending upon when the withdrawal request is made, a withdrawal charge may
apply.
The following example will illustrate the application of a Market-Value
Adjustment and the determination of the withdrawal charge. Suppose a Contract
owner made two invested purchase payments, the first in the amount of $10,000 on
December 1, 1995, all of which was allocated to the Equity Subaccount, and the
second in the amount of $5,000 on October 1, 1997, all of which was allocated to
the MVA Option with a guaranteed interest rate of 8% (0.08) for 7 years. A
request for withdrawal of $8,500 is made on February 1, 2000 (the Contract owner
does not provide any withdrawal instructions). On that date the amount in the
Equity Subaccount is equal to $12,000 and the amount in the interest cell with a
maturity date of September 30, 2004 is $5,985.23, so that the Contract Fund on
that date is equal to $17,985.23.
On February 1, 2000, the interest rate declared by Pruco Life for the duration
of 5 years (4 whole years remaining until September 30, 2004, plus one year) is
11%.
C-1
<PAGE>
The following computations would be made:
1. Calculate the Contract Fund value as of the effective date of the
transaction. This would be $17,985.23.
2. Calculate the charge-free amount (the amount of the withdrawal that is not
subject to a withdrawal charge).
DATE PAYMENT FREE
---- ------- ----
12/1/95 $10,000 $1,000
12/1/96 $2,000
10/1/97 $ 5,000 $2,500
12/1/97 $4,000
12/1/98 $5,500
12/1/99 $7,000
The charge-free amount in the fifth Contract year is 10% of $15,000 (total
purchase payments) plus $5,500 (the charge-free amount available in the
fourth Contract year) for a total of $7,000.
3. Since the withdrawal request is in the fifth Contract year, a 3% withdrawal
charge rate applies to any portion of the withdrawal which is not
charge-free.
$8,500.00 requested withdrawal amount
-$7,000.00 charge-free
---------
$1,500.00 additional amount needed to complete withdrawal
The Contract provides that the Contract Fund will be reduced by an amount
which, when reduced by the withdrawal charge, will equal the amount
requested. Therefore, in order to produce the amount needed to complete the
withdrawal request ($1,500), we must "gross-up" that amount, before
applying the withdrawal charge rate. This is done by dividing by 1 minus
the withdrawal charge rate.
$1,500.00 / (1-.03) =
$1,500.00 / 0.97 = $1,546.39 grossed-up amount
Please note that a 3% withdrawal charge on this grossed-up amount reduces
it to $1,500, the balance needed to complete the request.
$1,546.39 grossed-up amount
X .03 withdrawal charge rate
---------
$ 46.39 withdrawal charge
4. The Market Value Factor is determined as described in steps 1 through 5,
above. In this case, it is equal to 0.08 (8% is the guaranteed rate in the
existing cell) minus 0.11 (11% is the interest rate that would be offered
for an interest cell with a duration of the remaining whole years plus 1),
which is -0.03, multiplied by 4.58333 (55 months remaining until September
30, 2004, divided by 12) or -0.13750. Thus, there will be a negative
Market-Value Adjustment of 14% of the amount in the interest cell that is
subject to the adjustment.
-0.13750 X $5,985.23 = - 822.97 negative MVA
$ 5,985.23 unadjusted value
----------
$ 5,162.26 adjusted value
$12,000.00 Equity value
----------
$17,162.26 adjusted Contract Fund
5. The total amount to be withdrawn, $8,546.39, (sum of the surrender charge,
$46.39, and the requested withdrawal amount of $8,500) is apportioned over
all accounts making up the Contract Fund following the Market-Value
Adjustments, if any, associated with the MVA option.
Equity ($12,000 / $17,162.26) X $8,546.39 = $5,975.71
7-Yr MVA ($5,162.26 / $17,162.26) X $8,546.39 = $2,570.68
---------
$8,546.39
C-2
<PAGE>
6. The adjusted value of the interest cell, $5,162.26, reduced by the
withdrawal of $2,570.68 leaves $2,591.58. This amount must be "unadjusted"
by dividing it by 0.86250 (1 plus the Market-Value Adjustment of -0.13750)
to determine the amount remaining in the interest cell to which the
guaranteed interest rate of 8% will continue to be credited until September
30, 2004 or a subsequent withdrawal. That amount is $3,004.73.
C-3
<PAGE>
o FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT
o THE PRUDENTIAL SERIES FUND, INC.
o AIM VARIABLE INSURANCE FUNDS, INC.
o JANUS ASPEN SERIES
o MFS VARIABLE INSURANCE TRUST
o OCC ACCUMULATION TRUST
o T. ROWE PRICE EQUITY SERIES, INC.
o T. ROWE PRICE INTERNATIONAL SERIES, INC.
o WARBURG PINCUS TRUST
===========================================
_______________________________________________________________________________
===========================================
---------------------
| BULK RATE |
| U.S. Postage |
| PAID |
| Jersey City, N.J. |
| Permit No. 60 |
---------------------
A Subsidiary of
[LOGO] PRUDENTIAL
Pruco Life Insurance Company Of New Jersey
213 Washington Street
Newark, New Jersey 07102-3777
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT
OF ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 12, 1996
PRUCO LIFE OF NEW JERSEY FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT
VARIABLE ANNUITY CONTRACTS
The DISCOVERY SELECT(SM) Annuity Contract* (the "Contract") is an individual
variable annuity contract issued by the Pruco Life Insurance Company of New
Jersey ("Pruco Life of New Jersey"), a stock life insurance company that is an
indirect wholly-owned subsidiary of The Prudential Insurance Company of America
("The Prudential") and is funded through the Pruco Life of New Jersey Flexible
Premium Variable Annuity Account (the "Account"). The Contract is purchased by
making an initial purchase payment of $10,000 or more; subsequent payments must
be $1,000 or more.
This statement of additional information relates to the Discovery
Select(SM) Annuity Contract available to residents of New York only.
This statement of additional information is not a prospectus and should be
read in conjunction with the Contract's prospectus, dated ____________, 1996,
which is available without charge upon written request to the Prudential Annuity
Service Center, 300 Columbus Circle, Edison, New Jersey 08837, or by telephoning
1-888-PRU-2888 (toll free).
PRUCO LIFE INSURANCE COMPANY PRUDENTIAL ANNUITY SERVICE CENTER
OF NEW JERSEY 300 COLUMBUS CIRCLE
213 WASHINGTON STREET EDISON, NEW JERSEY 08837
NEWARK, NEW JERSEY 07102-2992 TELEPHONE: 1-888-PRU-2888 (TOLL FREE)
* DISCOVERY SELECT is a service mark of The Prudential.
Catalog No.
<PAGE>
CONTENTS
PAGE
----
Other Information Concerning the Account ................................ 1
Principal Underwriter ................................................... 1
Determination of Subaccount Unit Values ................................. 1
Performance Information ................................................. 1
Comparative Performance Information ..................................... 5
<PAGE>
OTHER INFORMATION CONCERNING THE ACCOUNT
PRINCIPAL UNDERWRITER
Pruco Securities Corporation ("Prusec"), an indirectly wholly-owned
subsidiary of The Prudential, performs all sales and distribution functions
regarding the Contracts and may be deemed to be the "principal underwriter" of
the Account under the Investment Company Act of 1940.
DETERMINATION OF SUBACCOUNT UNIT VALUES
The value for each Subaccount Unit is computed as of the end of each
"valuation period" as defined in the prospectus (also referred to in this
section as "business day"). On any given business day the value of a Unit in
each subaccount will be determined by multiplying the value of a Unit of that
subaccount for the preceding business day by the net investment factor for that
subaccount for the current business day. The net investment factor for any
business day is determined by dividing the value of the assets of the subaccount
for that day by the value of the assets of the subaccount for the preceding
business day (ignoring, for this purpose, changes resulting from new purchase
payments and withdrawals), and subtracting from the result the daily equivalent
of the 1.4% annual charge for administrative expenses and mortality and expense
risks. (See CHARGES, FEES, AND DEDUCTIONS in the prospectus.) The value of the
assets of a subaccount is determined by multiplying the number of shares of The
Prudential Series Fund, Inc. or other underlying portfolios (the "Funds") held
by that subaccount by the net asset value of each share and adding the value of
dividends declared by the Funds but not yet paid.
PERFORMANCE INFORMATION
The tables that follow provide performance information for each subaccount
through September 30, 1996. The performance information is based on historical
experience and does not indicate or represent future performance.
AVERAGE ANNUAL TOTAL RETURN
The DISCOVERY SELECT Annuity is a new contract. The returns shown below
were calculated using historical investment returns of the portfolios of the
Funds. All fees, expenses and charges associated with the DISCOVERY SELECT
Annuity and the Funds have been reflected in these returns, as if the Contract
had existed from the inception date of each Funds' portfolios.
Table 1 below shows the average annual rates of total return on
hypothetical investments of $1,000 for periods ended September 30, 1996 in each
subaccount other than the Money Market Subaccount. These figures assume
withdrawal of the investments at the end of the period other than to effect an
annuity under the Contract. This table assumes deferred sales charges.
1
<PAGE>
<TABLE>
TABLE 1
AVERAGE ANNUAL TOTAL RETURN
<CAPTION>
FROM DATE
FIVE TEN PORTFOLIO
ONE YEAR YEARS YEARS ESTABLISHED
FUND DATE ENDED ENDED ENDED THROUGH
PORTFOLIO ESTABLISHED 09/30/96 09/30/96 09/30/96 09/30/96
--------- ----------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
The Prudential Series Fund
Diversified Bond Portfolio .................
High Yield Bond Portfolio ..................
Stock Index Portfolio ......................
Equity Income Portfolio ....................
Equity Portfolio ...........................
Prudential Jennison Portfolio ..............
Global Portfolio ...........................
AIM Variable Insurance Funds, Inc.
AIM V.I. Growth and Income Fund ............
AIM V.I. Value Fund ........................
Janus Aspen Series
Growth Portfolio ...........................
International Growth Portfolio .............
MFS Variable Insurance Trust
Emerging Growth Series .....................
Research Series ............................
OCC Accumulation Trust(1)
Managed Portfolio ..........................
Small Cap Portfolio ........................
FROM DATE
FIVE TEN PORTFOLIOS
ONE YEAR YEARS YEARS ESTABLISHED
SERIES FUND DATE ENDED ENDED ENDED THROUGH
PORTFOLIO ESTABLISHED 09/30/96 09/30/96 09/30/96 09/30/96
--------- ----------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
T. Rowe Price Equity Series, Inc.
Equity Income Portfolio ....................
T. Rowe Price International Series, Inc.
International Stock Portfolio ..............
Warburg Pincus Trust
Post-Venture Capital Portfolio .............
</TABLE>
- --------------
(1) Based on the results of OCC Accumulation Trust and its predecessor. On
September 16, 1994, an investment company which had commenced operations on
August 1, 1988 called Quest for Value Accumulation Trust (the "Old Trust")
was effectively divided into two investment funds, the Old Trust and the
present OCC Accumulation Trust (the "Trust"), at which time the Trust
commenced operations. The total net assets for the Managed and Small Cap
Portfolios immediately after the transaction were $682,601,380 and
$139,812,573 respectively with respect to the Old Trust and for the Managed
and Small Cap Portfolios, $51,345,103 and $8,129,274, respectively, with
respect to the Trust. For the period prior to September 16, 1994, the
performance figures above for the Managed and Small Cap Portfolios reflect
the performance of the corresponding portfolios of the Old Trust.
The average annual rates of total return shown above are computed by
finding the average annual compounded rates of return over the periods shown
that would equate the initial amount invested to the withdrawal value, in
accordance with the following formula: P(1+T)" -ERA. In the formula, P is a
hypothetical investment of $1,000; T is the average annual total return; "is the
number of years; and ERA is the withdrawal value at the end of the periods
shown. These figures assume deduction of the maximum withdrawal charge that may
be applicable to a particular period.
2
<PAGE>
NON-STANDARD TOTAL RETURN
Table 2 below shows the average annual rates of return as in Table 1, but
assumes that the investments are not withdrawn at the end of the period or that
the Contract owner annuitizes at the end of the period. This table assumes no
deferred sales charges.
<TABLE>
TABLE 2
AVERAGE ANNUAL TOTAL RETURN ASSUMING NO WITHDRAWAL
<CAPTION>
FROM DATE
FIVE TEN PORTFOLIO
ONE YEAR YEARS YEARS ESTABLISHED
FUND DATE ENDED ENDED ENDED THROUGH
PORTFOLIO ESTABLISHED 09/30/96 09/30/96 09/30/96 09/30/96
--------- ----------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
The Prudential Series Fund
Diversified Bond Portfolio .................
High Yield Bond Portfolio ..................
Stock Index Portfolio ......................
Equity Income Portfolio ....................
Equity Portfolio ...........................
Prudential Jennison Portfolio ..............
Global Portfolio ...........................
AIM Variable Insurance Funds, Inc.
AIM V.I. Growth And Income Fund ............
AIM V.I. Value Fund ........................
Janus Aspen Series
Growth Portfolio ...........................
International Growth Portfolio .............
MFS Variable Insurance Trust
Emerging Growth Series .....................
Research Series ............................
FROM DATE
FIVE TEN PORTFOLIOS
ONE YEAR YEARS YEARS ESTABLISHED
SERIES FUND DATE ENDED ENDED ENDED THROUGH
PORTFOLIO ESTABLISHED 09/30/96 09/30/96 09/30/96 09/30/96
--------- ----------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
OCC Accumulation Trust(1)
Managed Portfolio ..........................
Small Cap Portfolio ........................
T. Rowe Price Equity Series, Inc.
Equity Income Portfolio ....................
T. Rowe Price International Series, Inc.
International Stock Portfolio ..............
Warburg Pincus Trust
Post-Venture Capital Portfolio .............
</TABLE>
- ----------
(1) Based on the results of OCC Accumulation Trust and its predecessor. On
September 16, 1994, an investment company which had commenced operations on
August 1, 1988 called Quest for Value Accumulation Trust (the "Old Trust")
was effectively divided into two investment funds, the Old Trust and the
present OCC Accumulation Trust (the "Trust"), at which time the Trust
commenced operations. The total net assets for the Managed and Small Cap
Portfolios immediately after the transaction were $682,601,380 and
$139,812,573 respectively with respect to the Old Trust and for the Managed
and Small Cap Portfolios, $51,345,103 and $8,129,274, respectively, with
respect to the Trust. For the period prior to September 16, 1994, the
performance figures above for the Managed and Small Cap Portfolios reflect
the performance of the corresponding portfolios of the Old Trust.
3
<PAGE>
Table 3 shows the cumulative total return for the portfolios, assuming no
withdrawal. This table assumes no deferred sales charges.
<TABLE>
TABLE 3
CUMULATIVE TOTAL RETURN ASSUMING NO WITHDRAWAL
<CAPTION>
FROM DATE
FIVE TEN PORTFOLIO
ONE YEAR YEARS YEARS ESTABLISHED
FUND DATE ENDED ENDED ENDED THROUGH
PORTFOLIO ESTABLISHED 09/30/96 09/30/96 09/30/96 09/30/96
--------- ----------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
The Prudential Series Fund
Diversified Bond Portfolio .................
High Yield Bond Portfolio ..................
Stock Index Portfolio ......................
Equity Income Portfolio ....................
Equity Portfolio ...........................
Prudential Jennison Portfolio ..............
Global Portfolio ...........................
AIM Variable Insurance Funds, Inc.
AIM V.I. Growth and Income Fund ............
AIM V.I. Value Fund ........................
Janus Aspen Series
Growth Portfolio ...........................
International Growth Portfolio .............
MFS Variable Insurance Trust
Emerging Growth Series .....................
Research Series ............................
FROM DATE
FIVE TEN PORTFOLIOS
ONE YEAR YEARS YEARS ESTABLISHED
SERIES FUND DATE ENDED ENDED ENDED THROUGH
PORTFOLIO ESTABLISHED 09/30/96 09/30/96 09/30/96 09/30/96
--------- ----------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
OCC Accumulation Trust(1)
Managed Portfolio ..........................
Small Cap Portfolio ........................
T. Rowe Price Equity Series, Inc.
Equity Income Portfolio ....................
T. Rowe Price International Series, Inc.
International Stock Portfolio ..............
Warburg Pincus Trust
Post-Venture Capital Portfolio .............
</TABLE>
- ----------
(1) Based on the results of OCC Accumulation Trust and its predecessor. On
September 16, 1994, an investment company which had commenced operations on
August 1, 1988 called Quest for Value Accumulation Trust (the "Old Trust")
was effectively divided into two investment funds, the Old Trust and the
present OCC Accumulation Trust (the "Trust"), at which time the Trust
commenced operations. The total net assets for the Managed and Small Cap
Portfolios immediately after the transaction were $682,601,380 and
$139,812,573 respectively with respect to the Old Trust and for the Managed
and Small Cap Portfolios, $51,345,103 and $8,129,274, respectively, with
respect to the Trust. For the period prior to September 16, 1994, the
performance figures above for the Managed and Small Cap Portfolios reflect
the performance of the corresponding portfolios of the Old Trust.
4
<PAGE>
MONEY MARKET SUBACCOUNT YIELD
The "yield" and "effective yield" figures for the Money Market Subaccount
shown below were calculated using historical investment returns of the Money
Market Portfolio of the Prudential Series Fund. All fees, expenses and charges
associated with the DISCOVERY SELECT Annuity and the Series Fund have been
reflected.
The "yield" and "effective yield" of the Money Market Subaccount for the
seven days ended ____________ were ______ and ______, respectively.
The yield is computed by determining the net change, exclusive of capital
changes, in the value of a hypothetical pre-existing account having a balance of
one accumulation unit of the Money Market Subaccount 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 subaccount 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 figure carried
to the nearest ten-thousandth of 1%.
The deduction referred to above consists of the 1.25% charge for mortality
and expense risks and the 0.15% charge for administration. It does not reflect
the withdrawal charge.
The effective yield is obtained by taking the base period return, adding 1,
raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the
result, according to the following formula: Effective Yield--((base period
return + 1) 365/7) -1.
The yields on amounts held in the Money Market Subaccount will fluctuate on
a daily basis. Therefore, the stated yields for any given period are not an
indication of future yields.
COMPARATIVE PERFORMANCE INFORMATION
Reports or advertising may include comparative performance information,
including, but not limited to: (1) comparisons to market indices such as the Dow
Jones Industrial Average, the Standard & Poor's 500 Index, the Value Line
Composite Index, the Russell 2000 Index, the Morgan Stanley World Index, the
Lehman Brothers bond indices; (2) comparisons to other investments, such as
certificates of deposit; (3) performance rankings assigned by services such as
Morningstar, Inc. and Variable Annuity Research and Data Services (VARDS), and
Lipper Analytical Services, Inc.; (4) data presented by analysts such as Dow
Jones, A.M. Best, The Bank Rate Monitor National Index; and (5) data in
publications such as The Wall Street Journal, Times, Forbes, Barrons, Fortune,
Money Magazine, and Financial World.
5
<PAGE>
FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT
VARIABLE ANNUITY CONTRACTS
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
213 WASHINGTON STREET
NEWARK, NEW JERSEY 07102-2992
TELEPHONE: (800) 445-4571
<PAGE>
PART C
OTHER INFORMATION
<PAGE>
ITEM 24
EXHIBITS
(a) Financial Statements
To be added by pre-effective amendment.
(b) Exhibits
(1) Resolutions of the Board of Directors of Pruco Life Insurance Company
of New Jersey establishing the Pruco Life of New Jersey Flexible
Premium Variable Annuity Account and the Pruco Life of New Jersey
Modified Guaranteed Annuity Account. (Note 1)
(2) Agreements for custody of securities and similar investments--Not
Applicable.
(3) (a) Form of Distribution Agreement between Pruco Securities Corporation
(Underwriter) and Pruco Life Insurance Company of New Jersey
(Depositor). (Note 1)
(b) Form of Selected Broker Agreement between Prudential Securities
Incorporated and Pruco Securities Corporation with respect to sale
of Contracts. (Note 1)
(4) The Prudential DISCOVERY SELECT Contract. (Note 1)
(5) Application form for the Contract. (Note 1)
(6) (a) Articles of Incorporation of Pruco Life Insurance Company of New
Jersey, as amended March 11, 1983. (Note 2)
(b) By-laws of Pruco Life Insurance Company of New Jersey, as amended
February 1, 1991. (Note 2)
(7) Contract of reinsurance in connection with variable annuity contract--
Not Applicable.
(8) Other material contracts performed in whole or in part after the date
the registration statement is filed:
(a) Form of Fund Participation Agreement. (Note 4 )
(9) Opinion of Counsel and consent to its use as to legality of the
securities being registered. (Note 3)
(10) Written consent of Price Waterhouse, independent auditors. (Note 3)
C-1
<PAGE>
(11) All financial statements omitted from Item 23, Financial Statements--
Not Applicable.
(12) Agreements in consideration for providing initial capital between or
among Registrant, Depositor, Underwriter, or initial Contract owners--
Not Applicable.
(13) Schedule of Performance Computations. (Note 3)
(14) Powers of Attorney.
William M. Bethke, Linda S. Dougherty, Ira J. Kleinman, Mendel A.
Melzer, Esther H. Milnes I. Edward Price and William F. Yelverton
(Note 1)
(15) Written consent of Paul A. Haley F.S.A., M.A.A.A. actuary for Pruco
Life of New Jersey (Note 3)
(Note 1) Filed herewith.
(Note 2) Incorporated by reference to Post-Effective Amendment No. 17 to Form
S-6 Registration No.2-89780, filed March 1, 1991, on behalf of the
Pruco Life of New Jersey Variable Appreciable Account.
(Note 3) To be filed by pre-effective amendment
(Note 4) Incorporated by reference to Pre-effective Amendment Form N-4
Registration No. 333-06701 filed June 26, 1996, on behalf of the Pruco
Life Flexible premium Variable Annuity Account.
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
Incorporated by reference to the Pruco Life of New Jersey Flexible Premium
Variable Annuity Account prospectus under "Directors and Officers" contained in
Part A of this registration statement.
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
Pruco Life Insurance Company of New Jersey ("Pruco Life of New Jersey"), a
corporation organized under the laws of New Jersey, is an indirect, wholly-owned
subsidiary of The Prudential Insurance Company of America, ("The Prudential"), a
mutual life insurance company organized under the laws of New Jersey. The
subsidiaries of The Prudential and short descriptions of each are set forth on
the following pages.
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<PAGE>
Pruco Life of New Jersey may be deemed to control the following separate
accounts which are registered as unit investment trusts under the Investment
Company Act of 1940: the Pruco Life of New Jersey Variable Appreciable Account,
the Pruco Life of New Jersey Variable Insurance Account, the Pruco Life of New
Jersey Single Premium Variable Life Account, Pruco Life of New Jersey Single
Premium Variable Annuity Account, the Pruco Life of New Jersey Flexible Premium
Variable Annuity Account (Registrant), the Pruco Life of New Jersey Modified
Guaranteed Annuity Account and the Pruco Life of New Jersey Variable Contract
Real Property Account (separate accounts of Pruco Life of New Jersey).
The above-referenced separate accounts, along with The Prudential and
certain of The Prudential's separate accounts, hold all the shares of The
Prudential Series Fund, Inc., a Maryland corporation. In addition, The
Prudential holds all the shares of Prudential's Gibraltar Fund, a Delaware
Corporation, in three of its separate accounts. The Prudential Series Fund, Inc.
and Prudential's Gibraltar Fund are registered as open-end diversified,
management investment companies under the Investment Company Act of 1940.
Additionally, the aforementioned separate accounts of The Prudential are
registered as unit investment trusts under the Investment Company Act of 1940.
In addition, Pruco Life may also be deemed to be under common control with
The Prudential Variable Contract Account-2, The Prudential Variable Contract
Account-10, and The Prudential Variable Contract Account-11, separate accounts
of The Prudential, all of which are registered as open-end, diversified,
management investment companies under the Investment Company Act of 1940.
ITEM 27. NUMBER OF CONTRACT OWNERS
No contracts offered by Registrant will be sold prior to the effective date
of this Registration Statement.
ITEM 28. INDEMNIFICATION
The Prudential Directors' and Officers' Liability and Corporation
Reimbursement Insurance Program, purchased by The Prudential from Aetna Casualty
& Surety Company, CNA Insurance Companies, Lloyds of London, Great American
Insurance Company, Reliance Insurance Company, Corporate Officers & Directors
Assurance Ltd., A.C.E. Insurance Company, Ltd., XL Insurance Company, Ltd., and
Zurich-American Insurance Company, provides reimbursement for "Loss" (as defined
in the policies) which the Company pays as indemnification to its directors or
officers resulting from any claim for any actual or alleged act, error,
misstatement, misleading statement, omission, or breach of duty by persons in
the discharge of their duties in their capacities as directors or officers of
The Prudential, any of its subsidiaries, or certain investment companies
affiliated with The Prudential. Coverage is also provided to the individual
directors or officers for such Loss, for which they shall not be indemnified.
Loss essentially is the legal liability on claims against a director or officer,
including adjudicated damages, settlements and reasonable and necessary legal
fees and expenses incurred in defense of adjudicatory proceedings and appeals
therefrom. Loss does not include punitive or exemplary damages or the multiplied
portion of any multiplied damage award, criminal or civil fines or penalties
imposed by law, taxes or wages, or matters which are uninsurable under the law
pursuant to which the policies are construed.
There are a number of exclusions from coverage. Among the matters excluded
are Losses arising as the result of (1) claims brought about or contributed to
by the criminal or fraudulent acts or omissions or the willful violation of any
law by a director or officer, (2) claims based on or attributable to directors
or officers gaining personal profit or advantage to which they were not legally
entitled, and (3) claims arising from actual or alleged performance of, or
failure to perform, services as, or in any capacity similar to, an investment
adviser, investment banker, underwriter, broker or dealer, as those terms are
defined in the Securities Act of 1933, the Securities Exchange Act of 1934, the
Investment Advisers Act of 1940, the Investment Company Act of 1940, any rules
or regulations thereunder, or any similar federal, state or local statute, rule
or regulation.
The limit of coverage under the Program for both individual and corporate
reimbursement coverage is $150,000,000. The retention for corporate
reimbursement coverage is $10,000,000 per loss.
The relevant provisions of New Jersey law permitting or requiring
indemnification, New Jersey being the state of organization of The Prudential,
can be found in Section 14A:3-5 of the New Jersey Statutes Annotated. The
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<PAGE>
relevant provisions of Arizona law, Arizona being the state of organization
of Pruco Life, can be found in Section 10-005 of the Arizona Statutes Annotated.
The text of The Prudential's by-law 26, which relates to indemnification of
officers and directors, is incorporated by reference to Exhibit 1.A.(6)(b) of
Post-Effective Amendment No. 1 to Form S-6, Registration No. 33-61079, filed
April 25, 1996, on behalf of The Prudential Variable Appreciable Account. The
text of Pruco Life's by-laws, Article VIII, which relates to indemnification of
officers and directors, is incorporated by reference to Exhibit (6)(b) to this
Registration Statement.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Pruco Securities Corporation also acts as principal underwriter for the
Pruco Life PRUvider Variable Appreciable Account, the Pruco Life Variable
Insurance Account, the Pruco Life Variable Appreciable Account, the Pruco
Life Variable Universal Account, the Pruco Life Single Premium Variable Life
Account, the Pruco Life Single Premium Variable Annuity Account, the Pruco
Life Flexible Premium Variable Annuity Account, the Pruco Life Modified
Guaranteed Annuity Account, the Pruco Life of New Jersey Flexible Premium
Variable Annuity Account, the Pruco Life of New Jersey Modified Guaranteed
Annuity Account, the Pruco Life of New Jersey Variable Insurance Account,
the Pruco Life of New Jersey Variable Appreciable Account, the Pruco Life of
New Jersey Single Premium Variable Life Account, the Pruco Life of New
Jersey Single Premium Variable Annuity Account, The Prudential Variable
Appreciable Account, The Prudential Individual Variable Contract Account,
The Prudential Qualified Individual Variable Contract Account, Prudential's
Annuity Plan Account, Prudential's Investment Plan Account, Prudential's
Annuity Plan Account-2, Prudential's Gibraltar Fund, and The Prudential
Series Fund, Inc.
(b) Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
William Frisby Yelverton* Chairman and Director
Richard Topp* President and Director
E. Michael Caulfield* Director
Joseph Mahoney* Director
James Avery Jr.* Director
Douglas Wade Henderson* Director
Richard Painter** Director
Lisa Ramaswamy** Chief Financial Officer and Comptroller
Clifford E. Kirsch* Chief Legal Officer and Secretary
- --------------
* Principal Business Address: Prudential Plaza, Newark, NJ 07102
** Principal Business Address: 1111 Durham Avenue, South Plainfield, NJ 07080
(c) Not applicable
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books or other documents required to be maintained by Section
31 (a) of the 1940 Act and the rules promulgated thereunder are maintained by
the Registrant through The Prudential Insurance Company of America, Prudential
Plaza, Newark, New Jersey 07102-3777.
ITEM 31. MANAGEMENT SERVICES
Summary of any contract not discussed in Part A or Part B of the
registration statement under which management-related services are provided to
the Registrant--Not Applicable.
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<PAGE>
ITEM 32. UNDERTAKINGS
(a) Registrant undertakes to file a post-effective amendment to this Registrant
Statement as frequently as is necessary to ensure that the audited financial
statements in the Registration Statement are never more than 16 months old
for so long as payments under the variable annuity contracts may be
accepted.
(b) Registrant undertakes 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 postcard or
similar written communication affixed to or included in the prospectus that
the applicant can remove to send for a statement of additional information.
(c) Registrant undertakes to deliver any statement of additional information and
any financial statements required to be made available under this Form
promptly upon written or oral request.
(d) Restrictions on withdrawal under Section 403(b) Contracts are imposed in
reliance upon, and in compliance with, a no-action letter issued by the
Chief of the Office of Insurance Products and Legal Compliance of the
Securities and Exchange Commission to the American Council of Life Insurance
on November 28, 1988.
(e) Registrant hereby represents that the fees and charges deducted under the
contract, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred and the risks assumed by
the Registrant.
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<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has caused this Registration Statement to be signed on its
behalf, in the City of Newark, and the State of New Jersey, on this 18th day of
December, 1996.
THE PRUCO LIFE OF NEW JERSEY FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT
(REGISTRANT)
BY: PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
(DEPOSITOR)
Attest: /s/ CLIFFORD E. KIRSCH *By: /s/ ESTHER H. MILNES
- -------------------------------------- ---------------------------------
Clifford E. Kirsch Esther H. Milnes
Chief Legal Officer President
As required by the Securities Act of 1933, this Pre-Effective Amendment No.
1 to the Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature and Title December 18, 1996
-------------------
/s/ *
- --------------------------------------
Esther Milnes
President and Director
/s/ *
- --------------------------------------
Linda S. Dougherty
Chief Accounting Officer, Vice
President and Comptroller
/s/ *
- --------------------------------------
William M. Bethke
Director
/s/ *
- -------------------------------------- *By: /s/ CLIFFORD E. KIRSCH
Ira J. Kleinman ---------------------------------
Director Clifford E. Kirsch
(Attorney-in-fact)
/s/ *
- --------------------------------------
Mendel A. Melzer
Director
/s/ *
I. Edward Price
- --------------------------------------
Director
/s/ *
- --------------------------------------
William F. Yelverton
Chairman of the Board and Director
C-6
<PAGE>
EXHIBIT INDEX
(1) Resolutions of the Board of Directors.................... Page C-8
(3)(a) Form of Distribution Agreement........................... Page C-13
(b) Form of Selected Broker Agreement ....................... Page C-19
(4) The DISCOVERY SELECT Contract............................ Page C-32
(5) Application Form for the Contract ....................... Page C-53
(14) Powers of Attorney ...................................... Page C-57
C-7
96-13
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Action by Executive Committee of the
Board of Directors by Unanimous Consent
Pursuant to Section 9 of Article II of the Bylaws of Pruco Life Insurance
Company of New Jersey (the "Company"), a New Jersey corporation, the
undersigned, being or acting for all of the regular members of the Executive
Committee of the Board of Directors of such corporation hereby consent to and
adopt the following resolutions:
R-339 ESTABLISHMENT OF SEPARATE ACCOUNT
RESOLVED, that the Company hereby establishes, pursuant to Section 17B:28-7
of the Revised Statutes of New Jersey, a variable contract account to be
designated initially as the "Pruco Life of New Jersey Flexible Premium Variable
Annuity Account" (hereinafter in these resolutions referred to as the
"Account"); and
FURTHER RESOLVED, that the Company shall receive and hold in the Account
amounts arising from (i) purchase payments received pursuant to certain
individual variable annuity contracts ("Variable Contracts") of the Company sold
as part of its Individual Variable Annuity Program ("Program") which may also
include contracts for (A) tax-qualified pension and profit-sharing plans, (B)
retirement plans for self-employed individuals, (C) individual retirement
accounts, (D) simplified employee pension plans, (E) public employee deferred
compensation plans, and (F) tax-deferred annuity plans, and (ii) such assets of
the Company as the proper officers of the Company may deem prudent and
appropriate to have invested in the same manner as the assets applicable to its
reserve liability under the Variable Contracts and lodged in the Account; such
amounts and the dividends, interest and gains produced thereby shall be invested
and reinvested, subject to the rights of the holders of such Variable Contracts,
(i) in shares of The Prudential Series Fund, Inc., a diversified open-end
management investment company of the series type managed by The Prudential
Insurance Company of America ("Prudential"), at the net asset value of such
shares at the time of acquisition and (ii) in shares of such other diversified
open-end management investment companies managed by investment advisers
unaffiliated with Prudential, as may be determined from time to time by the
proper officers of the Company, at the net asset value of such shares at the
time of acquisition; and
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<PAGE>
FURTHER RESOLVED, that the Account shall be registered as a unit investment
trust under the Investment Company Act of 1940, and that the proper officers of
the Company be and they hereby are authorized to sign and file, or cause to be
filed, with the Securities and Exchange Commission a registration statement, on
behalf of the Account, as registrant, under the Investment Company Act of 1940
("Investment Company Act Registration"); and
FURTHER RESOLVED, that the Company shall as part of its Program sell
Variable Contracts on a variable basis and that the proper officers of the
Company shall be and they hereby are authorized to sign and file, or cause to be
filed, with the Securities and Exchange Commission, on behalf of the Company, as
issuer, a registration statement, including the financial statements and
schedules, exhibits and form of prospectus required as a part thereof, for the
registration of the offering and sale of such Variable Contracts, to the extent
they represent participating interests in the Account, under the Securities Act
of 1933 ("Securities Act Registration"); and to pay the registration fees
required in connection therewith; and
FURTHER RESOLVED, that the proper officers of the Company are authorized
and directed to sign and file, or cause to be filed, such amendment or
amendments of such Investment Company Act Registration and Securities Act
Registration as they may find necessary or advisable from time to time; and
FURTHER RESOLVED, that the signature of any director or officer required by
law to affix his signature to such Investment Company Act Registration and
Securities Act Registration, or to any amendment thereof, may be affixed by said
director or officer personally, or by an attorney-in-fact duly constituted in
writing by said director or officer to sign his name thereto; and
FURTHER RESOLVED, that the Chief Legal Officer of the Company is appointed
agent of the Company to receive any and all notices and communications from the
Securities and Exchange Commission relating to such Investment Company Act
Registration and Securities Act Registration and any and all amendments thereof;
and
FURTHER RESOLVED, that the proper officers of the Company be and they
hereby are authorized to take whatever steps may be necessary or desirable to
comply with such of the laws and regulations of the several states as may be
applicable to the Company's Program; and
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<PAGE>
FURTHER RESOLVED, that the proper officers of the Company be and they
hereby are authorized, in the name and on behalf of the Company, to execute and
deliver such corporate documents and certificates and to take such further
action as may be necessary or desirable, including, but not limited to, the
payment of applicable fees, in order to effectuate the purposes of the foregoing
resolutions or any of them; and
FURTHER RESOLVED, that the Account shall not be chargeable with liabilities
arising out of any other business of the Company, and the income, if any, and
the gains and losses, realized and unrealized, on the Account shall be credited
or charged to the Account without regard to other gains or losses by the
Company.
Dated: May 20, 1996
/s/ ESTHER H. MILNES
--------------------------------
Esther H. Milnes
/s/ WILLIAM F. YELVERTON
--------------------------------
William F. Yelverton
/s/ I. EDWARD PRICE
--------------------------------
I. Edward Price
C-10
<PAGE>
96-14
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Action by Executive Committee of the
Board of Directors by Unanimous Consent
Pursuant to Section 9 of Article II of the Bylaws of Pruco Life Insurance
Company of New Jersey (the "Company"), a New Jersey corporation, the
undersigned, being or acting for all of the regular members of the Executive
Committee of the Board of Directors of such corporation hereby consent to and
adopt the following resolutions:
R-340 ESTABLISHMENT OF SEPARATE ACCOUNT
RESOLVED, that the Company hereby establishes, pursuant to Section 17B:28-7
of the Revised Statutes of New Jersey, a "non-unitized" separate account to be
designated initially as the "Pruco Life of New Jersey Modified Guaranteed
Annuity Account" (hereinafter in these resolutions referred to as the
"Account"); and
FURTHER RESOLVED, that the Company shall receive and hold in the Account
amounts arising from (i) purchase payments received pursuant to certain modified
guaranteed annuity contracts ("Contracts") of the Company sold as part of its
Individual Variable Annuity Program ("Program") and (ii) such assets of the
Company as the proper officers of the Company may deem prudent and appropriate
to have invested in the same manner as the assets applicable to its reserve
liability under the Contracts and lodged in the Account, and such amounts and
the dividends, interest and gains produced thereby shall be invested and
reinvested, subject to the rights of the holders of such Contracts, and subject
to the investment laws applicable to the Company's general account assets; and
FURTHER RESOLVED, that the Company shall, as part of its Program, sell the
Contracts as securities and that the proper officers of the Company shall be and
they hereby are authorized to sign and file, or cause to be filed, with the
Securities and Exchange Commission, on behalf of the Company, as issuer, a
registration statement, including the financial statements and schedules,
exhibits and form of prospectus required as a part thereof, for the registration
of the offering and sale of such Contracts under the Securities Act of 1933
(hereinafter in these resolutions referred to as "Securities Act Registration")
and to pay the registration fees required in connection therewith; and
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<PAGE>
FURTHER RESOLVED, that the proper officers of the Company are authorized
and directed to sign and file, or cause to be filed, such amendment or
amendments of such Securities Act Registration as they may find necessary or
advisable from time to time; and
FURTHER RESOLVED, that the signature of any director or officer required by
law to affix his signature to such Securities Act Registration, or to any
amendment thereof, may be affixed by said director or officer personally, or by
an attorney-in-fact duly constituted in writing by said director or officer to
sign his name thereto; and
FURTHER RESOLVED, that the Chief Legal Officer of the Company is appointed
agent of the Company to receive any and all notices and communications from the
Securities and Exchange Commission relating to such Securities Act Registration
and any and all amendments thereof; and
FURTHER RESOLVED, that the proper officers of the Company be and they
hereby are authorized to take whatever steps may be necessary or desirable to
comply with such of the laws and regulations of the several states as may be
applicable to the sale of the Contracts; and
FURTHER RESOLVED, that the proper officers of the Company be and they
hereby are authorized, in the name and on behalf of the Company, to execute and
deliver such corporate documents and certificates and to take such further
action as may be necessary or desirable, including, but not limited to, the
payment of applicable fees, in order to effectuate the purposes of the foregoing
resolutions or any of them.
FURTHER RESOLVED, that the Account shall not be chargeable with liabilities
arising out of any other business of the Company, and the income, if any, and
the gains and losses, realized and unrealized, on the Account shall be credited
or charged to the Account without regard to other gains or losses by the
Company.
Dated: May 20, 1996
/s/ ESTHER H. MILNES
--------------------------------
Esther H. Milnes
/s/ WILLIAM F. YELVERTON
--------------------------------
William F. Yelverton
/s/ I. EDWARD PRICE
--------------------------------
I. Edward Price
C-12
DISTRIBUTION AGREEMENT
AGREEMENT made this _____ day of November 1996, by and between Pruco Life
Insurance Company of New Jersey, a New Jersey corporation ("Company"), on its
own behalf and on behalf of the Pruco Life of New Jersey Flexible Premium
Variable Annuity Account (the "Account") and Pruco Securities Corporation, a New
Jersey corporation ("Distributor").
WITNESSETH:
WHEREAS, Company has established and maintains the Account, a separate
investment account, pursuant to the laws of New Jersey for the purpose of
selling combination variable annuity, fixed annuity and modified guaranteed
annuity contracts (the "Contracts"), to commence after the effectiveness of the
Registration Statement filed with the Securities and Exchange Commission on
Forms N-4 and S-1 pursuant to the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, the Account will be registered as a unit investment trust under
the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, Distributor is registered as a broker-dealer under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") and is a member of the
National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, Company and Distributor wish to enter into an agreement to have
Distributor act as Company's principal underwriter for the sale of the Contracts
through the Account;
NOW THEREFORE, the parties agree as follows:
1. APPOINTMENT OF DISTRIBUTOR
Company agrees that during the term of this Agreement it will take all
action which is required to cause the Contracts to comply as insurance products
and registered securities with all applicable federal and state laws and
regulations. Company appoints Distributor and Distributor agrees to act as the
principal underwriter for the sale of
C-13
<PAGE>
Contracts to the public, during the term of this Agreement, in the state of New
York. Distributor shall offer the Contracts for sale and distribution at premium
rates set by Company. Applications for the Contracts shall be solicited only by
representatives duly and appropriately licensed or otherwise qualified for the
sale of such Contracts in the state of New York. Company shall undertake to
appoint Distributor's qualified representatives as life insurance agents of
Company. Completed applications for Contracts shall be transmitted directly to
Company for acceptance or rejection in accordance with underwriting rules
established by Company. Initial premium payments under the Contracts shall be
made by check payable to Company and shall be held at all times by Distributor
or its representatives in a fiduciary capacity and remitted promptly to Company.
Anything in this Agreement to the contrary notwithstanding, Company retains the
ultimate right to control the sale of the Contracts and to appoint and discharge
life insurance agents of Company. Distributor shall be held to the exercise of
reasonable care in carrying out the provisions of this Agreement.
2. SALES AGREEMENTS
Distributor is hereby authorized to enter into separate written agreements,
on such terms and conditions as Distributor may determine not inconsistent with
this Agreement, with one or more organizations which agree to participate in the
distribution of the Contracts. Any such organization (each, a "Dealer") shall be
both registered as a broker/dealer under the Securities Exchange Act and a
member of the NASD. Dealer and its agents or representatives soliciting
applications for Contracts shall be duly and appropriately licensed, registered
or otherwise qualified for the sale of such Contracts (and the riders and other
policies offered in connection therewith) under the insurance laws and any
applicable blue-sky laws of each state or other jurisdiction in which the
Company is licensed to sell the Contracts.
Distributor shall have the responsibility for ensuring that Dealer
supervises its representatives. Dealer shall assume any legal responsibilities
of Company for the acts, commissions or defalcations of such representatives
insofar as they relate to the sale of the Contracts. Applications for Contracts
solicited by such Dealer through its agents or representatives shall be
transmitted directly to Company, and if received by Distributor, shall be
forwarded to Company. All premium payments under the Contracts shall be made by
check to Company and, if
C-14
<PAGE>
received by Distributor, shall be held at all times in a fiduciary capacity and
remitted promptly to Company.
3. LIFE INSURANCE LICENSING
Company shall be responsible for insuring that Dealers are duly qualified,
under the insurance laws of the applicable jurisdictions, to sell the Contracts.
4. SUITABILITY
Company wishes to ensure that Contracts sold by Distributor will be issued
to purchasers for whom the Contract will be suitable. Distributor shall take
reasonable steps to ensure that the various representatives appointed by it
shall not make recommendations to an applicant to purchase a Contract in the
absence of reasonable grounds to believe that the purchase of the Contract is
suitable for such applicant. While not limited to the following, a determination
of suitability shall be based on information furnished to a representative after
reasonable inquiry of such applicant concerning the applicant's insurance and
investment objectives, financial situation and needs, and the likelihood that
the applicant will continue to make the premium payments contemplated by the
Contracts.
5. PROMOTION MATERIALS
Company shall have the responsibility for furnishing to Distributor and its
representatives sales promotion materials and individual sales proposals related
to the sale of the Contracts. Distributor shall not use any such materials that
have not been approved by Company.
6. COMPENSATION
Company shall arrange for the payment of commissions directly to those
registered representatives of Distributor who are entitled thereto in connection
with the sale of the Contracts on behalf of Distributor, in the amounts and on
such terms and conditions as Company and Distributor shall determine; provided
that such terms, conditions and commissions shall be as are set forth in or as
are not inconsistent with the Prospectus included as part of the Registration
Statement for the Contracts and effective under the 1933 Act.
Company shall arrange for the payment of commissions directly to those
Dealers who sell Contracts under
C-15
<PAGE>
agreements entered into pursuant to paragraph 2 hereof, in amounts as may be
agreed to by Company and specified in such written agreements.
Company shall reimburse Distributor for the costs and expenses incurred by
Distributor in furnishing or obtaining the services, materials and supplies
required by the terms of this Agreement in the initial sales efforts and the
continuing obligations hereunder.
7. RECORDS
Distributor shall have the responsibility for maintaining the records of
representatives licensed, registered and otherwise qualified to sell the
Contracts. Distributor shall maintain such other records as are required of it
by applicable laws and regulations. The books, accounts, and records of Company,
the Account and Distributor shall be maintained so as to clearly and accurately
disclose the nature and details of the transactions. All records maintained by
Distributor in connection with this Agreement shall be the property of Company
and shall be returned to Company upon termination of this Agreement, free from
all claims or retention of rights by Distributor. Distributor shall keep
confidential any information obtained pursuant to this Agreement and shall
disclose such information, only if Company has authorized such disclosure, or if
such disclosure is expressly required by applicable federal or state regulatory
authorities.
8. INVESTIGATION AND PROCEEDING
(a) Distributor and Company agree to cooperate fully in any insurance
regulatory investigation or proceeding or judicial proceeding arising in
connection with the Contracts distributed under this Agreement. Distributor and
Company further agree to cooperate fully in any securities regulatory
investigation or proceeding with respect to Company, Distributor, their
affiliates and their agents or representatives to the extent that such
investigation or proceeding is in connection with Contracts distributed under
this Agreement. Distributor shall furnish applicable federal and state
regulatory authorities with any information or reports in connection with its
services under this Agreement which such authorities may request in order to
ascertain whether Company's operations are being conducted in a manner
consistent with any applicable law or regulations.
C-16
<PAGE>
(b) In the case of a substantive customer complaint, Distributor and
Company will cooperate in investigating such complaint and any response to such
complaint will be sent to the other party to this Agreement for approval not
less than five business days prior to its being sent to the customer or
regulatory authority, except that if a more prompt response is required, the
proposed response shall be communicated by telephone or telegraph.
9. TERMINATION
This Agreement shall terminate automatically upon its assignment without
the prior written consent of both parties. This Agreement may be terminated at
any time by either party on 60 days' written notice to the other party, without
the payment of any penalty. Upon termination of this Agreement, all
authorizations, rights and obligations shall cease except the obligation to
settle accounts hereunder, including commissions on premiums subsequently
received for Contracts in effect at a time of termination, and the agreements
contained in paragraph 8 hereof.
10. REGULATION
This Agreement shall be subject to the provisions of the 1940 Act and the
Securities Exchange Act and of the rules, regulations, and rulings thereunder
and of the applicable rules and regulations of the NASD, from time to time in
effect, and the terms hereof shall be interpreted and construed in accordance
therewith.
11. SEVERABILITY
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
12. APPLICABLE LAW
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
C-17
<PAGE>
PRUCO LIFE INSURANCE COMPANY
OF NEW JERSEY
By:__________________________
Esther H. Milnes
President
PRUCO SECURITIES CORPORATION
By:___________________________
Richard Topp
President
C-18
SELECTED BROKER AGREEMENT
This agreement is made on the day of November 1996 by and between
PRUDENTIAL SECURITIES INCORPORATED, a New York corporation with its principal
business address at One Seaport Plaza, New York, New York, 10292-0001 ("Broker")
and PRUCO SECURITIES CORPORATION ("Distributor"), a New Jersey corporation with
its principal place of business at 1111 Durham Avenue, South Plainfield, New
Jersey 07080.
This Agreement supersedes all previous Select-Broker Agreements between
Broker and Distributor.
WITNESSETH:
In consideration of the mutual promises contained herein, the parties
hereto agree as follows:
A. DEFINITIONS
(1) 1933 Act -- The Securities Act of 1933, as amended.
(2) 1934 Act -- The Securities Exchange Act of 1934, as amended.
(3) 1940 Act -- The Investment Company Act of 1940, as amended.
(4) SEC -- The Securities and Exchange Commission.
(5) Contracts -- Variable life insurance contracts and/or variable annuity
contracts and/or market-value adjusted annuity contracts, or
combinations thereof, described in Schedule A attached hereto and
issued by the applicable one of Pruco Life Insurance Company, Pruco
Life Insurance Company of New Jersey, The Prudential Life Insurance
Company of Arizona or The Prudential Insurance Company of America
(hereinafter collectively called the "Company") and for which
Distributor has been appointed the principal underwriter pursuant to
Distribution Agreements, copies of which have been furnished to
Broker. From time to time Schedule A may be updated or amended. Such
updates or amendments will be effective as of the date(s) specified in
Schedule A, upon written notification to the Broker that a new or
amended Schedule A has been issued.
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2
(6) Accounts -- Separate accounts established and maintained by the
Company pursuant to the laws of Arizona or New Jersey, whichever is
applicable, to fund the benefits under the Contracts.
(7) The Prudential Series Fund, Inc., or the "Fund" -- An open-end
management investment company registered under the 1940 Act, shares of
which are sold to the Accounts in connection with the sale of the
Contracts.
(8) Registration Statement -- The SEC registration statements and
amendments thereto under the 1940 and/or 1933 Acts, relating to the
Contracts, the Accounts, and the Fund, including financial statements
and all exhibits.
(9) Prospectus -- The current prospectuses included within the
Registration Statements referred to herein.
B. AGREEMENTS OF DISTRIBUTOR
(1) Pursuant to the authority delegated to it by Company, Distributor
hereby authorizes Broker during the term of this Agreement to solicit
applications for Contracts from eligible persons, provided that there
is an effective Registration Statement relating to such Contracts and
that any such solicitation is preceded or accompanied by delivery of a
Prospectus to the applicant, and provided further that Broker has been
notified by Distributor that the Contracts are qualified for sale
under all applicable securities and insurance laws of the state or
jurisdiction in which the applications will be solicited. In
connection with the solicitation of applications for Contracts, Broker
is hereby authorized to offer riders that are available with the
Contracts in accordance with instructions furnished by Distributor or
Company.
(2) Distributor, during the term of this Agreement, will notify Broker of
the issuance by the SEC of any stop order with respect to the
Registration Statement or any amendments thereto or the initiation of
any proceedings for that purpose or for any other purpose relating to
the registration and/or offering of the Contracts and of any other
action or circumstance that may prevent the lawful sale of any
Contract in any state or jurisdiction.
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3
(3) During the term of this Agreement, Distributor shall advise Broker of
any amendment to any Registration Statement or any amendment or
supplement to any Prospectus.
(4) Distributor hereby warrants that all advertising matter, prospectuses,
circulars, letters, booklets, schedules, stationary, broadcasting or
sales materials it provides pursuant to this Agreement have been
reviewed by Distributor, and that all such materials comply with all
applicable laws.
C. AGREEMENTS OF BROKER
(1) Broker represents that it is a registered broker/dealer under the 1934
Act and a member in good standing of the National Association of
Securities Dealers, Inc. ("NASD"). Broker represents that its agents
or representatives who will be soliciting applications for the
Contracts will be duly registered representatives of Broker and
furthermore that each one will be a registered representative in good
standing with accreditation to sell the Contracts as required by the
NASD.
(2) Commencing at such time as Distributor and Broker shall agree upon,
Broker agrees to use its reasonable efforts to find purchasers for the
Contracts acceptable to Company. In meeting its obligation to use its
reasonable efforts to solicit applications for Contracts, Broker
shall, during the term of this Agreement, engage in the following
activities:
(a) On an ongoing and exclusive basis, use training, sales,
advertising and promotional materials which have been approved by
Company;
(b) Establish and implement reasonable procedures for periodic
inspection and supervision of sales practices of its agents or
representatives and submit periodic reports to Distributor as may
be requested on the results of such inspections and the
compliance with such procedures.
(c) Broker shall take reasonable steps to ensure that the various
representatives appointed by it shall not make recommendations to
an applicant to purchase a Contract in the absence of reasonable
C-21
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4
grounds to believe that the purchase of the Contract is suitable
for such applicant. While not limited to the following, a
determination of suitability shall be based on information
furnished to the Agent or Representative after reasonable inquiry
of such applicant concerning the applicant's insurance and
investment objectives, financial situation (including tax
status)and needs, and the likelihood that the applicant will
continue to make any continuing premium payments contemplated by
the Contracts. Each application obtained by a representative
appointed by Broker shall bear the initials of a marketing
principal of Broker indicating that the application has been
reviewed by such marketing principal for suitability,
completeness, and accuracy.
(3) All payments for Contracts collected by agents or representatives of
Broker shall be held at all times in a fiduciary capacity and shall be
remitted promptly in full together with such applications, forms and
other required documentation to an office of the Company designated by
Distributor. Checks or money orders in payment of premiums and/or
purchase payments shall be drawn to the order of the applicable one of
"Pruco Life Insurance Company", "Pruco Life Insurance Company of New
Jersey", "The Prudential Insurance Company of America" or "The
Prudential Life Insurance Company of Arizona". Broker acknowledges
that the Company retains the ultimate right to control the sale of the
Contracts and that the Distributor or Company shall have the
unconditional right to reject, in whole or part, any application for a
Contract. In the event Company or Distributor rejects an application,
Company immediately will return all payments directly to the purchaser
and Broker will be notified of such action. In the event that any
purchaser of a Contract elects to return a Contract pursuant to state
law or either Rule 6e-2(b)(13)(viii) or Rule 6e-3(T)(b)(13)(viii) of
the 1940 Act, the purchaser will receive a refund in accordance with
the provisions of the applicable statute or Rule.
(4) Broker shall act as an independent contractor, and nothing herein
contained shall make Broker, or any one of its employees, agents or
representatives, an employee of Company or Distributor in connection
with the solicitation of or applications for Contracts.
C-22
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5
Broker, its agents or representatives, and its employees shall not
hold themselves out to be employees of Company or Distributor in this
connection or in any dealings with the public.
(5) Broker agrees that any material it develops, approves or uses for
sales, training, explanatory or other purposes in connection with the
solicitation of applications for Contracts hereunder, including
generic advertising and/or training materials which may be used in
connection with the sale of the Contracts, will not be used without
the prior written consent of Distributor and, where appropriate, the
endorsement of Company to be obtained by Distributor.
(6) Solicitation and other activities by Broker shall be undertaken only
in accordance with applicable laws and regulations. No agent or
representative of Broker shall solicit applications for the Contracts
until duly licensed and appointed by Company as a life insurance and
variable contract broker or agent of Company in the appropriate states
or other jurisdictions. Broker shall ensure that such agents or
representatives fulfill any training requirements necessary to be
licensed. Broker understands and acknowledges that neither it nor its
agents or representatives is authorized by Distributor or Company to
give any information or make any representation in connection with
this Agreement or the offering of the Contracts other than those
contained in the Prospectus or other solicitation material authorized
in writing by Distributor or Company.
(7) Broker shall not have authority on behalf of Distributor or Company
to: make, alter or discharge any Contract or other form; waive any
forfeiture; extend the time of paying any premium; or receive any
monies or premiums due, or to become due, to Company, except as set
forth in Section C(3) of this Agreement. Broker shall not expend, nor
contract for the expenditure of the funds of Distributor, nor shall
Broker possess or exercise any authority on behalf of the Company
under this Agreement.
(8) Broker shall have the responsibility for maintaining the records of
its representatives licensed, registered and otherwise qualified to
sell the Contracts. Broker shall maintain such other records as are
required of it
C-23
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6
by applicable laws and regulations. The books, accounts and records
maintained by Broker under the terms of this Agreement that relate to
the sale of the Contracts, the Company, the Accounts, Distributor
and/or Broker shall be maintained so as to clearly and accurately
disclose the nature and details of the transactions. All records
maintained by the Broker in connection with this Agreement shall be
the property of the Company and shall be returned to the Company upon
termination of this Agreement, free from any claims or retention of
rights by the Broker. Nothing in this Section C(8) shall be
interpreted to prevent the Broker from retaining copies of any such
records which the Broker, in its discretion, deems necessary or
desirable to keep. The Broker shall keep confidential any information
obtained pursuant to this Agreement and shall disclose such
information only if the Company has authorized such disclosure, or if
such disclosure is expressly required by applicable federal or state
regulatory authorities.
(9) With respect to the products covered by this Agreement, as amended
from time to time, Broker shall notify Distributor of any material
change or intention to materially change its marketing operations. A
material change may arise from a change in terms of the number of
people selling the products, the emphasis or method of any aspect of
any marketing campaign, or otherwise. Such notice shall be given in
the manner specified in Section J. of this Agreement.
(10) Broker, each year during the term of this Agreement, shall, within 30
days of receipt, return to Distributor a Questionnaire regarding any
regulatory, civil and/or criminal proceedings, including arbitrations,
against the Broker or associated persons commenced or concluded by any
state insurance or securities department, the NASD, the SEC, or other
self-regulatory organization, and/or in any court of competent
jurisdiction during the twelve month period prior to the date of the
Questionnaire. Broker shall provide Distributor with a full
explanation regarding matters disclosed in the Questionnaire. Broker
also agrees to send to Distributor copies of all Disclosure Reporting
Forms applicable to its agents or representatives authorized to
solicit applications for and sell the Contracts simultaneously with
filing such forms with the NASD.
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7
D. COMPENSATION
(1) Pursuant to the Distribution Agreement between Distributor and
Company, Distributor shall cause Company to arrange for the payment of
commissions to Broker as compensation for the sale of each Contract
sold by an agent or representative of Broker. The amount of such
commission shall be based on a Compensation Schedule to be determined
by agreement of Company and Distributor. The Compensation Schedule may
thereafter be amended by Distributor. No compensation is payable
unless the Broker and the Agent have first complied with all
applicable insurance laws, rules and regulations. Company shall
identify to Broker with each such payment the name of the agent or
representative of Broker who solicited each Contract covered by the
payment. Notwithstanding any other provision in the Compensation
Schedule concerning chargebacks, if any variable contract is tendered
for redemption within seven business days after acceptance of the
Contract application no compensation shall be paid.
(2) Neither Broker nor any of its agents or representatives shall have any
right to withhold or deduct any part of any premium it shall receive
for purposes of payment of commission or otherwise. Neither Broker nor
any of its agents or representatives shall have an interest in any
compensation paid by Company to Distributor, now or hereafter, in
connection with the sale of any Contracts hereunder.
(3) Upon the termination of this Agreement, the Company will pay
commissions to the Broker on (a) net premiums which the Company
receives within sixty (60) days of the termination date on
applications written by the Broker on or before the termination date;
and (b) any renewal commission which would otherwise be due on
business placed with Distributor prior to the termination date of this
Agreement unless such receipt of renewal commissions is determined to
violate current directives to the contrary as provided by the NASD or
a court of competent jurisdiction.
C-25
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8
E. COMPLAINTS AND INVESTIGATIONS
(1) Broker and Distributor jointly agree to cooperate fully in any
regulatory investigation or proceeding or judicial proceeding arising
in connection with the Contracts marketed under this Agreement. Broker
shall furnish applicable federal and state regulatory authorities with
any information or reports in connection with its services or the
services of its agents or representatives under this Agreement which
such authorities may request in order to ascertain whether the
Company's, Broker's or Distributor's operations are being conducted in
a manner consistent with any applicable law or regulation.
F. TERM OF AGREEMENT; ENTIRE AGREEMENT
(1) This Agreement shall continue in force for one year from its effective
date and thereafter shall automatically be renewed every year for a
further one year period, except that either party may unilaterally
terminate this Agreement upon thirty (30) days' written notice to the
other party of its intention to do so.
(2) Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except (a) the agreements contained in Section
E hereof; (b) the indemnity set forth in Section G hereof; and (c)
compensation payable pursuant to Section D(3).
G. INDEMNITY
(1) Broker shall be held to the exercise of reasonable care in carrying
out the provisions of this Agreement.
(2) Distributor agrees to indemnify and hold harmless Broker and each of
their current and former directors and officers against any losses,
claims, damages or liabilities, joint or several, to which Broker or
such officer or director become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact, required to
be stated therein or necessary to make the statements therein not
misleading, contained in any Registration Statement or any
post-effective amendment thereof or in any Prospectus, or any sales
literature provided by the Company or by the Distributor, or the
C-26
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9
failure of Company, Distributor, their officers, employees, or agents
to comply with the provisions of this Agreement; and Company will
reimburse Broker and any director or officer or controlling person
thereof for any legal or other expenses reasonably incurred by Broker
or such director, officer or controlling person in connection with
investigating or defending any such loss, claims, damage, liability or
action. This indemnity agreement will be in addition to any liability
which Company may otherwise have.
(3) Broker agrees to indemnify and hold harmless Company and Distributor
and each of their current and former directors and officers and each
person, if any, who controls or has controlled Company or Distributor
within the meaning of the 1933 Act or the 1934 Act, against any
losses, claims, damages or liabilities to which Company or Distributor
and any such director or officer or controlling person may become
subject, under the 1933 Act, 1934 Act, or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon:
(a) Any unauthorized use of sales materials or any verbal or written
misrepresentations or any unlawful sales practices concerning the
Contracts by Broker, its registered representatives, agents,
directors, officers, employees or other persons who are or should
be under its control or supervision; or
(b) Claims by agents or representatives or employees of Broker for
commissions, service fees, development allowances or other
compensation or remuneration of any type;
(c) The failure of Broker, its officers, employees, or agents to
comply with the provisions of this Agreement; and Broker will
reimburse Company and Distributor and any director or officer or
controlling person of either for any legal or other expenses
reasonably incurred by Company, Distributor, or such director,
officer or controlling person in connection with investigating or
defending any such loss, claims, damage, liability or action.
This indemnity agreement will be in addition to any liability
which Broker may otherwise have.
C-27
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10
H. ASSIGNABILITY
This Agreement shall not be assigned by either party without the written
consent of the other.
I. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New Jersey.
J. NOTICE
Any notice required under this Agreement shall be given when sent by
first-class mail to the other party at its address shown below.
If to Broker:
Prudential Securities Incorporated
One Seaport Plaza
New York, New York 10292-0001
If to Distributor:
The Prudential Insurance Company of America
213 Washington Street - 14th floor
Newark, NJ 07102
Attention: Daria Benson
K. CONFIDENTIALITY
Each party shall treat as confidential all information provided by one
party to another, pursuant to this agreement, including but not limited to
the names and addresses of the owners and annuitants of the Contracts. The
foregoing shall not be applicable to any information that is required to be
disclosed by judicial or administrative process or otherwise by applicable
law.
C-28
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11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PRUCO SECURITIES CORPORATION
By:
---------------------------------------
Kenneth Sanford
Vice President
PRUDENTIAL SECURITIES INCORPORATED
By:
---------------------------------------
C-29
<PAGE>
SCHEDULE A TO SELECTED BROKER AGREEMENT BY AND BETWEEN
PRUDENTIAL SECURITIES, INC.
AND
PRUCO SECURITIES CORPORATION
CONTRACTS FOR PRUCO LIFE INSURANCE COMPANY
o Discovery Life Plus
(single payment variable life insurance policy)
effective as of July 19, 1994
o PruSelect II
(flexible payment variable life insurance policy)
effective as of July 19, 1994
o Discovery Preferred
(flexible payment variable annuity and market-value adjusted
annuity contract) effective as of November 20, 1995
o Discovery Select
(flexible payment variable annuity and market-value adjusted
annuity contract) effective October 7, 1996
CONTRACTS FOR PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
o Discovery Select
(flexible payment variable annuity and market-value adjusted
annuity contract) effective ???
CONTRACTS FOR THE PRUDENTIAL LIFE INSURANCE COMPANY OF ARIZONA
o None
CONTRACTS FOR THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
o Variable Appreciable Life
(flexible payment variable whole life policy)
effective as of July 19, 1994
o Discovery Plus
(flexible payment deferred variable annuity)
effective as of July 19, 1994
C-30
<PAGE>
o Variable Investment Plan
(flexible payment deferred variable annuity)
effective as of July 19, 1994
o Survivorship Preferred
(flexible payment survivorship variable life policy)
effective as of December 31, 1995
C-31
- --------------------------------------------------==============================
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Newark, New Jersey 07102
A STOCK COMPANY SUBSIDIARY OF
The Prudential Insurance Company of America
[PRUDENTIAL LOGO]
ANNUITANT(S) JOHN DOE XXXXXXXX CONTRACT NUMBER
MARY DOE DECEMBER 1, 1996 CONTRACT DATE
ANNUITY DATE DECEMBER 1, 2051
AGENCY R-NK 1
================================================================================
This is an annuity contract. Subject to the provisions of the contract, and in
consideration of any purchase payment you make and we accept, we will make
annuity payments starting on the Annuity Date we show above.
Please read the contract carefully; it is a legal contract between you and Pruco
Life Insurance Company. Expense charges applicable to the contract are shown on
a Contract Data page. If you have a question about the contract, or a claim, see
one of our representatives or get in touch with one of our offices.
BENEFITS AND VALUES UNDER THIS CONTRACT MAY BE ON A VARIABLE BASIS. AMOUNTS
DIRECTED INTO ONE OR MORE OF THE VARIABLE INVESTMENT OPTIONS WILL REFLECT THE
INVESTMENT EXPERIENCE OF THOSE INVESTMENT OPTIONS. THEY ARE SUBJECT TO CHANGE
BOTH UP AND DOWN AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT. AMOUNTS DIRECTED
INTO THE MARKET-VALUE-ADJUSTMENT OPTION(S) MAY BE ADJUSTED UPWARD OR DOWNWARD BY
THE APPLICATION OF A MARKET-VALUE-ADJUSTMENT FORMULA. SEE THE MARKET-VALUE
ADJUSTMENT (MVA) PROVISION FOR A DESCRIPTION OF THE FORMULA. VALUES ARE
AVAILABLE WITHOUT AN ADJUSTMENT DURING THE 30-DAY PERIOD AFTER THE INTEREST
CELL'S MATURITY.
10 DAY RIGHT TO CANCEL CONTRACT.--If you return this contract to us not later
than 10 days after you receive it, we will return your money in accordance with
applicable law and the contract will be canceled. All you have to do is take it
or mail it to one of our offices or to the representative who sold it to you.
Signed for Pruco Life Insurance Company
an Arizona Corporation
/s/ SPECIMEN
-------------------------
VARIABLE ANNUITY CONTRACT WITH FLEXIBLE PURCHASE PAYMENTS. ANNUITY PAYMENTS
STARTING ON ANNUITY DATE. BENEFIT PAYABLE AS STATED UPON DEATH BEFORE ANNUITY
DATE. CONTRACT VALUES REFLECT INVESTMENT RESULTS. MARKET-VALUE-ADJUSTMENT
OPTION(S) SUBJECT TO MARKET-VALUE ADJUSTMENTS. ELIGIBLE FOR ANNUAL DIVIDENDS AS
STATED UNDER PARTICIPATION.
================================================================================
(VFM--96)--NY
C-32
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- --------------------------------================================================
GUIDE TO CONTENTS
PAGE
CONTRACT DATA ............................................................. 3
Basic Contract Data, Including Individuals Covered by
the Contract, Contract Minimums, Charges, Available Investment
Options, and Initial Allocations
DEFINITIONS ............................................................... 5
PURCHASE PAYMENTS ......................................................... 5
When Permitted; Invested Purchase Payments; Allocations
INTEREST-RATE INVESTMENT OPTIONS .......................................... 6
Options Available; Interest Rates; Interest Cell
VARIABLE INVESTMENT OPTIONS ............................................... 7
Variable Separate Account; Separate Account
Investments; Variable Investment Options
CONTRACT FUND ............................................................. 7
MARKET-VALUE ADJUSTMENT (MVA) ............................................. 8
Market-Value Adjustment (MVA); Market-Value Factor;
Effect of Market-Value Adjustment
TRANSFERS ................................................................. 9
WITHDRAWALS ............................................................... 10
Amount Available for Withdrawal; Withdrawal Charges;
Allocation of Withdrawals; Charge-Free Amounts; Waiver of
Withdrawal Charges
BENEFICIARY ............................................................... 11
DEATH OF ANNUITANT BEFORE ANNUITY DATE .................................... 12
DEATH OF ANNUITANT ON OR AFTER ANNUITY DATE ............................... 12
PAYOUT PROVISIONS ......................................................... 13
Choosing an Option; Options Described; Other Payout Options;
When No Option Chosen; Interest Rate; Withdrawal Charges
ANNUITY SETTLEMENT TABLES ................................................. 14
Amounts Payable
GENERAL PROVISIONS ........................................................ 15
Quarterly Report; The Contract; Contract Modifications; Change of Annuity
Date; Ownership and Control; Currency; Misstatement of Age or Sex;
Incontestability; Proof of Life or Death; Assignment; Deferring Payment;
Changes; Participation (Dividends); Terminally Ill; Eligible Nursing Home;
Eligible Hospital
Page 2
(VFM--96)
C-33
<PAGE>
CONTRACT NUMBER XXXXXXXX
CONTRACT DATA
Annuitant(s)
First Annuitant
JOHN DOE Male 35
Co-Annuitant
MARY DOE Female 35
- --------------------------------------------------------------------------------
BASIC CONTRACT INFORMATION
Contract Number XXXXXXXX
Contract Date DECEMBER 1, 1996
Annuity Date DECEMBER 1, 2051
Beneficiary Class 1 Robert Doe, SON
Class 2 Susan Smith, SISTER
- --------------------------------------------------------------------------------
PURCHASE PAYMENTS
The purchase payment paid on the Contract Date is $10,000.00.
The minimum initial purchase payment is $10,000.OQ. The minimum subsequent
purchase payment is $1,000.00.
- --------------------------------------------------------------------------------
OTHER MINIMUMS
The minimum withdrawal amount is $500.00.
The Minimum Interest Crediting Rate on the Interest-Rate Investment Option
is 3%.
- --------------------------------------------------------------------------------
EXPENSE CHARGES
The expense charges deducted from the contract fund (see the Contract Fund
provision for a complete description of the fund and how it increases and
decreases) are:
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3
(VFM~-96)
C-34
<PAGE>
CONTRACT NUMBER XXXXXXX
CONTRACT DATA CONTINUED
Daily Mortality and Expense Risk Charge - the maximum daily charge is
.00340349%, which is equivalent to an annual rate of 1.25%.
Daily Administrative Charge - the maximum daily charge is .00041065%, which is
equivalent to an annual rate of .15%.
Annual Administrative Charge - the charge is $30.00. It is deducted on the
Contract Anniversary and when a surrender (i.e., full withdrawal) of the
contract occurs, if the contract fund at the time is then less than $50,000.00.
- --------------------------------------------------------------------------------
TRANSACTION CHARGE
The transaction charge for each transfer after the first 12 in a contract
year is $25.00. We reserve the right to limit the number of transfers in
order to comply with federal, state or local law.
WITHDRAWAL CHARGE
The withdrawal charge (see the Withdrawals provision for a full discussion
of how this charge is applied) is a percentage of the amount withdrawn that
is subject to the charge, and depends on the Contract Year in which the
withdrawal is made.
-----------------------------------------------
Year of Withdrawal Withdrawal Charge
-----------------------------------------------
1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
8 and later 0%
-----------------------------------------------
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3A
(VFM--96)
C-35
<PAGE>
CONTRACT NUMBER XXXXXXXX
CONTRACT DATA CONTINUED
- --------------------------------------------------------------------------------
INVESTMENT OPTIONS
INTEREST-RATE INVESTMENT OPTIONS
As of the contract date, two interest-rate investment options are
available, a one-year fixed-interest-rate option (the Fixed-Rate option)
and a seven year market-value-adjustment option (the MVA option). Interest
is credited at declared rates to amounts held in each of these options. For
the MVA option, if money is withdrawn prior to the end of the maturity
date, there will be a market-value adjustment, which may increase or
decrease the value of amounts in that option.
VARIABLE-RATE INVESTMENT OPTIONS
The following variable investment options are available through allocation
to subaccounts of the Pruco Life Flexible Premium Variable Annuity Account.
We reserve the right to limit the availability of the below options, if
necessary, in order to comply with federal, state or local law.
- --------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS (SUBACCOUNTS) AVAILABLE
THE PRUDENTIAL SERIES FUND
Money Market Portfolio
Diversified Bond Portfolio
Equity Portfolio
Prudential Jennison Portfolio
Global Portfolio
Stock Index Portfolio
High Yield Bond Portfolio
Equity Income Portfolio
T. ROWE PRICE
Equity Income Portfolio
International Stock Portfolio
OPCAP ADVISORS
OCC Accumulation Trust Managed Portfolio
OCC Accumulation Trust Small Cap Portfolio
AIM
V.I. Value Fund
V.I. Growth and Income Fund
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3B
(VFM--96)
C-36
<PAGE>
CONTRACT NUMBER XXXXXXXX
CONTRACT DATA CONTINUED
JANUS
Aspen Growth Portfolio
Aspen International Growth Portfolio
MFS
Emerging Growth Series
Research Series
WARBURG PIN~US
Post-Venture Capital Portfolio
XXXXXXXXXXXXXX
XXXXXXXXXXXXXX
- --------------------------------------------------------------------------------
INITIAL ALLOCATION OF INVESTED PREMIUM AMOUNTS
The Prudential Series Fund Global Portfolio 40%
The Prudential Series Fund Equity Portfolio 30%
Janus Aspen Growth Portfolio 10%
One-Year Fixed-Rate Option 10%
Seven-Year MVA Option 10%
For any portion of the purchase payment allocated on the Contract Date to
an interest-rate investment option, the interest rates are:
One-Year Fixed-Rate Option 6%
Seven-Year MVA Option 8%
END CONTRACT DATA
Page 3C
(VFM--96)
C-37
<PAGE>
CONTRACT NUMBER XXXXXXXX
- --------------------------------------------------------------------------------
ENDORSEMENTS
(Only we can endorse this contract)
Page 4
(VFM--96)
C-38
<PAGE>
- --------------------------------------------------------------------------------
DEFINITIONS
We, Our, and Us.--Pruco Life Insurance Company of New Jersey, a New Jersey
corporation, or any affiliated company.
You and Your.--The owner of the contract.
Annuitant(s).--The person or persons named on the first page. If two persons are
named, one of the two is named on page 3 as First Annuitant, the other as
Co-Annuitant. In that case, the Beneficiary provision of the contract will be
based on the death of the last survivor of the persons so named.
Payee.--A beneficiary who has a right to receive a settlement under this
contract.
SEC.--The Securities and Exchange Commission.
Contract Date.--The date we receive the initial purchase payment. We show the
Contract Date on page 3.
Contract Anniversary.--The same day and month as the Contract Date in each later
year.
Contract Year.--A year which starts on the Contract Date or on a Contract
Anniversary.
Business Day.--Any day the New York Stock Exchange is open for business.
Annuity Date.--The date our first annuity payment to you is due. We show the
Annuity Date on page 3.
- --------------------------------------------------------------------------------
PURCHASE PAYMENTS
WHEN PERMITTED
The initial purchase payment must be paid on the Contract Date. Subsequent
purchase payments may be made at any time before the Annuity Date. Minimum
purchase payment amounts are shown on a Contract Data page; we reserve the right
to establish a maximum amount.
INVESTED PURCHASE PAYMENTS
Corresponding to each purchase payment, there is an "invested purchase payment."
This is the balance of the purchase payment after we make any applicable
deduction for: (1) state and local premium taxes; and (2) any other type of tax
(or component thereof) measured by or based upon the amount of the purchase
payment we receive.
ALLOCATIONS
You may allocate all or a part of an invested purchase payment to one or more of
the investment options described below. The allocation of the initial invested
purchase payment is shown on a Contract Data page. You may change the allocation
of future invested purchase payments at any time. The change will take effect on
the date we receive your request. If, after the initial purchase payment, we
receive a purchase payment without allocation instructions, we will allocate the
corresponding invested purchase payment in the same proportion as the most
recent purchase payment you made (unless that was a purchase payment you
directed us to allocate on a one-time-only basis).
We reserve the right to establish minimum percentage and dollar amounts for
invested purchase payment allocations.
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INTEREST--RATE INVESTMENT OPTIONS
OPTIONS AVAILABLE
As shown on a Contract Data page, two types of interest-rate investment options
were available on the Contract Date: fixed-interest-rate option (Fixed-Rate
option) and market-value adjustment option (MVA option). We may add other
options in the future. Each option may be divided into interest cells (described
below).
INTEREST RATES
The annual interest rates applicable to the interest-rate investment options on
the Contract Date are shown on a Contract Data page. We will credit interest
each day on amounts allocated to any of these options at the daily equivalent of
the rate shown for that option. Interest rates for future allocations or
transfers to interest-rate investment options will be declared when those
allocations or transfers are made. The declared rates will never be less than
the Minimum Interest Crediting Rate shown on a Contract Data page.
INTEREST CELL
An interest cell is created whenever you allocate or transfer an amount to an
interest-rate investment option. We credit interest to the amount in each
interest cell daily at a specific rate declared for that interest cell until the
earliest of: the date it is withdrawn; the date it is transferred to another
investment option; the maturity date (the date the cell was established plus the
number of years it is expected to remain in effect); and the date as of which a
death benefit is determined. An interest cell's declared rate is guaranteed for
the Fixed-Rate option or if the amount in that cell is held to maturity.
Withdrawals and transfers from an MVA interest cell are subject to market-value
adjustments, which may increase or decrease the cell's value. Withdrawals may
also be subject to a withdrawal charge, which is described in Withdrawals below.
At the maturity date of an interest cell, you may elect to transfer the amount
in the cell into any of the investment options available on that date. Once you
have made an election and we have received it, it may not be reversed. If you do
not make an election to transfer within 30 days following the maturity date, we
will transfer the amount in the interest cell on the maturity date to an
interest-rate investment option with the same duration to maturity as the
maturing interest cell.
Amounts that are transferred into the same interest-rate investment option
during the 30-day period will receive the appropriate rate for that option,
effective as of the maturity date. Amounts that you withdraw, or transfer into
any different investment option, during the 30-day period will receive interest
from the maturity date to the date of withdrawal or transfer at the rate that
would have applied to those amounts if you had taken no action within the 30-day
period.
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VARIABLE INVESTMENT OPTIONS
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VARIABLE SEPARATE ACCOUNT
"Variable Separate Account" refers to the Pruco Life of New Jersey Flexible
Premium Variable Annuity Account, its successors, if any, and any other variable
separate accounts we add in the future. We established this account to hold and
invest the assets that support this contract and variable annuity contracts like
this one. The Variable Separate Account is divided into divisions called
"subaccounts," and the subaccounts available to you on the Contract Date are
listed on a Contract Data page. We may establish additional subaccounts.
Any income and realized or unrealized gains and losses in a subaccount are
credited to or charged against that subaccount. This is without regard to
income, gains, or losses in other investment options.
SEPARATE ACCOUNT INVESTMENTS
We may invest the assets of different subaccounts in different ways than are
shown on a Contract Data page. We will do so only with the consent of the SEC
and, if required, of the insurance regulator where this contract is delivered.
We will always keep assets in the Variable Separate Account with a total value
at least equal to the amount credited to all the subaccounts under contracts
like this one. That portion of the assets of the Variable Separate Account equal
to the reserves and other contract liabilities with respect to the Variable
Separate Account shall not be chargeable with liabilities or obligations arising
out of any other business we conduct. To the extent that those assets exceed
that amount, we may use them in any way we choose.
VARIABLE INVESTMENT OPTIONS
We show the options available on the Contract Date on a Contract Data page. We
may offer additional options.
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CONTRACT FUND
The term "contract fund" refers to the total of all amounts credited to your
contract as of any date as a result of your initial purchase payment and the
increases and decreases described below. Note that this is not the same as the
"cash value" of the contract, which is described under Withdrawals below.
On the contract date, the contract fund is equal to the initial invested
purchase payment. After that, the fund as of any day is determined by starting
with the fund at the end of the previous day and adjusting it for items that
increase it or decrease it.
Items that increase the contract fund are: invested purchase payments; positive
investment results in a variable investment option; interest credited to an
interest-rate investment option; and any positive market-value adjustment
associated with a transfer or withdrawal.
Items that decrease the contract fund are: withdrawals and the charges
associated with them; negative investment results in a variable investment
option; mortality and expense risk charges; administration charges; any
applicable federal, state, or local taxes charged to the contract; and any
negative market-value adjustment associated with a transfer or withdrawal.
Investment results are credited daily. Mortality and expense risk charges are
deducted daily. There are two administration charges: one is deducted daily, and
one is deducted on the Contract Anniversary and at the time of a surrender.
Other charges may be assessed only if the appropriate event occurs. The maximum
charges we may deduct are shown on a Contract Data page.
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MARKET--VALUE ADJUSTMENT
MARKET-VALUE ADJUSTMENT (MVA)
The market-value adjustment (MVA) is made when a withdrawal or transfer is
requested from an MVA option. It is used to calculate the amount available for
withdrawal or transfer, and the amount remaining after the withdrawal or
transfer. It applies only to the interest cell from which the withdrawal or
transfer is made (no market-value adjustment will apply to an interest cell in
the event of a withdrawal or transfer within the 30-day period following the
cell's maturity).
We determine the amount available for withdrawal from a cell in two steps. We
first determine a "market-value factor." This is based on the time remaining to
maturity of the interest cell and the difference between the declared interest
rate for that cell and a current rate that we establish. We then multiply that
interest cell's portion of the contract fund by the sum of 1 plus the
market-value factor. The formula for the market-value factor is shown below.
To calculate the interest cell's portion of the contract fund after the
withdrawal or transfer, we first subtract the amount withdrawn or transferred
(including any charges) from the interest cell's original portion of the
contract fund. The remaining amount, divided by the sum of 1 plus the
market-value factor, is the interest cell's portion of the contract fund after
the withdrawal or transfer.
MARKET-VALUE FACTOR
The market-value factor is determined as: (M/12)x(R-C), where:
(M) is the number of whole months (not less than one) to the interest cell's
maturity date;
(R) is the interest cell's declared interest rate expressed as a decimal; for
example, 5 percent = .05; and
(C) is the current rate referred to above, in effect on the date of the
withdrawal or transfer, for a period to maturity one year longer than the
number of whole years remaining until the interest cell's maturity date as
of the date we receive your request. This rate is also expressed as a
decimal.
The market-value factor will never be greater than 0.4 or less than minus 0.4.
EFFECT OF MARKET-VALUE ADJUSTMENT
If the current interest rate is higher than the interest cell's declared
interest rate, the market-value factor will be negative, and we will reduce the
contract fund by more than the sum of the withdrawal and the withdrawal charge.
If the current rate is lower, the market-value factor will be positive, and we
will reduce the contract fund by less than the sum of the withdrawal and the
withdrawal charge.
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TRANSFERS
You may transfer amounts into or out of investment options, subject to the
following restrictions:
1. We impose a transaction charge, shown on a Contract Data page, if you make
more than 12 transfers in a Contract Year. The charge is taken pro-rata
from the investment options from which the transfer is made.
2. You may not make a transfer from an interest cell in the Fixed-Rate
option, except during the 30-day period following the cell's maturity date,
or under a plan for periodic transfers that we make available to all owners
of contracts like this one.
3. You may not make a transfer from an investment option to the same
investment option.
The transfer will take effect as of the end of the valuation period on the date
we receive valid notification from you, if that is a Business Day. Otherwise, it
will take effect on the next Business Day. A valuation period is the period of
time from one determination of the value of the amount invested in a subaccount
to the next such determination. Such determinations are made once each Business
Day, generally at 4:15 p.m., New York City time.
Any amount transferred from an MVA cell is subject to a market-value adjustment,
unless the transfer is made in the 30-day period following the maturity date of
the interest cell. If you do not direct us otherwise, when we transfer money
from a Fixed-Rate option or MVA option, we will take the money first from the
oldest eligible interest cell in the option.
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WITHDRAWALS
AMOUNT AVAILABLE FOR WITHDRAWAL
You may make a withdrawal at any time prior to the Annuity Date while at least
one Annuitant is living (the minimum withdrawal amount is shown on a Contract
Data page). The total amount available for withdrawal at any time is the "cash
value" of the contract. The cash value is equal to the contract fund, plus or
minus the market-value adjustment of all amounts in MVA options, minus the
withdrawal charge and the administrative charge that may apply for a surrender
of the contract.
WITHDRAWAL CHARGES
A withdrawal charge may apply if you make a withdrawal during the first seven
Contract Years. The amount of the charge is a percentage, shown on a Contract
Data page, of any amount to be withdrawn in excess of the applicable charge-free
amount described below. If you ask for a withdrawal of a specific dollar amount,
we will deduct enough from the contract fund to provide the withdrawal charge
and provide you the amount you asked for. If you request a percentage
withdrawal, unless you direct otherwise, we will apply that withdrawal pro-rata
across all investment options. The requested percentage will be applied to each
investment option in determining the gross amount withdrawn. In this instance,
any applicable withdrawal charge, in addition to the withdrawal, will be applied
pro-rata across all investment options. The withdrawal charge will never be
greater than that permitted by any applicable law or regulation.
ALLOCATION OF WITHDRAWALS
You may direct that a withdrawal be made from either an interest-rate investment
option, a variable investment option, or both. If you direct that some or all of
a withdrawal be made from an interest-rate investment option, you may direct
that the withdrawal be made from a specific interest cell or cells.
If you do not specify the investment option or options from which the withdrawal
is to be made, here is how we will allocate the withdrawal. We will take the
withdrawal (and the withdrawal charge) on a pro-rata basis from all investment
options. Within the interest-rate investment options, we will take the
withdrawal first from the oldest eligible interest cell or cells in those
options.
CHARGE-FREE AMOUNTS
Certain amounts (the charge-free amounts) may be withdrawn without incurring a
withdrawal charge. The charge-free amount available in any current Contract Year
is equal to:
(a) 10% of any portion of total purchase payments made in the current and all
prior Contract Years in excess of total purchase payments withdrawn in
prior Contract Years; plus
(b) any charge-free amount available in the prior Contract Year that has not
been withdrawn; plus
(c) any portion of the withdrawal amount in excess of: the sum of all purchase
payments made reduced by the amount of all prior withdrawals.
For purposes of determining withdrawal charges and charge-free amounts,
withdrawals are always assumed to come first from purchase payments.
WAIVER OF WITHDRAWAL CHARGES
We will waive all withdrawal charges upon receipt of due proof that a sole or
last surviving Annuitant is Terminally Ill, or has been confined to an Eligible
Nursing Home or Hospital continuously for at least three months. See the General
Provisions for definitions of these terms. This waiver is not available if the
contract has been assigned.
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BENEFICIARY
You may designate or change a beneficiary to receive any amount due if the sole
or last surviving Annuitant dies before the Annuity Date. You may initiate a
change to the beneficiary designation by completing a change form, which you can
obtain from us or from your representative. We may also ask you to send us the
contract. The change will take effect only when we process the request. Then any
previous beneficiary's interest will end as of the date of the request, even if
no Annuitant is living when we process the request. Any beneficiary's interest
is subject to the rights of any assignee we know of.
When a beneficiary is designated, any relationship shown is to the Annuitant
(First Annuitant if two Annuitants are named on page 3) unless otherwise
specified.
To show priority among beneficiaries, we will use numbered classes, so that the
class with first priority is called class 1, the class with next priority is
called class 2, and so on. If two Annuitants are named on page 3, the term
"Annuitant" refers to the last surviving Annuitant. The following statements
apply to beneficiaries unless a Contract Data page, contract endorsement or
change request that we have processed specifies otherwise:
1. One who survives the Annuitant will have the right to be paid only if no
one in a prior class survives the Annuitant.
2. One who has the right to be paid will be the only one paid if no one else
in the same class survives the Annuitant.
3. Two or more in the same class who have the right to be paid will be paid in
equal shares.
4. If none survives the Annuitant, we will pay in one sum to the Annuitant's
estate.
Before we make a payment, we have the right to decide what proof we need of the
identity, age or any other facts about any persons designated as beneficiaries.
If beneficiaries are not designated by name and we make payment(s) based on that
proof, we will not have to make the payment(s) again.
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DEATH OF ANNUITANT BEFORE ANNUITY DATE
If a sole or last surviving Annuitant dies before the Annuity Date, then, when
we receive due proof of death and any other documentation we need, the
beneficiary is entitled to receive a death benefit equal to the greatest of:
(a) the contract fund (without any market-value adjustment) as of the date we
receive due proof of death and any other documentation we need;
(b) the total invested purchase payments made less the total withdrawals made
(including withdrawal charges); and
(c) The minimum guaranteed death benefit less certain withdrawals described
below. On the third Contract Anniversary, we set the minimum guaranteed
death benefit equal to the contract fund. On each subsequent triennial
Contract Anniversary, the minimum guaranteed death benefit is reset to the
greater of: (1) the previous minimum guaranteed death benefit less total
withdrawals made in the prior three Contract Years; and (2) the contract
fund as of that Contract Anniversary. For death occurring between triennial
Contract Anniversaries, we subtract from the minimum guaranteed death
benefit any withdrawals made since the latest triennial Contract
Anniversary.
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DEATH OF ANNUITANT ON OR AFTER ANNUITY DATE
If an Annuitant dies on or after the Annuity Date, the payout provision then in
effect will govern whether and to whom we will make any payment.
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PAYOUT PROVISIONS
CHOOSING AN OPTION
You may use the contract fund as of the Annuity Date, plus or minus any
market-value adjustment, to provide an income to the Annuitant(s) by choosing
one or more of the options we describe below at any time before the Annuity
Date. But, for any annuity option, we will first deduct any charge for taxes
attributable to premiums, and any applicable withdrawal charges, described
below. We offer the same annuity options to the Payee that we offer to an
Annuitant. And we determine monthly payments for the Payee in the same way we do
for an Annuitant.
Your right to choose an option is subject to all these conditions: (1) You must
ask for the option in writing and in a form which meets our needs. (2) You must
send the contract to us to be endorsed. (3) If we require it, you must give us
due proof of the date of birth of the person on whose life an annuity payment is
based. (4) We must have your request, the contract and any required due proof(s)
of the date(s) of birth before the Annuity Date.
The option you choose will take effect on the Annuity Date if: (1) the person on
whose life the annuity is to be based is living on that date; (2) the first
payment under the option will be at least $20; and (3) you do not void the
choice by making a later choice before the Annuity Date.
If two Annuitants are named in the contract and both are living, payment will be
based on the life of the First Annuitant, as named on page 3.
OPTIONS DESCRIBED
When we use the word Annuitant in the following paragraphs we mean the Annuitant
for whom the annuity described was chosen and who is to receive payment under
the annuity.
For an Annuitant, the first payment under these options will be made on the
Annuity Date.
For a Payee, unless a later date is requested, the first payment will be made on
the first day of the earliest calendar month on or after the day we have
received the request for the payout and due proof of the Annuitant's death and
such claim forms and other evidence as may be satisfactory to us.
Here are the options we offer. We may also consent to other arrangements.
OPTION 1 (INSTALLMENTS FOR A FIXED PERIOD)
We will make equal payments for up to 25 years. The Option 1 Table shows the
minimum amounts we will pay.
OPTION 2 (LIFE INCOME)
We will make monthly payments for as long as the person on whose life the payout
is based lives, with payments certain for 120 months. The Option 2 Table shows
the minimum amounts we will pay.
OPTION 3 (INTEREST PAYMENT)
We will hold an amount at interest at the rate indicated below. At your choice,
we will pay the interest annually, semi-annually, quarterly, or monthly.
OTHER PAYOUT OPTIONS
We may offer other payout options. Contact one of our representatives or one of
our offices for information.
WHEN NO OPTION CHOSEN
If no choice takes effect on the Annuity Date, payout under Option 3 (Interest
Payment Option) will become effective.
INTEREST RATE
Payments under any of the options will be calculated assuming an effective
interest rate of at least 3% a year. We may include more interest.
WITHDRAWAL CHARGES
If you choose Option 1 or Option 3, we will apply a withdrawal charge in the
same way as we would if you had made a withdrawal (see Withdrawals). Any amount
used to provide income under Option 2 will be paid without charge. If you choose
any other method of payment not described in this contract, we will tell you if
it is subject to a withdrawal charge.
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ANNUITY SETTLEMENT TABLES
AMOUNTS PAYABLE
For Options 1 and 2, we will use the table below to compute the minimum amount
of the annuity payment.
In the Annuity Dates is not a Contract Anniversary, we will adjust the amounts
accordingly.
When we computed the amounts we show in the Option 2 Table, we adjusted the 1983
Table (a) to an age last birthday basis, less three years; we used an interest
rate of 3-1/2% per year. If the age is over 80, the rate for age 80 will be
used.
OPTION 1 TABLE
---------------------------
MINIMUM AMOUNT OF
MONTHLY PAYMENT FOR
EACH $1,000, THE FIRST
PAYABLE IMMEDIATELY
---------------------------
Number Monthly
of Years Payment
---------------------------
1 $84.65
2 43.05
3 29.19
4 22.27
5 18.12
6 15.35
7 13.38
8 11.90
9 10.75
10 9.83
11 9.09
12 8.46
13 7.94
14 7.49
15 7.10
16 6.76
17 6.47
18 6.20
19 5.97
20 5.75
21 5.56
22 5.39
23 5.24
24 5.09
25 4.96
---------------------------
Multiply the monthly amount
by 2.989 for quarterly,
5.952 for semi-annual or
11.804 for annual.
---------------------------
OPTION 2 TABLE
-----------------------------------------------------------------
Amount of Annuity Payment for
each $1,000 applied on the Annuity Date
-----------------------------------------------------------------
Age Male Female Age Male Female
-----------------------------------------------------------------
41 $3.88 $3.67 61 $5.25 $4.79
42 3.92 3.70 62 5.36 4.89
43 3.97 3.74 63 5.48 4.98
44 4.01 3.78 64 5.60 5.09
45 4.06 3.82 65 5.73 5.20
46 4.12 3.86 66 5.87 5.31
47 4.17 3.90 67 6.01 5.43
48 4.23 3.94 68 6.15 5.56
49 4.28 3.99 69 6.30 5.70
50 4.35 4.04 70 6.46 5.84
51 4.41 4.09 71 6.62 5.99
52 4.48 4.15 72 6.79 6.15
53 4.55 4.21 73 6.96 6.31
54 4.62 4.27 74 7.13 6.49
55 4.70 4.33 75 7.30 6.67
56 4.78 4.40 76 7.48 6.85
57 4.86 4.47 77 7.66 7.04
58 4.95 4.54 78 7.83 7.24
59 5.05 4.62 79 8.00 7.44
60 5.15 4.71 80 8.17 7.64
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GENERAL PROVISIONS
QUARTERLY REPORT
We will send you a report four times each calendar year until the Annuity Date.
It will show the contract fund, the cash value, the death benefit as of the
report date, the guaranteed minimum death benefit as of the report date,
interest and any other credits applied during the period covered by the report,
and charges and withdrawals during the period covered by the report. The report
will include any other data that may be required where this contract is
delivered. You may ask for a report like this at any time. But, except for the
four reports we send you during the year, we have the right to charge a fee for
each report. If you have chosen the MVA option, we shall also notify you 15 to
45 days before the maturity of your interest cell of your rights to withdraw
funds without adjustment.
THE CONTRACT
This document forms the whole contract.
CONTRACT MODIFICATIONS
Only one of our officers with the rank or title of vice president or above may
agree to modify this contract, and then only in writing.
CHANGE OF ANNUITY DATE
You may change your Annuity Date if we consent. Any such change will be subject
to conditions that we then determine. The maximum annuity age is age 90.
OWNERSHIP AND CONTROL
Unless we endorse this contract to say otherwise: (1) the Annuitant (the First
Annuitant, if two are named) is the owner of the contract; (2) while any
Annuitant is living the owner alone is entitled to any contract benefit and
value, and the exercise of any right or privilege granted by the contract or by
us; (3) if two Annuitants are named and the First Annuitant dies while the
Co-Annuitant is living, the Co-Annuitant will become the owner; and (4) if there
is no Co-Annuitant and no contingent owner has been named, on the death of the
owner, the beneficiary becomes the owner for purposes of Section 72(s) of the
Internal Revenue Code of 1986, as amended, or any successor provision.
CURRENCY
Any money we pay, or which is paid to us, must be in United States currency.
MISSTATEMENT OF AGE
If any Annuitant's stated sex or date of birth or both are not correct, we will
change each benefit and the amount of each annuity payment to that which the
total purchase payment amounts would have bought for the correct sex and date of
birth. Also, we will adjust the amount of any payments we have already made.
Here is how we will do it: (1) We will deduct any overpayments, with interest at
5% a year, from any payment(s) due then or later. (2) We will add any
underpayments, with interest at 5% a year, to the next payment we make after we
receive proof of the correct sex and date of birth.
INCONTESTABILITY
We will not contest this contract. We consider all statements made in the
application for this contract to be representations, not warranties.
PROOF OF LIFE OR DEATH
Before we make a payment, we have the right to require proof of continued life
or proof of death, and any other documentation we need to make the payment, for
any person whose life or death determines whether or to whom we must make the
payment.
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ASSIGNMENT
We are under no obligation to comply with or honor an assignment unless we
receive it, or a copy of it. We are not obliged to see that an assignment is
valid or sufficient. If any Annuitant is living on the Annuity Date and an
assignment is in effect on that date, we have the right to pay the cash value in
one sum to the assignee.
This contract may not be assigned to a tax-qualified retirement plan or program
without our approval.
DEFERRING PAYMENT
We will usually pay any death benefit or withdrawal promptly. If the death
benefit or withdrawal is to be paid from a variable investrnent option, we have
the right to defer that payment for any period during which the New York Stock
Exchange is closed for trading (except for normal holiday closing) or when the
Securities and Exchange Commission has determined that a state of emergency
exists which may make payment of the death benefit or withdrawal impractical. We
reserve the right to defer payment of amounts from the interest-rate investment
options for up to 6 months.
CHANGES
We reserve the right, upon 90 days notice to you to:
1. restrict or refuse to accept any purchase payment;
2. establish minimum percentage and dollar amounts for invested purchase
payment allocations;
3. change any or all terms and provisions of the Annuity Settlement Tables,
but only with respect to any portion of an annuity settlement deriving from
purchase payments made on or after the effective date of the change and
from earnings on those purchase payments; and
PARTICIPATION (DIVIDENDS)
4. make any changes required by law.
This contract is eligible to participate in our divisible surplus. We do not
expect that any dividends will be payable on or before the Annuity Date. While
any payout provision or arrangement is in effect, the contract will share in our
surplus to the extent and in the way we decide.
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TERMINALLY III
We consider someone terminally ill who has a life expectancy of six months or
less. Proof of Terminal Illness must include a certification by a licensed
physician.
ELIGIBLE NURSING HOME
An institution or special nursing unit of a hospital that meets at least one of
the following requirements:
1. It is Medicare approved as a provider of skilled nursing care
services;
2. It is licensed as a skilled nursing home or as an intermediate care
facility by the state it is located in; or
3. It meets all the following requirements:
(a) It is licensed as a nursing home by the state it is located in;
(b) Its main function is to provide skilled, intermediate, or
custodial nursing care;
(c) It is engaged in providing continuous room and board
accommodations to 3 or more persons;
(d) It is under the supervision of a registered nurse (RN) or
licensed practical nurse (LPN);
(e) It maintains a daily medical record of each patient; and
(f) It maintains control and records for all medications dispensed.
Institutions that primarily provide residential facilitles are
not eligible nursing homes.
ELIGIBLE HOSPITAL
An institution that meets either of the following requirements:
1. It is accredited as a hospital under the Hospital Accreditation
Program of the Joint Commission on Accreditation of Healthcare
Organizations; or
2. It is legally operated, has 24-hour a day supervision by a staff of
doctors, has 24-hour a day nursing service by registered graduate
nurses, and either:
(a) It mainly provides general inpatient medical care and treatment
of sick and injured persons by the use of medical, diagnostic and
major surgical facilities. All such facilities are located in it
or are under its control; or
(b) It mainly provides specialized inpatient medical care and
treatment of sick or injured persons by the use of medical and
diagnostic facilities (including x-ray and laboratory). All such
facilities are located in it, are under its control, or are
available to it under a written agreement with a hospital (as
defined above) or with a specialized provider of these
facilities.
An eligible hospital is not an institution, or part of one, that: (a)
furnishes mainly homelike or custodial care, or training in the routines of
daily living; or (b) is mainly a school.
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VARIABLE ANNUITY CONTRACT WITH FLEXIBLE PURCHASE PAYMENTS. ANNUITY PAYMENTS
STARTING ON ANNUITY DATE. BENEFIT PAYABLE AS STATED UPON DEATH BEFORE ANNUITY
DATE. CONTRACT VALUES REFLECT INVESTMENT RESULTS. MARKET-VALUE-ADJUSTMENT OPTION
SUBJECT TO MARKET-VALUE ADJUSTMENTS. ELIGIBLE FOR ANNUAL DIVIDENDS AS STATED
UNDER PARTICIPATION.
Page 18
(VFM--96)
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DISCOVERY SELECT(sm)
ANNUITY APPLICATION
[LOGO] PRUDENTIAL
Application for a Flexible Payment Variable Deferred Annuity to the Pruco Life Insurance Company
Phoenix, AZ 85014, a stock company subsidiary of THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
===========================================================================================================
Prudential Annuity Service Center
PO Box 14200
New Brunswick, NJ 08906-4200
<CAPTION>
PLEASE PRINT USING BLUE OR BLACK INK
<S> <C> <C> <C>
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OWNER First Name MI. Last Name ([ ]Individual [ ]Corporation [ ]Trust [ ]Other___)
(Owner
is the |__|__|__|__|__|__|__|__|__|__|__|__|__| |__| |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Annuitant
unless
otherwise Street
indicated.)
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
City State Zip Code
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| |__|__| |__|__|__|__|__| |__|__|__|__|
SS#/TIN (Tax Identification Number) Date of Birth (mm-dd-year) Area Code Phone Number
|__|__|__|__|__|__|__|__|__| |__|__|__|__|__|__|__|__| |__|__|__| |__|__|__|__|__|__|__|
Male Female U.S. Citizen Non-Resident Alien Country
Section 1 |__| |__| |__| |__| |__|__|__|__|__|__|__|__|__|__|__|__|__|__|
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---------------------------------------------------------------------------------------------------------------
CONTINGENT First Name MI. Last Name ([ ]Individual [ ]Corporation [ ]Trust [ ]Other___)
OWNER
(If any) |__|__|__|__|__|__|__|__|__|__|__|__|__| |__| |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
(Do not
complete if
opening Street
an IRA.)
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
City State Zip Code
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| |__|__| |__|__|__|__|__| |__|__|__|__|
SS#/TIN (Tax Identification Number) Date of Birth (mm-dd-year)
|__|__|__|__|__|__|__|__|__| |__|__|__|__|__|__|__|__|
Male Female U.S. Citizen Non-Resident Alien Country
Section 2 |__| |__| |__| |__| |__|__|__|__|__|__|__|__|__|__|__|__|__|__|
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
ANNUITANT First Name MI. Last Name
(If Owner
is the |__|__|__|__|__|__|__|__|__|__|__|__|__| |__| |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Annuitant,
skip this
section.) Street
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
City State Zip Code
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| |__|__| |__|__|__|__|__| |__|__|__|__|
SS#/TIN (Tax Identification#) Date of Birth (mm-dd-year) Area Code Phone Number
|__|__|__|__|__|__|__|__|__| |__|__|__|__|__|__|__|__| |__|__|__| |__|__|__|__|__|__|__|
Male Female U.S. Citizen Non-Resident Alien Country
Section 3 |__| |__| |__| |__| |__|__|__|__|__|__|__|__|__|__|__|__|__|__|
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Any person who knowingly gives false or deceptive information when completing this form
for the purpose of defrauding the company may be guilty of insurance fraud.
- ---------------
ORD 96190--96 Ed. 7/96 {Bar Code...........}
- ---------------
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<CAPTION>
<S> <C> <C> <C>
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CO- First Name MI. Last Name
ANNUITANT
(If any) |__|__|__|__|__|__|__|__|__|__|__|__|__| |__| |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
(Do not
complete if
opening Street
an IRA.)
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
City State Zip Code
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| |__|__| |__|__|__|__|__| |__|__|__|__|
SS#/TIN (Tax Identification Number) Date of Birth (mm-dd-year)
|__|__|__|__|__|__|__|__|__| |__|__|__|__|__|__|__|__|
Male Female U.S. Citizen Non-Resident Alien Country
Section 4 |__| |__| |__| |__| |__|__|__|__|__|__|__|__|__|__|__|__|__|__|
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BENEFICIARY First Name MI. Last Name
|__|__|__|__|__|__|__|__|__|__|__|__|__| |__| |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Relationship to Annuitant Primary (Class 1)
|__|__|__|__|__|__|__|__|__|__|__|__|__| |X|
First Name MI. Last Name
|__|__|__|__|__|__|__|__|__|__|__|__|__| |__| |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Relationship to Annuitant Primary (Class 1) Secondary Class (2)
|__|__|__|__|__|__|__|__|__|__|__|__|__| |__| |__|
First Name MI. Last Name
|__|__|__|__|__|__|__|__|__|__|__|__|__| |__| |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Relationship to Annuitant Primary (Class 1) Secondary Class (2)
Section 5 |__|__|__|__|__|__|__|__|__|__|__|__|__| |__| |__|
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_ _ _
TYPE OF |_| NON-QUALIFIED |_| QUALIFIED |_| CUSTODIAL IRA
PLAN _
|_| IRA
Section 6A
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
SOURCE OF NON-QUALIFIED QUALIFIED
FUNDS _ _ _ _ _
|_| 1035 Exchange |_| Rollover |_| Direct Rollover |_| Transfer |_| Regular Contribution*
* Please apply my Regular Contribution to the following tax years:
Section 6B $|__|__|__|__|.|__|__| Yr.|__|__|__|__| $|__|__|__|__|.|__|__| Yr.|__|__|__|__|
-----------------------------------------------------------------------------------------------------
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PAYMENT
(Minimum I am investing $|__|__|__|__|__|__|__|.|__|__| in Discovery Select
$10,000)
Section 7 Please make check(s) payable to PRUDENTIAL.
-----------------------------------------------------------------------------------------------------
- ---------------
ORD 96190--96 Ed. 7/96
- ---------------
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PURCHASE INTEREST RATE OPTIONS GROWTH PORTFOLIOS
PAYMENT _ _ _ _ _ _
ALLOCATION 1 Year Fixed Rate Option (1YRFXD) |_| |_| |_|% Prudential Equity Portfolio (STOCK) |_| |_| |_|%
(Please write _ _ _ _ _ _
in what % of 7 Year Market Value Adjustment Option |_| |_| |_|% Prudential Jennison Portfolio (GROWTH) |_| |_| |_|%
your payment (7YRMVA) _ _ _
you want to AIM V.I. Value Fund (AIMVAL) |_| |_| |_|%
allocate to MONEY MARKET PORTFOLIOS _ _ _
the following _ _ _ Janus Aspen Series Growth Portfolio |_| |_| |_|%
options. This Prudential Money Market Portfolio (MMKT) |_| |_| |_|% (JANGRW)
total must _ _ _
equal 100%.) BOND PORTFOLIOS MFS Research Series (MFSRSR) |_| |_| |_|%
_ _ _
Prudential Diversified Bond Portfolio |_| |_| |_|% AGGRESSIVE GROWTH PORTFOLIOS
(BOND) _ _ _
_ _ _ MFS Emerging Growth Series (MFSEMG) |_| |_| |_|%
Prudential High Yield Bond Portfolio |_| |_| |_|% _ _ _
(HYLD) OpCap Advisors OCC Accumulation Trust |_| |_| |_|%
Small Cap Portfolio (OPPSMC)
BALANCED PORTFOLIO _ _ _
_ _ _ Warburg Pincus Post-Venture |_| |_| |_|%
OpCap Advisors OCC Accumulation Trust |_| |_| |_|% Capital Portfolio (WARVCP)
Managed Portfolio (OPPMAN)
INTERNATIONAL STOCK PORTFOLIOS
GROWTH & INCOME PORTFOLIOS _ _ _
_ _ _ Prudential Global Portfolio (GLEQ) |_| |_| |_|%
Prudential Stock Index Portfolio (STIX) |_| |_| |_|% _ _ _
_ _ _ Janus Aspen Series International |_| |_| |_|%
Prudential Equity Income Portfolio (HIDV) |_| |_| |_|% Growth Portfolio (JANINT)
_ _ _ _ _ _
AIM V.I. Growth & Income Fund (AIMGRI) |_| |_| |_|% T. Rowe Price International Stock |_| |_| |_|%
_ _ _ Portfolio (TRINST)
T. Rowe Price Equity Income Portfolio |_| |_| |_|%
Section 8 (TREQST) TOTAL 1 0 0 %
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
_ _
REPLACEMENT Will the proposed contract replace any existing insurance or annuity contract? |_| No |_| Yes If yes, list:
AND
AGGREGATION Company Name Contract Number
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| |__|__|__|__|__|__|__|__|__|
Year of Issue Plan
|__|__|__|__| |__|__|__|__|__|__|__|__|__|__|
Section 9 Did you purchase a non-qualified annuity from Prudential or an affiliated company this _ _
calendar year? If yes, list contract number and plan in "Additional Remarks" section 12. |_| No |_| Yes
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
SPECIAL Please check any services you would like to elect.
SERVICES _
|_| DOLLAR COST AVERAGING I authorize Prudential to automatically transfer funds from the portfolio I select
_ _ _ _
to the other portfolio(s) listed below: |_| Annually |_| Semi-Annually |_| Quarterly |_| Monthly
Please use investment codes from Section 8 to indicate selections
TRANSFER FROM:* ALLOCATE TO:** (must total 100%)
Portfolio |__|__|__|__|__|__| $|__|__|__|__|__|__|__| Portfolio |__|__|__|__|__|__| |__|__|__|%
or |__|__|__|% Portfolio |__|__|__|__|__|__| |__|__|__|%
*7 year Market Value Adjustment Option not available. Portfolio |__|__|__|__|__|__| |__|__|__|%
Portfolio |__|__|__|__|__|__| |__|__|__|%
**Two Interest Rate Options not available.
Section 10 I understand that the transfer will continue until I terminate the program in writing or until the funds in the
account from which money is being transferred are exhausted. I also understand that Prudential's Dollar Cost
Averaging program is subject to the rules and restrictions outlined in the prospectus.
-------------------------------------------------------------------------------------------------------------------
- ---------------
ORD 96190--96 Ed. 7/96
- ---------------
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
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SPECIAL _
SERVICES |_| AUTO-REBALANCING I want to maintain my allocation percentages by having my portfolio mix automatically
(continued) adjusted as allocated in my variable investment options in Section 8.
_ _ _ _
Adjust my portfolio mix: |_| Annually |_| Semi-Annually |_| Quarterly |_| Monthly
If the desired start date is different than the contract date, please specify:
Start Date: |__|__| |__|__| |__|__|__|__|
MM DD Year
To auto-rebalance to a percentage that is different than listed in Section 8, please complete and
attach a separate Auto-Rebalancing Form.
_
|_| TELEPHONE TRANSFERS Telephone transfers/reallocations will be accepted from the Contract Owner.
For your protection, appropriate identification must be provided. Please indicate if you wish to
extend authority as follows:
_
Section 10 |_| I authorize the Company to accept telephone transfers/reallocation instructions from my Registered
Investment Advisor for my non-qualified plan only. (This is applicable to Registered Investment
Advisors only).
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
_
SIGNATURES |_| CHECK HERE IF A STATEMENT OF ADDITIONAL INFORMATION IS DESIRED.
If applying for an IRA, the Owner acknowledges receiving a Questions and Answers on Individual Retirement
Annuities (IRAs) explanatory booklet and understands that he or she will be given a financial disclosure
statement with the contract.
No representative can make or change a contract or waive any of the Company's rights or needs. The Owner
believes this contract meets his/her needs and financial objectives. The Owner further (1) understands that
any amount of purchase payments allocated to a variable investment option will reflect the investment
experience of that option and, therefore, annuity payments and surrender values may vary and are not
guaranteed as to a fixed dollar amount and, (2) acknowledges receipt of the current prospectus for the
contract applied for and the variable investment options.
Signed at __________________________________________ ______________________
City, State Date
__________________________________________ __________________________________________
Signature of Owner (Individual, Signature of Annuitant
Corporation, Trust)
Section 11 __________________________________________
Signature of Co-Annuitant (if applicable)
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
REPRESENTATIVE _ _ _ _
SIGNATURE |_| 1 |_| 2 |_| 3 |_| 4
_ _
Do you have, from any source, facts that any person named as Owner or Contingent Owner above |_| |_|
may replace or change any current insurance or annuity in any company? If yes, give details No Yes
in "Additional Remarks" below.
This application is submitted in the belief that the purchase of this contract is appropriate for the Owner
based upon the information furnished. Reasonable inquiry has been made of the Owner concerning the Owner's
overall financial situation and needs and investment objectives.
The representative hereby certifies that all information contained in this application is true to the best
of his/her knowledge and belief.
_ _ _ _ _ _
_____________________________________________________ |_||_||_||_||_||_|
Name Registered Representative Contract Number
_____________________________________________________ _____________________________________________________
Signature Account #
_____________________________________________________ _____________________________________________________
Branch/Field Office Name Branch/Field Office Code
ADDITIONAL REMARKS
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
PRUDENTIAL ANNUITY SERVICE CENTER Overnight: PRUDENTIAL ANNUITY SERVICE CENTER
PO Box 14200 300 Columbus Circle
New Brunswick, NJ 08906-4200 Edison, NJ 08837
Section 12
Questions? Call 1-888-PRU-2888 (toll free)
-----------------------------------------------------------------------------------------------------------------
- ---------------
ORD 96190--96 Ed. 7/96
- ---------------
</TABLE>
C-56
POWER OF ATTORNEY
Know all men by these presents:
That I, ESTHER H. MILNES, of NEWARK, NEW JERSEY, a member of the Board of
Directors of Pruco Life Insurance Company of New Jersey, do hereby make,
constitute and appoint as my true and lawful attorneys in fact CLIFFORD E.
KIRSCH, THOMAS C. CASTANO, RICHARD E. MEADE, KIRK A. MONTGOMERY, AND THOMAS J.
LOFTUS, or any of them severally for me in my name, place and stead to sign,
where applicable: Annual Reports on Form 10-K, registration statements on the
appropriate forms prescribed by the Securities and Exchange Commission, and any
other periodic documents and reports required under the Investment Company Act
of 1940, the Securities Act of 1933 and the Securities Exchange Act of 1934, and
all amendments thereto executed on behalf of Pruco Life Insurance Company of New
Jersey and filed with the Securities and Exchange Commission for the following:
The Pruco Life of New Jersey Variable Appreciable Account and flexible
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Variable Insurance Account and scheduled
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Single Premium Variable Life Account and
flexible premium variable life insurance contracts, to the extent they
represent participating interests in said Account;
The Pruco Life of New Jersey Flexible Premium Variable Annuity Account
and flexible premium variable annuity contracts, to the extent they
represent the participating interests in said Account;
The Pruco Life of New Jersey Modified Guaranteed Annuity Account and
modified guaranteed annuity contracts;
The Pruco Life of New Jersey Single Premium Variable Annuity Account
and single payment variable annuity contracts, to the extent they
represent participating interests in said Account;
C-57
<PAGE>
The Pruco Life of New Jersey Variable Contract Real Property Account
and individual variable life insurance contracts and variable annuity
contracts, to the extent they represent participating interests in
said Account.
IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of November, 1996.
/s/ ESTHER H. MILNES
------------------------
Esther H. Milnes
State of New Jersey )
) SS
County of Essex )
On this 12th day of November, 1996, before me personally appeared ESTHER H.
MILNES known to me to be the person mentioned and described in and who executed
the foregoing instrument and she duly acknowledged to me that she executed the
same.
My commission expires: 7/26/99
/s/ ANN L. WELLBROCK
-----------------------------
Ann L. Wellbrock
A Notary Public of New Jersey
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<PAGE>
POWER OF ATTORNEY
Know all men by these presents:
That I, MENDEL A. MELZER, of NEWARK, NEW JERSEY, a member of the Board of
Directors of Pruco Life Insurance Company of New Jersey, do hereby make,
constitute and appoint as my true and lawful attorneys in fact CLIFFORD E.
KIRSCH, THOMAS C. CASTANO, RICHARD E. MEADE, KIRK A. MONTGOMERY, AND THOMAS J.
LOFTUS, or any of them severally for me in my name, place and stead to sign,
where applicable: Annual Reports on Form 10-K, registration statements on the
appropriate forms prescribed by the Securities and Exchange Commission, and any
other periodic documents and reports required under the Investment Company Act
of 1940, the Securities Act of 1933 and the Securities Exchange Act of 1934, and
all amendments thereto executed on behalf of Pruco Life Insurance Company of New
Jersey and filed with the Securities and Exchange Commission for the following:
The Pruco Life of New Jersey Variable Appreciable Account and flexible
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Variable Insurance Account and scheduled
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Single Premium Variable Life Account and
flexible premium variable life insurance contracts, to the extent they
represent participating interests in said Account;
The Pruco Life of New Jersey Flexible Premium Variable Annuity Account
and flexible premium variable annuity contracts, to the extent they
represent the participating interests in said Account;
The Pruco Life of New Jersey Modified Guaranteed Annuity Account and
modified guaranteed annuity contracts;
The Pruco Life of New Jersey Single Premium Variable Annuity Account
and single payment variable annuity contracts, to the extent they
represent participating interests in said Account;
C-59
<PAGE>
The Pruco Life of New Jersey Variable Contract Real Property Account
and individual variable life insurance contracts and variable annuity
contracts, to the extent they represent participating interests in said
Account.
IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of November, 1996.
/s/ MENDEL A. MELZER
------------------------
Mendel A. Melzer
State of New Jersey )
) SS
County of Essex )
On this 11th day of November, 1996, before me personally appeared MENDEL A.
MELZER known to me to be the person mentioned and described in and who executed
the foregoing instrument and he duly acknowledged to me that he executed the
same.
My commission expires: 8/11/99
/s/ LORA A. McPARTLAND
-----------------------------
Lora A. McPartland
A Notary Public of New Jersey
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<PAGE>
POWER OF ATTORNEY
Know all men by these presents:
That I, I. EDWARD PRICE, of NEWARK, NEW JERSEY, a member of the Board of
Directors of Pruco Life Insurance Company of New Jersey, do hereby make,
constitute and appoint as my true and lawful attorneys in fact CLIFFORD E.
KIRSCH, THOMAS C. CASTANO, RICHARD E. MEADE, KIRK A. MONTGOMERY, AND THOMAS J.
LOFTUS, or any of them severally for me in my name, place and stead to sign,
where applicable: Annual Reports on Form 10-K, registration statements on the
appropriate forms prescribed by the Securities and Exchange Commission, and any
other periodic documents and reports required under the Investment Company Act
of 1940, the Securities Act of 1933 and the Securities Exchange Act of 1934, and
all amendments thereto executed on behalf of Pruco Life Insurance Company of New
Jersey and filed with the Securities and Exchange Commission for the following:
The Pruco Life of New Jersey Variable Appreciable Account and flexible
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Variable Insurance Account and scheduled
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Single Premium Variable Life Account and
flexible premium variable life insurance contracts, to the extent they
represent participating interests in said Account;
The Pruco Life of New Jersey Flexible Premium Variable Annuity Account
and flexible premium variable annuity contracts, to the extent they
represent the participating interests in said Account;
The Pruco Life of New Jersey Modified Guaranteed Annuity Account and
modified guaranteed annuity contracts;
The Pruco Life of New Jersey Single Premium Variable Annuity Account
and single payment variable annuity contracts, to the extent they
represent participating interests in said Account;
C-61
<PAGE>
The Pruco Life of New Jersey Variable Contract Real Property Account
and individual variable life insurance contracts and variable annuity
contracts, to the extent they represent participating interests in
said Account.
IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of November, 1996.
/s/ I. EDWARD PRICE
-----------------------
I. Edward Price
State of New Jersey )
) SS
County of Essex )
On this 11th day of November, 1996, before me personally appeared I. EDWARD
PRICE known to me to be the person mentioned and described in and who executed
the foregoing instrument and he duly acknowledged to me that he executed the
same.
My commission expires: 12/5/99
/s/ JOAN DUFFY
-----------------------------
Joan Duffy
A Notary Public of New Jersey
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<PAGE>
POWER OF ATTORNEY
Know all men by these presents:
That I, IRA J. KLEINMAN, of NEWARK, NEW JERSEY, a member of the Board of
Directors of Pruco Life Insurance Company of New Jersey, do hereby make,
constitute and appoint as my true and lawful attorneys in fact CLIFFORD E.
KIRSCH, THOMAS C. CASTANO, RICHARD E. MEADE, KIRK A. MONTGOMERY, AND THOMAS J.
LOFTUS, or any of them severally for me in my name, place and stead to sign,
where applicable: Annual Reports on Form 10-K, registration statements on the
appropriate forms prescribed by the Securities and Exchange Commission, and any
other periodic documents and reports required under the Investment Company Act
of 1940, the Securities Act of 1933 and the Securities Exchange Act of 1934, and
all amendments thereto executed on behalf of Pruco Life Insurance Company of New
Jersey and filed with the Securities and Exchange Commission for the following:
The Pruco Life of New Jersey Variable Appreciable Account and flexible
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Variable Insurance Account and scheduled
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Single Premium Variable Life Account and
flexible premium variable life insurance contracts, to the extent they
represent participating interests in said Account;
The Pruco Life of New Jersey Flexible Premium Variable Annuity Account
and flexible premium variable annuity contracts, to the extent they
represent the participating interests in said Account;
The Pruco Life of New Jersey Modified Guaranteed Annuity Account and
modified guaranteed annuity contracts;
The Pruco Life of New Jersey Single Premium Variable Annuity Account
and single payment variable annuity contracts, to the extent they
represent participating interests in said Account;
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The Pruco Life of New Jersey Variable Contract Real Property Account
and individual variable life insurance contracts and variable annuity
contracts, to the extent they represent participating interests in said
Account.
IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of November, 1996.
/s/ IRA J. KLEINMAN
-----------------------
Ira J. Kleinman
State of New Jersey )
) SS
County of Essex )
On this 12th day of November, 1996, before me personally appeared IRA J.
KLEINMAN known to me to be the person mentioned and described in and who
executed the foregoing instrument and he duly acknowledged to me that he
executed the same.
My commission expires: 6/27/99
/s/ TAMARA J. FREEMAN
-----------------------------
Tamara J. Freeman
A Notary Public of New Jersey
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<PAGE>
POWER OF ATTORNEY
Know all men by these presents:
That I, WILLIAM F. YELVERTON, of NEWARK, NEW JERSEY, a member of the Board
of Directors of Pruco Life Insurance Company of New Jersey, do hereby make,
constitute and appoint as my true and lawful attorneys in fact CLIFFORD E.
KIRSCH, THOMAS C. CASTANO, RICHARD E. MEADE, KIRK A. MONTGOMERY, AND THOMAS J.
LOFTUS, or any of them severally for me in my name, place and stead to sign,
where applicable: Annual Reports on Form 10-K, registration statements on the
appropriate forms prescribed by the Securities and Exchange Commission, and any
other periodic documents and reports required under the Investment Company Act
of 1940, the Securities Act of 1933 and the Securities Exchange Act of 1934, and
all amendments thereto executed on behalf of Pruco Life Insurance Company of New
Jersey and filed with the Securities and Exchange Commission for the following:
The Pruco Life of New Jersey Variable Appreciable Account and flexible
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Variable Insurance Account and scheduled
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Single Premium Variable Life Account and
flexible premium variable life insurance contracts, to the extent they
represent participating interests in said Account;
The Pruco Life of New Jersey Flexible Premium Variable Annuity Account
and flexible premium variable annuity contracts, to the extent they
represent the participating interests in said Account;
The Pruco Life of New Jersey Modified Guaranteed Annuity Account and
modified guaranteed annuity contracts;
The Pruco Life of New Jersey Single Premium Variable Annuity Account
and single payment variable annuity contracts, to the extent they
represent participating interests in said Account;
C-65
<PAGE>
The Pruco Life of New Jersey Variable Contract Real Property Account
and individual variable life insurance contracts and variable annuity
contracts, to the extent they represent participating interests in said
Account.
IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of November, 1996.
/s/ WILLIAM F. YELVERTON
------------------------
William F. Yelverton
State of New Jersey )
) SS
County of Essex )
On this 11th day of November, 1996, before me personally appeared WILLIAM
F. YELVERTON known to me to be the person mentioned and described in and who
executed the foregoing instrument and he duly acknowledged to me that he
executed the same.
My commission expires: 10/30/99
/s/ CAROL ANN BECK
-----------------------------
Carol Ann Beck
A Notary Public of New Jersey
C-66
<PAGE>
POWER OF ATTORNEY
Know all men by these presents:
That I, WILLIAM BETHKE, of NEWARK, NEW JERSEY, a member of the Board of
Directors of Pruco Life Insurance Company of New Jersey, do hereby make,
constitute and appoint as my true and lawful attorneys in fact CLIFFORD E.
KIRSCH, THOMAS C. CASTANO, RICHARD E. MEADE, KIRK A. MONTGOMERY, AND THOMAS J.
LOFTUS, or any of them severally for me in my name, place and stead to sign,
where applicable: Annual Reports on Form 10-K, registration statements on the
appropriate forms prescribed by the Securities and Exchange Commission, and any
other periodic documents and reports required under the Investment Company Act
of 1940, the Securities Act of 1933 and the Securities Exchange Act of 1934, and
all amendments thereto executed on behalf of Pruco Life Insurance Company of New
Jersey and filed with the Securities and Exchange Commission for the following:
The Pruco Life of New Jersey Variable Appreciable Account and flexible
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Variable Insurance Account and scheduled
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Single Premium Variable Life Account and
flexible premium variable life insurance contracts, to the extent they
represent participating interests in said Account;
The Pruco Life of New Jersey Flexible Premium Variable Annuity Account
and flexible premium variable annuity contracts, to the extent they
represent the participating interests in said Account;
The Pruco Life of New Jersey Modified Guaranteed Annuity Account and
modified guaranteed annuity contracts;
The Pruco Life of New Jersey Single Premium Variable Annuity Account
and single payment variable annuity contracts, to the extent they
represent participating interests in said Account;
C-67
<PAGE>
The Pruco Life of New Jersey Variable Contract Real Property Account
and individual variable life insurance contracts and variable annuity
contracts, to the extent they represent participating interests in said
Account.
IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of November, 1996.
/s/ WILLIAM BETHKE
------------------------
William Bethke
State of New Jersey )
) SS
County of Essex )
On this 11th day of November, 1996, before me personally appeared WILLIAM
BETHKE known to me to be the person mentioned and described in and who executed
the foregoing instrument and he duly acknowledged to me that he executed the
same.
My commission expires: 12/8/97
/s/ SANDRA WALKER
-----------------------------
Sandra Walker
A Notary Public of New Jersey
C-68
<PAGE>
POWER OF ATTORNEY
Know all men by these presents:
That I, LINDA DOUGHERTY, of NEWARK, NEW JERSEY, a member of the Board of
Directors of Pruco Life Insurance Company of New Jersey, do hereby make,
constitute and appoint as my true and lawful attorneys in fact CLIFFORD E.
KIRSCH, THOMAS C. CASTANO, RICHARD E. MEADE, KIRK A. MONTGOMERY, AND THOMAS J.
LOFTUS, or any of them severally for me in my name, place and stead to sign,
where applicable: Annual Reports on Form 10-K, registration statements on the
appropriate forms prescribed by the Securities and Exchange Commission, and any
other periodic documents and reports required under the Investment Company Act
of 1940, the Securities Act of 1933 and the Securities Exchange Act of 1934, and
all amendments thereto executed on behalf of Pruco Life Insurance Company of New
Jersey and filed with the Securities and Exchange Commission for the following:
The Pruco Life of New Jersey Variable Appreciable Account and flexible
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Variable Insurance Account and scheduled
premium variable life insurance contracts, to the extent they represent
participating interests in said Account;
The Pruco Life of New Jersey Single Premium Variable Life Account and
flexible premium variable life insurance contracts, to the extent they
represent participating interests in said Account;
The Pruco Life of New Jersey Flexible Premium Variable Annuity Account
and flexible premium variable annuity contracts, to the extent they
represent the participating interests in said Account;
The Pruco Life of New Jersey Modified Guaranteed Annuity Account and
modified guaranteed annuity contracts;
The Pruco Life of New Jersey Single Premium Variable Annuity Account
and single payment variable annuity contracts, to the extent they
represent participating interests in said Account;
C-69
<PAGE>
The Pruco Life of New Jersey Variable Contract Real Property Account
and individual variable life insurance contracts and variable annuity
contracts, to the extent they represent participating interests in said
Account.
IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of December, 1996.
/s/ LINDA DOUGHERTY
-------------------------
Linda Dougherty
State of New Jersey )
) SS
County of Essex )
On this 10th day of December, 1996, before me personally appeared LINDA
DOUGHERTY known to me to be the person mentioned and described in and who
executed the foregoing instrument and she duly acknowledged to me that she
executed the same.
My commission expires: 1/29/99
/s/ KIMBERLY PASKEVICIUS
-----------------------------
Kimberly Paskevicius
A Notary Public of New Jersey
C-70
