<PAGE>
Supplement Dated January 19, 2000 to Prospectus dated May 1, 1999 for
Pacific Innovations Variable Annuity
Individual Flexible Premium Deferred Variable Annuity Contracts
Issued by Pacific Life Insurance Company ("Prospectus")
Name Change and Substitution Transaction
The purpose of this supplement is to notify owners ("Contract Owners", "you" or
"your"), as well as prospective investors, of a change in the name of your
variable annuity contract from "Pacific Innovations Variable Annuity Contract"
to "Pacific Select Variable Annuity II Contract" (the "Contracts"), and of a
pending transaction, described below, that will affect Variable Investment
Options under the Contracts. This transaction, referred to as a "substitution",
is scheduled to occur on February 11, 2000 ("Substitution Date"). This
transaction will change the investment vehicles underlying your Contract, and
make more options available. The name change of the Contracts will also occur
on the Substitution Date.
Pacific Life Insurance Company ("Pacific Life") is the issuer of the Contracts.
Seven portfolios of Pacific Innovations Trust, a mutual fund, currently serve as
the underlying investment vehicles for the Contracts. Pacific Life applied to
the Securities and Exchange Commission ("SEC") for regulatory approval to
substitute portfolios of another mutual fund, Pacific Select Fund, for the
portfolios of Pacific Innovations Trust. The SEC has published notice of this
application. We expect the SEC to issue an order approving our application
prior to February 11, 2000, although there can be no assurance that the order
will be issued. In the event the SEC approval is not obtained by that date, the
Substitution Date will be postponed to the nearest practicable date.
At the same time as the substitution, Pacific Life will expand the Variable
Investment Options for the Contracts so that 20 Variable Investment Options will
be available to you. Each of the new Variable Investment Options will invest in
a corresponding Portfolio of Pacific Select Fund.
No Change to Contracts
The substitution will change the mutual fund portfolios that serve as underlying
investment vehicles for the Contracts. Other than this, the actual terms of the
Contracts will not change. The Contract Value for any Contract will be the same
immediately after the substitution as it will be immediately before the
substitution.
Substituted Shares
At the close of business on the Substitution Date, the shares of each Fund of
Pacific Innovations Trust will be substituted with shares of a designated
Portfolio of Pacific Select Fund that has similar investment policies. Here is
the list of the current portfolios of Pacific Innovations Trust and the
portfolios of Pacific Select Fund that will replace them:
<TABLE>
<CAPTION>
----------------------------------------------------------------------
Pacific Innovations Trust Funds Pacific Select Fund Portfolios
----------------------------------------------------------------------
<S> <C>
Money Market Money Market
----------------------------------------------------------------------
Managed Bond Managed Bond
----------------------------------------------------------------------
Capital Income Multi-Strategy
----------------------------------------------------------------------
Blue Chip Equity
----------------------------------------------------------------------
Mid-Cap Equity Growth LT
----------------------------------------------------------------------
Aggressive Growth Aggressive Equity
----------------------------------------------------------------------
International International Value
----------------------------------------------------------------------
</TABLE>
You need not take any action in connection with the substitution. The changes
in the underlying funds will occur automatically on the Substitution Date. If
you do not wish to participate in a substituted Portfolio, you can transfer
among the Investment Options as usual, without any charge for at least 60 days
from the Substitution Date. (Thereafter, Pacific Life reserves the right to
impose transfer fees for transfers as stated in the Prospectus, but there is no
current plan to do so.) Exchange of subaccount annuity units during the 60 days
immediately following the Substitution Date may be made in addition to the 4
permitted during any 12-month period.
Prospectus Changes effective at the end of the Substitution Date
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Throughout the Prospectus, any reference to: will be changed to refer to:
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
Pacific Innovations Trust Pacific Select Fund
- -----------------------------------------------------------------------------------------------------------------
Funds Portfolios
- -----------------------------------------------------------------------------------------------------------------
Capital Income Variable Investment Option Multi-Strategy Variable Investment Option
- -----------------------------------------------------------------------------------------------------------------
Blue Chip Variable Investment Option Equity Variable Investment Option
- -----------------------------------------------------------------------------------------------------------------
Mid-Cap Equity Variable Investment Option Growth LT Variable Investment Option
- -----------------------------------------------------------------------------------------------------------------
Aggressive Growth Variable Investment Option Aggressive Equity Variable Investment Option
- -----------------------------------------------------------------------------------------------------------------
International Variable Investment Option International Value Variable Investment Option
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
The following replaces the first paragraph of AN OVERVIEW OF PACIFIC INNOVATIONS
- -- The Accumulation Phase: Investment Options:
You can choose from 20 Variable Investment Options (also called
Subaccounts), each of which invests in a corresponding Portfolio of the
Pacific Select Fund. Pacific Life Insurance Company ("Pacific Life") is
the investment adviser for the Pacific Select Fund. Pacific Life oversees
the management of all of the Fund's Portfolios and manages two of the
Portfolios directly. The Fund and Pacific Life have retained other asset
managers to manage 18 of the Portfolios. The value of each Portfolio will
fluctuate with the value of the investments it holds, and returns are not
guaranteed.
The following replaces AN OVERVIEW OF PACIFIC INNOVATIONS -- Fees and Expenses
Paid by the Pacific Innovations Trust:
Fees and Expenses Paid by the Pacific Select Fund
The Pacific Select Fund pays advisory fees and other expenses. These
are deducted from the assets of the Fund's Portfolios and may vary from
year to year. They are not fixed and are not part of the terms of your
Contract. If you choose a Variable Investment Option, these fees and
expenses affect you indirectly because they reduce Portfolio returns.
Advisory Fee
------------
Pacific Life is the investment adviser to the Fund. The Fund pays an
advisory fee to us for these services. The table below shows the advisory
fee as an annual percentage of each Portfolio's average daily net assets.
Other Expenses
--------------
The table also shows expenses the Fund paid in 1998 or, where
appropriate, estimated expenses as an annual percentage of each Portfolio's
average daily net assets. To help limit Fund expenses, we've agreed to
waive all or part of our investment advisory fees or otherwise reimburse
each Portfolio for expenses (not including advisory fees, additional costs
associated with foreign investing and extraordinary expenses) that exceed
0.25% of its average daily net assets. We do this voluntarily, but do not
guarantee that we'll continue to do so after December 31, 2000. No
reimbursement was necessary for 1998.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
Portfolio Advisory Fee Other Expenses Total Expenses
-----------------------------------------------------------------------
<S> <C> <C> <C>
Aggressive Equity 0.80% 0.09% 0.89%
Emerging Markets 1.10% 0.36% 1.46%
Diversified Research/3/ 0.90% 0.05% 0.95%
Small-Cap Equity 0.65% 0.05% 0.70%
International Large-Cap/3/ 1.05% 0.15% 1.20%
Bond and Income 0.60% 0.10% 0.70%
Equity 0.65% 0.06% 0.71%
Multi-Strategy/1/ 0.65% 0.06% 0.71%
Equity Income/1/ 0.65% 0.05% 0.70%
Growth LT 0.75% 0.05% 0.80%
Mid-Cap Value/2/ 0.85% 0.06% 0.91%
Equity Index/4/ 0.25% 0.05% 0.30%
Small-Cap Index/2/ 0.50% 0.06% 0.56%
REIT/2/ 1.10% 0.06% 1.16%
International Value 0.85% 0.15% 1.00%
Managed Bond 0.60% 0.06% 0.66%
Government Securities 0.60% 0.06% 0.66%
Money Market/1/ 0.37% 0.06% 0.43%
High Yield Bond/1/ 0.60% 0.06% 0.66%
Large-Cap Value/2/ 0.85% 0.06% 0.91%
</TABLE>
/1/ Total net expenses for these Portfolios in 1998, after deduction of an
offset for custodian credits, were: 0.42% for Money Market Portfolio,
0.65% for High Yield Bond Portfolio, 0.69% for Equity Income Portfolio, and
0.70% for Multi-Strategy Portfolio.
/2/ Expenses are estimated. There were no actual advisory fees or other
expenses for these Portfolios in 1998 because the Portfolios started on
January 4, 1999.
/3/ Expenses are estimated. There were no actual advisory fees or other
expenses for these Portfolios in 1998 because the Portfolios started on
January 3, 2000.
2
<PAGE>
/4/ Expenses reflect new advisory fee as of January 1, 2000. Prior to that
date, the effective advisory fee for the Equity Index Portfolio was 0.16%.
The table under AN OVERVIEW OF PACIFIC INNOVATIONS--Examples is replaced with
the following:
The expense ratios of the substituted portfolios for the year ended December 31,
1998, were lower than those of the Pacific Innovations Trust. Therefore, the
expenses that you would pay as shown in the Examples in your Prospectus would
not be higher than those amounts shown, subject to the assumptions in the
Examples. The following are examples of the expenses you would pay for the
other Variable Investment Options.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
Expenses if you did
not annuitize or
Expenses if you Expenses if you surrender, but left
annuitized your surrendered your the money in your
Contract ($) Contract ($) Contract ($)
----------------------------------------------------------------------------------------------------------
Variable Account 1 yr 3 yr 1 yr 3 yr 1 yr 3 yr
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Emerging Markets $93.00 $91.00 $93.00 $136.00 $30.00 $91.00
----------------------------------------------------------------------------------------------------------
Diversified Research 88.00 76.00 88.00 121.00 25.00 76.00
----------------------------------------------------------------------------------------------------------
Small-Cap Equity 85.00 68.00 85.00 113.00 22.00 68.00
----------------------------------------------------------------------------------------------------------
International Large-Cap 90.00 83.00 90.00 128.00 27.00 83.00
----------------------------------------------------------------------------------------------------------
Bond and Income 85.00 68.00 85.00 113.00 22.00 68.00
----------------------------------------------------------------------------------------------------------
Equity Income 85.00 68.00 85.00 113.00 22.00 68.00
----------------------------------------------------------------------------------------------------------
Mid-Cap Value 87.00 75.00 87.00 120.00 24.00 75.00
----------------------------------------------------------------------------------------------------------
Equity Index 81.00 56.00 81.00 101.00 18.00 56.00
----------------------------------------------------------------------------------------------------------
Small-Cap Index 84.00 64.00 84.00 109.00 21.00 64.00
----------------------------------------------------------------------------------------------------------
REIT 90.00 82.00 90.00 127.00 27.00 82.00
----------------------------------------------------------------------------------------------------------
Government Securities 85.00 67.00 85.00 112.00 22.00 67.00
----------------------------------------------------------------------------------------------------------
High Yield Bond 85.00 67.00 85.00 112.00 22.00 67.00
----------------------------------------------------------------------------------------------------------
Large-Cap Value 87.00 75.00 87.00 120.00 24.00 75.00
----------------------------------------------------------------------------------------------------------
</TABLE>
The last paragraph in PACIFIC LIFE AND THE SEPARATE ACCOUNT -- Separate
Account B is replaced with the following:
Separate Account B is not the sole investor in Pacific Select Fund.
Investment in Pacific Select Fund by other separate accounts in connection
with variable annuity and variable life insurance contracts may create
conflicts. See the Prospectus and SAI for Pacific Select Fund for more
information.
3
<PAGE>
YOUR INVESTMENT OPTIONS -- Your Variable Investment Options is replaced with the
following:
Your Variable Investment Options
Each Variable Investment Option invests in a separate Portfolio of the
Pacific Select Fund. For your convenience, the following chart summarizes
some basic information about each Portfolio. This chart is only a summary.
For more complete information on each Portfolio, including a discussion of
the Portfolio's investment techniques and the risks associated with its
investments, see the accompanying Fund Prospectus. No assurance can be
given that a Portfolio will achieve its investment objective. YOU SHOULD
READ THE PACIFIC SELECT FUND PROSPECTUS CAREFULLY BEFORE INVESTING.
<TABLE>
<CAPTION>
Primary Investments
Portfolio Objective (under normal circumstances) Portfolio Manager
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggressive Equity Capital appreciation. Equity securities of small Alliance Capital
emerging-growth companies and Management L.P.
medium-sized companies.
- -----------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Long-term growth of capital. Equity securities of companies Alliance Capital
that are located in countries Management L.P.
generally regarded as "emerging
market" countries.
- -----------------------------------------------------------------------------------------------------------------------------------
Diversified Research Long-term growth of capital. Equity securities of U.S. Capital Guardian Trust Company
companies and securities whose
principal markets are in the U.S.
- -----------------------------------------------------------------------------------------------------------------------------------
Small-Cap Equity Growth of capital. Equity securities of smaller and Capital Guardian Trust Company
medium-sized companies.
- -----------------------------------------------------------------------------------------------------------------------------------
International Long-term growth of capital. Equity securities of non-U.S. Capital Guardian Trust Company
Large-Cap companies and securities whose
principal markets are outside
of the U.S
- -----------------------------------------------------------------------------------------------------------------------------------
Bond and Income Total return and income A wide range of fixed income Goldman Sachs Asset Management
consistent with prudent securities with varying terms to
investment management. maturity, with an emphasis on
long-term bonds.
- -----------------------------------------------------------------------------------------------------------------------------------
Equity Capital appreciation. Equity securities of large U.S. Goldman Sachs Asset Management
Current income is growth-oriented companies.
of secondary importance.
- -----------------------------------------------------------------------------------------------------------------------------------
Multi-Strategy High total return. A mix of equity and fixed income JP Morgan Investment
securities. Management Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
Equity Income Long-term growth of Equity securities of large and JP Morgan Investment
capital and income. medium-sized dividend-paying Management Inc.
companies.
- -----------------------------------------------------------------------------------------------------------------------------------
Growth LT Long-term growth of Equity securities of a large Janus Capital Corporation
capital consistent with number of companies of any size.
the preservation of capital.
- -----------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value Capital appreciation. Equity securities of medium-sized Lazard Asset Management
U.S. companies believed to be
undervalued.
- -----------------------------------------------------------------------------------------------------------------------------------
Equity Index Investment results that Equity securities of companies Mercury Asset
correspond to the total that are included in the Management US
return of common stock publicly Standard & Poor's 500 Composite
traded in the U.S. Price Index.
- -----------------------------------------------------------------------------------------------------------------------------------
Small-Cap Index Investment results that Equity securities of companies Mercury Asset
correspond to the total return that are included in the Russell Management US
of an index of small capitalization 2000 Small Stock Index.
companies.
- ------------------------------------------------------------------------------------------------------------------------------------
REIT Current income and long-term Equity securities of real estate Morgan Stanley Asset
capital appreciation. investment trusts. Management
- ------------------------------------------------------------------------------------------------------------------------------------
International Value Long-term capital appreciation Equity securities of companies Morgan Stanley Asset
primarily through investment of any size located in developed Management
in equity securities of countries outside of the U.S.
corporations domiciled in
countries other than the
United States.
- ------------------------------------------------------------------------------------------------------------------------------------
Managed Bond Maximize total return Medium and high-quality fixed Pacific Investment Management
consistent with income securities with varying Company
prudent investment management. terms to maturity.
- ------------------------------------------------------------------------------------------------------------------------------------
Government Securities Maximize total return Fixed income securities that Pacific Investment Management
consistent with are issued or guaranteed by the Company
prudent investment management. U.S. government, its agencies
or government-sponsored enterprises.
- ------------------------------------------------------------------------------------------------------------------------------------
Money Market Current income consistent with Highest quality money market Pacific Life
preservation of capital. instruments believed to have
limited credit risk.
- ------------------------------------------------------------------------------------------------------------------------------------
High Yield Bond High level of current income. Fixed income securities with Pacific Life
lower and medium-quality credit
ratings and intermediate to long
terms to maturity.
- ------------------------------------------------------------------------------------------------------------------------------------
Large-Cap Value Long-term growth of capital. Equity securities of large Salomon Brothers Asset
Current income is of secondary U.S. companies. Management Inc
importance.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PI011900
4
