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SUPPLEMENT DATED JANUARY 2, 2001 TO PROSPECTUS DATED MAY 1, 2000
FOR PACIFIC SELECT VARIABLE ANNUITY II, A VARIABLE ANNUITY CONTRACT
ISSUED BY PACIFIC LIFE INSURANCE COMPANY
This supplement changes the Prospectus to reflect the
following, and restates information contained in a
supplement dated October 2, 2000:
ELEVEN NEW VARIABLE INVESTMENT OPTIONS ARE AVAILABLE
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The following new Variable Investment Options are added to the list on page 1 of
the Prospectus.
- Blue Chip - Strategic Value
- Aggressive Growth - Focused 30
- Financial Services - Capital Opportunities
- Health Sciences - Mid-Cap Growth
- Technology - Global Growth
- Telecommunications
THE BOND AND INCOME INVESTMENT OPTION IS NO LONGER AVAILABLE
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The Bond and Income Variable Account terminated on September 22, 2000.
All references to the Bond and Income Investment Option, Portfolio, Subaccount
or Variable Account in the Prospectus are removed.
Unless you instruct us otherwise, to the extent any outstanding instruction you
have on file with us designates the Bond and Income Subaccount, the instruction
will be deemed an instruction for the Managed Bond Subaccount. Instructions
include, but are not limited to, instructions for Purchase Payment allocations,
any transfer or exchange instructions, including instructions under the
Portfolio Rebalancing, Dollar Cost Averaging, and Sweep Programs, and Partial
Withdrawal instructions.
THE NEW ELEVEN VARIABLE ACCOUNTS ARE ADDED AS VARIABLE INVESTMENT OPTIONS
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The new eleven Variable Accounts invest in their corresponding Portfolios of the
Fund. References to the 22 Variable Investment Options throughout the Prospectus
are changed to refer to 31 Variable Investment Options or Subaccounts.
THE INTERNATIONAL VALUE PORTFOLIO HAS A NEW PORTFOLIO MANAGER
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Effective January 1, 2001, Lazard Asset Management is the portfolio manager
of the International Value Portfolio.
A PORTFOLIO MANAGER HAS CHANGED ITS NAME
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Mercury Asset Management US has changed its name to Mercury Advisors.
1
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AN OVERVIEW OF PACIFIC SELECT VARIABLE ANNUITY II-FEES AND EXPENSES PAID BY THE
PACIFIC SELECT FUND: OTHER EXPENSES IS REPLACED
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The following replaces the OTHER EXPENSES Section on page 7 of the Prospectus:
OTHER EXPENSES
The table below shows the advisory fee and Fund expenses as an annual
percentage of each Portfolio's average daily net assets for the year 2000. To
help limit Fund expenses, effective July 1, 2000 we contractually agreed to
waive all or part of our investment advisory fees or otherwise reimburse each
Portfolio for operating expenses (including organizational expenses, but not
including advisory fees, additional costs associated with foreign investing
and extraordinary expenses) that exceed an annual rate of 0.10% of its
average daily net assets. Such waiver or reimbursement is subject to
repayment to us to the extent such expenses fall below the 0.10% expense cap.
For each Portfolio, our right to repayment is limited to amounts waived
and/or reimbursed that exceed the new 0.10% expense cap and, except for
Portfolios that started on or after October 2, 2000, that do not exceed the
previously established 0.25% expense cap. Any amounts repaid to us will have
the effect of increasing such expenses of the Portfolio, but not above the
0.10% expense cap. There is no guarantee that we will continue to cap
expenses after December 31, 2001. In 2000, Pacific Life reimbursed
approximately $14,627 to the I-Net Tollkeeper Portfolio, $36,874 to the
Strategic Value Portfolio, $34,687 to the Focused 30 Portfolio and $28,882 to
the Small-Cap Index Portfolio.
<TABLE>
<CAPTION>
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ADVISORY OTHER 12b-1 TOTAL LESS ADVISER'S TOTAL NET
PORTFOLIO FEE EXPENSES AMOUNTS+ EXPENSES REIMBURSEMENT EXPENSES
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AS AN ANNUAL % OF AVERAGE DAILY NET ASSETS
<S> <C> <C> <C> <C> <C> <C>
Blue Chip(1) 0.95 0.06 -- 1.01 -- 1.01
Aggressive Growth(1) 1.00 0.06 -- 1.06 -- 1.06
Aggressive Equity(2) 0.80 0.04 0.02 0.86 -- 0.86
Emerging Markets(2) 1.10 0.20 -- 1.30 -- 1.30
Diversified Research(2) 0.90 0.08 0.01 0.99 -- 0.99
Small-Cap Equity(2) 0.65 0.05 -- 0.70 -- 0.70
International Large-Cap(2) 1.05 0.13 -- 1.18 -- 1.18
Equity 0.65 0.04 -- 0.69 -- 0.69
I-Net Tollkeeper(2) 1.50 0.13 -- 1.63 (0.02) 1.61
Financial Services(1) 1.10 0.15 -- 1.25 (0.05) 1.20
Health Sciences(1) 1.10 0.11 -- 1.21 (0.01) 1.20
Technology(1) 1.10 0.08 -- 1.18 -- 1.18
Telecommunications(1) 1.10 0.08 -- 1.18 -- 1.18
Multi-Strategy 0.65 0.04 -- 0.69 -- 0.69
Equity Income(2) 0.65 0.04 0.01 0.70 -- 0.70
Strategic Value 0.95 0.54 -- 1.46 (0.41) 1.05
Growth LT 0.75 0.04 -- 0.79 -- 0.79
Focused 30 0.95 0.43 -- 1.38 (0.33) 1.05
Mid-Cap Value(2) 0.85 0.04 0.12 1.01 -- 1.01
International Value 0.85 0.11 -- 0.96 -- 0.96
Capital Opportunities(1) 0.80 0.06 -- 0.86 -- 0.86
Mid-Cap Growth(1) 0.90 0.06 -- 0.96 -- 0.96
Global Growth(1) 1.10 0.19 -- 1.29 -- 1.29
Equity Index 0.25 0.04 -- 0.29 -- 0.29
Small-Cap Index(2) 0.50 0.13 -- 0.63 (0.02) 0.61
REIT 1.10 0.05 -- 1.15 -- 1.15
Government Securities(2) 0.60 0.05 -- 0.65 -- 0.65
Managed Bond(2) 0.60 0.05 -- 0.65 -- 0.65
Money Market 0.34 0.04 -- 0.38 -- 0.38
High Yield Bond 0.60 0.04 -- 0.64 -- 0.64
Large-Cap Value(2) 0.85 0.05 0.06 0.96 -- 0.96
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</TABLE>
(1) Expenses are estimated. There were no actual advisory fees or expenses for
these Portfolios in 2000 because the Portfolios started after December
31, 2000.
(2) Total adjusted net expenses for these Portfolios, after deduction of an
offset for custodian credits and the 12b-1 recapture were: 0.84% for
Aggressive Equity Portfolio, 1.29% for Emerging Markets Portfolio,
0.98% for Diversified Research Portfolio, 0.69% for the Small-Cap Equity
Portfolio, 1.17% for International Large-Cap Portfolio, 1.60% for I-Net
Tollkeeper Portfolio, 0.69% for Equity Income Portfolio, 0.89% for
Mid-Cap Value Portfolio, 0.60% for Small-Cap Index Portfolio, 0.62% for
Government Securities Portfolio, 0.64% for Managed Bond Portfolio, and
0.90% for Large-Cap Value Portfolio.
+ The Fund has a brokerage enhancement 12b-1 plan under which
brokerage transactions, subject to best price and execution, may be
placed with certain broker-dealers in return for credits, cash, or other
compensation ("recaptured commissions"). While a Portfolio pays the cost of
brokerage when it buys or sells a Portfolio security, there are no fees or
charges to the Fund under the plan. Recaptured commissions may be used to
promote and market Fund shares and the distributor may therefore defray
expenses for distribution that it might otherwise incur. The SEC staff
requires that the amount of recaptured commissions be shown as an expense
in the chart above.
2
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AN OVERVIEW OF PACIFIC SELECT VARIABLE ANNUITY II-EXAMPLES IS REPLACED
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The EXAMPLES on page 8 of the Prospectus is replaced with the following:
The following table shows the expenses you would pay on each $1,000 you invested
if, at the end of each period, you: annuitized your Contract; surrendered your
Contract and withdrew the Contract Value, or did not annuitize or surrender, but
left the money in your Contract.
These examples assume the following:
- the Contract Value starts at $35,000
- the Investment Options have an annual return of 5%
- the Annual Fee is deducted for Contract Values less than $50,000, after
deducting any outstanding loan and interest
- no Annual Fee is deducted for annuitized amounts or Contract Values of
$50,000 or more.
THESE EXAMPLES DO NOT SHOW PAST OR FUTURE EXPENSES. YOUR ACTUAL EXPENSES IN ANY
YEAR MAY BE MORE OR LESS THAN THOSE SHOWN HERE.
<TABLE>
<CAPTION>
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EXPENSES IF YOU DID
NOT ANNUITIZE OR
EXPENSES IF YOU EXPENSES IF YOU SURRENDER, BUT LEFT
ANNUITIZED SURRENDERED THE MONEY IN YOUR
YOUR CONTRACT ($) YOUR CONTRACT ($) CONTRACT ($)
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Variable Account 1 yr 3 yr 5 yr 10 yr 1 yr 3 yr 5 yr 10 yr 1 yr 3 yr 5 yr 10 yr
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BLUE CHIP 88 78 132 282 88 123 141 282 25 78 132 282
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AGGRESSIVE GROWTH 89 79 135 287 89 124 144 287 26 79 135 287
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AGGRESSIVE EQUITY 87 72 124 265 87 117 133 265 24 72 124 265
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EMERGING MARKETS 91 86 146 309 91 131 155 309 28 86 146 309
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DIVERSIFIED RESEARCH 88 77 131 279 88 122 140 279 25 77 131 279
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SMALL-CAP EQUITY 85 68 116 249 85 113 125 249 22 68 116 249
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INTERNATIONAL
LARGE-CAP 90 82 140 297 90 127 144 297 27 82 140 297
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EQUITY 85 68 116 249 85 113 125 249 22 68 116 249
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I-NET TOLLKEEPER 94 95 162 338 94 140 171 338 31 95 162 338
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FINANCIAL SERVICES 90 83 142 300 90 128 151 300 27 83 142 300
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HEALTH SCIENCES 90 83 142 300 90 128 151 300 27 83 142 300
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TECHNOLOGY 90 83 141 298 90 128 150 298 27 83 141 298
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TELECOMMUNICATIONS 90 83 141 298 90 128 150 298 27 83 141 298
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MULTI-STRATEGY 85 68 116 249 85 113 125 249 22 68 116 249
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EQUITY INCOME 85 68 116 249 85 113 125 249 22 68 116 249
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STRATEGIC VALUE 89 79 134 286 89 124 143 286 26 79 134 286
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GROWTH LT 86 71 121 260 86 116 130 260 23 71 121 260
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FOCUSED 30 89 79 134 286 89 124 143 286 26 79 134 286
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MID-CAP VALUE 87 74 126 270 87 119 135 270 24 74 126 270
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INTERNATIONAL VALUE 88 76 130 277 88 121 139 277 25 76 130 277
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CAPITAL OPPORTUNITIES 87 73 125 267 87 118 134 267 24 73 125 267
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MID-CAP GROWTH 88 76 130 277 88 121 139 277 25 76 130 277
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GLOBAL GROWTH 91 86 146 309 91 131 155 309 28 86 146 309
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EQUITY INDEX 81 56 96 207 81 101 105 207 18 56 96 207
</TABLE>
3
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<TABLE>
<CAPTION>
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EXPENSES IF YOU DID
NOT ANNUITIZE OR
EXPENSES IF YOU EXPENSES IF YOU SURRENDER, BUT LEFT
ANNUITIZED SURRENDERED THE MONEY IN YOUR
YOUR CONTRACT ($) YOUR CONTRACT ($) CONTRACT ($)
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Variable Account 1 yr 3 yr 5 yr 10 yr 1 yr 3 yr 5 yr 10 yr 1 yr 3 yr 5 yr 10 yr
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SMALL-CAP INDEX 84 65 112 240 84 110 121 240 21 65 112 240
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REIT 90 82 139 295 90 127 148 295 27 82 139 295
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GOVERNMENT SECURITIES 84 66 113 242 84 111 122 242 21 66 113 242
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MANAGED BOND 85 66 114 244 85 111 123 244 22 66 114 244
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MONEY MARKET 82 59 100 217 82 104 109 217 19 59 100 217
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HIGH YIELD BOND 84 66 113 243 84 111 122 243 21 66 113 243
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LARGE-CAP VALUE 87 74 127 271 87 119 136 271 24 74 127 271
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</TABLE>
4
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YOUR INVESTMENT OPTIONS: YOUR VARIABLE INVESTMENT OPTIONS IS AMENDED
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The chart on page 9 of the Prospectus YOUR INVESTMENT OPTIONS: YOUR VARIABLE
INVESTMENT OPTIONS is amended to add the following:
<TABLE>
<CAPTION>
PRIMARY INVESTMENTS PORTFOLIO
PORTFOLIO OBJECTIVE (UNDER NORMAL CIRCUMSTANCES) MANAGER
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<S> <C> <C> <C>
Blue Chip Long-term growth of capital. Equity securities of "blue chip" AIM
Current income is of secondary companies--typically large companies that
importance. are well established in their respective
industries.
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Aggressive Growth Long-term growth of capital. Equity securities of small- and medium-sized AIM
growth companies.
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Financial Services Long-term growth of capital. Equity securities in the financial services INVESCO
sector. Such companies include banks,
insurance companies, brokerage firms and
other finance-related firms.
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Health Sciences Long-term growth of capital. Equity securities in the health sciences INVESCO
sector. Such companies include medical
equipment or supplies, pharmaceuticals,
health care facilities and other health
sciences-related firms.
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Technology Long-term growth of capital. Equity securities in the technology sector. INVESCO
Such companies include biotechnology,
communications, computers, electronics,
Internet telecommunications, networking,
robotics,video, and other technology-
related firms.
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Telecommunications Long-term growth of capital. Equity securities in the telecommunications INVESCO
Current income is of secondary sector. Such as companies that offer
importance. telephone service, wireless communications,
satellite communications, television and
movie programming, broadcasting and Internet
access.
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Strategic Value Long-term growth of capital. Equity securities with potential for long- Janus Capital
term growth of capital. Corporation
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Focused 30 Long-term growth of capital. Equity securities selected for their Janus Capital
growth potential. Corporation
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Capital Opportunities Long-term growth of capital. Equity securities with the potential for MFS
long-term growth of capital.
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Mid-Cap Growth Long-term growth of capital. Equity securities of medium-sized companies MFS
believed to have above-average growth
potential.
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Global Growth Capital appreciation. Equity securities of any size located MFS
within and outside of the U.S.
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</TABLE>
5
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ADDITIONAL INFORMATION: TELEPHONE TRANSACTIONS IS CHANGED TO TELEPHONE AND
ELECTRONIC TRANSACTIONS
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The following replaces TELEPHONE TRANSACTIONS on page 35 of the Prospectus:
TELEPHONE AND ELECTRONIC TRANSACTIONS
You are automatically entitled to make certain transactions by telephone or, to
the extent available in early 2001, electronically. You may also authorize other
people to make certain transaction requests by telephone or to the extent
available electronically by so indicating on the application or by sending us
instructions in writing in a form acceptable to us. We cannot guarantee that you
or any other person you authorize will always be able to reach us to complete a
telephone or electronic transaction; for example, all telephone lines or our
web-site may be busy during certain periods, such as periods of substantial
market fluctuations or other drastic economic or market change, or telephones or
the internet may be out of service during severe weather conditions or other
emergencies. Under these circumstances, you should submit your request in
writing (or other form acceptable to us). Transaction instructions we receive by
telephone or electronically before 4:00 p.m. Eastern time on any Business Day
will usually be effective on that day, and we will provide you confirmation of
each telephone or electronic transaction.
We have established procedures reasonably designed to confirm that instructions
communicated by telephone or electronically are genuine. These procedures may
require any person requesting a telephone or electronic transaction to provide
certain personal identification upon our request. We may also record all or part
of any telephone conversation with respect to transaction instructions. We
reserve the right to deny any transaction request made by telephone or
electronically. You are authorizing us to accept and to act upon instructions
received by telephone or electronically with respect to your Contract, and you
agree that, so long as we comply with our procedures, neither we, any of our
affiliates, nor the Fund, or any of their directors, trustees, officers,
employees or agents will be liable for any loss, liability, cost or expense
(including attorneys' fees) in connection with requests that we believe to be
genuine. This policy means that so long as we comply with our procedures, you
will bear the risk of loss arising out of the telephone and electronic
transaction privileges of your Contract. If a Contract has Joint Owners, each
Owner may individually make transaction requests by telephone.
WE EXPECT TO MAKE THE ELECTRONIC TRANSACTION AND DELIVERY FEATURES AVAILABLE IN
EARLY 2001. PLEASE ASK YOU REGISTERED REPRESENTATIVE FOR MORE INFORMATION
ELECTRONIC DELIVERY AUTHORIZATION
Subject to availability, you may authorize us to provide prospectuses,
statements and other information ("documents") electronically by so
indicating on the application, or by sending us instructions in writing in a
form acceptable to us to receive such documents electronically. You must have
internet access to use this service. While we impose no additional charge for
this service, there may be potential costs associated with electronic
delivery, such as on-line charges. Documents will be available on our
Internet Web site. You may access and print all documents provided through
this service. As documents become available, we will notify you of this by
sending you an e-mail message that will include instructions on how to
retrieve the document. If our e-mail notification is returned to us as
"undeliverable," we will contact you to obtain your updated e-mail address.
If we are unable to obtain a valid e-mail address for you, we will send a
paper copy by regular U.S. mail to your address of record. You may revoke
your consent for electronic delivery at any time and we will resume providing
you with a paper copy of all required documents; however, in order for us to
be properly notified, your revocation must be given to us a reasonable time
before electronic delivery has commenced. We will provide you with paper
copies at any time upon request. Such request will not constitute revocation
of your consent to receive required documents electronically.
6
