<PAGE>
As filed with the Securities and Exchange Commission on April 28, 1999
------------------------
Registration No. 333 -26209
811 -08197
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- --------------------------------------------------------------------------------
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No.
-----
Post-Effective Amendment No. 2
-----
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 3
------
PFL LIFE VARIABLE ANNUITY ACCOUNT A
-----------------------------------
(Exact Name of Registrant)
PFL LIFE INSURANCE COMPANY
--------------------------
(Name of Depositor)
4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499-0001
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code
(319) 297-8468
Frank A. Camp, Esquire
PFL Life Insurance Company
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001
(Name and Address of Agent for Service)
Copy to:
Frederick R. Bellamy, Esquire
Sutherland, Asbill and Brennan L.L.P.
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404
<PAGE>
Title of Securities Being Registered:
Flexible Premium Variable Annuity Policies
It is proposed that this filing will become effective:
_______ immediately upon filing pursuant to paragraph (b) of Rule 485
X on May 1, 1999 pursuant to paragraph (b) of Rule 485
- -------
_______ 60 days after filing pursuant to paragraph (a)(i) of Rule 485
_______ on __________ pursuant to paragraph (a)(i) of Rule 485
_______ 75 days after filing pursuant to paragraph (a)(ii)
_______ on __________ pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
[_] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 495
Showing Location in Part A (Prospectus) and
Part B (Statement of Additional Information)
of Registration Statement of Information Required by Form N-4
-------------------------------------------------------------
PART A
------
<TABLE>
<CAPTION>
Item of Form N-4 Prospectus Caption
- ---------------- ------------------
<S> <C> <C>
1. Cover Page............................... Cover Page
2. Definitions.............................. Glossary of Terms
3. Synopsis................................. Summary; Fee Table
4. Condensed Financial Information.......... Financial Information
5. General Description of Registrant,
Depositor and Portfolio Companies
(a) Depositor.......................... PFL Life Insurance Company
(b) Registrant......................... The Separate Account
(c) Portfolio Company.................. The Separate Account
(d) Fund Prospectus.................... Underlying Funds
(e) Voting Rights...................... Voting Rights
6. Deductions and Expenses
(a) General............................ Expenses
(b) Sales Load %....................... Surrender Charge
(c) Special Purchase Plan.............. N/A
(d) Commissions........................ Distribution of the Policies
(e) Expenses - Registrant.............. N/A
(f) Fund Expenses...................... Portfolio Management Fees
(g) Organizational Expenses............ N/A
7. Policies
(a) Persons with Rights................ The Annuity Policy; Annuity
Payment Option; Annuity
Payments; Ownership Voting
Rights
(b) (i) Allocation of Premium
Payments...................... Allocation of Premium Payments
(ii) Transfers..................... Transfers
(iii)Exchanges..................... N/A
(c) Changes............................ Policy Value; Annuity Payment
Options; Allocation of Premium
Payments; Ownership
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
(d) Inquiries.......................... Summary
8. Annuity Period.......................... Annuity Payments
9. Death Benefit........................... Family Protection Feature
10. Purchases and Contract Value
(a) Purchases.......................... Purchase
(b) Valuation.......................... Policy Value
(c) Daily Calculation.................. The Mutual Fund Account Value
(d) Underwriter........................ Distribution of the Policies
11. Redemptions
(a) By Owners.......................... Surrender Charges
By Annuitant....................... N/A
(b) Texas ORP.......................... Restrictions Under the Texas
................................... Optional Retirement Program
(c) Check Delay........................ Annuity Payments
(d) Lapse.............................. N/A
(e) Free Look.......................... Summary
12. Taxes................................... Taxes
13. Legal Proceedings....................... Legal Proceedings
14. Table of Contents for the
Statement of
Additional Information.................. Table of Contents of the
Statement of Additional
Information
PART B
------
<CAPTION>
Item of Form N-4 Statement of Additional
- ---------------- Information Caption
-------------------
<S> <C> <C>
15. Cover Page.............................. Cover Page
16. Table of Contents....................... Table of Contents
17. General Information
and History............................. (Prospectus) PFL Life Insurance
................................... Company
18. Services
(a) Fees and Expenses
of Registrant...................... N/A
(b) Management Policies................ N/A
(c) Custodian.......................... Custody of Assets
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Independent
Auditors........................... Independent Auditors
(d) Assets of Registrant............... Custody of Assets
(e) Affiliated Person.................. N/A
(f) Principal Underwriter.............. Distribution of the Policies
19. Purchase of Securities
Being Offered........................... Distribution of the Policies
Offering Sales Load..................... N/A
20. Underwriters............................ Distribution of the Policies;
................................... (also Prospectus)
21. Calculation of Performance
Data.................................... Historical Performance Data
22. Annuity Payments........................ (Prospectus) Annuity Payment
Options
23. Financial Statements.................... Financial Statements
PART C -- OTHER INFORMATION
---------------------------
<CAPTION>
Item of Form N-4 Part C Caption
- ---------------- --------------
<S> <C> <C>
24. Financial Statements
and Exhibits
(a) Financial Statements............... Financial Statements
(b) Exhibits........................... Exhibits
25. Directors and Officers of
the Depositor........................... Directors and Officers of the
Depositor
26. Persons Controlled By or Under
Common Control with the
Depositor or Registrant................. Persons Controlled By or Under
Common........................................ Control with the Depositor or
Registrant
27. Number of Contractowners................ Number of Contractowners
28. Indemnification......................... Indemnification
29. Principal Underwriters.................. Principal Underwriters
30. Location of Accounts
and Records............................. Location of Accounts and Records
31. Management Services..................... Management Services
32. Undertakings............................ Undertakings
Signature Page.......................... Signature Page
</TABLE>
<PAGE>
THE ATLAS
PORTFOLIO BUILDER VARIABLE ANNUITY
Issued Through
PFL LIFE VARIABLE ANNUITY
ACCOUNT A
by
PFL LIFE INSURANCE COMPANY
Prospectus-- May 1, 1999
This prospectus and the mutual fund prospectuses give you important
information about the policy and the mutual funds. Please read them carefully
before you invest and keep them for future reference.
If you would like more information about the Atlas Portfolio Builder Variable
Annuity Policy, you can obtain a free copy of the Statement of Additional
Information (SAI) dated May 1, 1999. Please call Atlas Securities Inc. (Atlas)
at (800) 933-2852 or write to 794 Davis Street, PO Box 1894, San Leandro, CA
94577. You may also write PFL Life Insurance Company (PFL) at: PFL Life
Insurance Company, Financial Markets Division, Variable Annuity Department,
4333 Edgewood Road N.E., Cedar Rapids, Iowa, 52499-0001. A registration
statement, including the SAI, has been filed with the Securities and Exchange
Commission (SEC) and is incorporated herein by reference. Information about
the separate account can be reviewed and copied at the SEC's Public Reference
Room in Washington, D.C. You may obtain information about the operation of the
public reference room by calling the SEC at 1-800-SEC-0330. The SEC also
maintains a web site (http://www.sec.gov) that contains the prospectus, the
SAI, material incorporated by reference, and other information. The table of
contents of the SAI is included at the end of this prospectus.
[ATLAS PINBUG INSERTED HERE]
The annuity policy has many investment choices. There is a fixed account,
which offers interest at rates that are guaranteed by PFL, and fifteen mutual
fund portfolios offered by the underlying funds listed below. You can choose
any combination of these investment choices. You bear the entire investment
risk for all amounts you put in the mutual fund portfolios.
Atlas Insurance Trust
Managed by Atlas Advisers, Inc.:
Atlas Balanced Growth Portfolio
Dreyfus Variable Investment Fund
Managed by The Dreyfus Corporation:
Dreyfus--Capital Appreciation Portfolio
Dreyfus--Disciplined Stock Portfolio
Dreyfus--Growth and Income Portfolio
Dreyfus--Quality Bond Portfolio
Dreyfus--Small Cap Portfolio
Endeavor Series Trust
Subadvised by The Dreyfus Corporation:
Dreyfus Small Cap Value Portfolio
Subadvised by T. Rowe Price Associates, Inc.:
T. Rowe Price Equity Income Portfolio
T. Rowe Price Growth Stock Portfolio
Subadvised by OpCap Advisors:
Endeavor Value Equity Portfolio
Federated Insurance Series
Managed by Federated Advisers:
Federated High Income Bond Fund II
Federated Utility Fund II
WRL Series Fund, Inc.
Subadvised by Janus Capital Corporation:
WRL Janus Global
WRL Janus Growth
Subadvised by Van Kampen Asset Management Inc.:
WRL VKAM Emerging Growth
The Securities and Exchange Commission has not approved or disapproved these
securities, or passed upon the adequacy of this prospectus. Any representation
to the contrary is a criminal offense.
<PAGE>
TABLE OF CONTENTS Page
<TABLE>
<S> <C>
GLOSSARY OF TERMS........................................................... 3
SUMMARY..................................................................... 4
ANNUITY POLICY FEE TABLE.................................................... 7
EXAMPLES.................................................................... 9
1.THE ANNUITY POLICY........................................................ 10
2. ANNUITY PAYMENTS (THE INCOME PHASE)...................................... 10
Annuity Payment Options................................................... 10
3.PURCHASE.................................................................. 12
Policy Issue Requirements................................................. 12
Premium Payments.......................................................... 12
Initial Premium Requirements.............................................. 12
Additional Premium Payments............................................... 12
Allocation of Premium Payments............................................ 12
Policy Value.............................................................. 12
4.INVESTMENT CHOICES........................................................ 12
The Separate Account...................................................... 12
The Fixed Account......................................................... 13
Transfers................................................................. 14
Dollar Cost Averaging Program............................................. 14
Asset Rebalancing......................................................... 14
Telephone Transactions.................................................... 15
5.EXPENSES.................................................................. 15
Surrender Charges......................................................... 15
Mortality and Expense Risk Fee............................................ 16
Administrative Charges.................................................... 16
Premium Taxes............................................................. 16
Federal, State and Local Taxes............................................ 16
Transfer Fee.............................................................. 16
Portfolio Management Fees................................................. 16
6.TAXES..................................................................... 16
Annuity Policies in General............................................... 16
Qualified and Nonqualified Policies....................................... 17
Withdrawals--Nonqualified Policies........................................ 17
Withdrawals--Qualified Policies........................................... 17
Withdrawals--403(b) Policies.............................................. 18
Diversification and Distribution Requirements............................. 18
</TABLE>
Page
<TABLE>
<S> <C>
Taxation of Death Benefit Proceeds........................................ 18
Annuity Payments.......................................................... 18
Transfers, Assignments or Exchanges of Policies........................... 19
Possible Tax Law Changes.................................................. 19
7.ACCESS TO YOUR MONEY...................................................... 19
Surrenders................................................................ 19
Delay of Payment and Transfers............................................ 19
Excess Interest Adjustment................................................ 19
Systematic Payout Option.................................................. 20
Nursing Care and Terminal Condition Withdrawal Option..................... 20
8.PERFORMANCE............................................................... 20
9.FAMILY PROTECTION FEATURE................................................. 20
When We Pay A Death Benefit............................................... 21
When We Do Not Pay A Death Benefit........................................ 21
Amount of Death Benefit................................................... 21
Guaranteed Minimum Death Benefit.......................................... 22
Adjusted Partial Withdrawal............................................... 22
10.OTHER INFORMATION........................................................ 22
Ownership................................................................. 22
Assignment................................................................ 22
PFL Life Insurance Company................................................ 22
The Separate Account...................................................... 23
Mixed and Shared Funding.................................................. 23
Reinstatements............................................................ 23
Voting Rights............................................................. 23
Distributor of the Policies............................................... 24
Non-participating Policy.................................................. 24
Variations in Policy Provisions........................................... 24
Year 2000 Matters......................................................... 24
Insurance Marketplace Standards Association............................... 25
Legal Proceedings......................................................... 25
Financial Statements...................................................... 25
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION................ 25
APPENDIX A
Condensed Financial Information............................................. 26
APPENDIX B
Historical Performance Data................................................. 27
</TABLE>
2
<PAGE>
GLOSSARY OF TERMS
Accumulation Unit--An accounting unit of measure used in calculating the policy
value in the separate account before the annuity commencement date.
Adjusted Partial Withdrawal--The adjusted partial withdrawal is:
. the gross partial withdrawal, [gross partial withdrawal = requested
withdrawal -excess interest adjustment + surrender charges on (excess
partial withdrawal -excess interest adjustment)]; multiplied by
. the adjustment factor, which is the current death benefit prior to
withdrawal divided by the current policy value prior to withdrawal.
Annuitant--The person entitled to receive annuity payments after the annuity
commencement date and during whose life any annuity payments involving life
contingencies will continue.
Annuity Commencement Date--The date upon which annuity payments are to
commence. This date may be any date at least thirty days after the policy date
and may not be later than the last day of the policy month starting after the
annuitant attains age 85, except as expressly allowed by PFL. In no event will
this date be later than the last day of the month following the month in which
the annuitant attains age 95.
Annuity Payment Option--A method of receiving a stream of annuity payments
selected by the owner.
Cash Value--The policy value, increased or decreased by an excess interest
adjustment, less the surrender charge, if any.
Cumulative Free Percentage--The percentage (as applied to the cumulative
premium payments) which is available to the owner free of any surrender charge.
Excess Interest Adjustment--An adjustment that can either decrease or increase
the amount to be received by the owner upon full surrender or commencement of
annuity payments from the guaranteed period options of the fixed account. The
adjustment reflects changes in the interest rates declared by PFL since the
date any payment was received by or an amount was transferred to the guaranteed
period option.
Fixed Account--One or more investment choices under the policy that are part of
the general assets of PFL and are not in the separate account.
Guaranteed Period Options--The various guaranteed interest rate periods of the
fixed account which may be offered by PFL and into which premium payments may
be paid or amounts transferred.
One Year Fixed Option--An account in the fixed account into or from which
premium payments may be paid or amounts transferred, and which may be used for
dollar cost averaging, asset rebalancing, other transfers and partial
withdrawals.
Owner--The person who may exercise all rights and privileges under the policy.
The owner during the lifetime of the annuitant and prior to the annuity
commencement date is the person designated as the owner or a successor owner in
the information that we require to issue a policy.
Policy Date--The date shown on the policy data page attached to the policy and
the date on which the policy becomes effective.
Policy Value--On or before the annuity commencement date, the policy value is
equal to the owner's:
. premium payments; minus
. partial withdrawals (including any applicable excess interest adjustment and
surrender charges on such withdrawals); plus
. partial interest credited in the fixed account; plus or minus
. accumulated gains or losses in the separate account; minus
. any applicable premium or other taxes and transfer fees, if any.
Separate Account--The PFL Life Variable Annuity Account A, a separate account
established and registered as a unit investment trust under the Investment
Company Act of 1940, (the "1940 Act"), as amended, to which premium payments
under the policies may be allocated.
Subaccount--A subdivision within the separate account, the assets of which are
invested in a specified portfolio of the underlying funds.
Note: The Statement of Additional Information contains a more extensive
Glossary.
3
<PAGE>
SUMMARY
The sections in this summary correspond to sections in this prospectus, which
discuss the topics in more detail. Words printed in italics in this prospectus
are defined in the Glossary.
THE ANNUITY POLICY
The Flexible Premium Variable Annuity Policy offered by PFL Life Insurance
Company (PFL, we, us or our) through Atlas Securities, Inc. (Atlas) is a policy
between the owner (you or your), and PFL, an insurance company. The policy
provides a way to invest on a tax-deferred basis in the following investment
choices: subaccounts of the separate account, and a fixed account of PFL. The
policy is intended to accumulate money for retirement or other long-term
investment purposes.
This policy offers fifteen subaccounts that are listed in Section 4. Each
subaccount invests exclusively in shares of one of the portfolios of the
underlying funds. The policy value may depend on the investment experience of
the selected subaccounts. Therefore, you bear the entire investment risk with
respect to all policy value in any subaccount. You could lose the amount that
you invest.
The fixed account offers an interest rate that is guaranteed by PFL. We
guarantee to return your investment with interest credited for all amounts
allocated to the fixed account.
You can transfer money between any of the investment choices within certain
limits. During the accumulation phase we reserve the right to impose a $10 fee
for each transfer in excess of 12 transfers per policy year.
The policy, like all deferred annuity policies, has two phases: the
"accumulation phase" and the "income phase." During the accumulation phase,
earnings accumulate on a tax-deferred basis and are taxed as income when you
take them out of the policy. The income phase occurs when you begin receiving
regular payments from your policy. The money you can accumulate during the
accumulation phase will largely determine the income payments you receive
during the income phase.
ANNUITY PAYMENTS (THE INCOME PHASE)
The policy allows you to receive an income under one of five annuity payment
options. You can choose from fixed payment options, variable payment options,
or a combination of both. If you select a variable payment option, the dollar
amount of your payments may go up or down.
PURCHASE
You can buy a nonqualified policy with a premium payment of $5,000 or more and
a qualified policy with $2,000 or more, under most circumstances. You can add
as little as $500 at any time during the accumulation phase.
INVESTMENT CHOICES
You can allocate your premium payments to one or more of the following
portfolios described in the fund prospectuses:
MANAGED BY ATLAS ADVISERS, INC.
Atlas Balanced Growth Portfolio
MANAGED BY THE DREYFUS CORPORATION
Dreyfus--Capital Appreciation Portfolio
Dreyfus--Disciplined Stock Portfolio
Dreyfus--Growth and Income Portfolio
Dreyfus--Quality Bond Portfolio
Dreyfus--Small Cap Portfolio
SUBADVISED BY THE DREYFUS CORPORATION
Dreyfus Small Cap Value Portfolio
SUBADVISED BY T. ROWE PRICE ASSOCIATES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price Growth Stock Portfolio
SUBADVISED BY OPCAP ADVISORS
Endeavor Value Equity Portfolio
MANAGED BY FEDERATED ADVISERS
Federated High Income Bond Fund II
Federated Utility Fund II
SUBADVISED BY JANUS CAPITAL CORPORATION
WRL Janus Global
WRL Janus Growth
SUBADVISED BY VAN KAMPEN ASSET MANAGEMENT INC.
WRL VKAM Emerging Growth
4
<PAGE>
Depending on their investment performance, you can either make or lose money in
any of the mutual fund portfolios.
You may also allocate your premium payments to the fixed account.
EXPENSES
No deductions are made from premium payments at the time you buy the policy so
that the full amount of each premium payment is invested in one or more of your
investment choices.
PFL may apply a surrender charge of up to 7% of premium payments withdrawn
within five years after the policy date. After the fifth policy year, no
surrender charges apply. To calculate surrender charges, we consider the
premium you paid to come out before any earnings. Additional premium payments
do not extend the surrender charge period.
Full surrenders and partial withdrawals from the guaranteed period options of
the fixed account may also be subject to an excess interest adjustment, which
may increase or decrease the amount you receive. This adjustment may also apply
to amounts applied to an annuity payment option from a guaranteed period option
of the fixed account.
We deduct daily mortality and expense risk fees and administrative charges of
1.40% per year from the assets in each subaccount.
We will deduct state premium taxes, which currently range from 0% to 2.37%,
when annuity payments begin upon total surrender, or payment of a death
benefit, if applicable.
The value of the net assets of the subaccounts will reflect the investment
advisory fee and other expenses incurred by the underlying funds. Those fees
and expenses are detailed in the underlying funds' prospectuses that are
attached to this prospectus.
TAXES
Your earnings, if any, are not taxed until you take them out. If you take money
out during the accumulation phase, earnings come out first and are taxed as
income for federal tax purposes. If you are younger than 59 1/2 when you take
money out, you may be charged a 10% federal penalty tax on the earnings.
Payments during the income phase may be considered partly a return of your
original investment so that part of each payment may not be taxable as income.
ACCESS TO YOUR MONEY
You can take money out anytime during the accumulation phase. You may take out
up to 10% of your cumulative premium payments free of surrender charges each
policy year. The percentage that may be taken free of surrender charges is
referred to as the cumulative free percentage. Any cumulative free percentage
that is not taken in one year is carried forward and is available to be taken
in following policy years free of surrender charges. Amounts withdrawn in
excess of the cumulative free percentage may be subject to a surrender charge.
PERFORMANCE
The value of the policy will vary up or down depending upon the investment
performance of the subaccounts you choose. We provide performance information
in Appendix B and in the Statement of Additional Information. This data is not
intended to indicate future performance.
FAMILY PROTECTION FEATURE
If you are both the owner and the annuitant and you die before the income phase
begins, then your beneficiary will receive a death benefit.
Naming different persons as owner and annuitant can affect whether the death
benefit is payable and to whom amounts will be paid. Use care when naming
owners, annuitants, and beneficiaries, and consult your agent if you have
questions.
The death benefit is the greatest of:
. policy value;
. cash value; or
. the guaranteed minimum death benefit.
5
<PAGE>
If the annuitant is younger than age 75 on the policy date, the guaranteed
minimum death benefit is the greater of:
. 5% Annually Compounding
. Annual Step-Up
If the annuitant is age 75 or older on the policy date, the guaranteed minimum
death benefit is a Return of Premium.
ADDITIONAL FEATURES
This policy has additional features that might interest you. These include the
following:
. Systematic Payout Option. You can arrange to have money automatically sent
to you monthly, quarterly, semi-annually or annually while your policy is in
the accumulation phase. Amounts you receive may be included in your gross
income, and in certain circumstances, may be subject to penalty taxes.
. Dollar Cost Averaging. You can arrange to have a certain amount of money
automatically transferred from the fixed account, either monthly or
quarterly, into your choice of subaccounts.
. Asset Rebalancing. We will, upon your request, automatically transfer
amounts among the subaccounts on a regular basis to maintain a desired
allocation of the policy value among the various subaccounts.
. Nursing Care and Terminal Condition Withdrawal Option. Under certain
medically related circumstances, we will allow you to surrender or partially
withdraw your money without a surrender charge and excess interest
adjustment.
. Telephone Transactions. You may make transfers and/or change the allocation
of additional premium payments by telephone.
These features are not available in all states and may not be suitable for your
particular situation.
OTHER INFORMATION
Right to Cancel Period. You may return your policy for a refund. The amount of
time you have to return the policy will depend on the state where the policy
was issued. It is generally only 10 days. The amount of the refund will
generally be the policy value. We will pay the refund within 7 days after we
receive written notice of cancellation and the returned policy. The policy will
then be deemed void. In some states you may have more than 10 days to return a
policy, or receive a refund of more (or less) than the policy value.
No Probate. Usually when you die, the person you choose as your beneficiary
will receive the death benefit under this policy without going through probate.
State laws vary on how the amount that may be paid is treated for estate tax
purposes.
Who should purchase the Policy? This policy is designed for people seeking
long-term tax-deferred accumulation of assets, generally for retirement or
other long-term purposes; and for persons who have maximized their use of other
retirement savings methods, such as 401(k) plans and individual retirement
accounts. The tax-deferred feature is most attractive to people in high federal
and state tax brackets. You should not buy this policy if you are looking for a
short-term investment or if you cannot take the risk of losing the money that
you put in.
Financial Statements. Financial statements for PFL and the subaccounts are in
the Statement of Additional Information.
INQUIRIES
If you need more information, please contact us at:
Atlas Securities, Inc.
794 Davis Street, P.O. Box 1894
San Leandro, CA 94577
PFL Life Insurance Company
Administrative and Service Office
Financial Markets Division
Variable Annuity Department
4333 Edgewood Road N.E.
P.O. Box 3183
Cedar Rapids, IA 52406-3183
6
<PAGE>
ANNUITY POLICY FEE TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Policy Owner Transaction Expenses
- -----------------------------------------------
<S> <C>
Sales Load On Purchase
Payments.................... 0
Maximum Surrender Charge
(as a % of Premium Payments
Surrendered)(/1/)(/2/)...... 7%
Surrender Fees............... 0
Service Charge............... None
Transfer Fee(/2/)............ Currently No Fee
</TABLE>
<TABLE>
<CAPTION>
Separate Account Annual Expenses
(as a percentage of average account value)
<S> <C>
Mortality and Expense Risk Fees.. 1.25%
Administrative Charge............ 0.15%
-----------
TOTAL SEPARATE ACCOUNT ANNUAL
EXPENSES........................ 1.40%
</TABLE>
- --------------------
Portfolio Annual
Expenses(/3/)
(as a percentage of
average net assets
and after expense
reimbursements)
- --------------------
<TABLE>
<CAPTION>
Management / Rule
Administrative 12b-1 Total Portfolio
Fees Other Expenses Fees (/4/) Annual Expenses
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Atlas Balanced Growth
Portfolio(/5/)......... 0.25% 0.25% -- 0.50%
Dreyfus--Capital Appre-
ciation Portfolio...... 0.75% 0.06% -- 0.81%
Dreyfus--Disciplined
Stock Portfolio........ 0.75% 0.13% -- 0.88%
Dreyfus--Growth and In-
come Portfolio......... 0.75% 0.03% -- 0.78%
Dreyfus--Quality Bond
Portfolio.............. 0.65% 0.08% -- 0.73%
Dreyfus--Small Cap Port-
folio.................. 0.75% 0.02% -- 0.77%
Dreyfus Small Cap Value
Portfolio(/6/)......... 0.80% 0.06% 0.08% 0.94%
T. Rowe Price Equity In-
come Portfolio(/6/).... 0.80% 0.05% -- 0.85%
T. Rowe Price Growth
Stock Portfolio(/6/)... 0.80% 0.07% -- 0.87%
Endeavor Value Equity
Portfolio(/6/)......... 0.80% 0.04% 0.01% 0.85%
Federated High Income
Bond Fund II........... 0.60% 0.18% -- 0.78%
Federated Utility Fund
II(/7/)(/8/)........... 0.68% 0.25% -- 0.93%
WRL Janus Global(/9/)... 0.80% 0.15% -- 0.95%
WRL Janus
Growth(/9/)(/10/)...... 0.78% 0.05% -- 0.83%
WRL VKAM Emerging
Growth(/9/)............ 0.80% 0.09% -- 0.89%
</TABLE>
- --------------------------------------------------------------------------------
7
<PAGE>
(/1/) The surrender charge decreases based on the number of years since the
policy date, from 7% in the first policy year to 0% in the sixth policy
year. If applicable, a surrender charge will only be applied to
withdrawals that exceed the amount available under certain listed
exceptions.
(/2/) The surrender charge and transfer fee, if any is imposed, apply to each
policy, regardless of how policy value is allocated among the separate
account and the fixed account. Separate account annual expenses do not
apply to the fixed account.
(/3/) The fee table information of the underlying funds was provided to PFL by
the underlying funds, for the year ended December 31, 1998, and PFL has
not independently verified such information. Actual future expenses of
the funds may be greater or less than those shown in the Table.
(/4/) The Board of Trustees of Endeavor Series Trust has authorized an
arrangement whereby, subject to best price and execution, executing
brokers will share commissions with the Trust's affiliated broker. Under
supervision of the Trustees, the affiliated broker will use the
"recaptured commission" to promote marketing of the Trust's shares. The
staff of the Securities and Exchange Commission believes that, through
the use of these recaptured commissions, the Trust is indirectly paying
for distribution expenses and such amounts must be shown as 12b-1 fees in
the above table. The use of recaptured commissions to promote the sale of
the Trust's shares involves no additional costs to the Trust or any
Owner. Endeavor Series Trust, based on advice of counsel, does not
believe that recaptured brokerage commissions should be treated as 12b-1
fees. For more information on the Trust's Brokerage Enhancement Plan, see
the Trust's prospectus accompanying this Prospectus.
(/5/) Atlas Advisers, Inc. has agreed to reduce its advisory fee and assume
expenses of the Balanced Growth Portfolio to the extent necessary to
limit the Portfolio's total direct annual operating expenses to 0.50%.
The Portfolio will also indirectly bear its pro rata share of fees and
expenses incurred by the underlying Atlas Funds. The prospectus for the
Portfolio provides specific information on the fees and expenses of the
Portfolio and the expense ratios for each of the underlying Atlas Funds
in which the Portfolio will invest. The range of the average weighted
expense ratio for the Portfolio, including such indirect expenses is
expected to be 1.63% to 1.73%. A range is provided since the average
assets of the Portfolio invested in each of the underlying Atlas Funds
will fluctuate. Without fee reductions and expense absorptions by Atlas
Advisers, during the fiscal period ended December 31, 1998, the
Portfolio's ratio of expenses to average net assets (annualized) would
have been 1.34%.
(/6/) Endeavor Management Co. has agreed, until further notice, to assume
expenses of the Portfolios that exceed the following rates: Endeavor
Value Equity--1.30%; Dreyfus Small Cap Value--1.30%; T. Rowe Price Equity
Income--1.30%; T. Rowe Price Growth Stock--1.30.
(/7/) The management fee has been reduced to reflect the volunatry waiver of a
portion of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximium management fee is
0.75%.
(/8/) The total operating expenses would have been 1.00% absent the voluntary
waiver of a portion of the management fee.
(/9/) Effective January 1, 1997, the Board of the WRL Series Fund, Inc.
authorized the Fund to charge each portfolio of the Fund, including WRL
Janus Growth, WRL Janus Global and WRL VKAM Emerging Growth, an annual
Rule 12b-1 fee of up to 0.15% of each portfolio's average daily net
assets. However, the Fund will not deduct the fee from any portfolio
before April 30, 2000. Owners will receive advance written notice if a
Rule 12b-1 fee is deducted. See the WRL Series Fund, Inc.'s prospectus
for more details.
(/10/) The WRL Janus Growth Portfolio's management and advisory expenses
reflects 0.80% of the average daily net assets for the period prior to
May 1, 1998, and 0.775% of the first $3 billion of average daily net
assets and 0.75% of the average daily net assets in excess of $3 billion
for the period May 1, 1998 to December 31, 1998.
8
<PAGE>
EXAMPLES
You would pay the following expenses on a $1,000 investment, assuming a
hypothetical 5% annual return on assets, and assuming the entire policy value
is in the applicable subaccount:
The expenses reflect a mortality and expense risk fee of 1.25% for the
guaranteed minimum death benefit, which is the greater of the 5% Annually
Compounding Death Benefit and the Annual Step-Up Death Benefit.
<TABLE>
<CAPTION>
If the Policy is annuitized at
If the Policy is surrendered the end of the applicable time
at the end of the applicable period or if the Policy is not
time period. surrendered or annuitized.
---------------------------------------------------------
1 3 5 10 1 3 5 10
Subaccounts Year Years Years Years Year Years Years Years
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Atlas Balanced
Growth(/1/)............ $ 82 $ 102 $ 123 $ 222 $ 19 $ 60$ 103$ 222
- -----------------------------------------------------------------------------------------
Dreyfus Capital
Appreciation........... $ 85 $ 111 $ 138 $ 254 $ 22 $ 69$ 118$ 254
- -----------------------------------------------------------------------------------------
Dreyfus Disciplined
Stock.................. $ 86 $ 113 $ 142 $ 262 $ 23 $ 71$ 122$ 262
- -----------------------------------------------------------------------------------------
Dreyfus Growth and
Income................. $ 85 $ 110 $ 137 $ 251 $ 22 $ 68$ 117$ 251
- -----------------------------------------------------------------------------------------
Dreyfus Quality Bond.... $ 85 $ 109 $ 134 $ 246 $ 22 $ 67$ 114$ 246
- -----------------------------------------------------------------------------------------
Dreyfus Small Cap....... $ 85 $ 110 $ 136 $ 250 $ 22 $ 68$ 116$ 250
- -----------------------------------------------------------------------------------------
Dreyfus Small Cap
Value.................. $ 87 $ 115 $ 145 $ 268 $ 24 $ 73$ 125$ 268
- -----------------------------------------------------------------------------------------
T. Rowe Price Equity
Income................. $ 86 $ 112 $ 140 $ 258 $ 23 $ 70$ 120$ 258
- -----------------------------------------------------------------------------------------
T. Rowe Price Growth
Stock.................. $ 86 $ 113 $ 142 $ 261 $ 23 $ 71$ 122$ 261
- -----------------------------------------------------------------------------------------
Endeavor Value Equity... $ 86 $ 112 $ 140 $ 258 $ 23 $ 70$ 120$ 258
- -----------------------------------------------------------------------------------------
Federated High Income
Bond Fund II........... $ 85 $ 110 $ 137 $ 251 $ 22 $ 68$ 117$ 251
- -----------------------------------------------------------------------------------------
Federated Utility Fund
II..................... $ 87 $ 115 $ 145 $ 267 $ 24 $ 73$ 125$ 267
- -----------------------------------------------------------------------------------------
WRL Janus Global........ $ 87 $ 115 $ 146 $ 269 $ 24 $ 73$ 126$ 269
- -----------------------------------------------------------------------------------------
WRL Janus Growth........ $ 86 $ 112 $ 139 $ 256 $ 23 $ 70$ 119$ 256
- -----------------------------------------------------------------------------------------
WRL VKAM Emerging
Growth................. $ 86 $ 114 $ 143 $ 263 $ 23 $ 72$ 123$ 263
</TABLE>
(/1/)These examples do not include the portion of the expenses incurred by each
of the underlying Atlas Funds which are indirectly borne by the Portfolio.
The above table will assist you in understanding the costs and expenses of the
policy and the underlying funds that you will bear, directly or indirectly.
These include the 1998 expenses of the underlying funds. In addition to the
expenses listed above, premium taxes, currently ranging from 0% to 2.37% of
premium payments may be applicable.
The examples should not be considered a representation of past or future
expenses, and actual expenses may be greater or less than those shown. The
assumed 5% annual return is hypothetical and should not be considered a
representation of past or future annual returns, which may be greater or less
than the assumed rate.
Financial Information. Condensed financial information for the subaccounts is
in Appendix A to this prospectus.
9
<PAGE>
1. THE ANNUITY POLICY
This prospectus describes the Atlas Portfolio Builder Variable Annuity Policy
offered by PFL Life Insurance Company through Atlas Securities, Inc.
An annuity is a contract between you, the owner, and an insurance company (in
this case PFL), where the insurance company promises to pay you an income in
the form of annuity payments. These payments begin on a designated date,
referred to as the annuity commencement date. Until the annuity commencement
date, your annuity is in the accumulation phase and the earnings are tax
deferred. Tax deferral means you generally are not taxed on your annuity until
you take money out of your annuity. After the annuity commencement date, your
annuity switches to the income phase.
The policy is a flexible premium variable annuity. You can use the policy to
accumulate funds for retirement or other long-term financial planning purposes.
It is a "flexible premium" policy because after you purchase it, you can
generally make additional investments of any amount of $500 or more, until the
annuity commencement date. However, you are not required to make any additional
investments.
The policy is a "variable" annuity because the value of your investments can go
up or down based on the performance of your investment choices. If you select
the variable annuity portion of the policy, the amount of money you are able to
accumulate in your policy during the accumulation phase depends upon the
performance of your investment choices. The amount of annuity payments you
receive during the income phase from the variable annuity portion of your
policy also depends upon the investment performance of your investment choices
for the income phase.
The policy also contains a fixed account. The fixed account offers interest at
rates that are guaranteed by PFL not to decrease during each one year period.
There may be different interest rates for each different guaranteed period
selected.
2. ANNUITY PAYMENTS (THE INCOME PHASE)
You choose the annuity commencement date. You can change this date by giving us
30 days written notice before the current annuity commencement date. The new
annuity commencement date must be at least 30 days after we receive the change.
The latest annuity commencement date cannot be after the policy month following
the month in which the annuitant attains age 95.
Election of Annuity Payment Option. Before the annuity commencement date, if
the annuitant is alive, you may choose an annuity payment option or change your
election. If the annuitant dies before the annuity commencement date, the
beneficiary may elect to receive the death benefit in a lump sum or under one
of the annuity payment options.
Unless you specify otherwise, the annuitant will receive the annuity payments.
After the annuitant's death, the beneficiary will receive any remaining
guaranteed payments.
Annuity Payment Options
The policy provides five annuity payment options that are described below. You
may choose any combination of annuity payment options. We will use your
"adjusted policy value" to provide these annuity payments. The adjusted policy
value is the policy value increased or decreased by any applicable excess
interest adjustment. If the adjusted policy value on the annuity commencement
date is less than $2,000, PFL reserves the right to pay it in one lump sum in
lieu of applying it under an annuity payment option. You can receive payments
monthly, quarterly, semi-annually, or annually.
A charge for premium taxes and an excess interest adjustment, if applicable,
may be made when annuity payments begin.
The annuity payment options are explained below. Options 1, 2, and 4 are fixed
only. Options 3 and 5 can be fixed or variable.
Payment Option 1--Interest Payments. We will pay the interest on the amount we
use to provide annuity payments in equal payments, or this
10
<PAGE>
amount may be left to accumulate for a period of time you and PFL agree to. You
and PFL will agree on withdrawal rights when you elect this option.
Payment Option 2--Income for a Specified Period. We will make level payments
only for the fixed period you choose. No funds will remain at the end.
Payment Option 3--Life Income. You may choose between:
Fixed Payments
. No Period Certain--We will make level payments only during the
annuitant's lifetime.
. 10 Years Certain--We will make level payments for the longer of the
annuitant's lifetime or ten years.
. Guaranteed Return of Policy Proceeds--We will make level payments for
the longer of the annuitant's lifetime or until the total dollar amount
of payments we made to you equals the amount applied to this option.
Variable Payments
. No Period Certain--Payments will be made only during the lifetime of the
annuitant.
. 10 Years Certain--Payments will be made for the longer of the
annuitant's lifetime or ten years.
Payment Option 4--Income of a Specified Amount. Payments are made for any
specified amount until the amount applied to this option, with interest, is
exhausted. This will be a series of level payments followed by a smaller final
payment.
Payment Option 5--Joint and Survivor Annuity. You may choose between:
Fixed Payments
. Payments are made during the joint lifetime of the payee and a joint
payee of your selection. Payments will be made as long as either person
is living.
Variable Payments
. Payments are made as long as either the payee or the joint payee is
living.
Unless you choose to receive variable payments under annuity payment options 3
or 5, the amount of each payment will be set on the annuity commencement date
and will not change. You may, however, choose to receive variable payments
under payment options 3 and 5.
The dollar amount of the first variable payment will be determined in
accordance with the annuity payment rates set forth in the applicable table
contained in the policy. The dollar amount of additional variable payments will
vary based on the investment performance of the subaccount(s) that you select.
The dollar amount of each variable payment after the first may increase,
decrease or remain constant. If the actual investment performance exactly
matched the assumed investment return of 5% at all times, the amount of each
variable annuity payment would remain equal. If actual investment performance
exceeds the assumed investment return, the amount of the variable annuity
payments would increase. Conversely, if actual investment performance is lower
than the assumed investment return, the amount of the variable annuity payments
would decrease.
Other annuity payment options may be arranged by agreement with PFL. Certain
annuity payment options may not be available in all states.
NOTE CAREFULLY:
IF:
. you choose Life Income with No Period Certain or a Joint and Survivor
Annuity; and
. the annuitant(s) dies before the due date of the second (third, fourth,
etc.) annuity payment(s);
THEN:
. we may make only one (two, three, etc.) annuity payment(s).
IF:
. you choose Income for a Specified Period, Life Income with 10 years Certain,
Life Income with Guaranteed Return of Policy Proceeds, or Income of a
Specified Amount; and
. the person receiving payments dies prior to the end of the guaranteed
period;
THEN:
. the remaining guaranteed payments will be continued to that person's
beneficiary, or their present value may be paid in a single sum.
11
<PAGE>
We will not pay interest on amounts represented by uncashed annuity payment
checks if the postal or other delivery service is unable to deliver checks to
the payee's address of record. The payee is responsible to keep PFL informed of
the payee's current address of record.
3. PURCHASE
Policy Issue Requirements
PFL will issue a policy IF:
. PFL receives all information needed to issue the policy;
. PFL receives a minimum initial premium payment; and
. owner and annuitant are age 80 or younger, however, PFL reserves the right
to issue policies up to age 90.
Premium Payments
You should make checks for premium payments payable only to PFL Life Insurance
Company. Your check must be honored in order for PFL to pay any associated
payments and benefits due under the policy.
Initial Premium Requirements
The initial premium payment must be at least:
. $5,000 for nonqualified policies; and
. $2,000 for qualified policies.
We allow premium payments up to a total of $1,000,000 without prior approval.
We will credit your initial premium payment to your policy within two business
days after the day we receive it and your complete policy information. If we
are unable to credit your initial premium payment, we will contact you within
five business days and explain why. We will also return your initial premium
payment at that time unless you tell us to keep it and credit it as soon as
possible.
The date on which we credit your initial premium payment to your policy is the
policy date. The policy date is used to determine policy years, policy months
and policy anniversaries.
Additional Premium Payments
Additional premium payments must be at least $500.
You are not required to make any additional premium payments. However, you can
make additional premium payments as often as you like during the lifetime of
the annuitant during the accumulation phase. We will credit additional premium
payments to your policy as of the business day PFL receives your premium and
required information at our administrative and service office.
Allocation of Premium Payments
When you purchase a policy, we will allocate your premium payment to the
investment choices you select. Your allocation must be in whole percentages and
must total 100%. We will allocate additional premium payments the same way,
unless you request a different allocation.
You may change allocations for future additional premium payments by sending us
written instructions or by telephone, subject to the limitations described
below under "Telephone Transactions." The allocation change will apply to
premium payments received after the date we receive the change request.
Policy Value
You should expect your policy value to change from valuation period to
valuation period. A valuation period begins at the close of trading on the New
York Stock Exchange on each business day and ends at the close of trading on
the next succeeding business day. A business day is each day that the New York
Stock Exchange is open. The New York Stock Exchange generally closes at 4:00
p.m. eastern time. Holidays are generally not business days.
4. INVESTMENT CHOICES
The Separate Account
The separate account currently consists of fifteen subaccounts.
12
<PAGE>
The Underlying Funds. The subaccounts invest in shares of the underlying funds.
The companies that provide investment management, investment advisory and
administrative services for the underlying funds offered through this policy
are listed below. The following investment choices are currently offered
through this policy:
ATLAS ADVISERS, INC.:
Atlas Balanced Growth Portfolio
THE DREYFUS CORPORATION:
Dreyfus--Capital Appreciation Portfolio
Dreyfus--Disciplined Stock Portfolio
Dreyfus--Growth and Income Portfolio
Dreyfus--Quality Bond Portfolio
Dreyfus--Small Cap Portfolio
THE DREYFUS CORPORATION:
Dreyfus Small Cap Value Portfolio
T. ROWE PRICE ASSOCIATES, INC.:
T. Rowe Price Equity Income Portfolio
T. Rowe Price Growth Stock Portfolio
OPCAP ADVISORS:
Endeavor Value Equity Portfolio
FEDERATED ADVISERS:
Federated High Income Bond Fund II
Federated Utility Fund II
JANUS CAPITAL CORPORATION:
WRL Janus Global
WRL Janus Growth
VAN KAMPEN ASSET MANAGEMENT INC.:
WRL VKAM Emerging Growth
The general public may not purchase these underlying funds. The investment
objectives and policies may be similar to other portfolios and mutual funds
managed by the same investment adviser or manager that are sold directly to the
public. You should not expect that the investment results of the other
portfolios and mutual funds will be comparable to those of the underlying
funds.
More detailed information, including an explanation of the portfolio's
investment objectives, may be found in the underlying funds' current
prospectuses, which are attached to this prospectus. You should read the
prospectuses for each of the underlying funds carefully before you invest.
We may receive expense reimbursements or other revenues from the underlying
funds or their investment advisers. The amount of these reimbursements or
revenues, if any, may be based on the amount of assets that PFL or the separate
account invests in the underlying funds.
The Fixed Account
The fixed account currently consists of guaranteed period options and a one
year fixed option.
Premium payments allocated and amounts transferred to the fixed account become
part of the general account of PFL. Interests in the general account are not
registered under the Securities Act of 1933 (the "1933 Act"), nor is the
general account registered as an investment company under the Investment
Company Act of 1940 (the "1940 Act"). Accordingly, neither the general account
nor any interests therein are generally subject to the provisions of the 1933
or 1940 Acts. PFL has been advised that the staff of the SEC has not reviewed
the disclosures in this prospectus which relate to the fixed account.
We guarantee that the interest credited to the fixed account will never be less
than 3% per year. At the end of a guaranteed period, the value in that
guaranteed period option will automatically be transferred into a new
guaranteed period option of the same length (or the next shorter period if the
same period is no longer offered) at the current interest rate for that period.
You can transfer to another investment choice by giving us notice within 30
days before the end of the expiring guaranteed period.
Surrenders or partial withdrawals from a guaranteed period option of the fixed
account (other than at the end of a guaranteed period) are subject to an excess
interest adjustment. However, surrenders or partial withdrawals from the one
year fixed option of the fixed account will never be subject to an excess
interest adjustment. This adjustment may increase or decrease the amount of
interest credited to your policy. The excess interest adjustment will not
decrease the
13
<PAGE>
interest credited to your policy below 3% per year, however. You bear the risk
that we will not credit interest greater than 3% per year. We determine
credited rates, which are guaranteed for at least one year, in our sole
discretion.
If you select the fixed account, your money will be placed with the other
general assets of PFL. The amount of money you are able to accumulate in the
fixed account during the accumulation phase depends upon the total interest
credited. The amount of annuity payments you receive during the income phase
from the fixed portion of your policy will remain level for the entire income
phase.
Transfers
During the accumulation phase, you may make transfers from any subaccount as
often as you wish. However, transfers from the guaranteed period options of the
fixed account are allowed only under the following circumstances:
. At the end of a guaranteed period, you must notify us within 30 days prior
to the end of the guaranteed period that you wish to transfer the amount in
the guaranteed period option to another investment choice. No excess
interest adjustment will apply to these transfers.
. When you request transfers of amounts equal to interest credited to the
guaranteed period options of the fixed account on a monthly, quarterly,
semi-annual or annual basis. No excess interest adjustment will apply to
these transfers. This may affect your overall interest-crediting rate,
because transfers are deemed to come from the oldest premium payment first.
Transfers from the one year fixed option to any of the other investment choices
are permitted without an excess interest adjustment.
Each transfer must be at least $500 (or the entire subaccount value if less
than $500), except for transfers out of the fixed account of amounts equal to
interest credited to the guaranteed period options of the fixed account for
which there is a minimum transfer amount of $50. If the subaccount value
remaining after the transfer is less than $500, we reserve the right to include
that amount as part of the transfer.
During the income phase of your policy, you may transfer values out of any
subaccount up to four times per policy year. However, you cannot transfer
values out of the fixed account in this phase. The minimum amount that can be
transferred during this phase is the lesser of $10 of monthly income, or the
entire monthly income of the annuity units in the subaccount from which the
transfer is being made.
Transfers may be made by telephone, subject to the limitations described below
under "Telephone Transactions."
Currently, there is no charge for transfers. However, the number of transfers
permitted may be limited in the future and a $10 charge in excess of 12
transfers per year may apply in the future.
Dollar Cost Averaging Program
During the accumulation phase, you may instruct us to automatically transfer
money from the one year fixed option into one or more variable subaccounts.
This is referred to as dollar cost averaging. You may specify the dollar amount
to be transferred either monthly or quarterly. We will make the transfers on
the 28th day of the applicable month. There is no charge for this program.
Dollar cost averaging buys more accumulation units when prices are low and
fewer accumulation units when prices are high. It does not guarantee profits or
assure that you will not experience a loss.
We may credit different interest rates for dollar cost averaging programs of
varying time periods. If you discontinue such a program before its completion,
then the interest credited on amounts in that program may be adjusted downward
to the rate in the one year fixed option.
Asset Rebalancing
During the accumulation phase you can instruct us to automatically rebalance
the amounts in your subaccounts to maintain your desired asset allocation. This
feature is called asset rebalancing and can be started and stopped at any time,
free of charge. However, we will not rebalance if you
14
<PAGE>
are in the dollar cost averaging program or if any other transfer is requested.
Asset rebalancing ignores amounts in the guaranteed period options of the fixed
account. You can choose to rebalance monthly, quarterly, semi-annually, or
annually based on the policy date.
Telephone Transactions
You may make transfers and change the allocation of additional premium payments
by telephone IF:
. you select the "Telephone Transfer/Reallocation Authorization" box on the
policy application or enrollment information; or
. you later make this request in writing.
You will be required to provide certain information for identification purposes
to PFL and Atlas when requesting a transaction by telephone. PFL may also
require written confirmation of your request. Neither PFL nor Atlas will be
liable for following telephone requests that we believe are genuine.
Telephone requests must be received by Atlas while the New York Stock Exchange
is open to assure same-day pricing of the transaction. This option may be
discontinued at any time.
5. EXPENSES
There are charges and expenses associated with your policy that reduce the
return on your investment in the policy.
Surrender Charges
During the accumulation phase, you can withdraw part or all of the cash value.
Cash value is the policy value increased or decreased by any excess interest
adjustment, if applicable, and decreased by any applicable surrender charge. We
may apply a surrender charge to compensate us for expenses relating to policy
sales, including commissions to registered representatives and other
promotional expenses. You can withdraw up to 10% of your cumulative premium
payments each year free of surrender charges. This free amount is cumulative
and is referred to as the cumulative free percentage and is determined at the
time of the withdrawal. If you withdraw money in excess of the cumulative free
percentage, you might have to pay a surrender charge, which is a contingent
deferred sales charge, on the excess amount. The following schedule shows the
surrender charges that apply during the first five policy years:
<TABLE>
<CAPTION>
Surrender Charge
Policy (as a percentage of
Year premium withdrawn)
- ------------------------------------------------------------------------------
<S> <C>
1 7%
- ------------------------------------------------------------------------------
2 7%
- ------------------------------------------------------------------------------
3 6%
- ------------------------------------------------------------------------------
4 5%
- ------------------------------------------------------------------------------
5 4%
- ------------------------------------------------------------------------------
6+ 0%
</TABLE>
Surrender charges are based only on policy years. No surrender charge will be
applied after the fifth policy year. For example, an additional premium payment
in policy year four would only be subject to a 5% surrender charge for one year
and a 4% surrender charge for a second year.
The application of the cumulative free percentage is shown in the following
example. Assume your premium payments total $100,000 at the beginning of policy
year 2 and you withdraw $30,000. Since that amount is more than your cumulative
free percentage of 20% that is available at that time, you would pay a
surrender charge of $700 on the remaining $10,000 (7% of $30,000--$20,000).
You receive the full amount of a requested partial withdrawal because we deduct
any applicable excess interest adjustment and surrender charge from your
remaining policy value. You receive your cash value upon full surrender.
For surrender charge purposes, premium payments are deemed to be withdrawn
before earnings. After all premium payments are withdrawn, the remaining
adjusted policy value may be withdrawn free from any surrender charges.
Withdrawals may be taxable, and if made before age 59 1/2, may be subject to a
10% federal penalty tax. For tax purposes, withdrawals are considered to come
from earnings first.
15
<PAGE>
Surrender charges are waived if you withdraw money under the nursing care and
terminal condition withdrawal option.
Mortality and Expense Risk Fee
We charge a fee as compensation for bearing certain mortality and expense risks
under the policy. Examples include a guarantee of annuity rates, the death
benefits, certain expenses of the policy, and assuming the risk that the
current charges will be insufficient in the future to cover costs of
administering the policy. The mortality and expense risk fee is at an annual
rate of 1.25% of assets. This annual fee is assessed daily based on the net
asset value of each subaccount.
If this charge does not cover our actual costs, we absorb the loss. Conversely,
if the charge more than covers actual costs, the excess is added to our
surplus. We expect to profit from this charge. We may use our surplus for any
proper purpose, including distribution expenses.
Administrative Charges
We deduct an annual administrative charge to cover the costs of administering
the policies. This charge is equal to 0.15% per year of the daily net asset
value of the separate account.
Premium Taxes
Some states assess premium taxes on the premium payments you make. We currently
do not deduct for these taxes at the time you make a premium payment. However,
we will deduct the total amount of premium taxes, if any, from the policy value
when:
. you elect to begin receiving annuity payments;
. you surrender the policy; or
. you die and a death benefit is paid (you must also be the annuitant for the
death benefit to be paid).
Generally, premium taxes range from 0% to 2.37%, depending on the state.
Federal, State and Local Taxes
We may in the future deduct charges from the policy for any taxes we incur
because of the policy. However, no deductions are being made at the present
time.
Transfer Fee
You are allowed to make 12 free transfers per year before the annuity
commencement date. However, we reserve the right to charge $10 for each
transfer in excess of 12 transfers per year. Premium payments, asset
rebalancing and dollar cost averaging transfers are not considered transfers.
All transfer requests made at the same time are treated as a single request.
Portfolio Management Fees
The value of the assets in each subaccount will reflect the fees and expenses
paid by the underlying fund. A description of these expenses is found in the
"Annuity Policy Fee Table" section of this prospectus and in the underlying
fund's prospectus.
6. TAXES
NOTE: PFL has prepared the following information on federal income taxes as a
general discussion of the subject. It is not intended as tax advice to any
individual. You should consult your own tax adviser about your own
circumstances. PFL has included an additional discussion regarding taxes in the
Statement of Additional Information.
Annuity Policies in General
Deferred annuity policies are a way of setting aside money for future needs
like retirement. Congress recognized how important saving for retirement is and
provided special rules in the Internal Revenue Code for annuities.
Simply stated, these rules provide that generally you will not be taxed on the
earnings, if any, on the money held in your annuity policy until you take the
money out. This is referred to as tax deferral. There are different rules as to
how you will be taxed depending on how you take the money out and the type of
policy--qualified or nonqualified (discussed below).
16
<PAGE>
You will not be taxed on increases in the value of your policy until a
distribution occurs--either as a withdrawal or as annuity payments.
When a non-natural person (e.g., corporation or certain other entities other
than tax-qualified trusts) owns a nonqualified policy, the policy will
generally not be treated as an annuity for tax purposes.
Qualified and Nonqualified Policies
If you purchase the policy under an individual retirement annuity, a pension
plan, or specially sponsored program, your policy is referred to as a qualified
policy.
Qualified policies are issued in connection with the following plans:
. Individual Retirement Annuity (IRA): A traditional IRA allows individuals to
make contributions, which may be deductible, to the Contract. A Roth IRA
also allows individuals to make contributions to the Contract, but it does
not allow a deduction for contributions, and distributions may be tax-free
if the owner meets certain rules.
. Tax-Sheltered Annuity (403(b) Plan): A 403(b) Plan may be made available to
employees of certain public school systems and tax-exempt organizations and
permits contributions to the Contract on a pre-tax basis.
. Corporate Pension and Profit-Sharing and H.R. 10 Plan: Employers and self-
employed individuals can establish pension or profit-sharing plans for their
employees or themselves and make contributions to the Contract on a pre-tax
basis.
. Deferred Compensation Plan (457 Plan): Certain governmental and tax-exempt
organizations can establish a plan to defer compensation on behalf of their
employees through contributions to the Contract.
If you purchase the policy as an individual and not under an individual
retirement annuity, 403(b) plan, 457 plan, or pension or profit sharing plan,
your policy is referred to as a nonqualified policy.
Withdrawals--Nonqualified Policies
If you make a withdrawal from your policy during the annuity commencement date,
the Internal Revenue Code treats that withdrawal as first coming from earnings
and then from your premium payments. When you make a withdrawal you are taxed
on the amount of the withdrawal that is earnings. (Any excess interest
adjustment resulting from a withdrawal from a guaranteed period option of the
fixed account may affect the amount on which you are taxed.) Different rules
apply for annuity payments. See "Annuity Payments" below.
The Internal Revenue Code also provides that withdrawn earnings may be subject
to a penalty. The amount of the penalty is equal to 10% of the amount that is
includable in income. Some withdrawals will be exempt from the penalty. They
include any amounts:
. paid on or after the taxpayer reaches age 59 1/2;
. paid after the taxpayer dies;
. paid if the taxpayer becomes totally disabled (as that term is defined in
the Internal Revenue Code);
. paid in a series of substantially equal payments made annually (or more
frequently) under a lifetime annuity;
. paid under an immediate annuity; or
. which come from premium payments made prior to August 14, 1982.
All deferred non-qualified annuity policies that are issued by AUSA Life (or
its affiliates) to the same owner during any calendar year are treated as one
annuity for purposes of determining the amount includable in the owner's income
when a taxable distributions occurs.
Withdrawals--Qualified Policies
The above information describing the taxation of nonqualified policies does not
apply to qualified policies. There are special rules that govern with respect
to qualified policies. Generally, these rules restrict:
. the amount that can be contributed to the policy during any year; and
. the time when amounts can be paid from the policies.
17
<PAGE>
In addition, a penalty tax may be assessed on amounts withdrawn from the policy
prior to the date you reach age 59 1/2, unless you meet one of the exceptions
to this rule. You may also be required to begin taking minimum distributions
from the policy by a certain rule. The terms of the plan may limit the rights
otherwise available to you under the policies.
We have provided more information in the Statement of Additional Information.
You should consult your legal counsel or tax adviser if you are considering
purchasing a policy for use with any retirement plan.
Withdrawals--403(b) Policies
The Internal Revenue Code limits the withdrawal of premium payments from
certain 403(b) policies. Withdrawals can generally only be made when an owner:
. reaches age 59 1/2;
. leaves his/her job;
. dies;
. becomes disabled (as that term is defined in the Internal Revenue Code); or
. in the case of hardship. However, in the case of hardship, the owner can
only withdraw the premium payments and not any earnings.
Diversification and Distribution Requirements
The Internal Revenue Code provides that the underlying investments for a
variable annuity must satisfy certain diversification requirements in order to
be treated as an annuity policy. The policy must also meet certain distribution
requirements at the death of an owner in order to be treated as an annuity
policy. These diversification and distribution requirements are discussed in
the Statement of Additional Information. PFL may modify the policy to attempt
to maintain favorable tax treatment.
Taxation of Death Benefit Proceeds
Amounts may be distributed from the policy because of the death of an owner or
the annuitant. Generally, such amounts are includable in the income of the
recipient:
. if distributed in a lump sum, these amounts are taxed in the same manner as
a full surrender; or
. if distributed under an annuity payment option, these amounts are taxed in
the same manner as annuity payments.
For these purposes, the "investment in the contract" is not affected by the
owner's or annuitant's death. That is, the "investment in the contract" remains
generally the total premium payments, less amounts received, which were not
includable in gross income.
Annuity Payments
Although the tax consequences may vary depending on the annuity payment option
you select, in general, for nonqualified and certain qualified policies, only a
portion of the annuity payments you receive will be includable in your gross
income.
In general, the excludable portion of each annuity payment you receive will be
determined as follows:
. Fixed payments--by dividing the "investment in the contract" on the annuity
commencement date by the total expected value of the annuity payments for
the term of the payments. This is the percentage of each annuity payment
that is excludable.
. Variable payments--by dividing the "investment in the contract" on the
annuity commencement date by the total number of expected periodic payments.
This is the amount of each annuity payment that is excludable.
The remainder of each annuity payment is includable in gross income. Once the
"investment in the contract" has been fully recovered, the full amount of any
additional annuity payments is includable in gross income.
If you select more than one annuity payment option, special rules govern the
allocation of the Policy's entire "investment in the contract" to each such
option, for purposes of determining the excludable amount of each payment
received under that option. We advise you to consult a competent tax adviser as
to the potential tax effects of allocating amounts to any particular annuity
payment option.
18
<PAGE>
If, after the annuity commencement date, annuity payments stop because an
annuitant died, the excess (if any) of the "investment in the contract" as of
the annuity commencement date over the aggregate amount of annuity payments
received that was excluded from gross income is generally allowable as a
deduction for your last taxable year.
Transfers, Assignments or Exchanges of Policies
A transfer of ownership or assignment of a policy, the designation of an
annuitant or other beneficiary who is not also the owner, the selection of
certain annuity commencement dates, or a change of annuitant, may result in
certain income or gift tax consequences to the owner that are beyond the scope
of this discussion. An owner contemplating any such transfer, assignment,
selection, or change should contact a competent tax adviser in respect to the
potential tax effects of such a transaction.
Possible Tax Law Changes
Although the likelihood of legislative changes is uncertain, there is always
the possibility that the tax treatment of the policy could change by
legislation or otherwise. You should consult a tax adviser with respect to
legislative developments and their effect on the policy.
7. ACCESS TO YOUR MONEY
Surrenders
You can have access to the money in your policy in several ways:
. by making a withdrawal (either a complete or partial withdrawal); or
. by taking annuity payments.
If you want to make a complete withdrawal, you will receive the value of your
policy including any excess interest adjustment, if applicable, minus:
. surrender charges; and
. premium taxes.
If you want to take a partial withdrawal, in most cases it must be for at least
$250. You must tell us how you want the withdrawal to be allocated among the
various investment choices.
Remember that any withdrawal you take will reduce the policy value and the
amount of the death benefit. See Section 9, Death Benefit, for more details.
Income taxes, federal tax penalties and certain restrictions may apply to any
withdrawals you make.
Delay of Payment and Transfers
Payment of any amount due from the separate account for a surrender, a death
benefit, or the death of the owner of a nonqualified policy, will generally
occur within seven business days from the date all required information is
received by PFL. PFL may be permitted to defer such payment from the separate
account if:
. the New York Stock Exchange is closed other than for usual weekends or
holidays or trading on the Exchange is otherwise restricted; or
. an emergency exists as defined by the SEC or the SEC requires that trading
be restricted; or
. the SEC permits a delay for the protection of owners.
In addition, transfers of amounts from the subaccounts may be deferred under
these circumstances.
Pursuant to the requirements of certain state laws, we reserve the right to
defer payment of the cash value from the fixed account for up to six months.
Excess Interest Adjustment
Money that you withdraw from a guaranteed period option of the fixed account
before the end of its guaranteed period (the number of years you specified the
money would remain in the guaranteed period option) may be subject to an excess
interest adjustment. At the time you request a withdrawal, if interest rates
set by PFL have risen since the date of the initial guarantee, the excess
interest adjustment will result in a lower cash value on surrender. However, if
interest rates have fallen since the date of the initial guarantee, the excess
interest adjustment will result in a higher cash value on surrender.
19
<PAGE>
There will be no excess interest adjustment on any of the following:
. nursing care and terminal condition withdrawals;
. periodic withdrawals of amounts equal to cumulative interest credited to the
guaranteed period options of the fixed account;
. withdrawals to satisfy any minimum distribution requirements; and
. systematic payout option payments, which do not exceed the cumulative
interest credited to the guaranteed period options of the fixed account; and
. surrenders, partial withdrawals and transfers from the one year fixed option
to any other investment choice.
Certain conditions must be satisfied. See the Statement of Additional
Information for more details.
Systematic Payout Option
You can receive regular payments from your policy by using the systematic
payout option. Under this option, you can receive up to 10% (annually) of your
cumulative premium payments free of surrender charges. Payments that are less
than the amount of cumulative interest credited to the guaranteed payment
options of the fixed account, less any prior interest withdrawals, are
available without an excess interest adjustment.
Payments can be made monthly, quarterly, semi-annually, or annually.
Nursing Care and Terminal Condition Withdrawal Option
No surrender charges or excess interest adjustment will apply if you or your
spouse has been:
. confined in a hospital or nursing facility for 30 days in a row; or
. diagnosed with a terminal condition (usually a life expectancy of 12 months
or less).
This benefit is also available to the annuitant or annuitant's spouse if the
owner is not a natural person.
This benefit may not be available in all states. See the policy or endorsement
for details and conditions.
8. PERFORMANCE
PFL and Atlas periodically advertise performance of the various investment
portfolios. We may disclose at least four different kinds of performance.
First, we may calculate performance by determining the percentage change in the
value of an accumulation unit by dividing the increase (decrease) for that unit
by the value of the accumulation unit at the beginning of the period. This
performance number reflects the deduction of the mortality and expense risk
fees and administrative charges. It does not reflect the deduction of any
applicable premium taxes or surrender charges. The deduction of any applicable
premium taxes or surrender charges would reduce the percentage increase or make
greater any percentage decrease.
Second, any advertisement will also include total return figures, which reflect
the deduction of the mortality and expense risk fees, administrative charges
and surrender charges.
Third, in addition, for certain investment portfolios, performance may be shown
for the period commencing from the inception date of the investment portfolio.
These figures should not be interpreted to reflect actual historical
performance of the separate account.
We also may, from time to time, include in our advertising and sales materials,
tax deferred compounding charts and other hypothetical illustrations, which may
include, comparisons of currently taxable and tax deferred investment programs,
based on selected tax brackets.
Appendix B contains performance information that you may find useful. It is
divided into various parts, depending upon the type of performance information
shown. Future performance will vary and future results will not be the same as
the results shown.
9. FAMILY PROTECTION FEATURE
We will pay a death benefit to the beneficiary you name, under certain
circumstances, if the
20
<PAGE>
annuitant dies during the accumulation phase and the annuitant was also an
owner. (If the annuitant was not an owner, a death benefit may or may not be
paid. See below.) The beneficiary may receive an amount payable under one of
the guaranteed period options or may receive a lump sum.
When We Pay A Death Benefit
Before the Annuity Commencement Date
We will pay a death benefit to your beneficiary IF:
. you are both the annuitant and an owner of the policy; and
. you die before the annuity commencement date.
We will also pay a death benefit to your beneficiary IF:
. you are not the annuitant; and
. the annuitant dies before the annuity commencement date; and
. you specifically requested that the death benefit be paid upon the
annuitant's death.
If the only beneficiary is your surviving spouse, then he or she may elect to
continue the policy as the new annuitant and owner, instead of receiving the
death benefit.
Distribution requirements apply upon the death of the owner. These
requirements are detailed in the Statement of Additional Information.
After the Annuity Commencement Date
The death benefit payable, if any, on or after the annuity commencement date
depends on the annuity payment option selected.
IF:
. you are not the annuitant; and
. you die on or after the annuity commencement date; and
. the entire interest in the policy has not been paid to you;
THEN:
. the remaining portion of such interest in the policy will be distributed at
least as rapidly as under the method of distribution being used as of the
date of your death.
When We Do Not Pay A Death Benefit
No death benefit is paid in the following cases:
IF:
. you are not the annuitant; and
. the annuitant dies prior to the annuity commencement date; and
. you did not specifically request that the death benefit be paid to the
beneficiary upon the annuitant's death;
THEN:
. you will become the new annuitant and the policy will continue.
IF:
. you are not the annuitant; and
. you die prior to the annuity commencement date;
THEN:
. the new owner must surrender the policy for the policy value increased or
decreased by an excess interest adjustment within five years of your death.
Note carefully. If the owner does not name a contingent owner, the owner's
estate will become the new owner. If no probate estate is opened (because, for
example, the owner has precluded the opening of a probate estate by means of a
trust or other instrument), and PFL has not received written notice of the
trust as a successor owner signed prior to the owner's death, then that trust
may not exercise ownership rights to the policy. It may be necessary to open a
probate estate in order to exercise ownership rights to the policy if no
contingent owner is named in a written notice received by PFL.
Amount of Death Benefit
Death benefit provisions may differ from state to state. The death benefit may
be paid as a lump sum or as annuity payments. The amount of the death benefit
depends on the guaranteed minimum death benefit, which is based on the age of
the annuitant on the policy date. The death benefit will be the greatest of:
. policy value on the date we receive the required information; or
21
<PAGE>
. cash value on the date we receive the required information; or
. guaranteed minimum death benefit (discussed below), plus premium payments,
less partial withdrawals from the date of death to the date the death
benefit is paid.
Guaranteed Minimum Death Benefit
If the annuitant(s) is younger than age 75 on the policy date, the guaranteed
minimum death benefit is the greater of:
. A 5% Annually Compounding Death Benefit. Total premium payments, less any
adjusted partial withdrawals, plus interest at an effective annual rate of
5% from the premium payment date or withdrawal date to the date of death
(but not later than your 76th birthday); or
. An Annual Step-Up Death Benefit. On each policy anniversary before your 76th
birthday, a new "stepped-up" death benefit is determined and becomes the
guaranteed minimum death benefit for that policy year. The death benefit is
equal to:
. the largest policy value on the policy date or on any policy anniversary
before you reach age 76; plus
. any premium payments you have made since then; minus
. any adjusted partial withdrawals we have paid to you since then.
If the annuitant(s) is age 75 or older on the policy date, the guaranteed
minimum death benefit is a Return of Premium.
IF, under both death benefit options:
. the surviving spouse elects to continue the policy instead of receiving the
death benefit; and
. the guaranteed minimum death benefit is greater than the policy value;
THEN:
. we will increase the policy value to be equal to the guaranteed minimum
death benefit. This increase is made only at the time the surviving spouse
elects to continue the policy.
Adjusted Partial Withdrawal
When you request a partial withdrawal, your guaranteed minimum death benefit
will be reduced by an amount called the adjusted partial withdrawal. Under
certain circumstances (such as when the policy value is less than the
guaranteed minimum death benefit immediately before the withdrawal), the
adjusted partial withdrawal may be more than the amount of your withdrawal
request. It is also possible that if a death benefit is paid after you have
made a partial withdrawal, then the total amount paid could be less than the
total premium payments. We have included a detailed explanation of this
adjustment in the Statement of Additional Information.
10. OTHER INFORMATION
Ownership
You, as owner of the policy, exercise all rights under the policy. You can
change the owner at any time by notifying us in writing. An ownership change
may be a taxable event.
Assignment
You can also assign the policy any time during your lifetime. PFL will not be
bound by the assignment until we receive written notice of the assignment. We
will not be liable for any payment or other action we take in accordance with
the policy before we receive notice of the assignment. An assignment may be a
taxable event. There may be limitations on your ability to assign a qualified
policy.
PFL Life Insurance Company
PFL Life Insurance Company was incorporated under the laws of the State of Iowa
on April 19, 1961 as NN Investors Life Insurance Company, Inc. It is engaged in
the sale of life and health insurance and annuity policies. PFL is a wholly-
owned indirect subsidiary of AEGON USA, Inc. which conducts most of its
operations through subsidiary companies engaged in the insurance business or in
providing non-insurance financial services. All of the stock of AEGON USA,
Inc., is indirectly owned by AEGON N.V. of The Netherlands, the securities of
which are publicly traded. AEGON N.V., a holding company, conducts its business
through subsidiary companies engaged primarily in the insurance
22
<PAGE>
business. PFL is licensed in the District of Columbia, Guam, and in all states
except New York.
All obligations arising under the policies, including the promote to make
annuity payments, are general corporate obligations of PFL.
The Separate Account
PFL established a separate account, called the PFL Life Variable Annuity
Account A, under the laws of the State of Iowa on February 17, 1997. The
separate account receives and currently invests the premium payments under the
policies that are allocated to the separate account for investment in shares of
the underlying mutual fund portfolios.
The separate account is registered with the SEC as a unit investment trust
under the Investment Company Act of 1940. However, the SEC does not supervise
the management, the investment practices, or the policies of the separate
account or PFL.
The assets of the separate account are held in PFL's name on behalf of the
separate account and belong to PFL. However, those assets that underlie the
policies are not chargeable with liabilities arising out of any other business
PFL may conduct. Income, gains, and losses, whether or not realized, from
assets allocated to the separate account are, in accordance with the policies,
credited or charged against the separate account without regard to PFL's other
income, gains or losses.
Information about the separate account can be reviewed and copied at the SEC's
Public Reference Room in Washington, D.C. You may obtain information about the
operation of the public reference room by calling the Commission at 1-800-SEC-
0330. In addition, the SEC maintains a web site (http://www.sec.gov) that
contains other information regarding the separate account.
Mixed and Shared Funding
Before making a decision concerning the allocation of premium payments to a
particular subaccount, please read the underlying funds' prospectuses. The
underlying funds are not limited to selling their shares to this separate
account and are permitted to accept investments from any separate account of an
insurance company. Since the portfolios of the underlying funds are available
to registered separate accounts offering variable annuity products of PFL, as
well as variable annuity and variable life products of other insurance
companies, and qualified retirement plans, there is a possibility that a
material conflict may arise between the interests of this separate account and
one or more of the separate accounts of another participating insurance
company. In the event of a material conflict, the affected insurance companies,
including PFL, agree to take any necessary steps to resolve the matter. This
includes removing their separate accounts from the underlying funds. See the
underlying funds' prospectuses for more details.
Reinstatements
You may decide to surrender your policy and transfer your money directly to
another life insurance company (sometimes referred to as a 1035 Exchange or a
trustee-to-trustee transfer). You may also request us to reinstate your policy
after such a transfer by returning the same total dollar amount of funds to the
applicable investment choices. The dollar amount will be used to purchase new
accumulation units at the then-current price. Because of changes in market
value, your new accumulation units may be worth more or less than the units you
previously owned. We recommend that you consult a tax professional to explain
the possible tax consequences of exchanges and/or reinstatements.
Voting Rights
PFL will vote all shares of the underlying funds in accordance with
instructions we receive from you and other owners that have voting interests in
the portfolios. We will send you and other owners written requests for
instructions on how to vote those shares. When we receive those instructions,
we will vote all of the shares in proportion to those instructions. If,
however, we determine that we are permitted to vote the shares in our own
right, we may do so.
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<PAGE>
Each person having a voting interest will receive proxy material, reports, and
other materials relating to the appropriate portfolio.
Distributor of the Policies
AFSG Securities Corporation is the principal underwriter of the policies. Like
PFL, it is an indirect wholly-owned subsidiary of AEGON USA, Inc. It is located
at 4333 Edgewood Road N.E., Cedar Rapids, IA 52499-0001. AFSG Securities
Corporation is registered as a broker/dealer under the Securities Exchange Act
of 1934. It is a member of the National Association of Securities Dealers, Inc.
It was incorporated in Pennsylvania on March 12, 1986.
The policies are sold through registered representatives of Atlas. Commissions
of up to 6.58% of premium payments will be paid to Atlas under its agreement
with AFSG Securities Corporation. These commissions are not deducted from
premium payments. In addition, certain production, persistency and managerial
bonuses may be paid. PFL may also, in conjunction with Atlas, pay compensation
to banks and other financial institutions for their services in connection with
the sale and servicing of the policies.
Non-participating Policy
The policy does not participate or share in the profits or surplus earnings of
PFL. No dividends are payable on the policy.
Variations in Policy Provisions
Certain provisions of the policies may vary from the descriptions in this
prospectus in order to comply with different state laws. See your policy for
variations since any such state variations will be included in your policy or
in riders or endorsements attached to your policy. New Jersey residents:
Annuity payments must begin on or before the later of: (1) the policy
anniversary that is closest to the annuitant's 70th birthday or (2) the 10th
policy anniversary. You may not select a guaranteed period option that would
extend beyond that date. Your options at the annuity commencement date are to
elect a lump sum payment, or elect to receive annuity payments under one of the
fixed payment options. New Jersey residents cannot elect variable payment
options. Consult your agent and the policy form itself for details regarding
these and other terms applicable to policies sold in New Jersey.
Year 2000 Matters
In May 1996, PFL Life Insurance Company (PFL) adopted and presently has in
place a Year 2000 Project Plan (the "Plan") to review and analyze existing
hardware and software systems, as well as voice and data communications
systems, to determine if they are Year 2000 compliant. As of March 1, 1999,
substantially all of PFL's mission-critical systems are Year 2000 compliant.
The Year 2000 Project Plan remains on track as PFL continues with the
validation of its mission-critical and non-mission-critical systems, including
revalidation testing in 1999. In addition, PFL has undertaken aggressive
initiatives to test all systems that interface with any third parties and other
business partners. All of these steps are aimed at allowing current operations
to remain unaffected by the year 2000 date change.
As of the date of this prospectus, PFL has identified and made available what
it believes are the appropriate resources of hardware, people, and dollars,
including the engagement of outside third parties, to ensure that the Plan will
be completed.
The actions taken by management under The Year 2000 Project Plan are intended
to significantly reduce PFL's risk of a material business interruption based on
the Year 2000 issues. It should be noted that the Year 2000 computer problem,
and its resolution, is complex and multifaceted, and any company's success
cannot be conclusively known until the Year 2000 is reached. In spite of its
efforts or results, PFL's ability to function unaffected to and through the
Year 2000 may be adversely affected by actions, or failure to act, of third
parties beyond our knowledge or control.
This statement is a Year 2000 Readiness Disclosure pursuant to Section 3(9) of
the Year 2000 Information and Readiness Disclosure Act, 15 U.S.C. Section 1
(1998).
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<PAGE>
Insurance Marketplace Standards Association
PFL is a member of the Insurance Marketplace Standards Association (IMSA). IMSA
members subscribe to a set of ethical standards involving the sales and service
of individually sold life insurance and annuities. As a member, we may use the
IMSA logo and language in advertisements.
Legal Proceedings
There are no legal proceedings to which the separate account is a party or to
which the assets of the account are subject. PFL, like other life insurance
companies, is involved in lawsuits. In some class action and other lawsuits
involving other insurers, substantial damages have been sought and/or material
settlement payments have been made. Although the outcome of any litigation
cannot be predicted with certainty, PFL believes that at the present time there
are no pending or threatened lawsuits that are reasonably likely to have a
material adverse impact on the separate account or PFL.
Financial Statements
The financial statements of PFL and the separate account are included in the
Statement of Additional Information.
Table of Contents of the Statement of Additional Information
<TABLE>
<S> <C>
Glossary of Terms
The Policy -- General Provisions
Certain Federal Income Tax Consequences
Investment Experience
Historical Performance Data
Published Ratings
State Regulation of PFL
Administration
Records and Reports
Distribution of the Policies
Other Products
Custody of Assets
Legal Matters
Independent Auditors
Other Information
Financial Statements
</TABLE>
25
<PAGE>
APPENDIX A
CONDENSED FINANCIAL INFORMATION
The accumulation unit values and the number of accumulation units outstanding
for each subaccount from the date of inception are shown in the following
tables.
The greater of a 5% Annually Compounding Death Benefit or an Annual Step-Up
Death Benefit; or the Return of Premium Death Benefit
(Total Separate Account Annual Expenses: 1.40%)
<TABLE>
<CAPTION>
Accumulation Unit Accumulation Unit Number of
Value Value Accumulation
at Beginning of Year at End of Year Units at End of Year
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Atlas Balanced Growth
Subaccount
1998.................. $ 0.983756 $ 1.093398 11,389,300.902
1997(/1/)............. $ 1.000000 $ 0.983756 3,469,693.985
- -------------------------------------------------------------------------------------
Dreyfus--Capital
Appreciation Subaccount
1998.................. $ 1.009698 $ 1.296659 3,327,523.150
1997(/1/)............. $ 1.000000 $ 1.009698 605,501.874
- -------------------------------------------------------------------------------------
Dreyfus--Disciplined
Stock Subaccount
1998.................. $ 1.19838 $ 1.274542 4,690,029.548
1997(/1/)............. $ 1.000000 $ 1.19838 247,060.402
- -------------------------------------------------------------------------------------
Dreyfus--Growth and
Income Subaccount
1998.................. $ 0.993285 $ 1.095299 3,163,385.885
1997(/1/)............. $ 1.000000 $ 0.993285 201,499.858
- -------------------------------------------------------------------------------------
Dreyfus--Quality Bond
Subaccount
1998.................. $ 1.024710 $ 1.066053 4,940,300.961
1997(/1/)............. $ 1.000000 $ 1.024710 377,687.374
- -------------------------------------------------------------------------------------
Dreyfus--Small Cap
Subaccount
1998.................. $ 0.941704 $ 0.896739 2,709,276.044
1997(/1/)............. $ 1.000000 $ 0.941704 397,321.058
- -------------------------------------------------------------------------------------
Dreyfus Small Cap Value
Subaccount
1998.................. $ 1.851229 $ 1.785929 509,101.233
1997(/1/)............. $ 1.968681 $ 1.851229 89,867.657
- -------------------------------------------------------------------------------------
T. Rowe Price Equity
Income Subaccount
1998.................. $ 1.925022 $ 2.065623 1,698,141.538
1997(/1/)............. $ 1.857860 $ 1.925022 156,951.014
- -------------------------------------------------------------------------------------
T. Rowe Price Growth
Stock Subaccount
1998.................. $ 2.043487 $ 2.593121 1,358,408.215
1997(/1/)............. $ 1.990457 $ 2.043487 98,880.797
- -------------------------------------------------------------------------------------
Endeavor Value Equity
Subaccount
1998.................. $ 2.086130 $ 2.212928 433,206.587
1997(/1/)............. $ 2.048951 $ 2.086130 44,448.849
- -------------------------------------------------------------------------------------
Federated High Income
Bond Fund II Subaccount
1998.................. $ 1.016935 $ 1.029959 2,819,023.591
1997(/1/)............. $ 1.000000 $ 1.016935 178,054.703
- -------------------------------------------------------------------------------------
Federated Utility Fund
II Subaccount
1998.................. $ 1.125700 $ 1.265017 1,492.268.116
1997(/1/)............. $ 1.000000 $ 1.125700 64,830.195
- -------------------------------------------------------------------------------------
WRL Janus Global
Subaccount
1998.................. $ 0.955350 $ 1.224958 3,285,525.975
1997(/1/)............. $ 1.000000 $ 0.955350 704,269.755
- -------------------------------------------------------------------------------------
WRL Janus Growth
Subaccount
1998.................. $19.665157 $31.898334 242,873.315
1997(/1/)............. $20.501671 $19.665157 12,277.088
- -------------------------------------------------------------------------------------
WRL VKAM Emerging Growth
Subaccount
1998.................. $ 0.943400 $ 1.277710 1,179,122.693
1997(/1/)............. $ 1.000000 $ 0.943400 126,110.341
</TABLE>
(/1/)Period from September 30, 1997 through December 31, 1997.
26
<PAGE>
APPENDIX B
HISTORICAL PERFORMANCE DATA
Standardized Performance Data
PFL and Atlas may advertise historical yields and total returns for the
subaccounts of the separate account. These figures are based on historical
earnings and are calculated according to guidelines from the SEC. They do not
indicate future performance.
The yield of a subaccount of the separate account for a policy refers to the
annualized income generated by an investment under a policy in the subaccount
over a specified 30-day period. The yield is calculated by assuming that the
income generated by the investment during that 30-day period is generated each
30-day period over a 12-month period and is shown as a percentage of the
investment.
The total return of a subaccount of the separate account refers to return
quotations assuming an investment under a policy has been held in the
subaccount for various periods of time including a period measured from the
date the subaccount commenced operations. When a subaccount has been in
operation for 1, 5, and 10 years, respectively, the total return for these
periods will be provided. The total return quotations for a subaccount will
represent the average annual compounded rates of return that equate an initial
investment of $1,000 in the subaccount to the redemption value of that
investment as of the last day of each of the periods for which total return
quotations are provided.
The yield and total return calculations for a subaccount do not reflect the
effect of any premium taxes that may be applicable to a particular policy. The
yield calculations also do not reflect the effect of any surrender charge that
may be applicable to a particular policy. To the extent that any or all of a
premium tax and/or surrender charge is applicable to a particular policy, the
yield and/or total return of that policy will be reduced. For additional
information regarding yields and total returns calculated using the standard
formats briefly summarized above, please refer to the Statement of Additional
Information.
Based on the method of calculation described in the Statement of Additional
Information, the average annual total returns for periods from inception of the
subaccounts to December 31, 1998, and for the one and five year periods ended
December 31, 1998 are shown in Table 1 below. Total returns shown reflect
deductions for the mortality and expense risk fee and administrative charges.
Performance figures will reflect the 1.25% mortality and expense risk fee.
Standard total return calculations will reflect the effect of surrender charges
that may be applicable to a particular period.
27
<PAGE>
TABLE 1
Standard Average Annual Total Returns*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 Year 5 Year Inception of Subaccount
Ended Ended the Subaccount Inception
Subaccount 12/31/98 12/31/98 to 12/31/98 Date
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Atlas Balanced Growth..... 5.70% N/A 3.08% September 30, 1997
Dreyfus--Capital
Appreciation............. 23.22% N/A 19.11% September 30, 1997
Dreyfus--Disciplined
Stock.................... 19.72% N/A 17.40% September 30, 1997
Dreyfus--Growth and
Income................... 4.81% N/A 3.23% September 30, 1997
Dreyfus--Quality Bond..... (1.51%) N/A 0.88% September 30, 1997
Dreyfus--Small Cap........ (10.44%) N/A (13.06%) September 30, 1997
Dreyfus Small Cap Value... (9.18%) N/A (12.18%) September 30, 1997
T. Rowe Price Equity
Income................... 1.81% N/A 4.56% September 30, 1997
T. Rowe Price Growth
Stock.................... 21.67% N/A 19.59% September 30, 1997
Endeavor Value Equity..... 0.56% N/A 2.00% September 30, 1997
Federated High Income Bond
Fund II.................. (4.30%) N/A (2.05%) September 30, 1997
Federated Utility Fund
II....................... 6.95% N/A 16.65% September 30, 1997
WRL Janus Global.......... 23.02% N/A 13.52% September 30, 1997
WRL Janus Growth.......... 57.48% N/A 38.81% September 30, 1997
WRL VKAM Emerging Growth.. 30.33% N/A 17.64% September 30, 1997
</TABLE>
Non-Standardized Performance Data
In addition to the standard data discussed above, similar performance data for
other periods may also be shown.
PFL may from time to time also advertise or disclose average annual total
return or other performance data in non-standard formats for a subaccount of
the separate account. The non-standard performance data may assume that no
surrender charge is applicable, and may also make other assumptions such as the
amount invested in a subaccount, differences in time periods to be shown, or
the effect of partial withdrawals or annuity payments.
All non-standard performance data will be advertised only if the standard
performance data is also disclosed. For additional information regarding the
calculation of other performance data, please refer to the Statement of
Additional Information.
The non-standardized average annual total return figures shown in Table 2 are
based on the assumption that the policy is not surrendered, and therefore the
surrender charge is not imposed.
28
<PAGE>
TABLE 2
Average Annual Total Returns*
(Assuming No Surrender Charge)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 Year 5 Year Inception of Subaccount
Ended Ended the Subaccount Inception
Subaccount 12/31/98 12/31/98 to 12/31/98 Date
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Atlas Balanced Growth..... 11.15% N/A 7.39% September 30, 1997
Dreyfus--Capital
Appreciation............. 28.42% N/A 23.06% September 30, 1997
Dreyfus--Disciplined
Stock.................... 24.97% N/A 21.38% September 30, 1997
Dreyfus--Growth and
Income................... 10.27% N/A 7.54% September 30, 1997
Dreyfus--Quality Bond..... 4.03% N/A 5.24% September 30, 1997
Dreyfus--Small Cap........ 94.77%) N/A (8.34%) September 30, 1997
Dreyfus Small Cap Value... (3.53%) N/A (7.49%) September 30, 1997
T. Rowe Price Equity
Income................... 7.30% N/A 8.84% September 30, 1997
T. Rowe Price Growth
Stock.................... 26.90% N/A 23.52% September 30, 1997
Endeavor Value Equity..... 6.08% N/A 6.34% September 30, 1997
Federated High Income Bond
Fund II.................. 1.28% N/A 2.39% September 30, 1997
Federated Utility Fund
II....................... 12.38% N/A 20.65% September 30, 1997
WRL Janus Global.......... 28.22% N/A 17.59% September 30, 1997
WRL Janus Growth.......... 62.21% N/A 42.34% September 30, 1997
WRL VKAM Emerging Growth.. 35.44% N/A 21.62% September 30, 1997
</TABLE>
Adjusted Historical Performance Data. The following performance data is
historic performance data for the underlying portfolios since their inception
reduced by some or all of the fees and charges under the policy. Such adjusted
historic performance includes data that precedes the inception dates of the
subaccounts. This data is designed to show the performance that would have
resulted if the Policy had been in existence during that time, based on the
performance of the applicable portfolio and the assumption that the applicable
subaccount was in existence for the same period as the portfolio with a level
of charges equal to those currently assessed under the policies. This data is
not intended to indicate future performance.
For instance, as shown Table 3 and Table 4 below, PFL may disclose average
annual total returns for the portfolios reduced by all fees and charges under
the policy, as if the policy had been in existence since the inception of the
portfolio. Such fees and charges include the mortality and expense risk fee,
administrative charge and surrender charges. Table 3 assumes a complete
surrender of the policy at the end of the period; therefore the surrender
charge is deducted. Table 4 assumes that the policy is not surrendered, and
therefore the surrender charge is not deducted.
The following information is also based on the method of calculation described
in the Statement of Additional Information. The adjusted historical average
annual total returns for periods ended December 31, 1998, were as follows:
29
<PAGE>
TABLE 3
Adjusted Historical Average Annual Total Returns*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Corresponding
10 Year Portfolio
Portfolio 1 Year 5 Year or Inception Inception Date
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Atlas Balanced Growth........ 5.70% N/A 3.08% September 30, 1997
Dreyfus--Capital
Appreciation................ 23.22% 21.87% 20.58% April 5, 1993
Dreyfus--Disciplined Stock... 19.72% N/A 26.75% May 1, 1996
Dreyfus--Growth and Income... 4.81% N/A 20.12% May 2, 1994
Dreyfus--Quality Bond........ (1.51%) 4.91% 7.48% August 31, 1990
Dreyfus--Small Cap........... (10.44%) 11.32% 35.38% August 31, 1990
Dreyfus Small Cap Value...... (9.18%) 10.05% 10.78% May 4, 1993
T. Rowe Price Equity Income.. 1.81% N/A 19.79% January 3, 1995
T. Rowe Price Growth Stock... 21.67% N/A 26.94% January 3, 1995
Endeavor Value Equity........ 0.56% 16.79% 15.24% May 27, 1993
Federated High Income Bond
Fund II..................... (4.30%) N/A 7.48% February 2, 1994
Federated Utility Fund II.... 6.95% N/A 13.31% February 28, 1994
WRL Janus Global............. 23.02% 17.81% 20.24% December 3, 1992
WRL Janus Growth............. 57.48% 23.48% 20.92% October 2, 1986
WRL VKAM Emerging Growth..... 30.33% 20.25% 21.43% March 1, 1993
- -------------------------------------------------------------------------------
</TABLE>
+ Ten Year Date
TABLE 4
Adjusted Historical Average Annual Total Returns*
(Assuming No Surrender Charge)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Corresponding
10 Year Portfolio
Portfolio 1 Year 5 Year or Inception Inception Date
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Atlas Balanced Growth......... 11.15% N/A 7.39% September 30, 1997
Dreyfus--Capital
Appreciation................. 28.42% 21.87% 20.58% April 5, 1993
Dreyfus--Disciplined Stock.... 24.97% N/A 27.40% May 1, 1996
Dreyfus--Growth and Income.... 10.27% N/A 20.12% May 2, 1994
Dreyfus--Quality Bond......... 4.03% 4.91% 7.48% August 31, 1990
Dreyfus--Small Cap............ (4.77%) 11.32% 35.38% August 31, 1990
Dreyfus Small Cap Value....... (3.53%) 10.03% 10.78% May 4, 1993
T. Rowe Price Equity Income... 7.30% N/A 19.91% January 3, 1995
T. Rowe Price Growth Stock.... 26.90% N/A 26.94% January 3, 1995
Endeavor Value Equity......... 6.08% 16.79% 15.24% May 27, 1993
Federated High Income Bond
Fund II...................... 1.28% N/A 7.65% February 2, 1994
Federated Utility Fund II..... 12.38% N/A 13.35% February 28, 1994
WRL Janus Global.............. 28.22% 17.81% 20.24% December 3, 1992
WRL Janus Growth.............. 62.21% 23.48% 20.92% October 2, 1986
WRL VKAM Emerging Growth...... 35.44% 20.25% 21.43% March 1, 1993
- ------------------------------------------------------------------------------
</TABLE>
+ Ten Year Date
* The calculation of total return performance for periods prior to inception
of the subaccounts reflects deductions for the mortality and expense risk
fee and administrative charge on a monthly basis, rather than a daily basis.
The monthly deduction is made at the beginning of each month and generally
approximates the performance that would have resulted if the subaccounts had
actually been in existence since the inception of the portfolio.
30
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE ATLAS PORTFOLIO BUILDER VARIABLE ANNUITY
Issued through
PFL LIFE VARIABLE ANNUITY ACCOUNT A
Offered by
PFL LIFE INSURANCE COMPANY
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001
This Statement of Additional Information expands upon subjects discussed in the
current prospectus for the Atlas Portfolio Builder Variable Annuity offered by
PFL Life Insurance Company. You may obtain a copy of the prospectus dated May
1, 1999 by calling Atlas at 1-800-933-2852, or by writing to Atlas Securities,
Inc., 794 Davis Street, P.O. Box 1894, San Leandro, CA, 94577. You may also
contact PFL Life Insurance Company at the Administrative and Service Office,
Financial Markets Division--Variable Annuity Dept., 4333 Edgewood Road, N.E.,
Cedar Rapids, Iowa 52499-0001. The prospectus sets forth information that a
prospective investor should know before investing in a policy. Terms used in
the current prospectus for the policy are incorporated in this Statement of
Additional Information.
This Statement of Additional Information is not a prospectus and should be read
only in conjunction with the prospectus for the policy and the PFL Life
Variable Annuity Account A.
Dated: May 1, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
GLOSSARY OF TERMS.......................................................... 3
THE POLICY--GENERAL PROVISIONS............................................. 6
Owner.................................................................... 6
Entire Policy............................................................ 6
Misstatement of Age or Sex............................................... 6
Addition, Deletion, or Substitution of Investments....................... 7
Excess Interest Adjustment............................................... 7
Reallocation of Policy Values After the Annuity Commencement Date........ 10
Annuity Payment Options.................................................. 10
Death Benefit............................................................ 11
Death of Owner........................................................... 14
Assignment............................................................... 14
Evidence of Survival..................................................... 14
Non Participating........................................................ 14
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................... 14
Tax Status of the Policy................................................. 15
Taxation of PFL.......................................................... 18
INVESTMENT EXPERIENCE...................................................... 19
Accumulation Units....................................................... 19
Annuity Unit Value and Annuity Payment Rates............................. 20
HISTORICAL PERFORMANCE DATA................................................ 22
Subaccount Yields........................................................ 22
Total Returns............................................................ 23
Other Performance Data................................................... 23
Adjusted Historical Performance Data..................................... 24
PUBLISHED RATINGS.......................................................... 24
STATE REGULATION OF PFL.................................................... 24
ADMINISTRATION............................................................. 24
RECORDS AND REPORTS........................................................ 24
DISTRIBUTION OF THE POLICIES............................................... 25
OTHER PRODUCTS............................................................. 25
CUSTODY OF ASSETS.......................................................... 25
LEGAL MATTERS.............................................................. 25
INDEPENDENT AUDITORS....................................................... 25
OTHER INFORMATION.......................................................... 25
FINANCIAL STATEMENTS....................................................... 26
</TABLE>
2
<PAGE>
GLOSSARY OF TERMS
Accumulation Unit--An accounting unit of measure used in calculating the policy
value in the separate account before the annuity commencement date.
Adjusted Policy Value--An amount equal to the policy value increased or
decreased by any excess interest adjustments.
Administrative and Service Office--PFL Life Insurance Company, Financial
Markets Division--Variable Annuity Department, 4333 Edgewood Road, N.E., Cedar
Rapids, Iowa 52499-0001.
Annuitant--The person entitled to receive annuity payments after the annuity
commencement date and during whose life any annuity payments involving life
contingencies will continue.
Annuity Commencement Date--The date upon which annuity payments are to
commence. This date may be any date at least thirty days after the policy date
and may not be later than the last day of the policy month starting after the
annuitant attains age 85, except as expressly allowed by PFL. In no event will
this date be later than the last day of the month following the month in which
the annuitant attains age 95.
Annuity Payment Option--A method of receiving a stream of annuity payments
selected by the owner.
Annuity Unit--An accounting unit of measure used in the calculation of the
amount of the second and each subsequent variable annuity payment after the
annuity commencement date.
Application--A written application, order form, or any other information
received electronically or otherwise upon which the policy is issued and/or is
reflected on the data or specifications page.
Beneficiary--The person who has the right to the death benefit set forth in the
policy.
Business Day--A day when the New York Stock Exchange is open for business.
Cash Value--The policy value, increased or decreased by any excess interest
adjustment, less the surrender charge, if any.
Code--The Internal Revenue Code of 1986, as amended.
Cumulative Free Percentage--The percentage (as applied to the cumulative
premium payments) which is available to the owner free of any surrender charge.
Due Proof of Death--A certified copy of a death certificate, a certified copy
of a decree of a court of competent jurisdiction as to the finding of death, a
written statement by the attending physician, or any other proof satisfactory
to PFL, will constitute due proof of death.
Excess Interest Adjustment ("EIA")--An adjustment can either decrease or
increase the amount to be received by the owner upon full surrender or
commencement of annuity payments from the guaranteed period options of the
fixed account. The adjustment reflects changes in the interest rates declared
by PFL since the date any payment was received by or an amount was transferred
to the guaranteed period option.
Fixed Account--One or more investment choices under the Policy that are part of
the general assets of PFL that are not in separate accounts.
Guaranteed Period Options--The various guaranteed interest rate periods of the
fixed account which may be offered by PFL into which premium payments may be
paid or amounts transferred.
-3-
<PAGE>
Investment Choices--Any of the guaranteed period options of the fixed account,
the one year fixed option, and any of the subaccounts of the separate account.
Nonqualified Policy--A policy other than a qualified policy.
One Year Fixed Option--An account in the fixed account into or from which
premium payments may be paid or amounts transferred, and which may be used for
dollar cost averaging, asset rebalancing, other transfers and partial
withdrawals.
Owner--The person who may exercise all rights and privileges under the policy.
The owner during the lifetime of the annuitant and prior to the annuity
commencement date is the person designated as the owner or a successor owner in
the application.
Policy Date--The date shown on the policy data page attached to the policy and
the date on which the policy becomes effective.
Policy Value--On or before the annuity commencement date, the policy value is
equal to the owner's:
.premium payments; minus
. partial withdrawals (including any applicable excess interest adjustments and
surrender charges on such withdrawals); plus
.interest credited in the fixed account; plus
.accumulated gains or losses in the separate account; minus
.any applicable premium or other taxes and transfer fees, if any.
Policy Year--A policy year begins on the policy date and on each policy
anniversary.
Premium Payment--An amount paid to PFL by the owner or on the owner's behalf as
consideration for the benefits provided by the policy.
Qualified Policy--A policy issued in connection with retirement plans that
qualify for special federal income tax treatment under the Code.
Separate Account--The PFL Life Variable Annuity Account A, a separate account
established and registered as a unit investment trust under the Investment
Company Act of 1940, (the "1940 Act"), as amended, to which premium payments
under the policies may be allocated.
Subaccount--A subdivision within the separate account, the assets of which are
invested in a specified portfolio of the underlying funds.
Successor Owner--A person appointed by the owner to succeed to ownership of the
policy in the event of the death of the owner who is not the annuitant before
the annuity commencement date.
Surrender Charge--The applicable contingent deferred sales charge, assessed on
certain full surrenders or partial withdrawals of premium payments to cover
expenses relating to the sale of the policies.
Underlying Funds--The designated portfolios of: (1) Atlas Insurance Trust; (2)
Dreyfus Variable Investment Fund; (3) Endeavor Series Trust; (4) Federated
Insurance Series; and (5) WRL Series Fund, Inc., which are described in the
underlying fund prospectuses that are attached to this prospectus.
Valuation Period--The period of time from one determination of accumulation
unit and annuity unit values to the next subsequent determination of values.
Such determination shall be made on each business day.
-4-
<PAGE>
Variable Annuity Payments--Payments made pursuant to an annuity payment option
which fluctuate as to dollar amount or payment term in relation to the
investment performance of the specified subaccounts within the separate
account.
Written Notice--Written notice, signed by the owner, that gives PFL the
information it requires and is received at the administrative and service
office. For some transactions, PFL may accept an electronic notice such as
telephone instructions. Such electronic notice must meet the requirements PFL
establishes for such notices.
-5-
<PAGE>
In order to supplement the description in the prospectus, the following
provides additional information about PFL and the policy, which may be of
interest to a prospective purchaser. Words printed in italics in this Statement
of Additional Information are defined in the Glossary of Terms, found on page
3.
THE POLICY--GENERAL PROVISIONS
Owner
The policy shall belong to the owner upon issuance of the policy after
completion of an application and delivery of the initial premium payment. While
the annuitant is living, the owner may: (1) assign the policy; (2) surrender
the policy; (3) amend or modify the policy with PFL's consent; (4) receive
annuity payments or name a payee to receive the payments; and (5) exercise,
receive and enjoy every other right and benefit contained in the policy. The
exercise of these rights may be subject to the consent of any assignee or
irrevocable beneficiary; and of the owner's spouse in a community or marital
property state.
A successor owner can be named in the application or in a written notice. The
successor owner will become the new owner upon the owner's death, if the owner
predeceases the annuitant. If no successor owner survives the owner and the
owner predeceases the annuitant, the owner's estate will become the owner.
Note Carefully. If the owner does not name a successor owner, the owner's
estate will become the new owner if the owner predeceases the annuitant. If no
probate estate is opened because the owner has precluded the opening of a
probate estate by means of a trust or other instrument, unless PFL has received
written notice of the trust as a successor owner signed prior to the owner's
death, that trust may not exercise ownership rights to the policy. It may be
necessary to open a probate estate in order to exercise ownership rights to the
policy if no successor owner is named in a written notice received by PFL.
The owner may change the ownership of the policy in a written notice. When this
change takes effect, all rights of ownership in the policy will pass to the new
owner. A change of ownership may have adverse tax consequences.
When there is a change of owner or successor owner, the change will take effect
as of the date the owner signs the written notice, subject to any payment PFL
has made or action PFL has taken before recording the change. Changing the
owner or naming a new successor owner cancels any prior choice of successor
owner, but does not change the designation of the beneficiary or the annuitant.
If ownership is transferred (except to the owner's spouse) because the owner
dies before the annuitant, the adjusted policy value generally must be
distributed to the successor owner within five years of the owner's death, or
if the first payment begins within one year of the owner's death, payments must
be made for a period certain which does not exceed that successor owner's life
expectancy.
Entire Policy
The policy, any endorsements thereon, and the application constitute the entire
contract between PFL and the owner. All statements in the application are
representations and not warranties. No statement will cause the policy to be
void or to be used in defense of a claim unless contained in the application.
Misstatement Of Age Or Sex
If the age or sex of the annuitant has been misstated, PFL will change the
annuity benefit payable to that which the premium payments would have purchased
for the correct age or sex. The dollar amount
-6-
<PAGE>
of any underpayment made by PFL shall be paid in full with the next payment due
such person or the beneficiary. The dollar amount of any overpayment made by
PFL due to any misstatement shall be deducted from payments subsequently
accruing to such person or beneficiary. Any underpayment or overpayment will
include interest at 5% per year, from the date of the wrong payment to the date
of the adjustment. The age of the annuitant may be established at any time by
the submission of proof satisfactory to PFL.
Addition, Deletion, or Substitution of Investments
PFL cannot and does not guarantee that any of the subaccounts or portfolios
will always be available for premium payments, allocations, or transfers. PFL
retains the right, subject to any applicable law, to make certain changes in
the separate account and its investments. PFL reserves the right to eliminate
the shares of any portfolio held by a subaccount and/or to substitute shares of
another portfolio of the underlying funds, or of another registered open-end
management investment company for the shares of any portfolio, if the shares of
the portfolio are no longer available for investment or if, in PFL's judgment,
investment in any portfolio would be inappropriate in view of the purposes of
the separate account. To the extent required by the 1940 Act, substitutions of
shares attributable to an owner's interest in a subaccount will not be made
without prior notice to the owner and the prior approval of the SEC. Nothing
contained herein shall prevent the separate account from purchasing other
securities for other series or classes of variable annuity policies, or from
effecting an exchange between series or classes of variable annuity policies on
the basis of requests made by owners.
New subaccounts may be established when, in the sole discretion of PFL,
marketing, tax, investment or other conditions warrant. Any new subaccounts may
be made available to existing owners on a basis to be determined by PFL. Each
additional subaccount will purchase shares in a mutual fund portfolio or other
investment vehicle. PFL may also eliminate one or more subaccounts if, in its
sole discretion, marketing, tax, investment or other conditions warrant such
change. In the event any subaccount is eliminated, PFL will notify owners and
request a reallocation of the amounts invested in the eliminated subaccount. If
the owner provides no such reallocation, PFL will reinvest the amounts invested
in the eliminated subaccount in the subaccount that invests in another
subaccount, if appropriate.
In the event of any such substitution or change, PFL may, by appropriate
endorsement, make such changes in the policies as may be necessary or
appropriate to reflect such substitution or change. Furthermore, if deemed to
be in the best interests of persons having voting rights under the policies,
the separate account may be (i) operated as a management company under the 1940
Act or any other form permitted by law, (ii) deregistered under the 1940 Act in
the event such registration is no longer required or (iii) combined with one or
more other separate accounts. To the extent permitted by applicable law, PFL
also may (1) transfer the assets of the separate account associated with the
policies to another account or accounts, (2) restrict or eliminate any voting
rights of owners or other persons who have voting rights as to the separate
account, (3) create new separate accounts, (4) add new subaccounts to or remove
existing subaccounts from the separate account, or combine subaccounts, or (5)
add new underlying funds, or substitute a new fund for an existing fund.
Excess Interest Adjustment
Money that you withdraw from a guaranteed period option of the fixed account
before the end of its guaranteed period (the number of years you specified the
money would remain in the guaranteed period option) may be subject to an excess
interest adjustment. At the time you request a withdrawal, if interest rates
set by PFL have risen since the date of the initial guarantee, the excess
interest adjustment will result in a lower cash value. However, if interest
rates have fallen since the date of the initial guarantee, the excess interest
adjustment will result in a higher cash value.
At the time of a full surrender, excess interest adjustments will not reduce
the adjusted policy value for a guaranteed period option below the amount paid
into it, less any prior partial withdrawals and
-7-
<PAGE>
transfers from that guaranteed period option, plus interest at the policy's
minimum guaranteed effective annual interest rate of 3%. This is referred to as
the EIA floor.
The formula that will be used to determine the excess interest adjustment is:
S*(G-C)* (M/12)
S = Gross amount being withdrawn that is subject to the excess interest
adjustment
G = Guaranteed Interest Rate applicable to S.
C = Current Guaranteed Interest Rate then being offered on new premium payments
for the next longer guaranteed period than "M". If this policy form or such
a guaranteed period is no longer offered, "C" will be the U.S. Treasury rate
for the next longer maturity (in whole years) than "M" on the 25th day of
the previous calendar month, plus up to 2%.
M = Number of months remaining in the current guaranteed period, rounded up to
the next higher whole number of months.
* = multiplication
# = exponentiation
Example 1
(Full Surrender, Rates Increase by 3%):
<TABLE>
<C> <S>
Assumptions:
- -------------------------------------------------------------------------------
Single Premium: $50,000
- -------------------------------------------------------------------------------
Guarantee Period: 5 Years
- -------------------------------------------------------------------------------
Guarantee Rate: 5.50% per annum
- -------------------------------------------------------------------------------
Full Surrender: Middle of policy year 3
- -------------------------------------------------------------------------------
Policy Value ("PV") before surrender = $50,000 * (1.055)# 2.5 = $57,161.18
- -------------------------------------------------------------------------------
Surrender Charge Free Amount = $50,000 * .3 = $15,000.00
- -------------------------------------------------------------------------------
EIA Free Amount = $57,161.18-$50,000 = $7,161.18
- -------------------------------------------------------------------------------
Amount Subject to EIA = $57,161.18-$7,161.18 = $50,000.00
- -------------------------------------------------------------------------------
= $50,000 * (1.03)# 2.5 =
EIA Floor $53,834.80
- -------------------------------------------------------------------------------
Excess Interest Adjustment Assumptions: "G" = .055; "C" = .085; "M" = 30
- -------------------------------------------------------------------------------
Excess Interest Adjustment = S * (G-C) * (M/12)
= $50,000.00 * (.055-.085) * (30/12)
= -$3,750.00, but excess interest
adjustment cannot cause
the adjusted policy value to fall
below the EIA floor, so the
adjustment is limited to: $53,834.80-
$57,161.18 = -$3,326.38
- -------------------------------------------------------------------------------
Adjusted Policy Value = PV + EIA
= $57,161.18 + (- $3,326.38) =
$53,834.80
- -------------------------------------------------------------------------------
= ($50,000-$15,000.00) * .06 =
Surrender Charge $2,100.00
- -------------------------------------------------------------------------------
Cash Value at middle of Policy Year 3 = PV + EIA-surrender charge
= $57,161.18 + (-$3,326.38)-$2,100.00
= $51,734.80
</TABLE>
-8-
<PAGE>
Example 2
(Full Surrender, Rates Decrease by 1%):
<TABLE>
<C> <S>
Assumptions:
- -------------------------------------------------------------------------------
Single Premium: $50,000
- -------------------------------------------------------------------------------
Guarantee Period: 5 Years
- -------------------------------------------------------------------------------
Guarantee Rate: 5.50% per annum
- -------------------------------------------------------------------------------
Full Surrender: Middle of policy year 3
- -------------------------------------------------------------------------------
= $50,000 * (1.055) #
Policy Value before surrender 2.5 = $57,161.18
- -------------------------------------------------------------------------------
Surrender Charge Free Amount = $50,000 * .30 = $15,000.00
- -------------------------------------------------------------------------------
EIA Free Amount = $57,161.18 - $50,000 = $7,161.18
- -------------------------------------------------------------------------------
Amount Subject to EIA = $57,161.18 - $7,161.18 = $50,000.00
- -------------------------------------------------------------------------------
= $50,000 * (1.03) #
EIA Floor 2.5 = $53,834.80
Excess Interest Adjustment Assumptions: "G" = .055; "C" = .045; "M" = 30
- -------------------------------------------------------------------------------
Excess Interest Adjustment = S * (G - C) * (M/12)
= $50,000 * (.055 - .045) * (30/12)
= $1,250.00
- -------------------------------------------------------------------------------
Adjusted Policy Value = PV + EIA
= $57,161.18 + $1,250.00 = $58,411.18
- -------------------------------------------------------------------------------
= ($50,000 - $15,000.00) *
Surrender Charge .06 = $2,100.00
- -------------------------------------------------------------------------------
Cash Value at middle of Policy Year 3 = PV + EIA-surrender charge
= $57,161.18 + $1,250 -
$2,100.00 = $56,311.18
</TABLE>
On a partial withdrawal, PFL will pay the owner the full amount of withdrawal
requested (as long as the policy value is sufficient).
Example 3
(Partial Withdrawal, Rates Increase by 1%):
<TABLE>
<S> <C>
Assumptions:
- ----------------------------------------------------------------------------------------
Single Premium: $50,000
- ----------------------------------------------------------------------------------------
Guarantee Period: 5 Years
- ----------------------------------------------------------------------------------------
Guarantee Rate: 5.50% per annum
- ----------------------------------------------------------------------------------------
Partial Withdrawal: $30,000; Middle of policy year 3
- ----------------------------------------------------------------------------------------
Policy Value before
withdrawal = $50,000 * (1.055) # 2.5 = $57,161.18
- ----------------------------------------------------------------------------------------
Surrender Charge Free
Amount = $50,000.00 * .30 = $15,000.00
- ----------------------------------------------------------------------------------------
EIA Free Amount = $57,161.18 - $50,000 = $7,161.18
- ----------------------------------------------------------------------------------------
"S" = $30,000 - $7,161.18 = $22,838.82
- ----------------------------------------------------------------------------------------
Excess Interest Adjust-
ment = $22,838.82 * (.055 - .065) * (30/12) = -$570.97
- ----------------------------------------------------------------------------------------
Surrender Charge = [($30,000.00 - $15,000.00) - (-$570.97)] * (.06) = $934.26
- ----------------------------------------------------------------------------------------
Gross Partial Withdraw-
al: = $30,000.00 - (-$570.97) + $934.26 = $31,505.23
- ----------------------------------------------------------------------------------------
Policy Value after with-
drawal = $57,161.18 - [$30,000.00 - (-$570.97) + ($934.26)]
= $57,161.18 - $31,505.23 = $25,655.95
</TABLE>
-9-
<PAGE>
Example 4
(Partial Withdrawal, Rates Decrease by 1%):
<TABLE>
<CAPTION>
Assumptions:
- -------------------------------------------------------------------------------------
<S> <C>
Single Premium: $50,000
- -------------------------------------------------------------------------------------
Guarantee Period: 5 Years
- -------------------------------------------------------------------------------------
Guaranteed Rate: 5.50% per annum
- -------------------------------------------------------------------------------------
Partial Surrender: $30,000; Middle of policy year 3
- -------------------------------------------------------------------------------------
Policy Value before
withdrawal = $50,000 * (1.055) # 2.5 = $57,161.18
- -------------------------------------------------------------------------------------
Surrender Charge Free
Amount = $50,000.00 * .30 = $15,000.00
- -------------------------------------------------------------------------------------
EIA Free Amount = $57,161.18 - $50,000 = $7,161.18
- -------------------------------------------------------------------------------------
"S" = $30,000.00 - $7,161.18 = $22,838.82
- -------------------------------------------------------------------------------------
Excess Interest
Adjustment = $22,838.82 * (.055 - .045) * (30/12) = $570.97
- -------------------------------------------------------------------------------------
Surrender Charge = [($30,000.00 - $15,000.00) - $570.97] * (.06) = $865.74
- -------------------------------------------------------------------------------------
Gross Partial Withdrawal = $30,000.00 - ($570.97) + $865.74 = $30,294.77
- -------------------------------------------------------------------------------------
Policy Value after
withdrawal = $57,161.18 - [$30,000.00 - ($570.97) + $865.74]
= $57,161.18 - $30,294.77 = $26,866.41
</TABLE>
Reallocation Of Policy Values After The Annuity Commencement Date
After the annuity commencement date, the owner may reallocate the value of a
designated number of annuity units of a subaccount of the mutual fund account
then credited to a policy into an equal value of annuity units of one or more
other subaccounts of the mutual fund account, or the fixed account. The
reallocation shall be based on the relative value of the annuity units of the
account(s) or subaccount(s) at the end of the business day on the next payment
date. The minimum amount which may be reallocated is the lesser of (1) $10 of
monthly income or (2) the entire monthly income of the annuity units in the
account or subaccount from which the transfer is being made. If the monthly
income of the annuity units remaining in an account or subaccount after a
reallocation is less than $10, PFL reserves the right to include the value of
those annuity units as part of the transfer. The request must be in writing to
PFL's administrative and service office. There is no charge assessed in
connection with such reallocation. PFL reserves the right to limit the number
of times a reallocation of policy value may be made in any given policy year.
After the annuity commencement date, no transfers may be made from the fixed
account to the separate account.
Annuity Payment Options
During the lifetime of the annuitant and prior to the annuity commencement
date, the owner may choose an annuity payment option or change the election,
but written notice of any election or change of election must be received by
PFL at its administrative and service office at least thirty (30) days prior to
the annuity commencement date. If no election is made prior to the annuity
commencement date, annuity payments will be made under (i) Payment Option 3,
life income with fixed (level) payments for 10 years certain, using the
existing adjusted policy value of the fixed account, or (ii) under Payment
Option 3, life income with variable payments for 10 years certain using the
existing policy value of the separate account, or (iii) in a combination of (i)
and (ii).
-10-
<PAGE>
The person who elects an annuity payment option can also name one or more
successor payees to receive any unpaid amount PFL has at the death of a payee.
Naming these payees cancels any prior choice of a successor payee.
A payee who did not elect the annuity payment option does not have the right to
advance or assign payments, take the payments in one sum, or make any other
change. However, the payee may be given the right to do one or more of these
things if the person who elects the option tells PFL in writing and PFL agrees.
Variable Payment Options. The dollar amount of the first variable annuity
payment will be determined in accordance with the annuity payment rates set
forth in the applicable table contained in the policy. The tables are based on
a 5% effective annual Assumed Investment Return and the "1983 Table a" (male,
female, and unisex if required by law) mortality table improved to the year
2000 with projection Scale G. ("The 1983 Table a" mortality rates are adjusted
based on improvements in mortality since 1983 to more appropriately reflect
increased longevity. This is accomplished using a set of improvement factors
referred to as projection scale G.) The dollar amount of additional variable
annuity payments will vary based on the investment performance of the
subaccount(s) of the separate account selected by the annuitant or beneficiary.
Determination of the First Variable Payment. The amount of the first variable
payment depends upon the sex (if consideration of sex is allowed under state
law) and adjusted age of the annuitant. The adjusted age is the annuitant's
actual age nearest birthday, on the annuity commencement date, adjusted as
follows:
<TABLE>
<CAPTION>
Annuity
Commencement Date Adjusted Age
----------------- ------------
<S> <C>
Before 2001 Actual Age
2001-2010 Actual Age minus 1
2011-2020 Actual Age minus 2
2021-2030 Actual Age minus 3
2031-2040 Actual Age minus 4
After 2040 As determined by PFL
</TABLE>
This adjustment assumes an increase in life expectancy, and therefore it
results in lower payments than without such an adjustment.
Determination of Additional Variable Payments. All variable annuity payments
other than the first are calculated using annuity units that are credited to
the policy. The number of annuity units to be credited in respect of a
particular subaccount is determined by dividing that portion of the first
variable annuity payment attributable to that subaccount by the annuity unit
value of that subaccount on the annuity commencement date. The number of
annuity units of each particular subaccount credited to the policy then remains
fixed, assuming no transfers to or from that subaccount occur. The dollar value
of variable annuity units in the chosen subaccount will increase or decrease
reflecting the investment experience of the chosen subaccount. The dollar
amount of each variable annuity payment after the first may increase, decrease
or remain constant, and is equal to the sum of the amounts determined by
multiplying the number of annuity units of each particular subaccount credited
to the policy by the annuity unit value for the particular subaccount on the
date the payment is made.
Death Benefit
Adjusted Partial Withdrawal. The amount of your Guaranteed Minimum Death
Benefit is reduced due to a partial withdrawal called the adjusted partial
withdrawal. The reduction amount depends on the relationship between your
Guaranteed Minimum Death Benefit and policy value. The adjusted partial
withdrawal is (1) multiplied by (2), where:
-11-
<PAGE>
(1) is the gross partial withdrawal, where gross partial
withdrawal=requested withdrawal--excess interest adjustment + surrender
charges on (excess partial withdrawal--excess interest adjustment); and
(2) is the adjustment factor, which is the current death benefit prior to
withdrawal divided by the current policy value prior to withdrawal.
The following examples describe the effect of a withdrawal on the Guaranteed
Minimum Death Benefit and policy value.
EXAMPLE 1
(Assumed Facts for Example)
<TABLE>
- -------------------------------------------------------------------------------
<C> <S>
$75,000 current Guaranteed Minimum Death Benefit (GMDB) before withdrawal
- -------------------------------------------------------------------------------
$50,000 current policy value before withdrawal
- -------------------------------------------------------------------------------
$75,000 current death benefit (larger of policy value and GMDB)
- -------------------------------------------------------------------------------
6% current surrender charge percentage
- -------------------------------------------------------------------------------
$15,000 requested withdrawal
- -------------------------------------------------------------------------------
surrender charge--free amount (assumes 20% cumulative free percentage
$10,000 is available)
- -------------------------------------------------------------------------------
$ 5,000 excess partial withdrawal (EPW) (amount subject to surrender charge)
- -------------------------------------------------------------------------------
$ 100 excess interest adjustment--
(assumes interest rates have decreased since initial guarantee)
- -------------------------------------------------------------------------------
$ 294 surrender charge on (EPW less EIA) = 0.06*(5000 - 100)
- -------------------------------------------------------------------------------
reduction in policy value due to excess partial withdrawal = 5000-
$ 5,194 100 + 294
- -------------------------------------------------------------------------------
$22,791 adjusted partial withdrawal = 15,194 * (75,000/50,000)
- -------------------------------------------------------------------------------
$52,209 New GMDB (after withdrawal) = 75,000-22,791
- -------------------------------------------------------------------------------
$34,806 New policy value (after withdrawal) = 50,000-10,000-5,194
</TABLE>
<TABLE>
<C> <S>
Summary:
Reduction in guaranteed minimum death benefit = $22,791
Reduction in policy value = $15,194
</TABLE>
Note, Guaranteed Minimum Death Benefit is reduced more than the policy value
since the Guaranteed Minimum Death Benefit was greater than the policy value
just prior to the withdrawal.
-12-
<PAGE>
EXAMPLE 2
(Assumed Facts for Example)
<TABLE>
- -------------------------------------------------------------------------------
<C> <S>
$50,000 current Guaranteed Minimum Death Benefit (GMDB) before withdrawal
- -------------------------------------------------------------------------------
$75,000 current policy value before withdrawal
- -------------------------------------------------------------------------------
$75,000 current death benefit (larger of policy value and GMDB)
- -------------------------------------------------------------------------------
6% current surrender charge percentage
- -------------------------------------------------------------------------------
$15,000 requested withdrawal
- -------------------------------------------------------------------------------
surrender charge--free amount (assumes 15% cumulative free percentage
$11,250 is available)
- -------------------------------------------------------------------------------
$ 3,750 excess partial withdrawal (EPW) (amount subject to surrender charge)
- -------------------------------------------------------------------------------
$ -100 excess interest adjustment--
(assumes interest rates have increased since initial guarantee)
- -------------------------------------------------------------------------------
$ 231 surrender charge on (EPW less EIA) = 0.06*[(3750 - (-100))]
- -------------------------------------------------------------------------------
reduction in policy value due to EPW = 3750 - (-
$ 4,081 100) + 231 = 3750 + 100 + 231
- -------------------------------------------------------------------------------
$15,331 adjusted partial withdrawal = $15,331 * (75,000/75,000)
- -------------------------------------------------------------------------------
$34,669 New GMDB (after withdrawal) = 50,000 - 15,331
- -------------------------------------------------------------------------------
$59,669 New policy value (after withdrawal) = 75,000 - 11,250 - 4,081
</TABLE>
<TABLE>
<C> <S>
Summary:
Reduction in guaranteed minimum death benefit = $15,331
Reduction in policy value = $15,331
</TABLE>
Note, the guaranteed minimum death benefit and policy value are reduced by the
same amount since the policy value was higher than the guaranteed minimum death
benefit just prior to the withdrawal.
Due proof of death of the annuitant is proof that the annuitant who is the
owner died prior to the commencement of annuity payments. Upon receipt of this
proof and an election of a method of settlement and return of the policy, the
death benefit generally will be paid within seven days, or as soon thereafter
as PFL has sufficient information about the beneficiary to make the payment.
The beneficiary may receive the amount payable in a lump sum cash benefit, or,
subject to any limitation under any state or federal law, rule, or regulation,
under one of the annuity payment options described above, unless a settlement
agreement is effective at the death of the owner preventing such election.
Distribution Requirements. If the annuitant was the owner, and the beneficiary
- --------------------------
was not the annuitant's spouse, the death benefit must (1) be distributed
within five years of the date of the deceased owner's death, or (2) payments
under an annuity payment option must begin no later than one year after the
deceased owner's death and must be made for the beneficiary's lifetime or for a
period certain (so long as any certain period does not exceed the beneficiary's
life expectancy). Death proceeds which are not paid to or for the benefit of a
natural person must be distributed within five years of the date of the
deceased owner's death. If the sole beneficiary is the deceased owner's
surviving spouse, such spouse may elect to continue the policy as the new
annuitant and owner instead of receiving the death benefit. (See "Certain
Federal Income Tax Consequences")
If the annuitant is not the owner, and the owner dies prior to the annuity
commencement date, a successor owner may surrender the policy at any time for
the amount of the adjusted policy value. If the successor owner is not the
deceased owner's spouse, however, the adjusted policy value must be
distributed: (1) within five years after the date of the deceased owner's
death, or (2) payments under an
-13-
<PAGE>
annuity payment option must begin no later than one year after the deceased
owner's death and must be made for the successor owner's lifetime or for a
period certain (so long as any period certain does not exceed the successor
owner's life expectancy).
Beneficiary. The beneficiary designation in the application will remain in
- ------------
effect until changed. The owner may change the designated beneficiary by
sending written notice to PFL. The beneficiary's consent to such change is not
required unless the beneficiary was irrevocably designated or law requires
consent. (If an irrevocable beneficiary dies, the owner may then designate a
new beneficiary.) The change will take effect as of the date the owner signs
the written notice, whether or not the owner is living when the Notice is
received by PFL. PFL will not be liable for any payment made before the written
notice is received. If more than one beneficiary is designated, and the owner
fails to specify their interests, they will share equally.
Death of Owner
Federal tax law requires that if any owner (including any joint owner or any
successor owner who has become a current owner) dies before the annuity
commencement date, then the entire value of the policy must generally be
distributed within five years of the date of death of such owner. Certain rules
apply where (1) the spouse of the deceased owner is the sole beneficiary; (2)
the owner is not a natural person and the primary annuitant dies or is changed;
or (3) any owner dies after the annuity commencement date. See "Certain Federal
Income Tax Consequences" below for a detailed description of these rules. Other
rules may apply to qualified policies.
Assignment
During the lifetime of the annuitant, the owner may assign any rights or
benefits provided by a nonqualified policy. An assignment will not be binding
on PFL until a copy has been filed at its administrative and service office.
The rights and benefits of the owner and beneficiary are subject to the rights
of the assignee. PFL assumes no responsibility for the validity or effect of
any assignment. Any claim made under an assignment shall be subject to proof of
interest and the extent of the assignment. An assignment may have adverse tax
consequences.
Unless the owner so directs by filing written notice with PFL, no beneficiary
may assign any payments under the policy before they are due. To the extent
permitted by law, no payments will be subject to the claims of any
beneficiary's creditors.
Ownership under qualified policies is restricted to comply with the Code.
Evidence Of Survival
PFL reserves the right to require satisfactory evidence that a person is alive
if a payment is based on that person being alive. No payment will be made until
PFL receives such evidence.
Non-Participating
The policy will not share in PFL's surplus earnings; no dividends will be paid.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary does not constitute tax advice. It is a general
discussion of certain of the expected federal income tax consequences of
investment in and distributions with respect to a policy, based on the Code, as
amended, proposed and final Treasury Regulations thereunder, judicial
authority, and current administrative rulings and practice. This summary
discusses only certain federal income tax consequences to "United States
Persons," and does
-14-
<PAGE>
not discuss state, local, or foreign tax consequences. United States Persons
means citizens or residents of the United States, domestic corporations,
domestic partnerships and trusts or estates that are subject to United States
federal income tax regardless of the source of their income.
Tax Status Of The Policy
The following discussion is based on the assumption that the policy qualifies
as an annuity contract for federal income tax purposes.
Diversification Requirements. Section 817(h) of the Code provides that in order
- -----------------------------
for a variable contract which is based on a segregated asset account to qualify
as an annuity contract under the Code, the investments made by such account
must be "adequately diversified" in accordance with Treasury regulations. The
Treasury regulations issued under Section 817(h) (Treas. Reg. ((S)) 1.817-5)
apply a diversification requirement to each of the subaccounts of the separate
account. The separate account, through the underlying funds and their
portfolios, intends to comply with the diversification requirements of the
Treasury. PFL has entered into agreements regarding participation in the Atlas
Portfolio Builder Variable Annuity that require the underlying funds and their
portfolios to be operated in compliance with the Treasury regulations.
Owner Control. In certain circumstances, owners of variable annuity contracts
- --------------
may be considered the owners, for federal income tax purposes, of the assets of
the separate account used to support their contracts. In those circumstances,
income and gains from the separate account assets would be includable in the
variable annuity contract owner's gross income. Several years ago, the IRS
stated in published rulings that a variable contractowner will be considered
the owner of separate account assets if the contractowner possesses incidents
of ownership in those assets, such as the ability to exercise investment
control over the assets. More recently, the Treasury Department announced, in
connection with the issuance of regulations concerning investment
diversification, that those regulations "do not provide guidance concerning the
circumstances in which investor control of the investments of a segregated
asset account may cause the investor, rather than the insurance company, to be
treated as the owner of the assets in the account." This announcement also
stated that guidance would be issued by way of regulations or rulings on the
"extent to which policyholders may direct their investments to particular
subaccounts without being treated as owners of underlying assets."
The ownership rights under the contract are similar to, but different in
certain respects from those described by the IRS in rulings in which it was
determined that contract owners were not owners of separate account assets. For
example, the owner of a policy has the choice of one or more subaccounts in
which to allocate premiums and policy values, and may be able to transfer among
these accounts more frequently than in such rulings. These differences could
result in policyowners being treated as the owners of the assets of the
separate account. In addition, PFL does not know what standards will be set
forth, if any, in the regulations or rulings which the Treasury Department has
stated it expects to issue. PFL therefore reserves the right to modify the
policies as necessary to attempt to prevent the policyowners from being
considered the owners of a pro rata share of the assets of the separate
account.
Distribution Requirements. The Code also requires that nonqualified policies
- --------------------------
contain specific provisions for distribution of policy proceeds upon the death
of any owner. In order to be treated as an annuity contract for federal income
tax purposes, the Code requires that such policies provide that if any owner
dies on or after the annuity commencement date and before the entire interest
in the policy has been distributed, the remaining portion must be distributed
at least as rapidly as under the method in effect on such owners death. If any
owner dies before the annuity commencement date, the entire interest in the
policy must generally be distributed within 5 years after such owner's date of
death or be applied to provide an immediate annuity under which payments will
begin within one year of such
-15-
<PAGE>
owner's death and will be made for the life of the beneficiary or for a period
not extending beyond the life expectancy of the beneficiary. However, if such
owner's death occurs prior to the annuity commencement date, and such owner's
surviving spouse is named beneficiary, then the policy may be continued with
the surviving spouse as the new owner receiving the one-time adjustment to the
policy value. If any owner is not a natural person, then for purposes of these
distribution requirements, the primary annuitant shall be treated as the owner
and any death or change of such primary annuitant shall be treated as the death
of an owner. The nonqualified policy contains provisions intended to comply
with these requirements of the Code. No regulations interpreting these
requirements of the Code have yet been issued and thus no assurance can be
given that the provisions contained in the policies satisfy all such Code
requirements. The provisions contained in the Policies will be reviewed and
modified if necessary to maintain their compliance with the Code requirements
when clarified by regulation or otherwise.
Withholding. The portion of any distribution under a policy that is includable
- ------------
in gross income will be subject to federal income tax withholding unless the
recipient of such distribution elects not to have federal income tax withheld.
Election forms will be provided at the time distributions are requested or
made. For certain qualified policies, certain distributions are subject to
mandatory withholding. The withholding rate varies according to the type of
distribution and the owner's tax status. For qualified policies, "eligible
rollover distributions" from Section 401(a) plans and Section 403(b) tax-
sheltered annuities are subject to a mandatory federal income tax withholding
of 20%. An eligible rollover distribution is the taxable portion of any
distribution from such a plan, except certain distributions such as
distributions required by the Code or distributions in a specified annuity
form. The 20% withholding does not apply, however, if the owner chooses a
"direct rollover" from the plan to another tax-qualified plan or IRA.
Qualified Policies. The qualified policy is designed for use with several types
- -------------------
of tax-qualified retirement plans. The tax rules applicable to participants and
beneficiaries in tax-qualified retirement plans vary according to the type of
plan and the terms and conditions of the plan. Special favorable tax treatment
may be available for certain types of contributions and distributions. Adverse
tax consequences may result from contributions in excess of specified limits;
distributions prior to age 59 1/2 (subject to certain exceptions);
distributions that do not conform to specified commencement and minimum
distribution rules; and in other specified circumstances. Some retirement plans
are subject to distribution and other requirements that are not incorporated
into PFL's policy administration procedures. Owners, participants and
beneficiaries are responsible for determining that contributions, distributions
and other transactions with respect to the policies comply with applicable law.
For qualified plans under Section 401(a), 403(a), 403(b), and 457, the Code
requires that distributions generally must commence no later than the later of
April 1 of the calendar year following the calendar year in which the owner (or
plan participant) (i) reaches age 70 1/2 or (ii) retires, and must be made in a
specified form or manner. If the plan participant is a "5 percent owner" (as
defined in the Code), or if the policy is a traditional individual retirement
annuity, then distributions generally must begin no later than April 1 of the
calendar year in which the owner (or plan participant) reaches age 70 1/2. Each
owner is responsible for requesting distributions under the policy that satisfy
applicable tax rules.
PFL makes no attempt to provide more than general information about use of the
policy with the various types of retirement plans. Purchasers of policies for
use with any retirement plan should consult their legal counsel and tax adviser
regarding the suitability of the policy.
Individual Retirement Annuities. In order to qualify as a traditional
- --------------------------------
individual retirement annuity under Section 408(b) of the Code, a policy must
contain certain provisions: (i) the owner must be the annuitant; (ii) the
policy generally is not transferable by the owner, e.g., the owner may not
designate a new owner, designate a successor owner or assign the policy as
collateral security; (iii) the total
-16-
<PAGE>
premium payments for any calendar year on behalf of any individual may not
exceed $2,000, except in the case of a rollover amount or contribution under
Sections 402(c), 403(a)(4), 403(b)(8) or 408(d)(3) of the Code; (iv) annuity
payments or partial withdrawals must begin no later than April 1 of the
calendar year following the calendar year in which the annuitant attains age 70
1/2; (v) an annuity payment option with a period certain that will guarantee
annuity payments beyond the life expectancy of the annuitant and the
beneficiary may not be selected; (vi) certain payments of death benefits must
be made in the event the annuitant dies prior to the distribution of the policy
value; and (vii) the entire interest of the owner is non-forfeitable. Policies
intended to qualify as traditional individual retirement annuities under
Section 408(b) of the Code contain such provisions. Amounts in the IRA (other
than nondeductible contributions) are taxed when distributed from the IRA.
Distributions prior to age 59 1/2 (unless certain exceptions apply) are subject
to a 10% penalty tax.
Section 408 of the Code also indicates that no part of the funds for an
individual retirement account or annuity ("IRA") may be invested in a life
insurance contract, but the regulations thereunder allow such funds to be
invested in an annuity policy that provides a death benefit that equals the
greater of the premiums paid or the cash value for the contract. The policy
provides an enhanced death benefit that could exceed the amount of such a
permissible death benefit, but it is unclear to what extent such an enhanced
death benefit could disqualify the policy under Section 408 of the Code. The
Internal Revenue Service has not reviewed the policy for qualification as an
IRA, and has not addressed in a ruling of general applicability whether an
enhanced death benefit provision, such as the provision in the policy, comports
with IRA qualification requirements.
Roth Individual Retirement Annuities (Roth IRA). The Roth IRA, under Section
- ------------------------------------------------
408A of the Code, contains many of the same provisions as a traditional IRA.
However, there are some differences. First, the contributions are not
deductible and must be made in cash or as a rollover or transfer from another
Roth IRA or other IRA. A rollover from or conversion of an IRA to a Roth IRA
may be subject to tax and other special rules may apply. You should consult a
tax adviser before combining any converted amounts with any other Roth IRA
contributions, including any other conversion amounts from other tax years. The
Roth IRA is available to individuals with earned income and whose adjusted
gross income is under $110,000 for single filers, $160,000 for married filing
jointly, and $10,000 for married filing separately. The amount per individual
that may be contributed to all IRAs (Roth and traditional) is $2,000. Secondly,
the distributions are taxed differently. The Roth IRA offers tax-free
distributions when made from assets which have been held in the account for 5
tax years and are made after attaining age 59 1/2, to pay for qualified first
time homebuyer expenses (lifetime maximum of $10,000) or due to death or
disability. All other distributions are subject to income tax when made from
earnings and may be subject to a premature withdrawal penalty tax unless an
exception applies. Unlike the traditional IRA, there are no minimum required
distributions during the owner's lifetime; however, required distributions at
death are the same.
Section 403(b) Plans. Under Section 403(b) of the Code, payments made by public
- ---------------------
school systems and certain tax exempt organizations to purchase policies for
their employees are excludable from the gross income of the employee, subject
to certain limitations. However, such payments may be subject to FICA (Social
Security) taxes. The policy includes a death benefit that in some cases may
exceed the greater of the premium payments or the policy value. The death
benefit could be characterized as an incidental benefit, the amount of which is
limited in any tax-sheltered annuity under Section 403(b). Because the death
benefit may exceed this limitation, employers using the policy in connection
with such plans should consult their tax adviser. Additionally, in accordance
with the requirements of the Code, Section 403(b) annuities generally may not
permit distribution of (i) elective contributions made in years beginning after
December 31, 1988, and (ii) earnings on those contributions and (iii) earnings
on amounts attributed to elective contributions held as of the end of the last
year beginning before January 1, 1989. Distributions of such amounts will be
allowed only upon the death of the employee, on
-17-
<PAGE>
or after attainment of age 59 1/2, separation from service, disability, or
financial hardship, except that income attributable to elective contributions
may not be distributed in the case of hardship.
Corporate Pension and Profit Sharing Plans and H.R. 10 Plans. Sections 401(a)
- -------------------------------------------------------------
and 403(a) of the Code permit corporate employers to establish various types of
retirement plans for employees and self-employed individuals to establish
qualified plans for themselves and their employees. Such retirement plans may
permit the purchase of the policies to accumulate retirement savings. Adverse
tax consequences to the plan, the participant or both may result if the policy
is assigned or transferred to any individual as a means to provide benefit
payments. The policy includes a death benefit that in some cases may exceed the
greater of the premium payments or the policy value. The death benefit could be
characterized as an incidental benefit, the amount of which is limited in an
pension or profit sharing plan. Because the death benefit may exceed this
limitation, employers using the policy in connection with such plans should
consult their tax adviser.
Deferred Compensation Plans. Section 457 of the Code, while not actually
- ----------------------------
providing for a qualified plan (as that term is not used in the Code), provides
for certain deferred compensation plans with respect to service for state
governments, local governments, political sub-divisions, agencies,
instrumentalities and certain affiliates of such entities, and tax exempt
organizations. The policies can be used with such plans. Under such plans a
participant may specify the form of investment in which his or her
participation will be made. For non-governmental 457 plans, all such
investments, however, are owned by, and are subject to, the claims of the
general creditors of the sponsoring employer. Depending on the terms of the
particular plan, a non-governmental employer may be entitled to draw on
deferred amounts for purposes unrelated to its Section 457 plan obligations. In
general, all amounts received under a Section 457 plan are taxable and are
subject to federal income tax withholding as wages.
Non-natural Persons. Pursuant to Section 72(u) of the Code, an annuity contract
- --------------------
held by a taxpayer other than a natural person generally will not be treated as
an annuity contract under the Code; accordingly, an owner who is not a natural
person will recognize as ordinary income for a taxable year the excess of (i)
the sum of the cash value as of the close of the taxable year and all previous
distributions under the policy over (ii) the sum of the premium payments paid
for the taxable year and any prior taxable year and the amounts includable in
gross income for any prior taxable year with respect to the policy. For these
purposes, the policy value at year end may have to be increased by any positive
excess interest adjustment which could result from a full surrender at such
time. There is, however, no definitive guidance on the proper tax treatment of
excess interest adjustments and the owner should contact a competent tax
adviser with respect to the potential tax consequences of an excess interest
adjustment. Notwithstanding the preceding sentences in that paragraph, Section
72(u) of the Code does not apply to (i) a policy the nominal owner of which is
not a natural person but the beneficial owner of which is a natural person,
(ii) a policy acquired by the estate of a decedent by reason of such decedent's
death, (iii) a qualified policy (other than one qualifying under Section 457)
or (iv) a single-payment annuity the commencement date for which is no later
than one year from the date of the single premium payment; such policies are
taxed as described in the prospectus.
Taxation of PFL
PFL at present is taxed as a life insurance company under part I of Subchapter
L of the Code. The separate account is treated as part of PFL and, accordingly,
will not be taxed separately as a "regulated investment company" under
Subchapter M of the Code. PFL does not expect to incur any federal income tax
liability with respect to investment income and net capital gains arising from
the activities of the separate account retained as part of the reserves under
the policy. Based on this expectation, it is anticipated that no charges will
be made against the separate account for federal income taxes. If, in future
years, any federal income taxes are incurred by PFL with respect to the
separate account, PFL may make a charge to the separate account.
-18-
<PAGE>
INVESTMENT EXPERIENCE
A "Net Investment Factor" is used to determine the value of accumulation units
and annuity units, and to determine annuity payment rates.
Accumulation Units
Allocations of a premium payment directed to a subaccount are credited in the
form of accumulation units. Each subaccount has a distinct accumulation unit
value. The number of units credited is determined by dividing the premium
payment or amount transferred to the subaccount by the accumulation unit value
of the subaccount as of the end of the valuation period during which the
allocation is made. For each subaccount, the accumulation unit value for a
given business day is based on the net asset value of a share of the
corresponding portfolio of the underlying funds less any applicable charges or
fees.
Upon allocation to the selected subaccount of the separate account, premium
payments are converted into accumulation units of the subaccount. The number of
accumulation units to be credited is determined by dividing the dollar amount
allocated to each subaccount by the value of an accumulation unit for that
subaccount as next determined after the premium payment is received at the
administrative and service office or, in the case of the initial premium
payment, when the application is completed, whichever is later. The value of an
accumulation unit was arbitrarily established at $1.000000 at the inception of
each subaccount. Thereafter, the value of an accumulation unit is determined as
of the close of business on each day the New York Stock Exchange is open for
trading.
An index (the "Net Investment Factor") which measures the investment
performance of a subaccount during a valuation period, is used to determine the
value of an accumulation unit for the next subsequent valuation period. The Net
Investment Factor may be greater or less than or equal to one; therefore, the
value of an accumulation unit may increase, decrease or remain the same from
one valuation period to the next. The owner bears this investment risk. The net
investment performance of a subaccount and deduction of certain charges affect
the accumulation unit value.
The Net Investment Factor for any subaccount for any valuation period is
determined by dividing (a) by (b) and subtracting (c) from the result, where:
(a) is the net result of:
(1) the net asset value per share of the shares held in the subaccount
determined at the end of the current valuation period, plus
(2) the per share amount of any dividend or capital gain distribution
made with respect to the shares held in the subaccount if the ex-
dividend date occurs during the current valuation period, plus or minus
(3) a per share charge or credit for any taxes determined by PFL to have
resulted from the investment operations of the subaccount;
(b) the net asset value per share of the shares held in the subaccount
determined as of the end of the immediately preceding valuation period; and
(c) is the charge for mortality and expense risk during the valuation
period (equal to an annual rate of 1.25%) of the daily net asset value of
the subaccount, plus the .15% administrative charge.
-19-
<PAGE>
Illustration Of Accumulation Unit Value Calculations
Formula And Illustration For Determining The Net Investment Factor
Investment Experience Factor = (A + B - C) - E
-----------
D
<TABLE>
<C> <S> <C>
Where: A = The Net Asset Value of an underlying fund share as of the
end of the current valuation period.
Assume........................................................ A = $11.57
B = The per share amount of any dividend or capital gains
distribution since the end of the immediately preceding
valuation period.
Assume........................................................ B = 0
C = The per share charge or credit for any taxes reserved for
at the end of the current valuation period.
Assume........................................................ C = 0
D = The Net Asset Value of an underlying fund share at the end
of the immediately preceding valuation period.
Assume........................................................ D = $11.40
E = The daily deduction for the mortality and expense risk fee
and administrative charge, which totals 1.40% on an annual
basis.
On a daily basis.............................................. = .0000380909
Then, the Investment Experience Factor =
11.57 + 0 - 0 - .0000380909 = Z = 1.0148741898
---------------------------
11.40
Formula And Illustration For Determining Accumulation Unit Value
Accumulation Unit Value = A * B
Where: A = The accumulation unit value for the immediately preceding
valuation period.
Assume........................................................ = $X
B = The Net Investment Factor for the current valuation period.
Assume........................................................ = Y
</TABLE>
Then, the accumulation unit value = $X * Y = $Z
Annuity Unit Value and Annuity Payment Rates
The amount of variable annuity payments will vary with annuity unit values.
Annuity unit values rise if the net investment performance of the subaccount
exceeds the assumed interest rate of 5% annually. Conversely, annuity unit
values fall if the net investment performance of the subaccount is less than
the assumed rate. The value of a variable annuity unit in each subaccount was
established at $1.00 on the date operations began for that subaccount. The
value of a variable annuity unit on any subsequent business day is equal to (a)
multiplied by (b) multiplied by (c), where:
(a) is the variable annuity unit value for that subaccount on the
immediately preceding business day;
(b) is the net investment factor for that subaccount for the valuation
period; and
(c) is the investment result adjustment factor for the valuation period.
-20-
<PAGE>
The investment result adjustment factor for the valuation period is the product
of discount factors of .99986634 per day to recognize the 5% effective annual
Assumed Investment Return. The valuation period is the period from the close of
the immediately preceding business day to the close of the current business
day.
The net investment factor for the policy used to calculate the value of a
variable annuity unit in each subaccount for the valuation period is determined
by dividing (i) by (ii) and subtracting (iii) from the result, where:
(i) is the result of:
(1) the net asset value of a fund share held in that subaccount
determined at the end of the current valuation period; plus
(2) the per share amount of any dividend or capital gain distributions
made by the fund for shares held in that subaccount if the ex-dividend date
occurs during the valuation period; plus or minus
(3) a per share charge or credit for any taxes reserved for, which PFL
determines to have resulted from the investment operations of the
subaccount.
(ii) is the net asset value of a fund share held in that subaccount
determined as of the end of the immediately preceding valuation period.
(iii) is a factor representing the mortality and expense risk fee and
administrative charge. This factor is equal, on an annual basis, to 1.40% of
the net asset value of that subaccount.
The dollar amount of subsequent variable annuity payments will depend upon
changes in applicable annuity unit values.
The annuity payment rates vary according to the annuity option elected and the
sex and adjusted age of the annuitant at the annuity commencement date. The
policy also contains a table for determining the adjusted age of the annuitant.
Illustration Of Calculations For Annuity Unit Value
And Variable Annuity Payments
Formula And Illustration For Determining Annuity Unit Value
Annuity unit value = A * B * C
<TABLE>
<C> <S> <C>
= Annuity unit value for the immediately preceding valuation
Where: A period.
Assume....................................................... = $ X
B = Investment Experience Factor for the valuation period for
which the annuity unit value is being calculated.
Assume....................................................... = Y
C = A factor to neutralize the assumed interest rate of 5%
built into the annuity tables used.
Assume....................................................... = Z
</TABLE>
Then, the annuity unit value is: $ X * Y * Z = $ Q
-21-
<PAGE>
Formula And Illustration For Determining Amount
Of First Monthly Variable Annuity Payment
First Monthly Variable Annuity Payment = A * B
$1,000
<TABLE>
<C> <S> <C>
Where: A = The policy value as of the annuity commencement date.
Assume..................................................... = $ X
B = The annuity purchase rate per $1,000 based upon the option
selected, the sex and adjusted age of the annuitant
according to the tables contained in the policy.
Assume..................................................... = $ Y
</TABLE>
Then, the first monthly variable annuity payment = $ X * $ Y = $Z
---------
1,000
Formula And Illustration For Determining The Number Of Annuity Units
Represented By Each Monthly Variable Annuity Payment
Number of annuity units = A
----
B
<TABLE>
<C> <S> <C>
The dollar amount of the first monthly variable annuity
Where: A = payment.
Assume..................................................... = $ X
B = The annuity unit value for the valuation date on which the
first monthly payment is due.
Assume..................................................... = $ Y
</TABLE>
Then, the number of annuity units = $ X = Z
----
$ Y
HISTORICAL PERFORMANCE DATA
Subaccount Yields
PFL may from time to time advertise or disclose the current annualized yield of
one or more of the subaccounts of the separate account for 30-day periods. The
annualized yield of a subaccount refers to income generated by the subaccount
over a specific 30-day period. Because the yield is annualized, the yield
generated by a subaccount during the 30-day period is assumed to be generated
each 30-day period over a 12-month period. The yield is computed by: (i)
dividing the net investment income of the subaccount less subaccount expenses
for the period, by (ii) the maximum offering price per unit on the last day of
the period times the daily average number of units outstanding for the period,
compounding that yield for a 6-month period, and (iv) multiplying that result
by 2. Expenses attributable to the subaccount include (i) the administrative
charge and (ii) the mortality and expense risk fee. The 30-day yield is
calculated according to the following formula:
Yield = 2 * ((((NI-ES)/(U * UV)) + 1)/6/-1)
Where:
NI = Net investment income of the subaccount for the 30-day period attributable
to the subaccount's unit.
ES = Expenses of the subaccount for the 30-day period.
U = The average number of units outstanding.
UV = The unit value at the close (highest) of the last day in the 30-day
period.
-22-
<PAGE>
Because of the charges and deductions imposed by the separate account, the
yield for a subaccount of the separate account will be lower than the yield for
its corresponding portfolio. The yield calculations do not reflect the effect
of any premium taxes or surrender charges that may be applicable to a
particular policy. Surrender charges range from 7% to 0% of the amount of
premium payments withdrawn based on the number of years since the policy date.
However, surrender charges will not be assessed after the fifth policy year.
The yield on amounts held in the subaccounts of the separate account normally
will fluctuate over time. Therefore, the disclosed yield for any given past
period is not an indication or representation of future yields or rates of
return. A subaccount's actual yield is affected by the types and quality of its
investments and its operating expenses.
Total Returns
PFL may from time to time also advertise or disclose total returns for one or
more of the subaccounts of the separate account for various periods of time.
One of the periods of time will include the period measured from the date the
subaccount commenced operations. When a subaccount has been in operation for 1,
5 and 10 years, respectively, the total return for these periods will be
provided. Total returns for other periods of time may from time to time also be
disclosed. Total returns represent the average annual compounded rates of
return that would equate an initial investment of $1,000 to the redemption
value of that investment as of the last day of each of the periods. The ending
date for each period for which total return quotations are provided will be for
the most recent month end practicable, considering the type and media of the
communication and will be stated in the communication.
Total returns will be calculated using subaccount unit values which PFL
calculates on each business day based on the performance of the subaccount's
underlying portfolio, and the deductions for the mortality and expense risk fee
and the administrative charge. Standard total return calculations will reflect
the effect of surrender charges that may be applicable to a particular period.
The total return will then be calculated according to the following formula:
P (1 + T) N = ERV
Where:
T= The average annual total return net of subaccount recurring charges.
ERV= The ending redeemable value of the hypothetical account at the end of the
period.
P= A hypothetical initial payment of $1,000.
N= The number of years in the period.
Other Performance Data
PFL may from time to time also disclose average annual total returns in a non-
standard format in conjunction with the standard format described above. The
non-standard format will be identical to the standard format except that the
surrender charge percentage will be assumed to be 0%.
PFL may from time to time also disclose cumulative total returns in conjunction
with the standard format described above. The cumulative returns will be
calculated using the following formula assuming that the surrender charge
percentage will be 0%.
CTR = (ERV/P) - 1
Where:
CTR= The cumulative total return net of subaccount recurring charges for the
period.
ERV= The ending redeemable value of the hypothetical investment at the end of
the period.
P= A hypothetical initial payment of $1,000.
-23-
<PAGE>
All non-standard performance data will only be advertised if the standard
performance data for the same period, as well as for the required period, is
also disclosed.
Adjusted Historical Performance Data
From time to time, sales literature or advertisements may quote average annual
total returns for periods prior to the date the separate account commenced
operations. Such performance information for the subaccounts will be calculated
based on the performance of the various portfolios and the assumption that the
subaccounts were in existence for the same periods as those indicated for the
portfolios, with the level of policy charges that were in effect at the
inception of the subaccounts.
PUBLISHED RATINGS
PFL may from time to time publish in advertisements, sales literature and
reports to owners, the ratings and other information assigned to it by one or
more independent rating organizations such as A.M. Best Company, Standard &
Poor's Insurance Ratings Services, Moody's Investors Service and Duff & Phelps
Credit Rating Co. The purpose of the ratings is to reflect the financial
strength and/or claims-paying ability of PFL and they should not be considered
as bearing on the investment performance of assets held in the separate account
or of the safety or riskiness of an investment in the separate account. Each
year the A.M. Best Company reviews the financial status of thousands of
insurers, culminating in the assignment of Best's ratings. These ratings
reflect their current opinion of the relative financial strength and operating
performance of an insurance company in comparison to the norms of the
life/health insurance industry. In addition, the claims-paying ability of PFL
as measured by Standard & Poor's Insurance Ratings Services, Moody's Investors
Service or Duff & Phelps Credit Rating Co. may be referred to in advertisements
or sales literature or in reports to owners. These ratings are opinions of an
operating insurance company's financial capacity to meet the obligations of its
insurance policies in accordance with their terms. Claims-paying ability
ratings do not refer to an insurer's ability to meet non-policy obligations
such as debt or commercial paper obligations.
STATE REGULATION OF PFL
PFL is subject to the laws of Iowa governing insurance companies and to
regulation by the Iowa Division of Insurance. An annual statement in a
prescribed form is filed with the Division of Insurance each year covering the
operation of PFL for the preceding year and its financial condition as of the
end of such year. Regulation by the Division of Insurance includes periodic
examination to determine PFL's contract liabilities and reserves so that the
Division may determine the items are correct. PFL's books and accounts are
subject to review by the Division of Insurance at all times and a full
examination of its operations is conducted periodically by the National
Association of Insurance Commissioners. In addition, PFL is subject to
regulation under the insurance laws of other jurisdictions in which it may
operate.
ADMINISTRATION
PFL performs administrative services for the policies. These services include
issuance of the policies, maintenance of records concerning the policies, and
certain valuation services.
RECORDS AND REPORTS
All records and accounts relating to the separate account will be maintained by
PFL. As presently required by the Investment Company Act of 1940 and
regulations promulgated thereunder, PFL will mail
-24-
<PAGE>
to all owners at their last known address of record, at least annually, reports
containing such information as may be required under that Act or by any other
applicable law or regulation. Owners will also receive confirmation of each
financial transaction and any other reports required by law or regulation.
DISTRIBUTION OF THE POLICIES
The policies are offered to the public through Atlas Securities, Inc., a
licensed broker-dealer under the federal securities laws and a licensed agent
under state insurance laws. The offering of the policies is continuous and PFL
and Atlas do not anticipate discontinuing the offering of the policies.
However, PFL and Atlas reserve the right to discontinue the offering of the
policies.
AFSG Securities Corporation, an affiliate of PFL, is the principal underwriter
of the policies and may enter into agreements with broker-dealers for the
distribution of the policies. Prior to April 30, 1998, AEGON USA Securities,
Inc. (also an affiliate of PFL) was the principal underwriter. During 1998 and
1997 the amount paid to AFSG Securities Corporation, AEGON USA Securities, Inc.
and/or the broker-dealers for their services was $3,918,406.04 and $628,439.24.
No fees had been paid to any broker/dealers for their services prior to 1997.
OTHER PRODUCTS
PFL makes other variable annuity policies available that may also be funded
through the separate account. These variable annuity policies may have
different features, such as different investment choices or charges.
CUSTODY OF ASSETS
The assets of each of the subaccounts of the separate account are held by PFL.
The assets of each of the subaccounts of the separate account are segregated
and held separate and apart from the assets of the other subaccounts and from
PFL's general account assets. PFL maintains records of all purchases and
redemptions of shares of the underlying funds held by each of the subaccounts.
Additional protection for the assets of the separate account is afforded by
PFL's fidelity bond, presently in the amount of $5,000,000, covering the acts
of officers and employees of PFL.
LEGAL MATTERS
Legal advice relating to certain matters under the federal securities laws
applicable to the issue and sale of the policies has been provided to PFL by
Sutherland Asbill & Brennan LLP, of Washington D.C.
INDEPENDENT AUDITORS
The statutory-basis financial statements and schedules of PFL as of December
31, 1998 and 1997, and for each of the three years in the period ended December
31, 1998, and the financial statements of subaccounts of PFL Life Variable
Annuity Account A,which are available for investment by the Atlas Portfolio
Builder Variable Annuity contract owners as of December 31, 1998, and for the
year then ended and the period September 30, 1997 (commencement of operations)
to December 31, 1997, included in this Statement of Additional Information have
been audited by Ernst & Young LLP, Independent Auditors, Suite 3400, 801 Grand
Avenue, Des Moines, Iowa 50309.
OTHER INFORMATION
A Registration Statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933 as amended, with respect to the
policies discussed in this Statement of Additional Information. Not all of the
information set forth in the Registration Statement, amendments and exhibits
-25-
<PAGE>
thereto has been included in the prospectus or this Statement of Additional
Information. Statements contained in the prospectus and this Statement of
Additional Information concerning the content of the policies and other legal
instruments are intended to be summaries. For a complete statement of the terms
of these documents, reference should be made to the instruments filed with the
Securities and Exchange Commission.
FINANCIAL STATEMENTS
The values of the interest of owners in the separate account will be affected
solely by the investment results of the selected subaccount(s). The statutory-
basis financial statements of PFL, which are included in this Statement of
Additional Information, should be considered only as bearing on the ability of
PFL to meet its obligations under the policies. They should not be considered
as bearing on the investment performance of the assets held in the separate
account.
-26-
<PAGE>
FINANCIAL STATEMENTS--STATUTORY BASIS
PFL LIFE INSURANCE COMPANY
Years ended December 31, 1998, 1997 and 1996
with Report of Independent Auditors
<PAGE>
PFL LIFE INSURANCE COMPANY
FINANCIAL STATEMENTS--STATUTORY BASIS
Years ended December 31, 1998, 1997 and 1996
Contents
<TABLE>
<S> <C>
Report of Independent Auditors.............................................. 1
Audited Financial Statements
Balance Sheets--Statutory Basis........................................... 2
Statements of Operations--Statutory Basis................................. 3
Statements of Changes in Capital and Surplus--Statutory Basis............. 4
Statements of Cash Flows--Statutory Basis................................. 5
Notes to Financial Statements--Statutory Basis............................ 6
Statutory-Basis Financial Statement Schedules
Summary of Investments--Other Than Investments in Related Parties......... 24
Supplementary Insurance Information....................................... 25
Reinsurance............................................................... 26
</TABLE>
<PAGE>
[LETTERHEAD OF ERNST & YOUNG LLP APPEARS HERE]
Report of Independent Auditors
The Board of Directors
PFL Life Insurance Company
We have audited the accompanying statutory-basis balance sheets of PFL Life
Insurance Company as of December 31, 1998 and 1997, and the related statutory-
basis statements of operations, changes in capital and surplus, and cash flows
for each of the three years in the period ended December 31, 1998. Our audits
also included the accompanying statutory-basis financial statement schedules
required by Article 7 of Regulation S-X. These financial statements and
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
As described in Note 1 to the financial statements, the Company presents its
financial statements in conformity with accounting practices prescribed or
permitted by the Insurance Division, Department of Commerce, of the State of
Iowa, which practices differ from generally accepted accounting principles.
The variances between such practices and generally accepted accounting
principles also are described in Note 1. The effects on the financial
statements of these variances are not reasonably determinable but are presumed
to be material.
In our opinion, because of the effects of the matters described in the
preceding paragraph, the financial statements referred to above do not present
fairly, in conformity with generally accepted accounting principles, the
financial position of PFL Life Insurance Company at December 31, 1998 and
1997, or the results of its operations or its cash flows for each of the three
years in the period ended December 31, 1998.
However, in our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of PFL Life Insurance
Company at December 31, 1998 and 1997, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1998 in conformity with accounting practices prescribed or permitted by the
Insurance Division, Department of Commerce, of the State of Iowa. Also, in our
opinion, the related financial statement schedules, when considered in
relation to the basic statutory-basis financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
/s/ Ernst & Young LLP
Des Moines, Iowa
February 19, 1999
1
<PAGE>
PFL LIFE INSURANCE COMPANY
BALANCE SHEETS--STATUTORY BASIS
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
December 31
---------------------
1998 1997
---------- ----------
ADMITTED ASSETS
---------------
<S> <C> <C>
Cash and invested assets:
Cash and short-term investments............................ $ 83,289 $ 23,939
Bonds...................................................... 4,822,442 4,913,144
Stocks:
Preferred................................................ 14,754 2,750
Common (cost: 1998--$34,731; 1997--$33,058).............. 49,448 42,345
Affiliated entities (cost: 1998--$8,060; 1997--$10,798).. 5,613 8,031
Mortgage loans on real estate.............................. 1,012,433 935,207
Real estate, at cost less accumulated depreciation ($9,500
in 1998; $8,655 in 1997):
Home office properties................................... 8,056 8,283
Properties acquired in satisfaction of debt.............. 11,778 11,814
Investment properties.................................... 44,325 36,416
Policy loans............................................... 60,058 57,136
Other invested assets...................................... 76,482 29,864
---------- ----------
Total cash and invested assets......................... 6,188,678 6,068,929
Premiums deferred and uncollected........................... 15,318 16,101
Accrued investment income................................... 65,308 69,662
Receivable from affiliate................................... 643 --
Federal income taxes recoverable............................ 639 --
Transfers from separate accounts............................ 70,866 60,193
Other assets................................................ 29,511 37,624
Separate account assets..................................... 3,348,611 2,517,365
---------- ----------
Total admitted assets.................................. $9,719,574 $8,769,874
========== ==========
<CAPTION>
LIABILITIES AND CAPITAL AND SURPLUS
-----------------------------------
<S> <C> <C>
Liabilities:
Aggregate reserves for policies and contracts:
Life..................................................... $1,357,175 $ 884,018
Annuity.................................................. 3,925,293 4,204,125
Accident and health...................................... 205,736 169,328
Policy and contract claim reserves:
Life..................................................... 9,101 8,635
Accident and health...................................... 48,906 57,713
Other policyholders' funds................................. 162,266 143,831
Remittances and items not allocated........................ 19,690 153,745
Asset valuation reserve.................................... 91,588 69,825
Interest maintenance reserve............................... 50,575 30,287
Federal income taxes payable............................... -- 1,889
Short-term notes payable to affiliates..................... 9,421 16,400
Other liabilities.......................................... 76,766 75,070
Payable for securities..................................... 57,645 --
Payable to affiliates...................................... -- 13,240
Separate account liabilities............................... 3,342,884 2,512,406
---------- ----------
Total liabilities...................................... 9,357,046 8,340,512
Commitments and contingencies
Capital and surplus:
Common stock, $10 par value, 500 shares authorized, 266
issued and outstanding.................................... 2,660 2,660
Paid-in surplus............................................ 154,282 154,282
Unassigned surplus......................................... 205,586 272,420
---------- ----------
Total capital and surplus.............................. 362,528 429,362
---------- ----------
Total liabilities and capital and surplus.............. $9,719,574 $8,769,874
========== ==========
</TABLE>
See accompanying notes.
2
<PAGE>
PFL LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS--STATUTORY BASIS
(Dollars in thousands)
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Revenues:
Premiums and other considerations, net
of reinsurance:
Life.................................. $ 516,111 $ 202,435 $ 204,872
Annuity............................... 667,920 657,695 725,966
Accident and health................... 178,593 207,982 227,862
Net investment income................... 446,984 446,424 428,337
Amortization of interest maintenance re-
serve.................................. 8,656 3,645 2,434
Commissions and expense allowances on
reinsurance ceded...................... 32,781 49,859 73,931
---------- ---------- ----------
1,851,045 1,568,040 1,663,402
Benefits and expenses:
Benefits paid or provided for:
Life and accident and health bene-
fits................................. 135,184 146,583 147,024
Surrender benefits.................... 732,796 658,071 512,810
Other benefits........................ 152,209 126,495 101,288
Increase (decrease) in aggregate
reserves for policies and contracts:
Life.................................. 473,158 149,575 140,126
Annuity............................... (278,665) (203,139) 188,002
Accident and health................... 36,407 30,059 26,790
Other................................. 17,550 16,998 19,969
---------- ---------- ----------
1,268,639 924,642 1,136,009
Insurance expenses:
Commissions............................. 136,569 157,300 177,466
General insurance expenses.............. 48,018 57,571 57,282
Taxes, licenses and fees................ 19,166 8,715 13,889
Net transfers to separate accounts...... 265,702 297,480 171,785
Other expenses.......................... 1,016 119 526
---------- ---------- ----------
470,471 521,185 420,948
---------- ---------- ----------
1,739,110 1,445,827 1,556,957
---------- ---------- ----------
Gain from operations before federal income
tax expense and net realized capital
gains (losses) on investments............ 111,935 122,213 106,445
Federal income tax expense................ 49,835 43,381 41,177
---------- ---------- ----------
Gain from operations before net realized
capital gains (losses) on investments.... 62,100 78,832 65,268
Net realized capital gains (losses) on
investments (net of related federal
income taxes and amounts transferred to
interest maintenance reserve)............ 3,398 7,159 (3,503)
---------- ---------- ----------
Net income................................ $ 65,498 $ 85,991 $ 61,765
========== ========== ==========
</TABLE>
See accompanying notes.
3
<PAGE>
PFL LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS--STATUTORY BASIS
(Dollars in thousands)
<TABLE>
<CAPTION>
Total
Capital
Common Paid-in Unassigned and
Stock Surplus Surplus Surplus
------ -------- ---------- ---------
<S> <C> <C> <C> <C>
Balance at January 1, 1996............... $2,660 $154,129 $ 220,739 $ 377,528
Net income............................. -- -- 61,765 61,765
Change in net unrealized capital
gains................................. -- -- 2,351 2,351
Change in non-admitted assets.......... -- -- (148) (148)
Change in asset valuation reserve...... -- -- (10,930) (10,930)
Dividend to stockholder................ -- -- (20,000) (20,000)
Prior period adjustment................ -- -- 5,025 5,025
Surplus effect of sales of divisions... -- -- (384) (384)
Surplus effect of ceding commissions
associated with the sale of a
division.............................. -- -- 29 29
Amendment of reinsurance agreement..... -- -- 421 421
Change in liability for reinsurance in
unauthorized companies................ -- -- 2,690 2,690
------ -------- --------- ---------
Balance at December 31, 1996............. 2,660 154,129 261,558 418,347
Capital contribution................... -- 153 -- 153
Net income............................. -- -- 85,991 85,991
Change in net unrealized capital
gains................................. -- -- 3,592 3,592
Change in non-admitted assets.......... -- -- (481) (481)
Change in asset valuation reserve...... -- -- (14,974) (14,974)
Dividend to stockholder................ -- -- (62,000) (62,000)
Surplus effect of sale of a division... -- -- (161) (161)
Surplus effect of ceding commissions
associated with the sale of a
division.............................. -- -- 5 5
Amendment of reinsurance agreement..... -- -- 389 389
Surplus effect of reinsurance
agreement............................. -- -- 402 402
Change in liability for reinsurance in
unauthorized companies................ -- -- (1,901) (1,901)
------ -------- --------- ---------
Balance at December 31, 1997............. 2,660 154,282 272,420 429,362
Net income............................. -- -- 65,498 65,498
Change in net unrealized capital
gains................................. -- -- 4,504 4,504
Change in non-admitted assets.......... -- -- (260) (260)
Change in asset valuation reserve...... -- -- (21,763) (21,763)
Dividend to stockholder................ -- -- (120,000) (120,000)
Increase in liability for reinsurance
in unauthorized companies............. -- -- 2,036 2,036
Tax benefit on stock options
exercised............................. -- -- 2,476 2,476
Change in surplus in separate
accounts.............................. -- -- 675 675
------ -------- --------- ---------
Balance at December 31, 1998............. $2,660 $154,282 $ 205,586 $ 362,528
====== ======== ========= =========
</TABLE>
See accompanying notes.
4
<PAGE>
PFL LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS--STATUTORY BASIS
(Dollars in thousands)
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Operating Activities
Premiums and other considerations, net
of reinsurance......................... $ 1,396,428 $ 1,119,936 $ 1,240,748
Net investment income................... 469,246 452,091 431,456
Life and accident and health claims..... (138,249) (154,383) (147,556)
Surrender benefits and other fund
withdrawals............................ (732,796) (658,071) (512,810)
Other benefits to policyholders......... (152,167) (126,462) (101,254)
Commissions, other expenses and other
taxes.................................. (197,135) (225,042) (248,321)
Net transfers to separate accounts...... (276,375) (319,146) (210,312)
Federal income taxes.................... (72,176) (47,909) (35,551)
Cash paid in conjunction with an
amendment of a reinsurance agreement... -- (4,826) (5,812)
Cash received in connection with a
reinsurance agreement.................. -- 1,477 --
Other, net.............................. (93,095) 89,693 (41,677)
Net cash provided by operating
activities............................. 203,681 127,358 368,911
Investing Activities
Proceeds from investments sold, matured
or repaid:
Bonds and preferred stocks............ 3,347,174 3,284,095 2,112,831
Common stocks......................... 34,564 34,004 27,214
Mortgage loans on real estate......... 192,210 138,162 74,351
Real estate........................... 5,624 6,897 18,077
Cash received from ceding commissions
associated with the sale of a
division............................. -- 8 45
Other................................. 7,210 57,683 22,568
----------- ----------- -----------
3,586,782 3,520,849 2,255,086
Cost of investments acquired:
Bonds and preferred stocks............ (3,251,822) (3,411,442) (2,270,105)
Common stocks......................... (36,379) (37,339) (29,799)
Mortgage loans on real estate......... (257,039) (159,577) (324,381)
Real estate........................... (11,458) (2,013) (222)
Policy loans.......................... (2,922) (2,922) (1,539)
Cash paid in association with the sale
of a division........................ -- (591) (662)
Other................................. (44,514) (15,674) (6,404)
----------- ----------- -----------
(3,604,134) (3,629,558) (2,633,112)
----------- ----------- -----------
Net cash used in investing activities... (17,352) (108,709) (378,026)
Financing Activities
Issuance (repayment) of short-term
intercompany notes payable............. $ (6,979) $ 16,400 $ --
Capital contribution.................... -- 153 --
Dividends to stockholder................ (120,000) (62,000) (20,000)
----------- ----------- -----------
Net cash used in financing activities... (126,979) (45,447) (20,000)
----------- ----------- -----------
Increase (decrease) in cash and short-
term investments....................... 59,350 (26,798) (29,115)
Cash and short-term investments at
beginning of year...................... 23,939 50,737 79,852
----------- ----------- -----------
Cash and short-term investments at end
of year................................ $ 83,289 $ 23,939 $ 50,737
=========== =========== ===========
</TABLE>
See accompanying notes.
5
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS
(Dollars in thousands)
December 31, 1998
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
PFL Life Insurance Company ("the Company") is a stock life insurance company
and is a wholly-owned subsidiary of First AUSA Life Insurance Company ("First
AUSA"), which, in turn, is a wholly-owned subsidiary of AEGON USA, Inc.
("AEGON"). AEGON is an indirect wholly-owned subsidiary of AEGON N.V., a
holding company organized under the laws of The Netherlands.
In connection with the sale of certain affiliated business units, the
Company has assumed various blocks of business from these former affiliates
through mergers. In addition, the Company has canceled or entered into several
coinsurance and reinsurance agreements with affiliates and non-affiliates. The
following is a description of those transactions:
. During 1996, the Company sold its North Richland Hills, Texas health
administrative operations known as The Insurance Center. The transaction
resulted in the transfer of substantially all employees and office
facilities to United Insurance Companies, Inc. ("UICI"). All inforce
business will continue to be shared by UICI and the Company and its
affiliates through the existing coinsurance agreements. After a short
transition period, all new business produced by United Group Association,
an independent insurance agency, will be written by the insurance
subsidiaries of UICI and will not be shared with the Company and its
affiliates through coinsurance arrangements. As a result of the sale,
during 1996 the Company transferred $123 in assets, substantially all of
which was cash, and $70 of liabilities. The difference between the assets
and liabilities of $(53) plus a tax credit of $19 was charged directly to
unassigned surplus. During 1997, the Company transferred $591 in assets,
substantially all of which was cash and $343 of liabilities. The difference
between the assets and liabilities of $(248) net of a tax credit of $87 was
charged directly to unassigned surplus.
. On January 1, 1994, the Company entered into an agreement with a non-
affiliate reinsurer to annually increase reinsurance ceded (primarily group
health business) by 2 1/2% through 1997. As a result, during 1996, the
Company transferred $5,991 in assets, including $5,812 of cash and short-
term investments and liabilities of $6,146. The difference between the
assets and liabilities of $155, plus a tax credit of $266 was credited
directly to unassigned surplus. During 1997, the Company transferred $5,045
in assets, including $4,826 of cash and short-term investments, and
liabilities of $5,164. The difference between the assets and liabilities of
$119 plus a tax credit of $270 was credited directly to unassigned surplus.
. During 1993, the Company sold the Oakbrook Division (primarily group health
business). The initial transfer of risk occurred through an indemnity
reinsurance agreement. The policies will then be assumed by the reinsurer
by novation as state regulatory and policyholder approvals are received.
During 1996, the Company paid $539 in association with this sale; the
payment, net of a tax credit of $189, was charged directly to unassigned
surplus. In addition, the Company received from the third party
administrator a ceding commission of one percent of the premiums collected
between January 1, 1994 and December 31, 1996. As a result of the sale, in
1996, the Company received $45 for ceding commissions; the commissions net
of the related tax effect of $(16) were charged directly to unassigned
surplus. Also, during 1996, the Company paid $539 in association with this
sale; this payment, net of a tax credit of $189, was charged directly to
unassigned surplus. In 1997,
6
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
the Company received $8 for ceding commissions; the commissions net of the
related tax effect of $3 were credited directly to unassigned surplus.
. During 1997, the Company entered into a reinsurance agreement with a non-
affiliate. As a result of the agreement, the Company received $1,480 of
assets, including $1,477 of cash and short-term securities, and $861 of
liabilities. The difference between the assets and liabilities of $619, net
of a tax effect of $217 was credited directly to unassigned surplus.
Nature of Business
The Company sells individual non-participating whole life, endowment and
term contracts, as well as a broad line of single fixed and flexible premium
annuity products. In addition, the Company offers group life, universal life,
and individual and specialty health coverages. The Company is licensed in 49
states and the District of Columbia. Sales of the Company's products are
primarily through the Company's agents and financial institutions.
Basis of Presentation
The preparation of financial statements of insurance companies requires
management to make estimates and assumptions that affect amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.
Significant estimates and assumptions are utilized in the calculation of
aggregate policy reserves, policy and contract claim reserves, guaranty fund
assessment accruals and valuation allowances on investments. It is reasonably
possible that actual experience could differ from the estimates and
assumptions utilized which could have a material impact on the financial
statements.
The accompanying financial statements have been prepared on the basis of
accounting practices prescribed or permitted by the Insurance Division,
Department of Commerce, of the State of Iowa ("Insurance Department"), which
practices differ in some respects from generally accepted accounting
principles. The more significant of these differences are as follows: (a)
bonds are generally reported at amortized cost rather than segregating the
portfolio into held-to-maturity (reported at amortized cost), available-for-
sale (reported at fair value), and trading (reported at fair value)
classifications; (b) acquisition costs of acquiring new business are charged
to current operations as incurred rather than deferred and amortized over the
life of the policies; (c) policy reserves on traditional life products are
based on statutory mortality rates and interest which may differ from reserves
based on reasonable assumptions of expected mortality, interest, and
withdrawals which include a provision for possible unfavorable deviation from
such assumptions; (d) policy reserves on certain investment products use
discounting methodologies based on statutory interest rates rather than full
account values; (e) reinsurance amounts are netted against the corresponding
asset or liability rather than shown as gross amounts on the balance sheet;
(f) deferred income taxes are not provided for the difference between the
financial statement and income tax bases of assets and liabilities; (g) net
realized gains or losses attributed to changes in the level of interest rates
in the market are deferred and amortized over the remaining life of the bond
or mortgage loan, rather than recognized as gains or losses in the statement
of operations when the sale is completed; (h) potential declines in the
estimated realizable value of investments are provided for through the
establishment of a formula-determined statutory investment reserve (reported
as a liability), changes to which are charged directly to surplus, rather than
through recognition in the statement of operations for declines in value, when
such declines are judged to be other than temporary; (i) certain assets
designated as "non-admitted assets" have been charged to surplus rather than
being reported as assets; (j) revenues for universal life and investment
products
7
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
consist of premiums received rather than policy charges for the cost of
insurance, policy administration charges, amortization of policy initiation
fees and surrender charges assessed; (k) pension expense is recorded as
amounts are paid; (l) adjustments to federal income taxes of prior years are
charged or credited directly to unassigned surplus, rather than reported as a
component of expense in the statement of operations; (m) gains or losses on
dispositions of business are charged or credited directly to unassigned
surplus rather than being reported in the statement of operations; and (n) a
liability is established for "unauthorized reinsurers" and changes in this
liability are charged or credited directly to unassigned surplus. The effects
of these variances have not been determined by the Company but are presumed to
be material.
In 1998, the National Association of Insurance Commissioners ("NAIC")
adopted codified statutory accounting principles ("Codification").
Codification will likely change, to some extent, prescribed statutory
accounting practices and may result in changes to the accounting practices
that the Company uses to prepare its statutory-basis financial statements.
Codification will require adoption by the various states before it becomes the
prescribed statutory basis of accounting for insurance companies domesticated
within those states. Accordingly, before Codification becomes effective for
the Company, the State of Iowa must adopt Codification as the prescribed basis
of accounting on which domestic insurers must report their statutory-basis
results to the Insurance Department. At this time, it is unclear whether the
State of Iowa will adopt Codification. However, based on current guidance,
management believes that the impact of Codification will not be material to
the Company's statutory-basis financial statements.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers all
highly liquid investments with remaining maturity of one year or less when
purchased to be cash equivalents.
Investments
Investments in bonds (except those to which the Securities Valuation Office
of the NAIC has ascribed a value), mortgage loans on real estate and short-
term investments are reported at cost adjusted for amortization of premiums
and accrual of discounts. Amortization is computed using methods which result
in a level yield over the expected life of the investment. The Company reviews
its prepayment assumptions on mortgage and other asset-backed securities at
regular intervals and adjusts amortization rates retrospectively when such
assumptions are changed due to experience and/or expected future patterns.
Investments in preferred stocks in good standing are reported at cost.
Investments in preferred stocks not in good standing are reported at the lower
of cost or market. Common stocks of unaffiliated and affiliated companies,
which includes shares of mutual funds and real estate investment trusts, are
carried at market value. Real estate is reported at cost less allowances for
depreciation. Depreciation is computed principally by the straight-line
method. Policy loans are reported at unpaid principal. Other invested assets
consist principally of investments in various joint ventures and are recorded
at equity in underlying net assets. Other "admitted assets" are valued,
principally at cost, as required or permitted by Iowa Insurance Laws.
Net realized capital gains and losses are determined on the basis of
specific identification and are recorded net of related federal income taxes.
The Asset Valuation Reserve ("AVR") is established by the Company to provide
for potential losses in the event of default by issuers of certain invested
assets. These amounts are determined using a formula prescribed by the NAIC
and are reported as a liability. The formula for the AVR provides for a
corresponding adjustment for realized gains and losses. Under
8
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
a formula prescribed by the NAIC, the Company defers, in the Interest
Maintenance Reserve ("IMR"), the portion of realized gains and losses on sales
of fixed income investments, principally bonds and mortgage loans,
attributable to changes in the general level of interest rates and amortizes
those deferrals over the remaining period to maturity of the security.
Interest income is recognized on an accrual basis. The Company does not
accrue income on bonds in default, mortgage loans on real estate in default
and/or foreclosure or which are delinquent more than twelve months, or on real
estate where rent is in arrears for more than three months. Further, income is
not accrued when collection is uncertain. At December 31, 1998, 1997 and 1996,
the Company excluded investment income due and accrued of $102, $177 and
$1,541, respectively, with respect to such practices.
The Company uses interest rate swaps and caps as part of its overall
interest rate risk management strategy for certain life insurance and annuity
products. The Company entered into several interest rate swap contracts to
modify the interest rate characteristics of the underlying liabilities. The
net interest effect of such swap transactions is reported as an adjustment of
interest income from the hedged items as incurred.
The Company has entered into an interest rate cap agreement to hedge the
exposure of changing interest rates. The cash flows from the interest rate cap
will help offset losses that might occur from changes in interest rates. The
cost of such agreement is included in interest expense ratably during the life
of the agreement. Income received as a result of the cap agreement will be
recognized in investment income as earned. Unamortized cost of the agreements
is included in other invested assets.
Aggregate Policy Reserves
Life, annuity and accident and health benefit reserves are developed by
actuarial methods and are determined based on published tables based on
statutorily specified interest rates and valuation methods that will provide,
in the aggregate, reserves that are greater than or equal to the minimum
required by law.
The aggregate policy reserves for life insurance policies are based
principally upon the 1941, 1958 and 1980 Commissioners' Standard Ordinary
Mortality and American Experience Mortality Tables. The reserves are
calculated using interest rates ranging from 2.00 to 6.00 percent and are
computed principally on the Net Level Premium Valuation and the Commissioners'
Reserve Valuation Methods. Reserves for universal life policies are based on
account balances adjusted for the Commissioners' Reserve Valuation Method.
Deferred annuity reserves are calculated according to the Commissioners'
Annuity Reserve Valuation Method including excess interest reserves to cover
situations where the future interest guarantees plus the decrease in surrender
charges are in excess of the maximum valuation rates of interest. Reserves for
immediate annuities and supplementary contracts with life contingencies are
equal to the present value of future payments assuming interest rates ranging
from 2.50 to 11.25 percent and mortality rates, where appropriate, from a
variety of tables.
Accident and health policy reserves are equal to the greater of the gross
unearned premiums or any required midterminal reserves plus net unearned
premiums and the present value of amounts not yet due on both reported and
unreported claims.
9
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
Policy and Contract Claim Reserves
Claim reserves represent the estimated accrued liability for claims reported
to the Company and claims incurred but not yet reported through the statement
date. These reserves are estimated using either individual case-basis
valuations or statistical analysis techniques. These estimates are subject to
the effects of trends in claim severity and frequency. The estimates are
continually reviewed and adjusted as necessary as experience develops or new
information becomes available.
Separate Accounts
Assets held in trust for purchases of variable annuity contracts and the
Company's corresponding obligation to the contract owners are shown separately
in the balance sheets. The assets in the separate accounts are valued at
market. Income and gains and losses with respect to the assets in the separate
accounts accrue to the benefit of the policyholders and, accordingly, the
operations of the separate accounts are not included in the accompanying
financial statements. The separate accounts do not have any minimum guarantees
and the investment risks associated with market value changes are borne
entirely by the policyholders. The Company received variable contract premiums
of $345,319, $281,095 and $227,864 in 1998, 1997 and 1996, respectively. All
variable account contracts are subject to discretionary withdrawal by the
policyholder at the market value of the underlying assets less the current
surrender charge.
Stock Option Plan
AEGON N.V. sponsors a stock option plan for eligible employees of the
Company. Under this plan, certain employees have indicated a preference to
immediately sell shares received as a result of their exercise of the stock
options; in these situations, AEGON N.V. has settled such options in cash
rather than issuing stock to these employees. These cash settlements are paid
by the Company, and AEGON N.V. subsequently reimburses the Company for such
payments. Under statutory accounting principles, the Company does not record
any expense related to this plan, as the expense is recognized by AEGON N.V.
However, the Company is allowed to record a deduction in the consolidated tax
return filed by the Company and certain affiliates. The tax benefit of this
deduction has been credited directly to surplus.
Reclassifications
Certain reclassifications have been made to the 1997 and 1996 financial
statements to conform to the 1998 presentation.
2. FAIR VALUES OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standard ("SFAS") No. 107, Disclosures
about Fair Value of Financial Instruments, requires disclosure of fair value
information about financial instruments, whether or not recognized in the
statutory-basis balance sheet, for which it is practicable to estimate that
value. SFAS No. 119, Disclosures about Derivative Financial Instruments and
Fair Value of Financial Instruments, requires additional disclosure about
derivatives. In cases where quoted market prices are not available, fair
values are based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash flows. In that
regard, the derived fair value estimates cannot be substantiated by
comparisons to independent markets and, in many cases, could not be realized
in immediate settlement of the instrument. SFAS No. 107 and No. 119 exclude
certain financial instruments and all nonfinancial instruments from their
disclosure requirements and allow companies to forego the
10
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
disclosures when those estimates can only be made at excessive cost.
Accordingly, the aggregate fair value amounts presented do not represent the
underlying value of the Company.
The following methods and assumptions were used by the Company in estimating
its fair value disclosures for financial instruments:
Cash and short-term investments: The carrying amounts reported in the
balance sheet for these instruments approximate their fair values.
Investment securities: Fair values for fixed maturity securities
(including redeemable preferred stocks) are based on quoted market prices,
where available. For fixed maturity securities not actively traded, fair
values are estimated using values obtained from independent pricing
services or, in the case of private placements, are estimated by
discounting expected future cash flows using a current market rate
applicable to the yield, credit quality, and maturity of the investments.
The fair values for equity securities, including affiliated mutual funds
and real estate investment trusts, are based on quoted market prices.
Mortgage loans and policy loans: The fair values for mortgage loans are
estimated utilizing discounted cash flow analyses, using interest rates
reflective of current market conditions and the risk characteristics of the
loans. The fair value of policy loans is assumed to equal their carrying
value.
Investment contracts: Fair values for the Company's liabilities under
investment-type insurance contracts are estimated using discounted cash
flow calculations, based on interest rates currently being offered for
similar contracts with maturities consistent with those remaining for the
contracts being valued.
Interest rate cap and interest rate swaps: Estimated fair value of the
interest rate cap is based upon the latest quoted market price. Estimated
fair value of interest rate swaps are based upon the pricing differential
for similar swap agreements.
Fair values for the Company's insurance contracts other than investment
contracts are not required to be disclosed. However, the fair values of
liabilities under all insurance contracts are taken into consideration in the
Company's overall management of interest rate risk, which minimizes exposure
to changing interest rates through the matching of investment maturities with
amounts due under insurance contracts.
11
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
The following sets forth a comparison of the fair values and carrying values
of the Company's financial instruments subject to the provisions of SFAS No.
107 and No. 119:
<TABLE>
<CAPTION>
December 31
-------------------------------------------
1998 1997
--------------------- ---------------------
Carrying Carrying
Value Fair Value Value Fair Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Admitted Assets
Cash and short-term investments.... $ 83,289 $ 83,289 $ 23,939 $ 23,939
Bonds.............................. 4,822,442 4,900,516 4,913,144 5,046,527
Preferred stocks................... 14,754 14,738 2,750 8,029
Common stocks...................... 49,448 49,448 42,345 42,345
Affiliated common stock............ 5,613 5,613 8,031 8,031
Mortgage loans on real estate...... 1,012,433 1,089,315 935,207 983,720
Policy loans....................... 60,058 60,058 57,136 57,136
Interest rate cap.................. 4,445 725 5,618 1,513
Interest rate swaps................ 1,916 6,667 -- 2,546
Separate account assets............ 3,348,611 3,348,611 2,517,365 2,517,365
Liabilities
Investment contract liabilities.... 4,084,683 4,017,509 4,345,181 4,283,461
Separate account liabilities....... 3,271,005 3,213,251 2,452,205 2,452,205
</TABLE>
3. INVESTMENTS
The carrying value and estimated fair value of investments in debt securities
were as follows:
<TABLE>
<CAPTION>
Gross Gross
Carrying Unrealized Unrealized Estimated
Value Gains Losses Fair Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
December 31, 1998
Bonds:
United States Government and
agencies........................ $ 150,085 $ 2,841 $ 321 $ 152,605
State, municipal and other
government...................... 62,948 918 1,651 62,215
Public utilities................. 139,732 5,053 2,555 142,230
Industrial and miscellaneous..... 2,068,086 78,141 34,493 2,111,734
Mortgage and other asset-backed
securities...................... 2,401,591 45,185 15,044 2,431,732
---------- -------- ------- ----------
4,822,442 132,138 54,064 4,900,516
Preferred stocks................... 14,754 75 91 14,738
---------- -------- ------- ----------
$4,837,196 $132,213 $54,155 $4,915,254
========== ======== ======= ==========
</TABLE>
12
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
<TABLE>
<CAPTION>
Gross Gross
Carrying Unrealized Unrealized Estimated
Value Gains Losses Fair Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
December 31, 1997
Bonds:
United States Government and
agencies........................ $ 188,241 $ 2,562 $ 21 $ 190,782
State, municipal and other
government...................... 61,532 2,584 1,774 62,342
Public utilities................. 121,582 5,384 2,952 124,014
Industrial and miscellaneous..... 1,955,587 85,233 7,752 2,033,068
Mortgage and other asset-backed
securities...................... 2,586,202 55,382 5,263 2,636,321
---------- -------- ------- ----------
4,913,144 151,145 17,762 5,046,527
Preferred stocks................... 2,750 5,279 -- 8,029
---------- -------- ------- ----------
$4,915,894 $156,424 $17,762 $5,054,556
========== ======== ======= ==========
</TABLE>
The carrying value and estimated fair value of bonds at December 31, 1998,
by contractual maturity, are shown below. Expected maturities may differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Carrying Estimated
Value Fair Value
---------- ----------
<S> <C> <C>
Due in one year or less............................... $ 151,747 $ 148,410
Due after one year through five years................. 1,211,064 1,232,329
Due after five years through ten years................ 753,543 761,787
Due after ten years................................... 304,497 326,258
---------- ----------
2,420,851 2,468,784
Mortgage and other asset-backed securities............ 2,401,591 2,431,732
---------- ----------
$4,822,442 $4,900,516
========== ==========
</TABLE>
A detail of net investment income is presented below:
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Interest on bonds and notes......................... $374,478 $373,496 $364,356
Dividends on equity investments..................... 1,357 1,460 1,436
Interest on mortgage loans.......................... 77,960 80,266 69,418
Rental income on real estate........................ 6,553 7,501 9,526
Interest on policy loans............................ 4,080 3,400 3,273
Other investment income............................. 2,576 613 1,799
-------- -------- --------
Gross investment income............................. 467,004 466,736 449,808
Investment expenses................................. 20,020 20,312 21,471
-------- -------- --------
Net investment income............................... $446,984 $446,424 $428,337
======== ======== ========
</TABLE>
13
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
Proceeds from sales and maturities of debt securities and related gross
realized gains and losses were as follows:
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Proceeds.................................... $3,347,174 $3,284,095 $2,112,831
========== ========== ==========
Gross realized gains........................ $ 48,760 $ 30,094 $ 19,876
Gross realized losses....................... (8,072) (17,265) (19,634)
---------- ---------- ----------
Net realized gains.......................... $ 40,688 $ 12,829 $ 242
========== ========== ==========
</TABLE>
At December 31, 1998, investments with an aggregate carrying value of
$5,935,160 were on deposit with regulatory authorities or were restrictively
held in bank custodial accounts for the benefit of such regulatory authorities
as required by statute.
Realized investment gains (losses) and changes in unrealized gains (losses)
for investments are summarized below:
<TABLE>
<CAPTION>
Realized
---------------------------
Year Ended December 31
---------------------------
1998 1997 1996
-------- -------- -------
<S> <C> <C> <C>
Debt securities................................... $ 40,688 $ 12,829 $ 242
Short-term investments............................ 1,533 (19) (197)
Equity securities................................. (879) 6,972 1,798
Mortgage loans on real estate..................... 12,637 2,252 (5,530)
Real estate....................................... 3,176 4,252 1,210
Other invested assets............................. (2,523) 1,632 12
-------- -------- -------
54,632 27,918 (2,465)
Tax effect........................................ (22,290) (10,572) (1,235)
Transfer to interest maintenance reserve.......... (28,944) (10,187) 197
-------- -------- -------
Net realized gains (losses)....................... $ 3,398 $ 7,159 $(3,503)
======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
Change in Unrealized
---------------------------
Year Ended December 31
---------------------------
1998 1997 1996
-------- ------- ---------
<S> <C> <C> <C>
Debt securities.................................. $(60,604) $40,289 $(115,867)
Equity securities................................ 5,750 5,653 2,929
-------- ------- ---------
Change in unrealized appreciation
(depreciation).................................. $(54,854) $45,942 $(112,938)
======== ======= =========
</TABLE>
Gross unrealized gains and gross unrealized losses on equity securities were
as follows:
<TABLE>
<CAPTION>
December 31
-------------------------
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Unrealized gains..................................... $15,980 $10,356 $ 9,590
Unrealized losses.................................... (3,710) (3,836) (8,723)
------- ------- -------
Net unrealized gains................................. $12,270 $ 6,520 $ 867
======= ======= =======
</TABLE>
14
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
During 1998, the Company issued mortgage loans with interest rates ranging
from 5.88% to 7.86%. The maximum percentage of any one mortgage loan to the
value of the underlying real estate at origination was 90% for commercial
loans and 95% for residential loans. Mortgage loans with a carrying value of
$245 were non-income producing for the previous twelve months. Accrued
interest of $89 related to these mortgage loans was excluded from investment
income. The Company requires all mortgaged properties to carry fire insurance
equal to the value of the underlying property.
At December 31, 1998 and 1997, the Company held a mortgage loan loss reserve
in the asset valuation reserve of $16,104 and $11,985, respectively. The
mortgage loan portfolio is diversified by geographic region and specific
collateral property type as follows:
Geographic Distribution
<TABLE>
<CAPTION>
December 31
-------------
1998 1997
----- -----
<S> <C> <C>
South Atlantic............................ 32% 29%
E. North Central.......................... 16 12
Pacific................................... 15 15
Mountain.................................. 10 10
Middle Atlantic........................... 10 7
W. South Central.......................... 6 9
W. North Central.......................... 5 6
E. South Central.......................... 3 8
New England............................... 3 4
</TABLE>
Property Type Distribution
<TABLE>
<CAPTION>
December 31
-------------
1998 1997
----- -----
<S> <C> <C>
Retail.................................... 35% 35%
Office.................................... 30 31
Industrial................................ 21 6
Apartment................................. 12 14
Other..................................... 2 14
</TABLE>
At December 31, 1998, the Company had no investments (excluding U.S.
Government guaranteed or insured issues) which individually represented more
than ten percent of capital and surplus and the asset valuation reserve.
The Company utilizes a variety of off-balance sheet financial instruments as
part of its efforts to hedge and manage fluctuations in the market value of
its investment portfolio attributable to changes in general interest rate
levels and to manage duration mismatch of assets and liabilities. These
instruments include interest rate exchange agreements (swaps and caps),
options, and commitments to extend credit and all involve elements of credit
and market risks in excess of the amounts recognized in the accompanying
financial statements at a given point in time. The contract or notional
amounts of those instruments reflect the extent of involvement in the various
types of financial instruments.
The Company's exposure to credit risk is the risk of loss from a
counterparty failing to perform according to the terms of the contract. That
exposure includes settlement risk (i.e., the risk that the
15
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
counterparty defaults after the Company has delivered funds or securities
under terms of the contract) that would result in an accounting loss and
replacement cost risk (i.e., the cost to replace the contract at current
market rates should the counterparty default prior to settlement date). Credit
loss exposure resulting from nonperformance by a counterparty for commitments
to extend credit is represented by the contractual amounts of the instruments.
At December 31, 1998 and 1997, the Company's outstanding financial
instruments with on and off-balance sheet risks, shown in notional amounts,
are summarized as follows:
<TABLE>
<CAPTION>
Notional Amount
-----------------
1998 1997
-------- --------
<S> <C> <C>
Derivative securities:
Interest rate swaps:
Receive fixed--pay floating............................... $100,000 $100,000
Receive floating (uncapped)--pay floating (capped)........ 53,011 67,229
Receive floating (LIBOR)--pay floating (S&P).............. 60,000 --
Interest rate cap agreements................................ 500,000 500,000
</TABLE>
4. REINSURANCE
The Company reinsures portions of risk on certain insurance policies which
exceed its established limits, thereby providing a greater diversification of
risk and minimizing exposure on larger risks. The Company remains contingently
liable with respect to any insurance ceded, and this would become an actual
liability in the event that the assuming insurance company became unable to
meet its obligation under the reinsurance treaty.
Reinsurance assumption and cession treaties are transacted primarily with
affiliates. Premiums earned reflect the following reinsurance assumed and
ceded amounts:
<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Direct premiums............................. $1,533,822 $1,312,446 $1,457,450
Reinsurance assumed......................... 2,366 2,038 1,796
Reinsurance ceded........................... (173,564) (246,372) (300,546)
---------- ---------- ----------
Net premiums earned......................... $1,362,624 $1,068,112 $1,158,700
========== ========== ==========
</TABLE>
The Company received reinsurance recoveries in the amount of $173,297,
$183,638 and $168,155 during 1998, 1997 and 1996, respectively. At December
31, 1998 and 1997, estimated amounts recoverable from reinsurers that have
been deducted from policy and contract claim reserves totaled $47,956 and
$60,437, respectively. The aggregate reserves for policies and contracts were
reduced for reserve credits for reinsurance ceded at December 31, 1998 and
1997 of $2,163,905 and $2,434,130, respectively.
At December 31, 1998, amounts recoverable from unauthorized reinsurers of
$55,379 (1997--$73,080) and reserve credits for reinsurance ceded of $49,835
(1997--$78,838) were associated with a single reinsurer and its affiliates.
The Company holds collateral under these reinsurance agreements in the form of
trust agreements totaling $106,226 at December 31, 1998 that can be drawn on
for amounts that remain unpaid for more than 120 days.
16
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
5. INCOME TAXES
For federal income tax purposes, the Company joins in a consolidated tax
return filing with certain affiliated companies. Under the terms of a tax-
sharing agreement between the Company and its affiliates, the Company computes
federal income tax expense as if it were filing a separate income tax return,
except that tax credits and net operating loss carryforwards are determined on
the basis of the consolidated group. Additionally, the alternative minimum tax
is computed for the consolidated group and the resulting tax, if any, is
allocated back to the separate companies on the basis of the separate
companies' alternative minimum taxable income.
Federal income tax expense differs from the amount computed by applying the
statutory federal income tax rate to gain from operations before federal
income tax expense and net realized capital gains (losses) on investments for
the following reasons:
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Computed tax at federal statutory rate (35%)......... $39,177 $42,775 $37,256
Tax reserve adjustment............................... 607 2,004 2,211
Excess tax depreciation.............................. (223) (392) (384)
Deferred acquisition costs--tax basis................ 11,827 4,308 5,583
Prior year under (over) accrual...................... 1,750 (1,016) (499)
Dividend received deduction.......................... (1,053) (941) (454)
Charitable contribution.............................. -- (848) --
Other items--net..................................... (2,250) (2,509) (2,536)
------- ------- -------
Federal income tax expense........................... $49,835 $43,381 $41,177
======= ======= =======
</TABLE>
Prior to 1984, as provided for under the Life Insurance Company Tax Act of
1959, a portion of statutory income was not subject to current taxation but
was accumulated for income tax purposes in a memorandum account referred to as
the policyholders' surplus account. No federal income taxes have been provided
for in the financial statements on income deferred in the policyholders'
surplus account ($20,387 at December 31, 1998). To the extent dividends are
paid from the amount accumulated in the policyholders' surplus account, net
earnings would be reduced by the amount of tax required to be paid. Should the
entire amount in the policyholders' surplus account become taxable, the tax
thereon computed at current rates would amount to approximately $7,135.
The Company's federal income tax returns have been examined and closing
agreements have been executed with the Internal Revenue Service through 1987.
During 1996, there was a $5,025 prior period adjustment to the tax accrual.
This included a $2,100 writeoff of an intangible asset for tax purposes, and a
federal income tax refund of $1,829 for tax years 1984 through 1986 and
related interest of $1,686, net of a tax effect of $590. An examination is
underway for years 1993 through 1995.
6. POLICY AND CONTRACT ATTRIBUTES
A portion of the Company's policy reserves and other policyholders' funds
(including separate account liabilities) relates to liabilities established on
a variety of the Company's products that are not subject to significant
mortality or morbidity risk; however, there may be certain restrictions placed
upon
17
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
the amount of funds that can be withdrawn without penalty. The amount of
reserves on these products, by withdrawal characteristics, are summarized as
follows:
<TABLE>
<CAPTION>
December 31
-------------------------------------
1998 1997
------------------ ------------------
Percent Percent
of of
Amount Total Amount Total
---------- ------- ---------- -------
<S> <C> <C> <C> <C>
Subject to discretionary withdrawal with
market value adjustment................. $ 82,048 1% $ 8,912 0%
Subject to discretionary withdrawal at
book value less surrender charge........ 515,778 5 755,300 8
Subject to discretionary withdrawal at
market value............................ 3,211,896 34 2,454,845 27
Subject to discretionary withdrawal at
book value (minimal or no charges or
adjustments)............................ 5,519,265 58 5,821,049 63
Not subject to discretionary withdrawal
provision............................... 228,030 2 203,522 2
---------- --- ---------- ---
9,557,017 100% 9,243,628 100%
Less reinsurance ceded................... 2,124,769 2,372,495
---------- ----------
Total policy reserves on annuities and
deposit fund liabilities................ $7,432,248 $6,871,134
========== ==========
</TABLE>
A reconciliation of the amounts transferred to and from the separate accounts
is presented below:
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Transfers as reported in the summary of operations
of the separate accounts statement:
Transfers to separate accounts.................... $345,319 $281,095 $227,864
Transfers from separate accounts.................. 79,808 9,819 75,172
-------- -------- --------
Net transfers to separate accounts.................. 265,511 271,276 152,692
Reconciling adjustments--charges for investment
management, administration fees and contract
guarantees......................................... 191 26,204 19,093
-------- -------- --------
Transfers as reported in the summary of operations
of the life, accident and health annual statement.. $265,702 $297,480 $171,785
======== ======== ========
</TABLE>
18
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
Reserves on the Company's traditional life products are computed using mean
reserving methodologies. These methodologies result in the establishment of
assets for the amount of the net valuation premiums that are anticipated to be
received between the policy's paid-through date to the policy's next
anniversary date. At December 31, 1998 and 1997, these assets (which are
reported as premiums deferred and uncollected) and the amounts of the related
gross premiums and loadings, are as follows:
<TABLE>
<CAPTION>
Gross Loading Net
------- ------- -------
<S> <C> <C> <C>
December 31, 1998
Life and annuity:
Ordinary direct first year business................ $ 3,346 $2,500 $ 846
Ordinary direct renewal business................... 21,435 6,365 15,070
Group life direct business......................... 1,171 536 635
Reinsurance ceded.................................. (1,367) (44) (1,323)
------- ------ -------
24,585 9,357 15,228
Accident and health:
Direct............................................. 108 -- 108
Reinsurance ceded.................................. (18) -- (18)
------- ------ -------
Total accident and health............................ 90 -- 90
------- ------ -------
$24,675 $9,357 $15,318
======= ====== =======
December 31, 1997
Life and annuity:
Ordinary direct first year business................ $ 2,316 $1,698 $ 618
Ordinary direct renewal business................... 22,724 6,834 15,890
Group life direct business......................... 1,523 646 877
Reinsurance ceded.................................. (1,464) (81) (1,383)
------- ------ -------
25,099 9,097 16,002
Accident and health:
Direct............................................. 148 -- 148
Reinsurance ceded.................................. (49) -- (49)
------- ------ -------
Total accident and health............................ 99 -- 99
------- ------ -------
$25,198 $9,097 $16,101
======= ====== =======
</TABLE>
At December 31, 1998 and 1997, the Company had insurance in force
aggregating $44,233 and $69,271, respectively, in which the gross premiums are
less than the net premiums required by the standard valuation standards
established by the Insurance Division, Department of Commerce, of the State of
Iowa. The Company established policy reserves of $998 and $1,128 to cover
these deficiencies at December 31, 1998 and 1997, respectively.
7. DIVIDEND RESTRICTIONS
The Company is subject to limitations, imposed by the State of Iowa, on the
payment of dividends to its parent company. Generally, dividends during any
twelve-month period may not be paid, without prior regulatory approval, in
excess of the greater of (a) 10 percent of statutory capital and surplus as of
the preceding December 31, or (b) statutory gain from operations for the
preceding year. Subject to
19
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
the availability of unassigned surplus at the time of such dividend, the
maximum payment which may be made in 1999, without the prior approval of
insurance regulatory authorities, is $62,100.
The Company paid dividends to its parent of $120,000, $62,000 and $20,000 in
1998, 1997 and 1996, respectively.
8. RETIREMENT AND COMPENSATION PLANS
The Company's employees participate in a qualified benefit pension plan
sponsored by AEGON. The Company has no legal obligation for the plan. The
Company recognizes pension expense equal to its allocation from AEGON. The
pension expense is allocated among the participating companies based on the
FASB No. 87 expense as a percent of salaries. The benefits are based on years
of service and the employee's compensation during the highest five consecutive
years of employment. Pension expense aggregated $380, $422 and $1,056 for the
years ended December 31, 1998, 1997 and 1996, respectively. The plan is
subject to the reporting and disclosure requirements of the Employee
Retirement and Income Security Act of 1974.
The Company's employees also participate in a contributory defined
contribution plan sponsored by AEGON which is qualified under Section 401(k)
of the Internal Revenue Service Code. Employees of the Company who customarily
work at least 1,000 hours during each calendar year and meet the other
eligibility requirements, are participants of the plan. Participants may elect
to contribute up to fifteen percent of their salary to the plan. The Company
will match an amount up to three percent of the participant's salary.
Participants may direct all of their contributions and plan balances to be
invested in a variety of investment options. The plan is subject to the
reporting and disclosure requirements of the Employee Retirement and Income
Security Act of 1974. Expense related to this plan was $233, $226 and $297 for
the years ended December 31, 1998, 1997 and 1996, respectively.
AEGON sponsors supplemental retirement plans to provide the Company's senior
management with benefits in excess of normal pension benefits. The plans are
noncontributory, and benefits are based on years of service and the employee's
compensation level. The plans are unfunded and nonqualified under the Internal
Revenue Service Code. In addition, AEGON has established incentive deferred
compensation plans for certain key employees of the Company. AEGON also
sponsors an employee stock option plan for individuals employed at least three
years and a stock purchase plan for its producers, with the participating
affiliated companies establishing their own eligibility criteria, producer
contribution limits and company matching formula. These plans have been
accrued or funded as deemed appropriate by management of AEGON and the
Company.
In addition to pension benefits, the Company participates in plans sponsored
by AEGON that provide postretirement medical, dental and life insurance
benefits to employees meeting certain eligibility requirements. Portions of
the medical and dental plans are contributory. The expenses of the
postretirement plans calculated on the pay-as-you-go basis are charged to
affiliates in accordance with an intercompany cost sharing arrangement. The
Company expensed $62, $62 and $184 for the years ended December 31, 1998, 1997
and 1996, respectively.
9. RELATED PARTY TRANSACTIONS
The Company shares certain offices, employees and general expenses with
affiliated companies.
The Company receives data processing, investment advisory and management,
marketing and administration services from certain affiliates. During 1998,
1997 and 1996, the Company paid $18,706, $18,705 and $17,028, respectively,
for these services, which approximates their costs to the affiliates.
20
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
Payables to affiliates bear interest at the thirty-day commercial paper rate
of 4.95% at December 31, 1998. During 1998, 1997 and 1996, the Company paid
net interest of $1,491, $1,188 and $174, respectively, to affiliates.
During 1997, the Company received a capital contribution of $153 in cash
from its parent.
At December 31, 1998 and 1997, the Company has short-term notes payable to
an affiliate of $9,421 and $16,400, respectively. Interest on these notes
accrues at rates ranging from 5.13% to 5.52% at December 31, 1998 and at 5.60%
at December 31, 1997.
During 1998, the Company issued life insurance policies to certain
affiliated companies, covering the lives of certain employees of those
affiliates. Premiums of $174,000 related to these policies were recognized
during the year, and aggregate reserves for policies and contracts are
$181,720 at December 31, 1998.
10. COMMITMENTS AND CONTINGENCIES
The Company is a party to legal proceedings incidental to its business.
Although such litigation sometimes includes substantial demands for
compensatory and punitive damages, in addition to contract liability, it is
management's opinion, after consultation with counsel and a review of
available facts, that damages arising from such demands will not be material
to the Company's financial position.
The Company is subject to insurance guaranty laws in the states in which it
writes business. These laws provide for assessments against insurance
companies for the benefit of policyholders and claimants in the event of
insolvency of other insurance companies. Assessments are charged to operations
when received by the Company except where right of offset against other taxes
paid is allowed by law; amounts available for future offsets are recorded as
an asset on the Company's balance sheet. Potential future obligations for
unknown insolvencies are not determinable by the Company. The future
obligation has been based on the most recent information available from the
National Organization of Life and Health Insurance Guaranty Associations. The
Company has established a reserve of $17,901 and $17,700 and an offsetting
premium tax benefit of $7,631 and $7,984 at December 31, 1998 and 1997,
respectively, for its estimated share of future guaranty fund assessments
related to several major insurer insolvencies. The guaranty fund expense
(benefit) was $1,985, $(975) and $2,617 for December 31, 1998, 1997 and 1996,
respectively.
11. YEAR 2000 (UNAUDITED)
The term Year 2000 issue generally refers to the improper processing of
dates and incorrect date calculations that might occur in computer software
and hardware and embedded systems as the Year 2000 is approached. The use of
computer programs that rely on two-digit date fields to perform computations
and decision-making functions may cause systems to malfunction when processing
information involving dates after 1999. For example, any computer software
that has date-sensitive coding might recognize a code of 00 as the year 1900
rather than the year 2000.
The Company has developed a Year 2000 Project Plan (the "Plan") to address
the Year 2000 issue as it affects the Company's internal IT ("Information
Technology") and non-IT systems, and to assess Year 2000 issues relating to
third parties with whom the Company has critical relationships.
The Plan for addressing internal systems generally includes an assessment of
internal IT and non-IT systems and equipment affected by the Year 2000 issue;
definition of strategies to address affected
21
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
systems and equipment; remediation of identified systems and equipment;
internal testing and certification that each internal system is Year 2000
compliant; and a review of existing and revised business resumption and
contingency plans to address potential Year 2000 issues. The Company has
remediated and tested substantially all of its mission-critical internal IT
systems as of December 31, 1998. The Company continues to remediate and test
certain non-critical internal IT systems, internal non-IT systems and will
continue with a revalidation testing program throughout 1999.
The Company's Year 2000 issues are more complex because a number of its
systems interface with other systems not under the Company's control. The
Company's most significant interfaces and uses of third-party vendor systems
are in the bank, financial services and trust areas. The Company utilizes
various banks to handle numerous types of financial and sales transactions.
Several of these banks also provide trustee and custodial services for the
Company's investment holdings and transactions. These services are critical to
a financial services company such as the Company as its business centers
around cash receipts and disbursements to policyholders and the investment of
policyholder funds. The Company has received written confirmation from its
vendor banks regarding their status on Year 2000. The banks indicate their
dedication to resolving any Year 2000 issues related to their systems and
services prior to December 31, 1999. The Company anticipates that a
considerable effort will be necessary to ensure that its corrected or new
systems can properly interface with those business partners with whom it
transmits and receives data and other information (external systems). The
Company has undertaken specific testing regimes with these third-party
business partners and expects to continue working with its business partners
on any interfacing of systems. However, the timing of external system
compliance cannot currently be predicted with accuracy because the
implementation of Year 2000 readiness will vary from one company to another.
The Company does have some exposure to date-sensitive embedded technology
such as micro-controllers, but the Company views this exposure as minimal.
Unlike other industries that may be equipment intensive, like manufacturing,
the Company is a life insurance, and financial services organization providing
insurance annuities and pension products to its customers. As such, the
primary equipment and electronic devices in use are computers and telephone-
related equipment. This type of hardware can have date-sensitive embedded
technology which could have Year 2000 problems. Because of this exposure, the
Company has reviewed its computer hardware and telephone systems, with
assistance from the applicable vendors, and has upgraded, or replaced, or is
in the process of replacing any equipment that will not properly process date-
sensitive data in the Year 2000 or beyond.
For the Company, a reasonably likely worst case scenario might include one
or more of the Company's significant policyholder systems being non-compliant.
Such an event could result in a material disruption of the Company's
operations. Specifically, a number of the Company's operations could
experience an interruption in the ability to collect and process premiums or
deposits, process claim payments, accurately maintain policyholder
information, accurately maintain accounting records, and/or perform adequate
customer service. Should the worst case scenario occur, it could, dependent
upon its duration, have a material impact on the Company's business and
financial condition. Simple failures can be repaired and returned to
production within a matter of hours with no material impact. Unanticipated
failures with a longer service disruption period could have a more serious
impact. For this reason, the Company is placing significant emphasis on risk
management and Year 2000 business resumption contingency planning in 1999 by
modifying its existing business resumption and disaster recovery plans to
address potential Year 2000 issues.
The actions taken by management under the Year 2000 Project Plans are
intended to significantly reduce the Company's risk of a material business
interruption based on the Year 2000 issues. It should
22
<PAGE>
PFL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS--(Continued)
be noted that the Year 2000 computer problem, and its resolution, is complex
and multifaceted, and any company's success cannot be conclusively known until
the Year 2000 is reached. In spite of its efforts or results, the Company's
ability to function unaffected to and through the Year 2000 may be adversely
affected by actions (or failure to act) of third parties beyond our knowledge
or control. It is anticipated that there may be problems that will have to be
resolved in the ordinary course of business on and after the Year 2000.
However, the Company does not believe that the problems will have a material
adverse affect on the Company's operations or financial condition.
23
<PAGE>
PFL LIFE INSURANCE COMPANY
SUMMARY OF INVESTMENTS--OTHER THAN
INVESTMENTS IN RELATED PARTIES
December 31, 1998
(Dollars in thousands)
SCHEDULE I
<TABLE>
<CAPTION>
Amount at Which
Market Shown in the
Type of Investment Cost(1) Value Balance Sheet
------------------ ---------- ---------- ---------------
<S> <C> <C> <C>
Fixed Maturities
Bonds:
United States Government and government
agencies and authorities.............. $ 926,370 $ 943,313 $ 926,370
States, municipalities and political
subdivisions.......................... 107,975 114,146 107,975
Foreign governments.................... 54,670 53,950 54,670
Public utilities....................... 139,732 142,230 139,732
All other corporate bonds.............. 3,593,695 3,646,877 3,593,695
Redeemable preferred stock............... 14,754 14,738 14,754
---------- ---------- ----------
Total fixed maturities................... 4,837,196 4,915,254 4,837,196
Equity Securities
Common stocks:
Affiliated entities.................... 8,060 5,613 5,613
Banks, trust and insurance............. 5,935 7,193 7,193
Industrial, miscellaneous and all
other................................. 28,796 42,255 42,255
---------- ---------- ----------
Total equity securities.................. 42,791 55,061 55,061
Mortgage loans on real estate............ 1,012,433 1,012,433
Real estate.............................. 52,381 52,381
Real estate acquired in satisfaction of
debt.................................... 11,778 11,778
Policy loans............................. 60,058 60,058
Other long-term investments.............. 76,482 76,482
Cash and short-term investments.......... 83,289 83,289
---------- ----------
Total investments........................ $6,176,408 $6,188,678
========== ==========
</TABLE>
- -------------------------
(1) Original cost of equity securities and, as to fixed maturities, original
cost reduced by repayments and adjusted for amortization of premiums or
accrual of discounts.
24
<PAGE>
PFL LIFE INSURANCE COMPANY
SUPPLEMENTARY INSURANCE INFORMATION
(Dollars in thousands)
SCHEDULE III
<TABLE>
<CAPTION>
Future Benefits,
Policy Claims
Benefits Policy and Net Losses and Other
and Unearned Contract Premium Investment Settlement Operating Premiums
Expenses Premiums Liabilities Revenue Income* Expenses Expenses* Written
---------- -------- ----------- ---------- ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended December 31,
1998
Individual life......... $1,355,283 $ -- $ 8,976 $ 514,194 $ 85,258 $ 545,720 $ 87,455 --
Individual health....... 94,294 9,631 12,123 68,963 8,004 48,144 30,442 $ 68,745
Group life and health... 93,405 10,298 36,908 111,547 11,426 82,690 54,352 108,769
Annuity................. 3,925,293 -- -- 667,920 342,296 592,085 298,222 --
---------- ------- ------- ---------- -------- ---------- --------
$5,468,275 $19,929 $58,007 $1,362,624 $446,984 $1,268,639 $470,471
========== ======= ======= ========== ======== ========== ========
Year Ended December 31,
1997
Individual life......... $ 882,003 $ -- $ 8,550 $ 200,175 $ 75,914 $ 211,921 $ 36,185 --
Individual health....... 62,033 9,207 12,821 63,548 5,934 37,706 29,216 $ 63,383
Group life and health... 88,211 11,892 44,977 146,694 11,888 103,581 91,568 143,580
Annuity................. 4,204,125 -- -- 657,695 352,688 571,434 364,216 --
---------- ------- ------- ---------- -------- ---------- --------
$5,236,372 $21,099 $66,348 $1,068,112 $446,424 $ 924,642 $521,185
========== ======= ======= ========== ======== ========== ========
Year Ended December 31,
1996
Individual life......... $ 734,350 $ -- $ 7,240 $ 202,082 $ 66,538 $ 197,526 $ 38,067 --
Individual health....... 39,219 8,680 13,631 55,871 5,263 32,903 29,511 $ 55,678
Group life and health... 78,418 14,702 53,486 174,781 12,877 105,459 122,953 171,320
Annuity................. 4,408,419 -- -- 725,966 343,659 800,121 230,417 --
---------- ------- ------- ---------- -------- ---------- --------
$5,260,406 $23,382 $74,357 $1,158,700 $428,337 $1,136,009 $420,948
========== ======= ======= ========== ======== ========== ========
</TABLE>
- -------------
* Allocations of net investment income and other operating expenses are based
on a number of assumptions and estimates, and the results would change if
different methods were applied.
25
<PAGE>
PFL LIFE INSURANCE COMPANY
REINSURANCE
(Dollars in thousands)
SCHEDULE IV
<TABLE>
<CAPTION>
Assumed Percentage
Ceded to From of Amount
Gross Other Other Net Assumed
Amount Companies Companies Amount to Net
---------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year Ended December 31,
1998
Life insurance in force.. $6,384,095 $438,590 $39,116 $5,984,621 .6%
========== ======== ======= ========== ===
Premiums:
Individual life........ $ 515,164 $ 3,692 $ 2,366 $ 513,838 .5%
Individual health...... 76,438 7,475 -- 68,963 --
Group life and health.. 255,848 144,301 -- 111,547 --
Annuity................ 686,372 18,096 -- 668,276 --
---------- -------- ------- ---------- ---
$1,533,822 $173,564 $ 2,366 $1,362,624 .2%
========== ======== ======= ========== ===
Year Ended December 31,
1997
Life insurance in force.. $5,025,027 $420,519 $35,486 $4,639,994 .8%
========== ======== ======= ========== ===
Premiums:
Individual life........ $ 201,691 $ 3,554 $ 2,038 $ 200,175 1.0%
Individual health...... 73,593 10,045 -- 63,548 --
Group life and health.. 339,269 192,575 -- 146,694 --
Annuity................ 697,893 40,198 -- 657,695 --
---------- -------- ------- ---------- ---
$1,312,446 $246,372 $ 2,038 $1,068,112 .2%
========== ======== ======= ========== ===
Year Ended December 31,
1996
Life insurance in force.. $4,863,416 $477,112 $30,685 $4,416,989 .7%
========== ======== ======= ========== ===
Premiums:
Individual life........ $ 204,144 $ 3,858 $ 1,796 $ 202,082 .9%
Individual health...... 68,699 12,828 -- 55,871 --
Group life and health.. 390,296 215,515 -- 174,781 --
Annuity................ 794,311 68,345 -- 725,966 --
---------- -------- ------- ---------- ---
$1,457,450 $300,546 $ 1,796 $1,158,700 .2%
========== ======== ======= ========== ===
</TABLE>
26
<PAGE>
Audited Financial Statements
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Year ended December 31, 1998
with Report of Independent Auditors
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Financial Statements
Year ended December 31, 1998
Contents
Report of Independent Auditors.................................................1
Financial Statements
Balance Sheet..................................................................2
Statement of Operations........................................................6
Statement of Changes in Contract Owners' Equity...............................10
Notes to Financial Statements.................................................16
<PAGE>
Report of Independent Auditors
The Board of Directors and Contract Owners of the
Atlas Portfolio Builder Variable Annuity,
PFL Life Insurance Company
We have audited the accompanying balance sheet of the subaccounts of the PFL
Life Variable Annuity Account A, which are available for investment by the Atlas
Portfolio Builder Variable Annuity as of December 31, 1998, and the related
statements of operations for the year then ended and changes in contract owners'
equity for the year then ended and the period from September 30, 1997
(commencement of operations) through December 31, 1997. These financial
statements are the responsibility of the Variable Account's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of mutual fund shares owned as of December 31, 1998 by
correspondence with the mutual funds' transfer agent. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the subaccounts of PFL Life
Variable Annuity Account A, which are available for investment by the Atlas
Portfolio Builder Variable Annuity at December 31, 1998, and the results of its
operations for the year then ended and changes in its contract owners' equity
for the year then ended and the period from September 30, 1997 through December
31, 1997 in conformity with generally accepted accounting principles.
Des Moines, Iowa
January 29, 1999
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Balance Sheet
December 31, 1998
<TABLE>
<CAPTION>
Balanced
Growth
Total Subaccount
-------------------------------
<S> <C> <C>
Assets
Investments in mutual funds, at current market value:
Atlas Insurance Trust:
Balanced Growth Portfolio $12,453,210 $12,453,210
Dreyfus Variable Investment Fund:
Small Cap Portfolio 2,429,617 -
Capital Appreciation Portfolio 4,314,677 -
Disciplined Stock Portfolio 5,977,682 -
Growth & Income Portfolio 3,464,887 -
Quality Bond Portfolio 5,266,742 -
Federated Insurance Series:
Utility Fund II Portfolio 1,887,762 -
High Income Bond Fund II Portfolio 2,903,484 -
WRL Series Fund, Inc.:
Global Portfolio 4,024,656 -
Growth Portfolio 7,747,314 -
Emerging Growth Portfolio 1,506,620 -
Endeavor Series Trust:
Dreyfus Small Cap Value Portfolio 909,269 -
Endeavor Value Equity Portfolio 958,682 -
T. Rowe Price Equity Income Portfolio 3,507,750 -
T. Rowe Price Growth Stock Portfolio 3,522,572 -
-------------------------------
Total investments in mutual funds 60,874,924 12,453,210
-------------------------------
Total assets $60,874,924 $12,453,210
===============================
Liabilities and contract owners' equity
Liabilities:
Contract terminations payable $ 796 $ 171
-------------------------------
796 171
Contract owners' equity:
Deferred annuity contracts terminable by owners 60,874,128 12,453,039
-------------------------------
Total liabilities and contract owners' equity $60,874,924 $12,453,210
===============================
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Capital Disciplined
Small Cap Appreciation Stock
Subaccount Subaccount Subaccount
--------------------------------------------------
<S> <C> <C> <C>
Assets
Investments in mutual funds, at current market value:
Balanced Growth Portfolio $ - $ - $ -
Dreyfus Variable Investment Fund:
Small Cap Portfolio 2,429,617
Capital Appreciation Portfolio - 4,314,677 -
Disciplined Stock Portfolio - - 5,977,682
Growth & Income Portfolio - - -
Quality Bond Portfolio - - -
Federated Insurance Series:
Utility Fund II Portfolio - - -
High Income Bond Fund II Portfolio - - -
WRL Series Fund, Inc.:
Global Portfolio - - -
Growth Portfolio - - -
Emerging Growth Portfolio - - -
Endeavor Series Trust:
Dreyfus Small Cap Value Portfolio - - -
Endeavor Value Equity Portfolio - - -
T. Rowe Price Equity Income Portfolio - - -
T. Rowe Price Growth Stock Portfolio - - -
--------------------------------------------------
Total investments in mutual funds 2,429,617 4,314,677 5,977,682
==================================================
Total assets $2,429,617 $4,314,677 $5,977,682
==================================================
Liabilities and contract owners' equity Liabilities:
Contract terminations payable $ 104 $ 14 $ 42
--------------------------------------------------
104 14 42
Contract owners' equity:
Deferred annuity contracts terminable by owners 2,429,513 4,314,663 5,977,640
==================================================
Total liabilities and contract owners' equity $2,429,617 $4,314,677 $5,977,682
==================================================
<CAPTION>
Growth & Quality Utility
Income Bond Fund II
Subaccount Subaccount Subaccount
---------------------------------------------
<S> <C> <C> <C>
Assets
Investments in mutual funds, at current market value:
Balanced Growth Portfolio $ - $ - $ -
Dreyfus Variable Investment Fund:
Small Cap Portfolio
Capital Appreciation Portfolio - - -
Disciplined Stock Portfolio - - -
Growth & Income Portfolio 3,464,887 - -
Quality Bond Portfolio - 5,266,742 -
Federated Insurance Series:
Utility Fund II Portfolio - - 1,887,762
High Income Bond Fund II Portfolio - - -
WRL Series Fund, Inc.:
Global Portfolio - - -
Growth Portfolio - - -
Emerging Growth Portfolio - - -
Endeavor Series Trust:
Dreyfus Small Cap Value Portfolio - - -
Endeavor Value Equity Portfolio - - -
T. Rowe Price Equity Income Portfolio - - -
T. Rowe Price Growth Stock Portfolio - - -
---------------------------------------------
Total investments in mutual funds 3,464,887 5,266,742 1,887,762
=============================================
Total assets $3,464,887 $5,266,742 $1,887,762
=============================================
Liabilities and contract owners' equity Liabilities:
Contract terminations payable $ 34 $ 119 $ 17
---------------------------------------------
34 119 17
Contract owners' equity:
Deferred annuity contracts terminable by owners 3,464,853 5,266,623 1,887,745
=============================================
Total liabilities and contract owners' equity $3,464,887 $5,266,742 $1,887,762
=============================================
</TABLE>
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Balance Sheet (continued)
<TABLE>
<CAPTION>
High Income
Bond Fund II Global
Subaccount Subaccount
--------------------------------
<S> <C> <C>
Assets
Investments in mutual funds, at current market value:
Atlas Insurance Trust:
Balanced Growth Portfolio $ - $
-
Dreyfus Variable Investment Fund:
Small Cap Portfolio - -
Capital Appreciation Portfolio - -
Disciplined Stock Portfolio - -
Growth & Income Portfolio - -
Quality Bond Portfolio - -
Federated Insurance Series:
Utility Fund II Portfolio - -
High Income Bond Fund II Portfolio 2,903,484 -
WRL Series Fund, Inc.:
WRL Global Portfolio - 4,024,656
WRL Growth Portfolio - -
WRL Emerging Growth Portfolio - -
Endeavor Series Trust:
Dreyfus Small Cap Value Portfolio - -
Endeavor Value Equity Portfolio - -
T. Rowe Price Equity Income Portfolio - -
T. Rowe Price Growth Stock Portfolio - -
--------------------------------
Total investments in mutual funds 2,903,484 4,024,656
--------------------------------
Total assets $2,903,484 $4,024,656
================================
Liabilities and contract owners' equity
Liabilities:
Contract terminations payable $ 5 $ 25
--------------------------------
5 25
Contract owners' equity:
Deferred annuity contracts terminable by owners 2,903,479 4,024,631
--------------------------------
Total liabilities and contract owners' equity $2,903,484 $4,024,656
================================
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Emerging Dreyfus Small
Growth Growth Cap Value
Subaccount Subaccount Subaccount
---------------------------------------------
<S> <C> <C> <C>
Assets
Investments in mutual funds, at current market value:
Atlas Insurance Trust:
Balanced Growth Portfolio $ -- $ -- $ --
Dreyfus Variable Investment Fund:
Small Cap Portfolio -- -- --
Capital Appreciation Portfolio -- -- --
Disciplined Stock Portfolio -- -- --
Growth & Income Portfolio -- -- --
Quality Bond Portfolio -- -- --
Federated Insurance Series:
Utility Fund II Portfolio -- -- --
High Income Bond Fund II Portfolio -- -- --
WRL Series Fund, Inc.:
WRL Global Portfolio -- -- --
WRL Growth Portfolio 7,747,314 -- --
WRL Emerging Growth Portfolio -- 1,506,620 --
Endeavor Series Trust:
Dreyfus Small Cap Value Portfolio -- -- 909,269
Endeavor Value Equity Portfolio -- -- --
T. Rowe Price Equity Income Portfolio -- -- --
T. Rowe Price Growth Stock Portfolio -- -- --
---------------------------------------------
Total investments in mutual funds 7,747,314 1,506,620 909,269
---------------------------------------------
Total assets $7,747,314 $1,506,620 $ 909,269
=============================================
Liabilities and contract owners' equity
Liabilities:
Contract terminations payable $ 60 $ 43 $ 50
---------------------------------------------
60 43 50
Contract owners' equity:
Deferred annuity contracts terminable by owners 7,747,254 1,506,577 909,219
---------------------------------------------
Total liabilities and contract owners' equity $7,747,314 $1,506,620 $ 909,269
=============================================
<CAPTION>
Endeavor T. Rowe Price T. Rowe Price
Value Equity Growth
Equity Income Stock
Subaccount Subaccount Subaccount
--------------------------------------------
<S> <C> <C> <C>
Assets
Investments in mutual funds, at current market value:
Atlas Insurance Trust:
Balanced Growth Portfolio $ -- $ -- $ --
Dreyfus Variable Investment Fund:
Small Cap Portfolio -- -- --
Capital Appreciation Portfolio -- -- --
Disciplined Stock Portfolio -- -- --
Growth & Income Portfolio -- -- --
Quality Bond Portfolio -- -- --
Federated Insurance Series:
Utility Fund II Portfolio -- -- --
High Income Bond Fund II Portfolio -- -- --
WRL Series Fund, Inc.:
WRL Global Portfolio -- -- --
WRL Growth Portfolio -- -- --
WRL Emerging Growth Portfolio -- -- --
Endeavor Series Trust:
Dreyfus Small Cap Value Portfolio -- -- --
Endeavor Value Equity Portfolio 958,682 -- --
T. Rowe Price Equity Income Portfolio -- 3,507,750 --
T. Rowe Price Growth Stock Portfolio -- -- 3,522,572
--------------------------------------------
Total investments in mutual funds 958,682 3,507,750 3,522,572
--------------------------------------------
Total assets $ 958,682 $3,507,750 $3,522,572
============================================
Liabilities and contract owners' equity
Liabilities:
Contract terminations payable $ 27 $ 30 $ 55
--------------------------------------------
27 30 55
Contract owners' equity:
Deferred annuity contracts terminable by owners 958,655 3,507,720 3,522,517
--------------------------------------------
Total liabilities and contract owners' equity $ 958,682 $3,507,750 $3,522,572
============================================
</TABLE>
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Statement of Operations
Year ended December 31, 1998
<TABLE>
<CAPTION>
Balanced
Growth
Total Subaccount
---------------------------------
<S> <C> <C>
Net investment income (loss)
Income:
Dividends $1,185,661 $ 302,109
Expenses
Mortality and expense risk charge 470,465 125,638
---------------------------------
Net investment income (loss) 715,196 176,471
Net realized and unrealized capital gain (loss) from investments
Net realized capital gain (loss) from sales of investments:
Proceeds from sales 3,652,266 1,121,067
Cost of investments sold 3,717,664 1,139,410
---------------------------------
Net realized capital gain (loss) from sales of investments (65,398) (18,343)
Net change in unrealized appreciation (depreciation) of investments:
Beginning of period (309,397) (172,835)
End of period 3,650,406 388,839
---------------------------------
Net change in unrealized appreciation (depreciation) of investments
3,959,803 561,674
Net realized and unrealized capital gain (loss) from investments 3,894,405 543,331
=================================
Increase (decrease) from operations $4,609,601 $ 719,802
=================================
</TABLE>
See accompanying notes.
6
<PAGE>
<TABLE>
<CAPTION>
Small Capital Disciplined
Cap Appreciation Stock
Subaccount Subaccount Subaccount
---------------------------------------------
<S> <C> <C> <C>
Net investment income (loss)
Income:
Dividends $ 42,808 $ 23,590 $ 34,842
Expenses
Mortality and expense risk charge 23,511 34,149 40,489
---------------------------------------------
Net investment income (loss) 19,297 (10,559) (5,647)
Net realized and unrealized capital gain (loss) from investments
Net realized capital gain (loss) from sales of investments:
Proceeds from sales 217,161 138,180 161,271
Cost of investments sold 266,037 127,119 159,410
---------------------------------------------
Net realized capital gain (loss) from sales of investments (48,876) 11,061 1,861
Net change in unrealized appreciation (depreciation) of investments:
Beginning of period (24,894) 3,890 (8,620)
End of period (202,088) 537,910 593,524
---------------------------------------------
Net change in unrealized appreciation (depreciation) of investments (177,194) 534,020 602,144
Net realized and unrealized capital gain (loss) from investments (226,070) 545,081 604,005
---------------------------------------------
Increase (decrease) from operations $(206,773) $ 534,522 $ 598,358
=============================================
<CAPTION>
Growth & Quality Utility
Income Bond Fund II
Subaccount Subaccount Subaccount
-----------------------------------------
<S> <C> <C> <C>
Net investment income (loss)
Income:
Dividends $ 39,389 $ 231,287 $ 16,157
Expenses
Mortality and expense risk charge 26,241 36,700 10,627
-----------------------------------------
Net investment income (loss) 13,148 194,587 5,530
Net realized and unrealized capital gain (loss) from investments
Net realized capital gain (loss) from sales of investments:
Proceeds from sales 188,775 265,502 210,674
Cost of investments sold 202,877 264,711 204,404
-----------------------------------------
Net realized capital gain (loss) from sales of investments (14,102) 791 6,270
Net change in unrealized appreciation (depreciation) of investments:
Beginning of period (7,654) (53) 4,981
End of period 127,028 (139,686) 117,341
-----------------------------------------
Net change in unrealized appreciation (depreciation) of investments 134,682 (139,633) 112,360
Net realized and unrealized capital gain (loss) from investments 120,580 (138,842) 118,630
-----------------------------------------
Increase (decrease) from operations $ 133,728 $ 55,745 $ 124,160
=========================================
</TABLE>
7
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Statement of Operations (continued)
<TABLE>
<CAPTION>
High Income
Bond Fund II Global
Subaccount Subaccount
-------------------------------
<S> <C> <C>
Net investment income (loss)
Income:
Dividends $ 28,717 $143,623
Expenses:
Administrative, mortality and expense risk charge 24,320 32,176
-------------------------------
Net investment income (loss) 4,397 111,447
Net realized and unrealized capital gain (loss) from investments
Net realized capital gain (loss) from sales of investments:
Proceeds from sales 246,232 266,327
Cost of investments sold 248,650 278,986
-------------------------------
Net realized capital gain (loss) from sales of investments (2,418) (12,659)
Net change in unrealized appreciation (depreciation) of investments:
Beginning of period 2,304 (81,947)
End of period (14,216) 210,579
-------------------------------
Net change in unrealized appreciation (depreciation) of investments (16,520) 292,526
Net realized and unrealized capital gain (loss) from investments (18,938) 279,867
-------------------------------
Increase (decrease) from operations $(14,541) $391,314
===============================
</TABLE>
See accompanying notes.
8
<PAGE>
<TABLE>
<CAPTION>
Emerging Dreyfus
Growth Growth Small Cap Value
Subaccount Subaccount Subaccount
----------------------------------------------
<S> <C> <C> <C>
Net investment income (loss)
Income:
Dividends $ 27,512 $ 47,273 $ 72,161
Expenses:
Administrative, mortality and expense risk charge 38,966 9,376 8,247
----------------------------------------------
Net investment income (loss) (11,454) 37,897 63,914
Net realized and unrealized capital gain (loss) from investments
Net realized capital gain (loss) from sales of investments:
Proceeds from sales 164,152 124,363 77,439
Cost of investments sold 148,334 126,263 93,237
----------------------------------------------
Net realized capital gain (loss) from sales of investments 15,818 (1,900) (15,798)
Net change in unrealized appreciation (depreciation) of investments:
Beginning of period (23,574) (10,858) (3,673)
End of period 1,551,799 208,727 (90,729)
---------------------------------------------
Net change in unrealized appreciation (depreciation) of investments 1,575,373 219,585 (87,056)
Net realized and unrealized capital gain (loss) from investments 1,591,191 217,685 (102,854)
----------------------------------------------
Increase (decrease) from operations $1,579,737 $255,582 $ (38,940)
==============================================
<CAPTION>
Endeavor T. Rowe Price T. Rowe Price
Value Equity Growth
Equity Income Stock
Subaccount Subaccount Subaccount
------------------------------------------------
<S> <C> <C> <C>
Net investment income (loss)
Income:
Dividends $ 13,942 $ 90,697 $ 71,554
Expenses:
Administrative, mortality and expense risk charge 7,772 27,353 24,900
------------------------------------------------
Net investment income (loss) 6,170 63,344 46,654
Net realized and unrealized capital gain (loss) from investments
Net realized capital gain (loss) from sales of investments:
Proceeds from sales 173,042 167,369 130,712
Cost of investments sold 167,817 168,683 121,726
------------------------------------------------
Net realized capital gain (loss) from sales of investments 5,225 (1,314) 8,986
Net change in unrealized appreciation (depreciation) of investments:
Beginning of period 1,430 7,672 4,434
End of period (3,653) 40,900 324,131
------------------------------------------------
Net change in unrealized appreciation (depreciation) of investments (5,083) 33,228 319,697
Net realized and unrealized capital gain (loss) from investments 142 31,914 328,683
------------------------------------------------
Increase (decrease) from operations $ 6,312 $ 95,258 $375,337
================================================
</TABLE>
9
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Statements of Changes in Contract Owners' Equity
Year ended December 31, 1998 and the period from September 30, 1997
(commencement of operations) through December 31, 1997
<TABLE>
<CAPTION>
Balanced Growth
Total Subaccount
------------------------------------------------------------
1998 1997 1998 1997
------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 715,196 $ 329,191 $ 176,471 $ 180,871
Net realized capital gain (loss) (65,398) (4,857) (18,343) (410)
Net change in unrealized appreciation
(depreciation) of investments 3,959,803 (309,397) 561,674 (172,835)
------------------------------------------------------------
Increase (decrease) from operations 4,609,601 14,937 719,802 7,626
Contract transactions:
Net contract purchase payments 48,071,095 7,145,059 8,804,499 3,375,577
Transfer payments from (to) other
subaccounts or general account 1,521,718 149,734 (280,649) 31,091
Contract terminations, withdrawals,
and other deductions (616,845) (21,171) (203,945) (962)
------------------------------------------------------------
Increase from contract transactions 48,975,968 7,273,622 8,319,905 3,405,706
------------------------------------------------------------
Net increase in contract owners' equity 53,585,569 7,288,559 9,039,707 3,413,332
Contract owners' equity:
Beginning of period 7,288,559 -- 3,413,332 --
------------------------------------------------------------
End of period $60,874,128 $7,288,559 $12,453,039 $3,413,332
============================================================
</TABLE>
See accompanying notes.
10
<PAGE>
<TABLE>
<CAPTION>
Small Cap Capital Appreciation Disciplined Stock
Subaccount Subaccount Subaccount
------------------------- ------------------------- ---------------------------
1998 1997 1998 1997 1998 1997
------------------------- ------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 19,297 $ 18,878 $ (10,559) $ 3,488 $ (5,647) $ 12,553
Net realized capital gain (loss) (48,876) (1,717) 11,061 (13) 1,861 (8)
Net change in unrealized appreciation
(depreciation) of investments (177,194) (24,894) 534,020 3,890 602,144 (8,620)
------------------------- ------------------------- ---------------------------
Increase (decrease) from operations (206,773) (7,733) 534,522 7,365 598,358 3,925
Contract transactions:
Net contract purchase payments 2,303,051 366,713 3,081,714 593,051 5,020,243 246,186
Transfer payments from (to) other
subaccounts or general account (33,004) 16,080 104,661 11,940 214,952 2,835
Contract terminations, withdrawals,
and other deductions (7,920) (901) (17,608) (982) (107,875) (984)
------------------------- ------------------------- ---------------------------
Increase from contract transactions 2,262,127 381,892 3,168,767 604,009 5,127,320 248,037
------------------------- ------------------------- ---------------------------
Net increase in contract owners' equity 2,055,354 374,159 3,703,289 611,374 5,725,678 251,962
Contract owners' equity:
Beginning of period 374,159 -- 611,374 -- 251,962 --
------------------------- ------------------------- ---------------------------
End of period $2,429,513 $374,159 $4,314,663 $611,374 $5,977,640 $251,962
========================= ========================= ===========================
</TABLE>
11
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Statements of Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
Growth & Income Quality Bond
Subaccount Subaccount
---------------------------- ---------------------------
1998 1997 1998 1997
---------------------------- ---------------------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 13,148 $ 11,354 $ 194,587 $ 5,300
Net realized capital gain (loss) (14,102) (650) 791 (31)
Net change in unrealized appreciation
(depreciation) of investments 134,682 (7,654) (139,633) (53)
---------------------------- ---------------------------
Increase (decrease) from operations 133,728 3,050 55,745 5,216
Contract transactions:
Net contract purchase payments 3,112,980 193,019 4,547,507 372,024
Transfer payments from (to) other
subaccounts or general account 32,218 5,038 364,597 17,404
Contract terminations, withdrawals,
and other deductions (14,220) (960) (88,246) (7,624)
---------------------------- ---------------------------
Increase from contract transactions 3,130,978 197,097 4,823,858 381,804
---------------------------- ---------------------------
Net increase in contract owners' equity 3,264,706 200,147 4,879,603 387,020
Contract owners' equity:
Beginning of period 200,147 -- 387,020 --
---------------------------- ---------------------------
End of period $3,464,853 $200,147 $5,266,623 $387,020
============================ ===========================
</TABLE>
See accompanying notes.
12
<PAGE>
<TABLE>
<CAPTION>
Utility Fund II High Income Bond Fund II Global
Subaccount Subaccount Subaccount
------------------------ ------------------------- --------------------------
1998 1997 1998 1997 1998 1997
------------------------ ------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 5,530 $ (123) $ 4,397 $ (287) $ 111,447 $ 67,608
Net realized capital gain (loss) 6,270 740 (2,418) 71 (12,659) (1,161)
Net change in unrealized appreciation
(depreciation) of investments 112,360 4,981 (16,520) 2,304 292,526 (81,947)
------------------------ ------------------------- --------------------------
Increase (decrease) from operations 124,160 5,598 (14,541) 2,088 391,314 (15,500)
Contract transactions:
Net contract purchase payments 1,606,782 68,628 2,706,003 173,626 2,626,206 668,809
Transfer payments from (to) other
subaccounts or general account 92,665 (141) 53,801 6,372 357,747 20,441
Contract terminations, withdrawals,
and other deductions (8,841) (1,106) (22,854) (1,016) (23,460) (926)
------------------------ ------------------------- --------------------------
Increase from contract transactions 1,690,606 67,381 2,736,950 178,982 2,960,493 688,324
------------------------ ------------------------- --------------------------
Net increase in contract owners' equity 1,814,766 72,979 2,722,409 181,070 3,351,807 672,824
Contract owners' equity:
Beginning of period 72,979 -- 181,070 -- 672,824 --
------------------------ ------------------------- --------------------------
End of period $1,887,745 $72,979 $2,903,479 $181,070 $4,024,631 $672,824
======================== ========================= ==========================
</TABLE>
13
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Statements of Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
Growth Emerging Growth
Subaccount Subaccount
---------------------------- ----------------------------
1998 1997 1998 1997
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ (11,454) $ 22,053 $ 37,897 $ 8,828
Net realized capital gain (loss) 15,818 (188) (1,900) (25)
Net change in unrealized appreciation
(depreciation) of investments 1,575,373 (23,574) 219,585 (10,858)
---------------------------- ----------------------------
Increase (decrease) from operations 1,579,737 (1,709) 255,582 (2,055)
Contract transactions:
Net contract purchase payments 5,403,806 243,524 1,149,335 120,287
Transfer payments from (to) other
subaccounts or general account 558,687 537 (14,394) 1,619
Contract terminations, withdrawals,
and other deductions (36,407) (921) (2,919) (878)
---------------------------- ----------------------------
Increase from contract transactions 5,926,086 243,140 1,132,022 121,028
---------------------------- ----------------------------
Net increase in contract owners' equity 7,505,823 241,431 1,387,604 118,973
Contract owners' equity:
Beginning of period 241,431 -- 118,973 --
---------------------------- ----------------------------
End of period $7,747,254 $241,431 $1,506,577 $118,973
============================ ============================
</TABLE>
See accompanying notes.
14
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Small Cap Value Endeavor Value Equity
Subaccount Subaccount
------------------------ ---------------------
1998 1997 1998 1997
------------------------ ---------------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 63,914 $ (349) $ 6,170 $ (127)
Net realized capital gain (loss) (15,798) (1,448) 5,225 (2)
Net change in unrealized appreciation
(depreciation) of investments (87,056) (3,673) (5,083) 1,430
------------------------ ---------------------
Increase (decrease) from operations (38,940) (5,470) 6,312 1,301
Contract transactions:
Net contract purchase payments 818,381 166,934 876,577 89,930
Transfer payments from (to) other
subaccounts or general account (27,208) 5,816 (9,968) 2,487
Contract terminations, withdrawals,
and other deductions (9,380) (914) (6,992) (992)
------------------------ ---------------------
Increase from contract transactions 781,793 171,836 859,617 91,425
------------------------ ---------------------
Net increase in contract owners' equity 742,853 166,366 865,929 92,726
Contract owners' equity:
Beginning of period 166,366 -- 92,726 --
------------------------ ---------------------
End of period $909,219 $166,366 $958,655 $92,726
======================== =====================
<CAPTION>
T. Rowe Price T. Rowe Price
Equity Income Growth Stock
Subaccount Subaccount
------------------------- --------------------------
1998 1997 1998 1997
------------------------- --------------------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 63,344 $ (467) $ 46,654 $ (389)
Net realized capital gain (loss) (1,314) 16 8,986 (31)
Net change in unrealized appreciation
(depreciation) of investments 33,228 7,672 319,697 4,434
------------------------- --------------------------
Increase (decrease) from operations 95,258 7,221 375,337 4,014
Contract transactions:
Net contract purchase payments 3,213,492 278,237 2,800,519 188,514
Transfer payments from (to) other
subaccounts or general account (62,904) 17,690 170,517 10,525
Contract terminations, withdrawals,
and other deductions (40,260) (1,014) (25,918) (991)
------------------------- --------------------------
Increase from contract transactions 3,110,328 294,913 2,945,118 198,048
------------------------- --------------------------
Net increase in contract owners' equity 3,205,586 302,134 3,320,455 202,062
Contract owners' equity:
Beginning of period 302,134 -- 202,062 --
------------------------- --------------------------
End of period $3,507,720 $302,134 $3,522,517 $202,062
========================= ==========================
</TABLE>
15
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Notes to Financial Statements
December 31, 1998
1. Organization and Summary of Significant Accounting Policies
Organization
The PFL Life Variable Annuity Account A (the "Mutual Fund Account") is a
segregated investment account of PFL Life Insurance Company ("PFL Life"), an
indirect, wholly-owned subsidiary of AEGON N.V., a holding company organized
under the laws of The Netherlands.
The Mutual Fund Account is registered with the Securities and Exchange
Commission as a Unit Investment Trust pursuant to provisions of the Investment
Company Act of 1940. The Mutual Fund Account consists of fifteen investment
subaccounts, one of which is invested in the Balanced Growth Portfolio of the
Atlas Insurance Trust, five of which are invested in specified portfolios of the
Dreyfus Variable Investment Fund, two of which are invested in specified
portfolios of the Federated Insurance Series, three of which are invested in
specified portfolios of the WRL Series Fund, Inc., and four of which are
invested in specified portfolios of the Endeavor Series Trust (each a "Series
Fund" and collectively "the Series Funds"). Activity in these fifteen
subaccounts is available to contract owners of the Atlas Portfolio Builder
Variable Annuity.
The Mutual Fund Account commenced operations on September 30, 1997. The
investment manager of the Atlas Insurance Trust is Atlas Advisors, Inc. The
investment manager of the Dreyfus Variable Investment Fund is The Dreyfus
Corporation. The investment manager of the Federated Insurance Series is
Federated Advisers, Inc. The investment manager of the WRL Series Fund, Inc. is
Western Reserve Life Assurance Co. of Ohio, an affiliate of PFL. The investment
manager of the Endeavor Series Trust is Endeavor Management Co.
Investments
Net purchase payments received by the Mutual Fund Account for Atlas Portfolio
Builder Variable Annuity are invested in the portfolios of the Series Funds, as
selected by the contract owner. Investments are stated at the closing net asset
values per share on December 31, 1998.
Realized capital gains and losses from sale of shares in the Series Funds are
determined on the first-in, first-out basis. Investment transactions are
accounted for on the trade date (date the order to buy or sell is executed) and
dividend income is recorded on the ex-dividend date. Unrealized gains or losses
from investments in the Series Funds are credited or charged to contract owners'
equity.
Dividend Income
Dividends received from the Series Funds investments are reinvested to purchase
additional mutual fund shares.
16
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Notes to Financial Statements (continued)
2. Investments
A summary of the mutual fund investment at December 31, 1998 follows:
<TABLE>
<CAPTION>
Number of Net Asset Value Market
Shares Held Per Share Value Cost
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Atlas Insurance Trust
Balanced Growth Portfolio 1,213,763.168 $10.26 $12,453,210 $12,064,371
Dreyfus Variable Investment Fund:
Small Cap Portfolio 45,068.017 53.91 2,429,617 2,631,705
Capital Appreciation Portfolio 119,487.038 36.11 4,314,677 3,776,767
Disciplined Stock Portfolio 260,465.452 22.95 5,977,682 5,384,158
Growth & Income Portfolio 153,110.351 22.63 3,464,887 3,337,859
Quality Bond Portfolio 457,977.548 11.50 5,266,742 5,406,428
Federated Insurance Series:
Utility Fund II Portfolio 123,625.541 15.27 1,887,762 1,770,421
High Income Bond Fund II Portfolio 265,886.852 10.92 2,903,484 2,917,700
WRL Series Fund, Inc.:
Global Portfolio 169,754.373 23.087010 4,024,656 3,814,077
Growth Portfolio 129,252.842 59.939219 7,747,314 6,195,515
Emerging Growth Portfolio 55,958.812 26.923736 1,506,620 1,297,893
Endeavor Series Trust:
Dreyfus Small Cap Value Portfolio 64,304.751 14.14 909,269 999,998
Endeavor Value Equity Portfolio 44,219.635 21.68 958,682 962,335
T. Rowe Price Equity Income
Portfolio 175,037.406 20.04 3,507,750 3,466,850
T. Rowe Price Growth Stock
Portfolio 137,600.479 25.60 3,522,572 3,198,441
------------------------------
$60,874,924 $57,224,518
==============================
</TABLE>
The aggregate cost of purchases and proceeds from sales of investments were as
follows:
<TABLE>
<CAPTION>
Period ended December 31
1998 1997
------------------------------ ---------------------------------
Purchases Sales Purchases Sales
------------------------------ ---------------------------------
<S> <C> <C> <C> <C>
Atlas Insurance Trust:
Balanced Growth Portfolio $ 9,617,580 $1,121,067 $3,594,876 $ 8,265
Dreyfus Variable Investment Fund:
Small Cap Portfolio 2,498,685 217,161 424,307 23,533
Capital Appreciation Portfolio 3,296,396 138,180 608,756 1,253
Disciplined Stock Portfolio 5,282,983 161,271 260,698 105
Growth & Income Portfolio 3,332,932 188,775 218,525 10,071
Quality Bond Portfolio 5,284,067 265,502 406,157 19,054
</TABLE>
17
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Notes to Financial Statements (continued)
2. Investments (continued)
<TABLE>
<CAPTION>
Period ended December 31
1998 1997
------------------------------ --------------------------------
Purchases Sales Purchases Sales
------------------------------ --------------------------------
<S> <C> <C> <C> <C>
Federated Insurance Series:
Utility Fund II Portfolio $ 1,906,823 $ 210,674 $ 77,564 $ 10,302
High Income Bond Fund II Portfolio 2,987,583 246,232 184,993 6,297
WRL Series Fund, Inc.:
Global Portfolio 3,338,289 266,327 763,396 7,461
Growth Portfolio 6,078,842 164,152 267,853 2,658
Emerging Growth Portfolio 1,294,323 124,363 130,029 171
Endeavor Series Trust:
Dreyfus Small Cap Value Portfolio 923,196 77,439 196,038 24,551
Endeavor Value Equity Portfolio 1,038,855 173,042 91,469 170
T. Rowe Price Equity Income Portfolio 3,341,065 167,369 295,559 1,107
T. Rowe Price Growth Stock Portfolio 3,122,535 130,712 201,428 3,765
------------------------------ --------------------------------
$53,344,154 $3,652,266 $7,721,648 $118,763
============================== =================================
</TABLE>
3. Contract Owners' Equity
A summary of deferred annuity contracts terminable by owners at December 31,
1998 follows:
<TABLE>
<CAPTION>
Accumulation Accumulation Total
Subaccount Units Owned Unit Value Contract Value
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balanced Growth 11,389,300.902 $1.093398 $12,453,039
Small Cap 2,709,276.044 .896739 2,429,513
Capital Appreciation 3,327,523.150 1.296659 4,314,663
Disciplined Stock 4,690,029.547 1.274542 5,977,640
Growth & Income 3,163,385.885 1.095299 3,464,853
Quality Bond 4,940,300.961 1.066053 5,266,623
Utility Fund II 1,492,268.116 1.265017 1,887,745
High Income Bond Fund II 2,819,023.591 1.029959 2,903,479
Global 3,285,525.975 1.224958 4,024,631
Growth 242,873.315 31.898334 7,747,254
Emerging Growth 1,179,122.693 1.277710 1,506,577
Dreyfus Small Cap Value 509,101.233 1.785929 909,219
Endeavor Value Equity 433,206.587 2.212928 958,655
T. Rowe Price Equity Income 1,698,141.528 2.065623 3,507,720
T. Rowe Price Growth Stock 1,358,408.215 2.593121 3,522,517
-----------------
$60,874,128
=================
</TABLE>
18
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Notes to Financial Statements (continued)
3. Contract Owners' Equity (continued)
At December 31, 1998, contract owners' equity was comprised of:
<TABLE>
<CAPTION>
Balanced Capital
Growth Small Cap Appreciation
Total Subaccount Subaccount Subaccount
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Unit transactions, accumulated net
investment income and realized capital
gains $57,223,722 $12,064,200 $2,631,601 $3,776,753
Adjustment for appreciation (depreciation)
to market value 3,650,406 388,839 (202,088) 537,910
------------- ------------- ------------- --------------
Total contract owners' equity $60,874,128 $12,453,039 $2,429,513 $4,314,663
============= ============= ============= ==============
<CAPTION>
Disciplined Growth & Quality Utility
Stock Income Bond Fund II
Subaccount Subaccount Subaccount Subaccount
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Unit transactions, accumulated net
investment income and realized capital
gains $5,384,116 $3,337,825 $5,406,309 $1,770,404
Adjustment for appreciation (depreciation)
to market value 593,524 127,028 (139,686) 117,341
------------- ------------- ------------- --------------
Total contract owners' equity $5,977,640 $3,464,853 $5,266,623 $1,887,745
============= ============= ============= ==============
<CAPTION>
High Income
Bond Emerging
Fund II Global Growth Growth
Subaccount Subaccount Subaccount Subaccount
--------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Unit transactions, accumulated net
investment income and realized capital
gains $2,917,695 $3,814,052 $6,195,455 $1,297,850
Adjustment for appreciation (depreciation)
to market value (14,216) 210,579 1,551,799 208,727
--------------- ------------- -------------- -------------
Total contract owners' equity $2,903,479 $4,024,631 $7,747,254 $1,506,577
=============== ============= ============== =============
</TABLE>
19
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Notes to Financial Statements (continued)
3. Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
Dreyfus Endeavor T. Rowe T. Rowe Price
Small Cap Value Price Equity Growth
Value Equity Income Stock
Subaccount Subaccount Subaccount Subaccount
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Unit transactions, accumulated net
investment income and realized capital $999,948 $962,308 $3,466,820 $3,198,386
gains
Adjustment for appreciation (depreciation)
to market value (90,729) (3,653) 40,900 324,131
-------------------------------------------------------------
Total contract owners' equity $909,219 $958,655 $3,507,720 $3,522,517
=============================================================
</TABLE>
A summary of changes in contract owners' account units follows:
<TABLE>
<CAPTION>
Balanced Small Capital Disciplined Growth &
Growth Cap Appreciation Stock Income
Subaccount Subaccount Subaccount Subaccount Subaccount
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Units outstanding at
September 30, 1997 - - - - -
Units purchased 3,438,739 383,032 595,851 245,153 197,428
Units redeemed and
transferred 30,955 14,289 9,651 1,907 4,072
--------------------------------------------------------------------------
Units outstanding at
December 31, 1997 3,469,694 397,321 605,502 247,060 201,500
Units purchased 8,384,682 2,390,495 2,654,205 4,432,868 2,956,559
Units redeemed and
transferred (465,075) (78,540) 67,816 10,102 5,327
--------------------------------------------------------------------------
Units outstanding at
December 31, 1998 11,389,301 2,709,276 3,327,523 4,690,030 3,163,386
==========================================================================
<CAPTION>
Quality Utility High Income
Bond Fund II Bond Fund II Global Growth
Subaccount Subaccount Subaccount Subaccount Subaccount
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Units outstanding at
September 30, 1997 - - - - -
Units purchased 368,060 65,726 172,718 685,142 12,308
Units redeemed and
transferred 9,627 (896) 5,337 19,128 (31)
--------------------------------------------------------------------------
Units outstanding at
December 31, 1997 377,687 64,830 178,055 704,270 12,277
Units purchased 4,312,150 1,379,655 2,608,850 2,371,648 216,033
Units redeemed and
transferred 250,464 47,783 32,119 209,608 14,563
--------------------------------------------------------------------------
Units outstanding at
December 31, 1998 4,940,301 1,492,268 2,819,024 3,285,526 242,873
==========================================================================
</TABLE>
20
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Notes to Financial Statements (continued)
3. Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
Dreyfus Endeavor T. Rowe T. Rowe
Emerging Small Cap Value Price Equity Price Growth
Growth Value Equity Income Stock
Subaccount Subaccount Subaccount Subaccount Subaccount
-------------- --------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Units outstanding at
September 30, 1997 - - - - -
Units purchased 125,702 88,064 43,737 148,169 93,998
Units redeemed and
transferred 408 1,804 712 8,782 4,883
-------------- --------------- --------------- -------------- --------------
Units outstanding at
December 31, 1997 126,110 89,868 44,449 156,951 98,881
Units purchased 1,075,045 441,102 396,010 1,600,641 1,202,211
Units redeemed and
transferred (22,032) (21,869) (7,252) (59,450) 57,316
-------------- --------------- --------------- -------------- --------------
Units outstanding at
December 31, 1998 1,179,123 509,101 433,207 1,698,142 1,358,408
============== =============== =============== ============== ==============
</TABLE>
4. Administrative, Mortality and Expense Risk Charge
PFL Life deducts a daily charge equal to an annual rate of 1.25% of the value of
the contract owners' account as a charge for assuming certain mortality and
expense risks. PFL Life also deducts a daily charge equal to an annual rate of
0.15% of the contract owners' account for administrative expenses.
5. Taxes
Operations of the Mutual Fund Account form a part of PFL Life, which is taxed as
a life insurance company under Subchapter L of the Internal Revenue Code of
1986, as amended (the "Code"). The operations of the Mutual Fund Account are
accounted for separately from other operations of PFL Life for purposes of
federal income taxation. The Mutual Fund Account is not separately taxable as a
regulated investment company under Subchapter M of the Code and is not otherwise
taxable as an entity separate from PFL Life. Under existing federal income tax
laws, the income of the Mutual Fund Account, to the extent applied to increase
reserves under the variable annuity contracts, is not taxable to PFL Life.
21
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Notes to Financial Statements (continued)
6. Year 2000 (Unaudited)
The term Year 2000 Issue generally refers to the improper processing of dates
and incorrect date calculations that might occur in computer software and
hardware and embedded systems as the Year 2000 is approached. The use of
computer programs that rely on two-digit date fields to perform computations and
decision-making functions may cause systems to malfunction when processing
information involving dates after 1999. For example, any computer software that
has date-sensitive coding might recognize a code of 00 as the year 1900 rather
than the year 2000.
PFL Life has developed a Year 2000 Project Plan (the Plan) to address the Year
2000 issue as it affects PFL Life's internal IT and non-IT systems, and to
assess Year 2000 issues relating to third parties with whom PFL Life has
critical relationships.
The Plan for addressing internal systems generally includes an assessment of
internal IT and non-IT systems and equipment affected by the Year 2000 issue;
definition of strategies to address affected systems and equipment; remediation
of identified systems and equipment; internal testing and certification that
each internal system is Year 2000 compliant; and a review of existing and
revised business resumption and contingency plans to address potential Year 2000
issues. PFL Life has remediated and tested substantially all of its
mission-critical internal IT systems as of December 31, 1998. PFL Life continues
to remediate and test certain non-critical internal IT systems, internal non-IT
systems and will continue with a revalidation testing program throughout 1999.
PFL Life's Year 2000 issues are more complex because a number of its systems
interface with other systems not under PFL Life's control. PFL Life's most
significant interfaces and uses of third-party vendor systems are in the bank,
financial services and trust areas. PFL Life utilizes various banks to handle
numerous types of financial and sales transactions. Several of these banks also
provide trustee and custodial services for PFL Life's investment holdings and
transactions. These services are critical to a financial services company such
as PFL Life as its business centers around cash receipts and disbursements to
policyholders and the investment of policyholder funds. PFL Life has received
written confirmation from its vendor banks regarding their status on Year 2000.
The banks indicate their dedication to resolving any Year 2000 issues related to
their systems and services prior to December 31, 1999. PFL Life anticipates that
a considerable effort will be necessary to ensure that its corrected or new
systems can properly interface with those business partners with whom it
transmits and receives data and other information (external systems). PFL Life
has undertaken specific testing regimes with these third-party business partners
and expects to continue working with its business partners on any interfacing of
systems. However, the timing of external system compliance cannot currently be
predicted with accuracy because the implementation of Year 2000 readiness will
vary from one company to another.
22
<PAGE>
PFL Life Variable Annuity Account A -
Atlas Portfolio Builder Variable Annuity
Notes to Financial Statements (continued)
6. Year 2000 (Unaudited) (continued)
PFL Life does have some exposure to date sensitive embedded technology such as
micro-controllers, but PFL Life views this exposure as minimal. Unlike other
industries that may be equipment intensive, like manufacturing, PFL Life is a
life insurance, and financial services organization providing insurance,
annuities and pension products to its customers. As such, the primary equipment
and electronic devices in use are computers and telephone related equipment.
This type of hardware can have date sensitive embedded technology which could
have Year 2000 problems. Because of this exposure, PFL Life has reviewed its
computer hardware and telephone systems, with assistance from the applicable
vendors, and has upgraded, or replaced, or is in the process of replacing any
equipment that will not properly process date sensitive data in the Year 2000 or
beyond. This undertaking has been substantially completed for all operations.
For PFL Life, a reasonably likely worst case scenario might include one or more
of PFL Life's significant policyholder systems being non-compliant. Such an
event could result in a material disruption of PFL Life's operations.
Specifically, a number of PFL Life's operations could experience an interruption
in the ability to collect and process premiums or deposits, process claim
payments, accurately maintain policyholder information, accurately maintain
accounting records, and or perform adequate customer service. Should the worst
case scenario occur, it could, dependent upon its duration, have a material
impact on PFL Life's business and financial condition. Simple failures can be
repaired and returned to production within a matter of hours with no material
impact. Unanticipated failures with a longer service disruption period could
have a more serious impact. For this reason, PFL Life is placing significant
emphasis on risk management and Year 2000 business resumption contingency
planning in 1999 by modifying its existing business resumption and disaster
recovery plans to address potential Year 2000 issues.
The actions taken by management under the Year 2000 Project Plans are intended
to significantly reduce PFL Life's risk of a material business interruption
based on the Year 2000 issues. It should be noted that the Year 2000 computer
problem, and its resolution, is complex and multifaceted, and any company's
success cannot be conclusively known until the Year 2000 is reached. In spite of
its efforts or results, PFL Life's ability to function unaffected to and through
the Year 2000 may be adversely affected by actions (or failure to act) of third
parties beyond our knowledge or control. It is anticipated that there may be
problems that will have to be resolved in the ordinary course of business on and
after the Year 2000. However, PFL Life does not believe that the problems will
have a material adverse affect on PFL Life's operations or financial condition.
23
<PAGE>
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
All required financial statements are included in Part B of this
Registration Statement. Note 4.
(b) Exhibits:
(1) (a) Resolution of the Board of Directors of PFL Life Insurance
Company authorizing establishment of the Mutual Fund
Account. Note 1.
(2) Not Applicable.
(3) (a) Form of Principal Distribution Agreement by and between PFL
Life Insurance Company on its own behalf and on the behalf
of the Mutual Fund Account, and AEGON USA Securities, Inc.
Note 1.
(a)(1) Form of Principal Distribution Agreement by and between
PFL Life Insurance Company on its own behalf and on
behalf of the Mutual Fund Account and AFSG Securities
Corporation. Note. 4.
(3)(a)(2) Termination of Principal Distribution Agreement by and
between PFL Life Insurance Company on its own behalf and or
the behalf of the Mutual Fund Account, and AEGON USA
Securities, Inc. Note 5.
(b) Form of Broker/Dealer Supervision and Sales Agreement by and
between AFSG Securities Corporation and the Broker/Dealer.
Note 4.
(4) Form of Policy for the Atlas Portfolio Builder Variable
Annuity. Note 3.
(5) Form of Application for the Atlas Portfolio Builder Variable
Annuity. Note 3.
(6) (a) Articles of Incorporation of PFL Life
Insurance Company. Note 1.
(b) ByLaws of PFL Life Insurance Company. Note 1.
(7) Not Applicable.
(8) (a) Participation Agreement by and between PFL Life Insurance
Company and Atlas Insurance Trust. Note 4.
(8) (b) Participation Agreement by and between PFL
Life Insurance Company and Dreyfus Variable
Investment Fund. Note 1.
<PAGE>
<TABLE>
<S> <C>
(8) (c) (1) Participation Agreement by and between PFL
Life Insurance Company and the Endeavor
Series Trust.
Note 2.
(c) (2) Amended Schedule A to Participation Agreement.
Note 3.
(8) (d) Participation Agreement by and between PFL
Life Insurance Company and Federated
Insurance Series.
Note 3.
(8) (e) (1) Participation Agreement by and between PFL
Life Insurance Company and WRL Series Funds,
Inc., and addendums thereof.
Note 4.
(e) (2) Amended Schedule A to Participation Agreement.
Note 3.
(9) Opinion and Consent of Counsel. Note 3.
(10) (a) Consent of Independent Auditors. Note 5.
(b) Opinion and Consent of Actuary. Note 4.
(11) Not applicable.
(12) Not applicable.
(13) Performance Data Calculations. Note 5.
(14) Powers of Attorney. Note 1. (Patrick S. Baird, Craig D.
Vermie, William L. Busler, Douglas C. Kolsrud, Robert J.
Kontz, Brenda K. Clancy.) Note 5. Larry N. Norman
</TABLE>
------------------------
Note 1. Filed with initial Registration Statement on Form N-4 (File
No. 333-26209) on April 30, 1997.
Note 2. Incorporated by reference to the Endeavor Series Trust
Post-Effective Amendment #14, Exhibit No. 6, (File No. 33-
27352), filed on April 29, 1996.
Note 3. Filed with Pre-Effective Amendment No. 1 on Form N-4 (File
No. 333-26209) on July 28, 1997.
Note 4. Filed with Post-Effective Amendment No. 1 on Form N-4 (File
No. 333-26209) on April 29, 1998.
Note 5. Filed herewith.
<PAGE>
Item 25. Directors and Officers of the Depositor
Principal Positions
Name and and Offices with
Business Address Depositor
- ---------------- ---------
William L. Busler Director, Chairman of the Board and
4333 Edgewood Road N.E. President
Cedar Rapids, Iowa
52499-0001
Patrick S. Baird Director, Senior Vice President and
4333 Edgewood Road N.E. Chief Operating Officer
Cedar Rapids, Iowa
52499-0001
Craig D. Vermie Director, Vice President, Secretary
4333 Edgewood Road N.E. and General Counsel
Cedar Rapids, Iowa
52499-0001
Douglas C. Kolsrud Director, Senior Vice President Chief
4333 Edgewood Road N.E. Investment Officer and Corporate
Cedar Rapids, Iowa Actuary
52499-0001
Larry N. Norman Director and Executive Vice
4333 Edgewood Road N.E. President
Cedar Rapids, Iowa
52499-0001
Robert J. Kontz Vice President and Corporate
4333 Edgewood Road N.E. Controller
Cedar Rapids, Iowa
52499-0001
Brenda K. Clancy Vice President, Treasurer and
4333 Edgewood Road N.E. Chief Financial Officer
Cedar Rapids, Iowa
52499-0001
Item 26. Persons Controlled by or Under Common Control with the Depositor
or Registrant
<TABLE>
<CAPTION>
Jurisdication of Percent of Voting
Name Incorporation Securities Owned Business
- ------------------------------- ------------------------------- ------------------------------- ---------------------------
<S> <C> <C> <C>
AEGON N.V. Netherlands 53.63% of Vereniging Holding company
Corporation AEGON Netherlands
Membership Association
Groninger Financieringen B.V. Netherlands 100% of AEGON N.V. Holding company
Corporation Netherlands Corporation
AEGON Netherland N.V. Netherlands 100% of AEGON N.V. Holding company
Corporation Netherlands Corporation
AEGON Nevak Holding B.V. Netherlands 100% of AEGON N.V. Holding company
Corporation Netherlands Corporation
AEGON International N.V. Netherlands 100% of AEGON N.V. Holding company
Corporation Netherlands Corporation
Voting Trust Delaware Voting Trust
Trustees:
K.J. Storm
Donald J. Shepard
H.B. Van Wijk
Dennis Hersch
AEGON U.S. Holding Delaware 100% of Voting Trust Holding company
Corporation
Short Hills Management New Jersey 100% of AEGON U.S. Holding company
Company Holding Corporation
CORPA Reinsurance New York 100% of AEGON U.S. Holding company
Company Holding Corporation
AEGON Management Indiana 100% of AEGON U.S. Holding company
Company Holding Corporation
RCC North America Inc. Delaware 100% of AEGON U.S. Holding company
Holding Corporation
AEGON USA, Inc. Iowa 100% AEGON U.S. Holding company
Holding Corporation
AUSA Holding Company Maryland 100% AEGON USA, Inc. Holding company
Monumental General Insurance Maryland 100% AUSA Holding Co. Holding company
Group, Inc.
Trip Mate Insurance Agency, Kansas 100% Monumental General Sale/admin. of travel
Inc. Insurance Group, Inc. insurance
Monumental General Maryland 100% Monumental General Provides management srvcs.
Administrators, Inc. Insurance Group, Inc. to unaffiliated third party
administrator
Executive Management and Maryland 100% Monumental General Provides actuarial consulting
Consultant Services, Inc. Administrators, Inc. services
Monumental General Mass Maryland 100% Monumental General Marketing arm for sale of
Marketing, Inc. Insurance Group, Inc. mass marketed insurance
coverages
Diversified Investment Delaware 100% AUSA Holding Co. Registered investment advisor
Advisors, Inc.
Diversified Investors Delaware 100% Diversified Investment Broker-Dealer
Securities Corp. Advsiors, Inc.
AEGON USA Securities, Inc. Iowa 100% AUSA Holding Co. Broker-Dealer
Supplemental Ins. Division, Tennessee 100% AUSA Holding Co. Insurance
Inc.
Creditor Resources, Inc. Michigan 100% AUSA Holding Co. Credit insurance
CRC Creditor Resources Canada 100% Creditor Resources, Inc. Insurance agency
Canadian Dealer Network Inc.
AEGON USA Investment Iowa 100% AUSA Holding Co. Investment advisor
Management, Inc.
AEGON USA Realty Iowa 100% AUSA Holding Co. Provides real estate
Advisors, Inc. administrative and real
estate investment services
Quantra Corporation Delaware 100% AEGON USA Realty Real estate and financial
Advisors, Inc. software production and sales
Quantra Software Corporation Delaware 100% Quantra Corporation Manufacture and sell
mortgage loan and security
management software
Landauer Realty Advisors, Inc. Iowa 100% AEGON USA Realty Real estate counseling
Advisors, Inc.
Landauer Associates, Inc. Delaware 100% AEGON USA Realty Real estate counseling
Advisors, Inc.
Realty Information Systems, Iowa 100% AEGON USA Realty Information Systems for
Inc. Advisors, Inc. real estate investment
management
AEGON USA Realty Iowa 100% AEGON USA Real estate management
Management, Inc Realty Advisors, Inc.
USP Real Estate Investment Iowa 21.89% First AUSA Life Ins. Co. Real estate investment trust
Trust 13.11% PFL Life Ins. Co.
4.86% Bankers United Life
Assurance Co.
RCC Properties Limited Iowa AEGON USA Realty Advisors, Limited Partnership
Partnership Inc. is General Partner and 5%
owner.
AUSA Financial Markets, Inc. Iowa 100% AUSA Holding Co. Marketing
Endeavor Investment Advisors California 49.9% AUSA Financial General Partnership
Markets, Inc.
Universal Benefits Corporation Iowa 100% AUSA Holding Co. Third party administrator
Investors Warranty of Iowa 100% AUSA Holding Co. Provider of automobile
America, Inc. extended maintenance
contracts
Massachusetts Fidelity Trust Iowa 100% AUSA Holding Co. Trust company
Co.
Money Services, Inc. Delaware 100% AUSA Holding Co. Provides financial counseling
for employees and agents of
affiliated companies
Zahorik Company, Inc. California 100% AUSA Holding Co. Broker-Dealer
ZCI, Inc. Alabama 100% Zahorik Company, Inc. Insurance agency
AEGON Asset Management Delaware 100% AUSA Holding Co. Registered investment advisor
Services, Inc.
Intersecurities, Inc. Delaware 100% AUSA Holding Co. Broker-Dealer
ISI Insurance Agency, Inc. California 100% Intersecurities, Inc. Insurance agency
ISI Insurance Agency Ohio 100% ISI Insurance Agency, Inc. Insurance agency
of Ohio, Inc.
ISI Insurance Agency Texas 100% ISI Insurance Agency, Inc. Insurance agency
of Texas, Inc.
ISI Insurance Agency Massachusetts 100% ISI Insurance Agency Inc. Insurance Agency
of Massachusetts, Inc.
Associated Mariner Financial Michigan 100% Intersecurities, Inc. Holding co./management
Group, Inc. services
Mariner Financial Services, Michigan 100% Associated Mariner Broker/Dealer
Inc. Financial Group, Inc.
Mariner Planning Corporation Michigan 100% Mariner Financial Financial planning
Services, Inc.
Associated Mariner Agency, Inc. Michigan 100% Associated Mariner Insurance agency
Financial Group, Inc.
Associated Mariner Agency Hawaii 100% Associated Mariner Insurance agency
of Hawaii, Inc. Agency, Inc.
Associated Mariner Ins. Agency Massachusetts 100% Associated Mariner Insurance agency
of Massachusetts, Inc. Agency, Inc.
Associated Mariner Agency Ohio 100% Associated Mariner Insurance agency
Ohio, Inc. Agency, Inc.
Associated Mariner Agency Texas 100% Associated Mariner Insurance agency
Texas, Inc. Agency, Inc.
Associated Mariner Agency New Mexico 100% Associated Mariner Insurance agency
New Mexico, Inc. Agency, Inc.
Mariner Mortgage Corp. Michigan 100% Associated Mariner Mortgage origination
Financial Group, Inc.
Idex Investor Services, Inc. Florida 100% AUSA Holding Co. Shareholder services
Idex Management, Inc. Delaware 50% AUSA Holding Co. Investment advisor
50% Janus Capital Corp.
IDEX II Series Fund Massachusetts Various Mutual fund
First AUSA Life Insurance Maryland 100% AEGON USA, Inc. Insurance holding company
Company
AUSA Life Insurance New York 100% First AUSA Life Insurance
Company, Inc. Insurance Company
Life Investors Insurance Iowa 100% First AUSA Life Ins. Co. Insurance
Company of America
AEGON Assignment Illinois 100% AEGON Financial Administrator or
Corporation Services Group, Inc. Structured settlements
Bankers United Life Iowa 100% Life Investors Ins. Insurance
Assurance Company Company of America
Life Investors Agency Iowa 100% Life Investors Ins. Marketing
Group, Inc. Company of America
PFL Life Insurance Company Iowa 100% First AUSA Life Ins. Co. Insurance
AEGON Financial Services Minnesota 100% PFL Life Insurance Co. Marketing
Group, Inc.
AEGON Assignment Corporation Kentucky 100% AEGON Financial Administrator of structured
of Kentucky Services Group, Inc. settlements
Life Investors Alliance, LLC Delaware 100% WICA Purchase, own, and hold the
equity interest of other
entities
Southwest Equity Life Ins. Co. Arizona 100% of Common Voting Stock Insurance
First AUSA Life Ins. Co.
Iowa Fidelity Life Insurance Arizona 100% of Common Voting Stock Insurance
Co. First AUSA Life Ins. Co.
Western Reserve Life Assurance Ohio 100% First AUSA Life Ins. Co. Insurance
Co. of Ohio
WRL Series Fund, Inc. Maryland Various Mutual fund
WRL Investment Services, Inc. Florida 100% Western Reserve Life Provides administration for
Assurance Co. of Ohio affiliated mutual fund
WRL Investment Florida 100% Western Reserve Life Registered investment advisor
Management, Inc. Assurance Co. of Ohio
AEGON Equity Group. Inc. Florida 100% Western Reserve Life Insurance Agency
Assurance Co. of Ohio
Monumental Life Insurance Co. Maryland 100% First AUSA Life Ins. Co. Insurance
AEGON Special Markets Maryland 100% Monumental Life Ins. Co. Marketing
Group, Inc.
Monumental General Casualty Co. Maryland 100% First AUSA Life Ins. Co. Insurance
United Financial Services, Inc. Maryland 100% First AUSA Life Ins. Co. General agency
Bankers Financial Life Ins. Co. Arizona 100% First AUSA Life Ins. Co. Insurance
The Whitestone Corporation Maryland 100% First AUSA Life Ins. Co. Insurance agency
Cadet Holding Corp. Iowa 100% First AUSA Life Holding company
Insurance Company
Commonwealth General Delaware 100% AEGON USA Holding company
Corporation ("CGC")
PB Series Trust Massachusetts N/A Mutual fund
Monumental Agency Group, Inc. Kentucky 100% CGC Provider of srvcs. to ins.
cos.
Benefit Plans, Inc. Delaware 100% CGC TPA for Peoples Security Life
Insurance Company
Durco Agency, Inc. Virginia 100% Benefit Plans, Inc. General agent
Commonwealth General. Kentucky 100% CGC Administrator of structured
Assignment Corporation settlements
AFSG Securities Corporation Pennsylvania 100% CGC Broker-Dealer
PB Investment Advisors, Inc. Delaware 100% CGC Registered investment advisor
Diversified Financial Products Delaware 100% CGC Provider of investment,
Inc. marketing and admin.
services to ins. cos.
AEGON USA Real Estate Delaware 100% Diversified Financial Real estate and mortgage
Services, Inc. Products Inc., holding company
Capital Real Estate Delaware 100% CGC Furniture and equiment lessor
Development Corporation
Capital General Development Delaware 100% CGC Holding company
Corporation
Ammest Realty Corporation Texas 100% Peoples Security Life Special purpose subsidiary
Insurance Company
JMH Operating Company, Inc. Mississippi 100% Peoples Security Life Real estate holdings
Insurance Company
Independence Automobile Florida 100% Capital Security Automobile Club
Association, Inc. Life Insurance Company
Independence Automobile Georgia 100% Capital Security Automobile Club
Club, Inc. Life Insurance Company
Capital 200 Block Corporation Delaware 100% CGC Real estate holdings
Capital Broadway Corporation Kentucky 100% CGC Real estate holdings
Southlife, Inc. Tennessee 100% CGC Investment subsidiary
Ampac Insurance Agency, Inc. Pennsylvania 100% CGC Provider of management
(EIN 23-1720755) support services
National Home Life Corporation Pennsylvania 100% Ampac Insurance Special-purpose subsidiary
Agency, Inc.
Compass Rose Development Pennsylvania 100% Ampac Insurance Special-purpose subsidiary
Corporation Agency, Inc.
Frazer Association Consultants, Illinois 100% Ampac Insurance TPA license-holder
Inc. Agency, Inc.
Valley Forge Associates, Inc. Pennsylvania 100% Ampac Insurance Furniture & equipment lessor
Agency, Inc.
Veterans Benefits Plans, Inc. Pennsylvania 100% Ampac Insurance Administator of group
Agency, Inc. insurance programs
Veterans Insurance Services, Delaware 100% Ampac Insurance Special-purpose subsidiary
Inc. Agency, Inc.
Financial Planning Services, Dist. Columbia 100% Ampac Insurance Special-purpose subsidiary
Inc. Agency, Inc.
Academy Insurance Group, Inc. Delaware 100% CGC Holding company
Academy Life Insurance Co. Missouri 100% Academy Insurance Insurance company
Group, Inc.
Pension Life Insurance New Jersey 100% Academy Insurance Insurance company
Company of America Group, Inc.
Academy Services, Inc. Delaware 100% Academy Insurance Special-purpose subsidiary
Group, Inc.
Ammest Development Corp. Inc. Kansas 100% Academy Insurance Special-purpose subsidiary
Group, Inc.
Ammest Insurance Agency, Inc. California 100% Academy Insurance General agent
Group, Inc.
Ammest Massachusetts Massachusetts 100% Academy Insurance Special-purpose subsidiary
Insurance Agency, Inc. Group, Inc.
Ammest Realty, Inc. Pennsylvania 100% Academy Insurance Special-purpose subsidiary
Group, Inc.
Ampac, Inc. Texas 100% Academy Insurance Managing general agent
Group, Inc.
Ampac Insurance Agency, Inc. Pennsylvania 100% Academy Insurance Special-purpose subsidiary
(EIN 23-2364438) Group, Inc.
Data/Mark Services, Inc. Delaware 100% Academy Insurance Provider of mgmt. services
Group, Inc.
Force Financial Group, Inc. Delaware 100% Academy Insurance Special-purpose subsidiary
Group, Inc.
Force Financial Services, Inc. Massachusetts 100% Force Fin. Group, Inc. Special-purpose subsidiary
Military Associates, Inc. Pennsylvania 100% Academy Insurance Special-purpose subsidiary
Group, Inc.
NCOA Motor Club, Inc. Georgia 100% Academy Insurance Automobile club
Group, Inc.
NCOAA Management Company Texas 100% Academy Insurance Special-purpose subsidiary
Group, Inc.
Unicom Administrative Pennsylvania 100% Academy Insurance Provider of admin. services
Services, Inc. Group, Inc.
Unicom Administrative Germany 100%Unicom Administrative Provider of admin. servcies
Services, GmbH Services, Inc.
Capital Liberty, L.P. Delaware 79.2% Commonwealth Life Holding Company
Insurance Company
19.8% Peoples Security Life
Insurance Company
1% CGC
Commonwealth General LLC Turks & 100% CGC Special-purpose subsidiary
Caicos Islands
Peoples Benefit Life Missouri 3.7% CGC Insurance company
Insurance Company 20% Capital Liberty, L.P.
76.3% Monumental Life Ins Co.
Veterans Life Insurance Co. Illinois 100% Providian Life and Insurance company
Health Insurance Company
Peoples Benefit Services, Inc. Pennsylvania 100% Veterans Life Ins. Co. Special-purpose subsidiary
</TABLE>
<PAGE>
Item 27. Number of Contract Owners.
As of December 31, 1998, there were 2,268 Owners of the Policies.
Item 28. Indemnification
The Iowa Code (Sections 490.850 et. seq.) provides for permissive
--------
indemnification in certain situations, mandatory indemnification in other
situations, and prohibits indemnification in certain situations. The Code also
specifies procedures for determining when indemnification payments can be made.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Depositor pursuant to the foregoing provisions, or otherwise, the Depositor 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 Depositor of expenses incurred
or paid by a director, officer or controlling person in connection with the
securities being registered), the Depositor 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
AFSG Securities Corporation
4333 Edgewood Road N.E.
Cedar Rapids, IA 52499-0001
The directors and officers of
AFSG Securities Corporation
are as follows:
Larry N. Norman Sarah J. Strange
Director and President Director and Vice President
Frank A. Camp Darin Smith
Director and Secretary Assistant Vice President and Assistant
Secretary
Lisa Wachendorf Linda Gilmer
Vice President and Chief Treasurer/Controller
Compliance Officer
Debra C. Cubero Robert Warner
Vice President Assistant Compliance Officer
Priscilla Hechler Emily Bates
Assistant Vice President and Assistant Treasurer
Assistant Secretary
Thomas Pierpar Clifton Flenniken
Assistant Vice President and Assistant Treasurer
Assistant Secretary
Anne Spaes
Vice President
- --------------------
The principal business address of each person listed is ASFG Securities
Corporation, 4333 Edgewood Road N.E., Cedar Rapids, IA 52499-0001.
<PAGE>
Commissions and Other Compensation Received by Principal Underwriter.
- --------------------------------------------------------------------
AFSG Securities Corporation, the broker/dealer, received $2,463,152.13 from the
Registrant from May 1, 1998 through December 31, 1998, for its services in
distributing the Policies. AEGON USA Securities, Inc., its predecessor, received
$1,455,253.91 from the Registrant from January 1, 1998 through April 30, 1998,
for its services in distributing the Policies. No other commission or
compensation was received by the principal underwriter, directly or indirectly,
from the Registrant during the fiscal year.
AFSG Securities Corporation serves as the principal underwriter for the PFL
Endeavor VA Separate Account, the PFL Retirement Builder Variable Annuity
Account, the PFL Life Variable Annuity Account A, the PFL Wright Variable
Annuity Account and the AUSA Endeavor Variable Annuity Account. These accounts
are separate accounts of PFL Life Insurance Company or AUSA Life Insurance
Company, Inc. AFSG Securities Corporation also serves as principal underwriter
for Separate Account I, Separate Account II, Separate Account IV and Separate
Account V of Peoples Benefit Life Insurance Company, and for Separate Account B
and Separate Account C of AUSA Life Insurance Company, Inc.
Item 30. Location of Accounts and Records
The records required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder, are maintained by
PFL Life Insurance Company at 4333 Edgewood Road, N.E., Cedar Rapids, Iowa
52499-0001.
Item 31. Management Services.
All management Contracts are discussed in Part A or Part B.
Item 32. Undertakings
(a) Registrant undertakes that it will file a post-effective amendment to this
registration statement as frequently as necessary to ensure that the
audited financial statements in the registration statement are never more
than 16 months old for so long as Premiums under the Policy may be
accepted.
(b) Registrant undertakes that it will include either (i) 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 or
(ii) a space in the Policy application that an applicant can check to
request 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 to PFL at the address or phone number
listed in the Prospectus.
(d) PFL Life Insurance Company hereby represents that the fees and changes
deducted under the policies, in the aggregate, are reasonable in relation
to the services rendered, the expenses expected to be incurred, and the
risks assumed by PFL Life Insurance Company.
Section 403(b) Representations
- ------------------------------
PFL represents that it is relying on a no-action letter dated November 28, 1988,
to the American Council of Life Insurance (Ref. No. IP-6-88), regarding Sections
22(e), 27(c)(1), and 27(d) of the Investment Company Act of 1940, in connection
with redeemability restrictions on Section 403(b) Policies, and that paragraphs
numbered (1) through (4) of that letter will be complied with.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant hereby certifies that this Amendment to the Registration
Statement meets the requirements for effectiveness pursuant to paragraph (b) of
Rule 485 and has caused this Registration Statement to be signed on its behalf,
in the City of Cedar Rapids and State of Iowa, on this 27th day of April, 1999.
PFL LIFE VARIABLE
ANNUITY ACCOUNT A
PFL LIFE INSURANCE COMPANY
Depositor
/s/ William L. Busler
--------------------------------
William L. Busler
President
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the duties indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Patrick S. Baird Director April 27, 1999
- ----------------------------------------
Patrick S. Baird
/s/ Craig D. Vermie Director April 27, 1999
- ----------------------------------------
Craig D. Vermie
/s/ William L. Busler Director April 27, 1999
- ---------------------------------------- (Principal Executive
William L. Busler Officer)
/s/ Larry N. Norman Director April 27, 1999
- ----------------------------------------
Larry N. Norman
/s/ Douglas C. Kolsrud Director April 27, 1999
- ----------------------------------------
Douglas C. Kolsrud
/s/ Robert J. Kontz Vice President and April 27, 1999
- ---------------------------------------- Corporate Controller
Robert J. Kontz
/s/ Brenda K. Clancy Treasurer April 27, 1999
- ----------------------------------------
Brenda K. Clancy
</TABLE>
<PAGE>
Registration No.
333 - 26209
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
EXHIBITS
TO
FORM N-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FOR
PFL LIFE VARIABLE ANNUITY ACCOUNT A
---------------
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description of Exhibit Page No.*
- ----------- ---------------------- ---------
(3)(a)(2) Termination of Principal Distribution Agreement
by and between PFL Life Insurance Company on its
own behalf and on behalf of the Mutual Fund Account,
and AEGON USA Securities, Inc.
(10)(a) Consent of Independent Auditors.
(13) Performance Data Calculations
(14) Power of Attorney
- --------
* Page numbers included only in manually executed original.
<PAGE>
Exhibit (3)(a)(2)
-----------------
Termination of Principal Distribution Agreement by and between PFL Life
Insurance Company on its own behalf of the Mutual Fund Account, and AEGON USA
Securities, Inc.
<PAGE>
TERMINATION OF
PRINCIPAL DISTRIBUTION AGREEMENT
BY AND BETWEEN
PFL LIFE INSURANCE COMPANY
ON ITS OWN BEHALF
AND ON THE BEHALF OF THE MUTUAL FUND ACCOUNT,
AND AEGON USA SECURITIES, INC.
WHEREAS, All underwriting and primary distribution activities for variable
annuity or variable life insurance products for the insurance company and the
separate accounts have been assigned effective as of the close of business April
30, 1998, to AFSG Securities Corporation.
THEREFORE, The undersigned parties to the Principal Distribution Agreement dated
November 20, 1996, hereby mutually agree to terminate such Agreement as of the
close of business April 30, 1998.
WITNESSETH:
[SIGNATURE APPEARS HERE] April 29, 1998
- -------------------------------- -------------------
PFL Life Insurance Company Date Signed
[SIGNATURE APPEARS HERE] April 29, 1998
- -------------------------------- -------------------
AEGON USA Securities, Inc. Date Signed
<PAGE>
Exhibit (10)(a)
---------------
Consent of Independent Auditors
<PAGE>
[LETTERHEAD OF ERNST & YOUNG LLP APPEARS HERE]
Consent of Independent Auditors
We consent to the reference to our firm under the captions "Financial
Statements" in the Prospectus and "Independent Auditors" in the Statement of
Additional Information and to the use of our report dated March 27, 1998 with
respect to the financial statements of PFL Life Variable Annuity Account A, and
to the use of our report dated February 27, 1998 with respect to the statutory-
basis financial statements and schedules of PFL Life Insurance Company, included
in Post-Effective Amendment No. 1 to the Registration Statement (Form N-4 No.
333-26209) and related Prospectus of The Atlas Portfolio Builder Variable
Annuity.
/s/ Ernst & Young LLP
Des Moines, Iowa
April 27, 1998
<PAGE>
Exhibit 13
----------
Performance Data Calculations
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER - EMERGING GROWTH
-----------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND 67M) Year Rate Available
-----------------------------------------
<S> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.411275 2 7.00% 20%
Units purchased 2,431.460 3 6.00% 30%
4 5.00% 40%
5 4.00% 50%
M&E factor - Annual 0.0000% 6 0.00% 100%
M&E factor - Monthly 0.0000% 7 0.00%
Contract charge factor 0.00% -----------------------------------------
WRL model has 1.40% M & E
<CAPTION>
Contract Contract Ending
Acct Value Charge Charge Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
01-Mar-1993 0.411275 2431.5 1,000.00 1,000.00 3,106.70 0.00%
31-Mar-1993 0.433380 2431.5 1,053.75 0.00000 0 1,053.75 3,106.70 0.00%
30-Apr-1993 0.419047 2431.5 1,018.90 0.00000 0 1,018.90 3,106.70 0.00%
31-May-1993 0.462661 2431.5 1,124.94 0.00000 0 1,124.94 3,106.70 0.00%
30-Jun-1993 0.468226 2431.5 1,138.47 0.00000 0 1,138.47 3,106.70 0.00%
31-Jul-1993 0.464873 2431.5 1,130.32 0.00000 0 1,130.32 3,106.70 0.00%
31-Aug-1993 0.490924 2431.5 1,193.66 0.00000 0 1,193.66 3,106.70 0.00%
30-Sep-1993 0.517711 2431.5 1,258.80 0.00000 0 1,258.80 3,106.70 0.00%
31-Oct-1993 0.504055 2431.5 1,225.59 0.00000 0 1,225.59 3,106.70 0.00%
30-Nov-1993 0.475522 2431.5 1,156.22 0.00000 0 1,156.22 3,106.70 0.00%
31-Dec-1993 0.508098 2431.5 1,235.42 0.00000 0 1,235.42 3,106.70 0.00%
31-Jan-1994 0.516582 2431.5 1,256.05 0.00000 0 1,256.05 3,106.70 4.00%
28-Feb-1994 0.516283 2431.5 1,255.32 0.00000 0 1,255.32 3,106.70 4.00%
31-Mar-1994 0.480128 2431.5 1,167.41 0.00000 0 1,167.41 3,106.70 4.00%
30-Apr-1994 0.491678 2431.5 1,195.50 0.00000 0 1,195.50 3,106.70 4.00%
31-May-1994 0.472076 2431.5 1,147.83 0.00000 0 1,147.83 3,106.70 4.00%
30-Jun-1994 0.442959 2431.5 1,077.04 0.00000 0 1,077.04 3,106.70 4.00%
31-Jul-1994 0.444729 2431.5 1,081.34 0.00000 0 1,081.34 3,106.70 4.00%
31-Aug-1994 0.472719 2431.5 1,149.40 0.00000 0 1,149.40 3,106.70 4.00%
30-Sep-1994 0.471575 2431.5 1,146.62 0.00000 0 1,146.62 3,106.70 4.00%
31-Oct-1994 0.482541 2431.5 1,173.28 0.00000 0 1,173.28 3,106.70 4.00%
30-Nov-1994 0.457247 2431.5 1,111.78 0.00000 0 1,111.78 3,106.70 4.00%
31-Dec-1994 0.464172 2431.5 1,128.62 0.00000 0 1,128.62 3,106.70 4.00%
31-Jan-1995 0.455749 2431.5 1,108.14 0.00000 0 1,108.14 3,106.70 5.00%
28-Feb-1995 0.483280 2431.5 1,175.08 0.00000 0 1,175.08 3,106.70 5.00%
31-Mar-1995 0.502211 2431.5 1,221.11 0.00000 0 1,221.11 3,106.70 5.00%
30-Apr-1995 0.515375 2431.5 1,253.12 0.00000 0 1,253.12 3,106.70 5.00%
31-May-1995 0.523546 2431.5 1,272.98 0.00000 0 1,272.98 3,106.70 5.00%
30-Jun-1995 0.563810 2431.5 1,370.88 0.00000 0 1,370.88 3,106.70 5.00%
31-Jul-1995 0.618983 2431.5 1,505.03 0.00000 0 1,505.03 3,106.70 5.00%
31-Aug-1995 0.628822 2431.5 1,528.96 0.00000 0 1,528.96 3,106.70 5.00%
30-Sep-1995 0.651304 2431.5 1,583.62 0.00000 0 1,583.62 3,106.70 5.00%
31-Oct-1995 0.636295 2431.5 1,547.13 0.00000 0 1,547.13 3,106.70 5.00%
30-Nov-1995 0.658438 2431.5 1,600.97 0.00000 0 1,600.97 3,106.70 5.00%
31-Dec-1995 0.671912 2431.5 1,633.73 0.00000 0 1,633.73 3,106.70 5.00%
31-Jan-1996 0.661315 2431.5 1,607.96 0.00000 0 1,607.96 3,106.70 6.00%
29-Feb-1996 0.694028 2431.5 1,687.50 0.00000 0 1,687.50 3,106.70 6.00%
31-Mar-1996 0.717098 2431.5 1,743.60 0.00000 0 1,743.60 3,106.70 6.00%
30-Apr-1996 0.771391 2431.5 1,875.61 0.00000 0 1,875.61 3,106.70 6.00%
31-May-1996 0.803554 2431.5 1,953.81 0.00000 0 1,953.81 3,106.70 6.00%
30-Jun-1996 0.788011 2431.5 1,916.02 0.00000 0 1,916.02 3,106.70 6.00%
31-Jul-1996 0.714497 2431.5 1,737.27 0.00000 0 1,737.27 3,106.70 6.00%
31-Aug-1996 0.755355 2431.5 1,836.62 0.00000 0 1,836.62 3,106.70 6.00%
30-Sep-1996 0.823169 2431.5 2,001.50 0.00000 0 2,001.50 3,106.70 6.00%
31-Oct-1996 0.794021 2431.5 1,930.63 0.00000 0 1,930.63 3,106.70 6.00%
<CAPTION>
ERV of ERV of
W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<C> <C> <C> <C> <C> <C> <C> <C>
01-Mar-1993 100.00% 3,106.70 5.84 21.43% 21.43% 3,106.70 3,106.70
31-Mar-1993 100.00% 3,106.70 5.76 20.66% 20.66% 2,948.24 2,948.24
30-Apr-1993 100.00% 3,106.70 5.67 21.71% 21.71% 3,049.09 3,049.09
31-May-1993 100.00% 3,106.70 5.59 19.93% 19.93% 2,761.66 2,761.66
30-Jun-1993 100.00% 3,106.70 5.51 20.00% 20.00% 2,728.83 2,728.83
31-Jul-1993 100.00% 3,106.70 5.42 20.50% 20.50% 2,748.51 2,748.51
31-Aug-1993 100.00% 3,106.70 5.34 19.63% 19.63% 2,602.66 2,602.66
30-Sep-1993 100.00% 3,106.70 5.25 18.76% 18.76% 2,468.00 2,468.00
31-Oct-1993 100.00% 3,106.70 5.17 19.71% 19.71% 2,534.86 2,534.86
30-Nov-1993 100.00% 3,106.70 5.09 21.44% 21.44% 2,686.96 2,686.96
31-Dec-1993 100.00% 3,106.70 5.00 20.24% 20.24% 2,514.69 2,514.69
31-Jan-1994 50.00% 3,106.70 4.92 20.22% 20.22% 2,473.39 2,473.39
28-Feb-1994 50.00% 3,106.70 4.84 20.58% 20.58% 2,474.82 2,474.82
31-Mar-1994 50.00% 3,106.70 4.76 22.85% 22.85% 2,661.19 2,661.19
30-Apr-1994 50.00% 3,106.70 4.67 22.67% 22.67% 2,598.67 2,598.67
31-May-1994 50.00% 3,106.70 4.59 24.23% 24.23% 2,706.58 2,706.58
30-Jun-1994 50.00% 3,106.70 4.51 26.50% 26.50% 2,884.49 2,884.49
31-Jul-1994 50.00% 3,106.70 4.42 26.96% 26.96% 2,873.01 2,873.01
31-Aug-1994 50.00% 3,106.70 4.34 25.77% 25.77% 2,702.90 2,702.90
30-Sep-1994 50.00% 3,106.70 4.25 26.40% 26.40% 2,709.45 2,709.45
31-Oct-1994 50.00% 3,106.70 4.17 26.30% 26.30% 2,647.88 2,647.88
30-Nov-1994 50.00% 3,106.70 4.09 28.58% 28.58% 2,794.35 2,794.35
31-Dec-1994 50.00% 3,106.70 4.00 28.78% 28.78% 2,752.67 2,752.67
31-Jan-1995 40.00% 3,106.70 3.92 30.10% 30.10% 2,803.54 2,803.54
28-Feb-1995 40.00% 3,106.70 3.84 28.80% 28.80% 2,643.83 2,643.83
31-Mar-1995 40.00% 3,106.70 3.76 28.22% 28.22% 2,544.17 2,544.17
30-Apr-1995 40.00% 3,106.18 3.67 28.03% 28.03% 2,478.77 2,479.19
31-May-1995 40.00% 3,105.19 3.59 28.20% 28.22% 2,439.30 2,440.49
30-Jun-1995 40.00% 3,100.29 3.51 26.20% 26.27% 2,261.53 2,266.21
31-Jul-1995 40.00% 3,093.59 3.42 23.44% 23.59% 2,055.49 2,064.21
31-Aug-1995 40.00% 3,092.39 3.34 23.50% 23.67% 2,022.55 2,031.91
30-Sep-1995 40.00% 3,089.66 3.25 22.79% 23.00% 1,951.01 1,961.77
31-Oct-1995 40.00% 3,091.48 3.17 24.41% 24.60% 1,998.21 2,008.05
30-Nov-1995 40.00% 3,088.79 3.09 23.72% 23.95% 1,929.33 1,940.52
31-Dec-1995 40.00% 3,087.15 3.00 23.61% 23.87% 1,889.64 1,901.60
31-Jan-1996 30.00% 3,066.15 2.92 24.76% 25.32% 1,906.85 1,932.08
29-Feb-1996 30.00% 3,061.38 2.84 23.35% 23.99% 1,814.15 1,841.01
31-Mar-1996 30.00% 3,058.01 2.75 22.63% 23.34% 1,753.85 1,781.78
30-Apr-1996 30.00% 3,050.09 2.67 19.96% 20.79% 1,626.19 1,656.37
31-May-1996 30.00% 3,045.40 2.59 18.72% 19.64% 1,558.69 1,590.07
30-Jun-1996 30.00% 3,047.66 2.50 20.36% 21.29% 1,590.62 1,621.44
31-Jul-1996 30.00% 3,058.39 2.42 26.34% 27.16% 1,760.45 1,788.26
31-Aug-1996 30.00% 3,052.43 2.33 24.31% 25.26% 1,661.98 1,691.53
30-Sep-1996 30.00% 3,042.54 2.25 20.44% 21.56% 1,520.12 1,552.18
31-Oct-1996 30.00% 3,046.79 2.17 23.43% 24.55% 1,578.13 1,609.16
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER - EMERGING GROWTH
-----------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND 67M) Year Rate Available
-----------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.411275 2 7.00% 20%
Units purchased 2,431.460 3 6.00% 30%
4 5.00% 40%
5 4.00% 50%
M&E factor - Annual 0.0000% 6 0.00% 100%
M&E factor - Monthly 0.0000% 7 0.00%
Contract charge factor 0.00% -----------------------------------------
WRL model has 1.40% M & E
<CAPTION>
Contract Contract Ending
Acct Value Charge Charge Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30-Nov-1996 0.806296 2431.5 1,960.48 0.00000 0 1,960.48 3,106.70 6.00%
31-Dec-1996 0.787684 2431.5 1,915.23 0.00000 0 1,915.23 3,106.70 6.00%
31-Jan-1997 0.829930 2431.5 2,017.94 0.00000 0 2,017.94 3,106.70 7.00%
28-Feb-1997 0.761038 2431.5 1,850.44 0.00000 0 1,850.44 3,106.70 7.00%
31-Mar-1997 0.717680 2431.5 1,745.01 0.00000 0 1,745.01 3,106.70 7.00%
30-Apr-1997 0.744784 2431.5 1,810.91 0.00000 0 1,810.91 3,106.70 7.00%
31-May-1997 0.815464 2431.5 1,982.77 0.00000 0 1,982.77 3,106.70 7.00%
30-Jun-1997 0.849675 2431.5 2,065.95 0.00000 0 2,065.95 3,106.70 7.00%
31-Jul-1997 0.937488 2431.5 2,279.47 0.00000 0 2,279.47 3,106.70 7.00%
31-Aug-1997 0.924798 2431.5 2,248.61 0.00000 0 2,248.61 3,106.70 7.00%
30-Sep-1997 1.000000 2431.5 2,431.46 0.00000 0 2,431.46 3,106.70 7.00%
31-Oct-1997 0.936746 2431.5 2,277.66 0.00000 0 2,277.66 3,106.70 7.00%
30-Nov-1997 0.924065 2431.5 2,246.83 0.00000 0 2,246.83 3,106.70 7.00%
31-Dec-1997 0.943400 2431.5 2,293.84 0.00000 0 2,293.84 3,106.70 7.00%
31-Jan-1998 0.932970 2431.5 2,268.48 0.00000 0 2,268.48 3,106.70 7.00%
28-Feb-1998 1.034777 2431.5 2,516.02 0.00000 0 2,516.02 3,106.70 7.00%
31-Mar-1998 1.093290 2431.5 2,658.29 0.00000 0 2,658.29 3,106.70 7.00%
30-Apr-1998 1.105536 2431.5 2,688.07 0.00000 0 2,688.07 3,106.70 7.00%
31-May-1998 1.055411 2431.5 2,566.19 0.00000 0 2,566.19 3,106.70 7.00%
30-Jun-1998 1.147519 2431.5 2,790.15 0.00000 0 2,790.15 3,106.70 7.00%
31-Jul-1998 1.110906 2431.5 2,701.13 0.00000 0 2,701.13 3,106.70 7.00%
31-Aug-1998 0.901694 2431.5 2,192.44 0.00000 0 2,192.44 3,106.70 7.00%
30-Sep-1998 1.000213 2431.5 2,431.98 0.00000 0 2,431.98 3,106.70 7.00%
31-Oct-1998 1.008351 2431.5 2,451.77 0.00000 0 2,451.77 3,106.70 7.00%
30-Nov-1998 1.088446 2431.5 2,646.52 0.00000 0 2,646.52 3,106.70 7.00%
31-Dec-1998 1.277710 2431.5 3,106.70 0.00000 0 3,106.70 3,106.70 7.00%
31-Dec-1998 3,106.70
<CAPTION>
ERV of ERV of
W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C>
30-Nov-1996 30.00% 3,045.00 2.08 23.51% 24.71% 1,553.19 1,584.67
31-Dec-1996 30.00% 3,047.71 2.00 26.15% 27.36% 1,591.31 1,622.11
31-Jan-1997 20.00% 3,008.94 1.92 23.20% 25.27% 1,491.09 1,539.54
28-Feb-1997 20.00% 3,020.67 1.84 30.55% 32.56% 1,632.41 1,678.90
31-Mar-1997 20.00% 3,028.05 1.75 36.93% 38.95% 1,735.26 1,780.33
30-Apr-1997 20.00% 3,023.43 1.67 35.89% 38.12% 1,669.56 1,715.54
31-May-1997 20.00% 3,011.40 1.59 30.14% 32.72% 1,518.79 1,566.85
30-Jun-1997 20.00% 3,005.58 1.50 28.30% 31.16% 1,454.82 1,503.76
31-Jul-1997 20.00% 2,990.64 1.42 21.09% 24.38% 1,311.99 1,362.91
31-Aug-1997 20.00% 2,992.80 1.33 23.90% 27.41% 1,330.95 1,381.61
30-Sep-1997 20.00% 2,980.00 1.25 17.64% 21.62% 1,225.60 1,277.71
31-Oct-1997 20.00% 2,990.76 1.17 26.29% 30.47% 1,313.08 1,363.99
30-Nov-1997 20.00% 2,992.92 1.08 30.25% 34.81% 1,332.06 1,382.71
31-Dec-1997 20.00% 2,989.63 1.00 30.33% 35.44% 1,303.33 1,354.37
31-Jan-1998 10.00% 2,969.66 0.92 30.91% 36.95% 1,279.49 1,333.42
28-Feb-1998 10.00% 2,952.33 0.84 17.34% 23.48% 1,143.47 1,193.39
31-Mar-1998 10.00% 2,942.37 0.75 10.69% 16.87% 1,079.50 1,124.62
30-Apr-1998 10.00% 2,940.29 0.67 9.38% 15.57% 1,062.05 1,102.03
31-May-1998 10.00% 2,948.82 0.59 14.91% 21.06% 1,084.90 1,118.59
30-Jun-1998 10.00% 2,933.14 0.50 5.12% 11.35% 1,025.51 1,055.67
31-Jul-1998 10.00% 2,939.37 0.42 8.82% 15.02% 1,036.07 1,060.39
31-Aug-1998 10.00% 2,974.98 0.33 35.69% 41.70% 1,107.41 1,123.56
30-Sep-1998 10.00% 2,958.21 0.25 21.64% 27.74% 1,050.61 1,063.66
31-Oct-1998 10.00% 2,956.83 0.17 20.60% 26.71% 1,031.80 1,040.36
30-Nov-1998 10.00% 2,943.20 0.08 11.21% 17.39% 1,009.06 1,013.71
31-Dec-1998 10.00% 2,910.98 0.00 -6.30% 0.00% 1,000.00 1,000.00
31-Dec-1998
</TABLE>
<TABLE>
<CAPTION>
Average Average
Annual Annual
Beginning Ending Value Ending Value Return Return
Years Value W/ Surrender W/O Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C> <C> <C>
30-Nov-1998 0.08 One Month 2,646.52 2,943.20 3,106.70 11.21% 17.39%
30-Sep-1998 0.25 3 Months 2,431.98 2,958.21 3,106.70 21.64% 27.74%
30-Jun-1998 0.50 6 Months 2,790.15 2,933.14 3,106.70 5.12% 11.35%
31-Mar-1998 0.75 9 Months 2,658.29 2,942.37 3,106.70 10.69% 16.87%
31-Dec-1997 1.00 YTD 2,293.84 2,989.63 3,106.70 30.33% 35.44%
31-Dec-1997 1.00 One Year 2,293.84 2,989.63 3,106.70 30.33% 35.44%
31-Dec-1996 2.00 Two Years 1,915.23 3,047.71 3,106.70 26.15% 27.36%
31-Dec-1995 3.00 Three Years 1,633.73 3,087.15 3,106.70 23.63% 23.89%
31-Dec-1994 4.00 Four Years 1,128.62 3,106.70 3,106.70 28.81% 28.81%
31-Dec-1993 5.00 Five Years 1,235.42 3,106.70 3,106.70 20.25% 20.25%
31-Dec-1988 10.00 Ten Years -- -- -- -- --
<CAPTION>
Total Return Total Return
W/ Surrender W/O Surrender
<S> <C> <C>
30-Nov-1998 11.21% 17.39%
30-Sep-1998 21.64% 27.74%
30-Jun-1998 5.12% 11.35%
31-Mar-1998 10.69% 16.87%
31-Dec-1997 30.33% 35.44%
31-Dec-1997 30.33% 35.44%
31-Dec-1996 59.13% 62.21%
31-Dec-1995 88.96% 90.16%
31-Dec-1994 175.27% 175.27%
31-Dec-1993 151.47% 151.47%
31-Dec-1988
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER - EMERGING GROWTH
-----------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND 67M) Year Rate Available
-----------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.411275 2 7.00% 20%
Units purchased 2,431.460 3 6.00% 30%
4 5.00% 40%
5 4.00% 50%
M&E factor - Annual 0.0000% 6 0.00% 100%
M&E factor - Monthly 0.0000% 7 0.00%
Contract charge factor 0.00% -----------------------------------------
WRL model has 1.40% M & E
<CAPTION>
Contract Contract Ending
Acct Value Charge Charge Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge
<S> <C> <C> <C> <C> <C> <C> <C>
01-Mar-1993 5.8 Inc to Date 1,000.00 3,106.70 3,106.70 21.43% 21.43%
30-Sep-1997 1.3 2,431.46 2,980.00 3,106.70 17.64% 21.62%
<CAPTION>
Total Return Total Return
W/ Surrender W/O Surrender
<S> <C> <C>
01-Mar-1993 210.67% 210.67%
30-Sep-1997 22.56% 27.77%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER VA - SMALL CAP SUBACCOUNT
---------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND 54M) Year Rate Available
---------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.071717 2 7.00% 20%
Units purchased 13,943.641 3 6.00% 30%
4 5.00% 40%
M & E Factor (Annual Rate) 5 4.00% 50%
M & E Factor (Monthly Rate) 0 6 0.00% 100%
7 0.00%
---------------------------------------
<CAPTION>
Ending
Acct Value M & E M & E Adjusted Redeemable
Date AUV # Units Before Chrge Factor Deduction Acct Value Value
<S> <C> <C> <C> <C> <C> <C> <C>
31-Aug-1990 0.071717 13943.64098 1,000.00 1,000.00 12,503.81
30-Sep-1990 0.071992 13943.64098 1,003.83 0.00000000 0 1,003.83 12,503.81
31-Oct-1990 0.072338 13943.64098 1,008.66 0.00000000 0 1,008.66 12,503.81
30-Nov-1990 0.072611 13943.64098 1,012.47 0.00000000 0 1,012.47 12,503.81
31-Dec-1990 0.072884 13943.64098 1,016.27 0.00000000 0 1,016.27 12,503.81
31-Jan-1991 0.073941 13943.64098 1,031.01 0.00000000 0 1,031.01 12,503.81
28-Feb-1991 0.081912 13943.64098 1,142.15 0.00000000 0 1,142.15 12,503.81
31-Mar-1991 0.092145 13943.64098 1,284.83 0.00000000 0 1,284.83 12,503.81
30-Apr-1991 0.099579 13943.64098 1,388.50 0.00000000 0 1,388.50 12,503.81
31-May-1991 0.115740 13943.64098 1,613.84 0.00000000 0 1,613.84 12,503.81
30-Jun-1991 0.111842 13943.64098 1,559.48 0.00000000 0 1,559.48 12,503.81
31-Jul-1991 0.125753 13943.64098 1,753.46 0.00000000 0 1,753.46 12,503.81
31-Aug-1991 0.140130 13943.64098 1,953.93 0.00000000 0 1,953.93 12,503.81
30-Sep-1991 0.147260 13943.64098 2,053.34 0.00000000 0 2,053.34 12,503.81
31-Oct-1991 0.160032 13943.64098 2,231.43 0.00000000 0 2,231.43 12,503.81
30-Nov-1991 0.163166 13943.64098 2,275.13 0.00000000 0 2,275.13 12,503.81
31-Dec-1991 0.186867 13943.64098 2,605.61 0.00000000 0 2,605.61 12,503.81
31-Jan-1992 0.208329 13943.64098 2,904.87 0.00000000 0 2,904.87 12,503.81
29-Feb-1992 0.210805 13943.64098 2,939.39 0.00000000 0 2,939.39 12,503.81
31-Mar-1992 0.220063 13943.64098 3,068.48 0.00000000 0 3,068.48 12,503.81
30-Apr-1992 0.211127 13943.64098 2,943.87 0.00000000 0 2,943.87 12,503.81
31-May-1992 0.213770 13943.64098 2,980.73 0.00000000 0 2,980.73 12,503.81
30-Jun-1992 0.206395 13943.64098 2,877.90 0.00000000 0 2,877.90 12,503.81
31-Jul-1992 0.221379 13943.64098 3,086.83 0.00000000 0 3,086.83 12,503.81
31-Aug-1992 0.227330 13943.64098 3,169.81 0.00000000 0 3,169.81 12,503.81
30-Sep-1992 0.241919 13943.64098 3,373.23 0.00000000 0 3,373.23 12,503.81
31-Oct-1992 0.251679 13943.64098 3,509.32 0.00000000 0 3,509.32 12,503.81
30-Nov-1992 0.286239 13943.64098 3,991.21 0.00000000 0 3,991.21 12,503.81
31-Dec-1992 0.315804 13943.64098 4,403.46 0.00000000 0 4,403.46 12,503.81
31-Jan-1993 0.334626 13943.64098 4,665.90 0.00000000 0 4,665.90 12,503.81
28-Feb-1993 0.326318 13943.64098 4,550.06 0.00000000 0 4,550.06 12,503.81
31-Mar-1993 0.354518 13943.64098 4,943.27 0.00000000 0 4,943.27 12,503.81
30-Apr-1993 0.344403 13943.64098 4,802.23 0.00000000 0 4,802.23 12,503.81
31-May-1993 0.363104 13943.64098 5,062.99 0.00000000 0 5,062.99 12,503.81
30-Jun-1993 0.377423 13943.64098 5,262.65 0.00000000 0 5,262.65 12,503.81
31-Jul-1993 0.400137 13943.64098 5,579.36 0.00000000 0 5,579.36 12,503.81
31-Aug-1993 0.446778 13943.64098 6,229.71 0.00000000 0 6,229.71 12,503.81
30-Sep-1993 0.467660 13943.64098 6,520.88 0.00000000 0 6,520.88 12,503.81
31-Oct-1993 0.498405 13943.64098 6,949.58 0.00000000 0 6,949.58 12,503.81
30-Nov-1993 0.492025 13943.64098 6,860.62 0.00000000 0 6,860.62 12,503.81
31-Dec-1993 0.524452 13943.64098 7,312.78 0.00000000 0 7,312.78 12,503.81
31-Jan-1994 0.545154 13943.64098 7,601.43 0.00000000 0 7,601.43 12,503.81
28-Feb-1994 0.554554 13943.64098 7,732.50 0.00000000 0 7,732.50 12,503.81
31-Mar-1994 0.530820 13943.64098 7,401.56 0.00000000 0 7,401.56 12,503.81
30-Apr-1994 0.533841 13943.64098 7,443.69 0.00000000 0 7,443.69 12,503.81
31-May-1994 0.537158 13943.64098 7,489.94 0.00000000 0 7,489.94 12,503.81
30-Jun-1994 0.531537 13943.64098 7,411.56 0.00000000 0 7,411.56 12,503.81
31-Jul-1994 0.541499 13943.64098 7,550.47 0.00000000 0 7,550.47 12,503.81
31-Aug-1994 0.562461 13943.64098 7,842.75 0.00000000 0 7,842.75 12,503.81
30-Sep-1994 0.564190 13943.64098 7,866.86 0.00000000 0 7,866.86 12,503.81
31-Oct-1994 0.567028 13943.64098 7,906.43 0.00000000 0 7,906.43 12,503.81
30-Nov-1994 0.542227 13943.64098 7,560.63 0.00000000 0 7,560.63 12,503.81
31-Dec-1994 0.557286 13943.64098 7,770.59 0.00000000 0 7,770.59 12,503.81
31-Jan-1995 0.544886 13943.64098 7,597.69 0.00000000 0 7,597.69 12,503.81
28-Feb-1995 0.571990 13943.64098 7,975.62 0.00000000 0 7,975.62 12,503.81
31-Mar-1995 0.588069 13943.64098 8,199.83 0.00000000 0 8,199.83 12,503.81
30-Apr-1995 0.592858 13943.64098 8,266.60 0.00000000 0 8,266.60 12,503.81
31-May-1995 0.596267 13943.64098 8,314.14 0.00000000 0 8,314.14 12,503.81
30-Jun-1995 0.635778 13943.64098 8,865.06 0.00000000 0 8,865.06 12,503.81
31-Jul-1995 0.680352 13943.64098 9,486.58 0.00000000 0 9,486.58 12,503.81
31-Aug-1995 0.690308 13943.64098 9,625.41 0.00000000 0 9,625.41 12,503.81
30-Sep-1995 0.707048 13943.64098 9,858.82 0.00000000 0 9,858.82 12,503.81
<CAPTION>
ERV of ERV of
Surrender W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Charge Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C>
31-Aug-1990 0.00% 100.00% 12,503.81 8.34 35.38% 35.38% 12,503.81 12,503.81
30-Sep-1990 0.00% 100.00% 12,503.81 8.26 35.72% 35.72% 12,456.06 12,456.06
31-Oct-1990 0.00% 100.00% 12,503.81 8.17 36.07% 36.07% 12,396.51 12,396.51
30-Nov-1990 0.00% 100.00% 12,503.81 8.09 36.44% 36.44% 12,349.84 12,349.84
31-Dec-1990 0.00% 100.00% 12,503.81 8.01 36.82% 36.82% 12,303.65 12,303.65
31-Jan-1991 0.00% 100.00% 12,503.81 7.92 37.03% 37.03% 12,127.74 12,127.74
28-Feb-1991 0.00% 100.00% 12,503.81 7.84 35.68% 35.68% 10,947.58 10,947.58
31-Mar-1991 0.00% 100.00% 12,503.81 7.76 34.08% 34.08% 9,731.87 9,731.87
30-Apr-1991 0.00% 100.00% 12,503.81 7.68 33.15% 33.15% 9,005.27 9,005.27
31-May-1991 0.00% 100.00% 12,503.81 7.59 30.96% 30.96% 7,747.88 7,747.88
30-Jun-1991 0.00% 100.00% 12,503.81 7.51 31.94% 31.94% 8,017.94 8,017.94
31-Jul-1991 0.00% 100.00% 12,503.81 7.42 30.29% 30.29% 7,130.93 7,130.93
31-Aug-1991 0.00% 100.00% 12,503.81 7.34 28.78% 28.78% 6,399.32 6,399.32
30-Sep-1991 0.00% 100.00% 12,503.81 7.26 28.26% 28.26% 6,089.49 6,089.49
31-Oct-1991 0.00% 100.00% 12,503.81 7.17 27.16% 27.16% 5,603.50 5,603.50
30-Nov-1991 0.00% 100.00% 12,503.81 7.09 27.17% 27.17% 5,495.87 5,495.87
31-Dec-1991 0.00% 100.00% 12,503.81 7.01 25.09% 25.09% 4,798.80 4,798.80
31-Jan-1992 0.00% 100.00% 12,503.81 6.92 23.48% 23.48% 4,304.43 4,304.43
29-Feb-1992 0.00% 100.00% 12,503.81 6.84 23.57% 23.57% 4,253.88 4,253.88
31-Mar-1992 0.00% 100.00% 12,503.81 6.76 23.11% 23.11% 4,074.92 4,074.92
30-Apr-1992 0.00% 100.00% 12,503.81 6.67 24.20% 24.20% 4,247.40 4,247.40
31-May-1992 0.00% 100.00% 12,503.81 6.59 24.31% 24.31% 4,194.88 4,194.88
30-Jun-1992 0.00% 100.00% 12,503.81 6.51 25.33% 25.33% 4,344.77 4,344.77
31-Jul-1992 0.00% 100.00% 12,503.81 6.42 24.34% 24.34% 4,050.69 4,050.69
31-Aug-1992 0.00% 100.00% 12,503.81 6.34 24.18% 24.18% 3,944.65 3,944.65
30-Sep-1992 0.00% 100.00% 12,503.81 6.25 23.30% 23.30% 3,706.78 3,706.78
31-Oct-1992 0.00% 100.00% 12,503.81 6.17 22.87% 22.87% 3,563.03 3,563.03
30-Nov-1992 0.00% 100.00% 12,503.81 6.09 20.63% 20.63% 3,132.83 3,132.83
31-Dec-1992 0.00% 100.00% 12,503.81 6.00 18.99% 18.99% 2,839.54 2,839.54
31-Jan-1993 0.00% 100.00% 12,503.81 5.92 18.13% 18.13% 2,679.83 2,679.83
28-Feb-1993 0.00% 100.00% 12,503.81 5.84 18.89% 18.89% 2,748.05 2,748.05
31-Mar-1993 0.00% 100.00% 12,503.81 5.76 17.49% 17.49% 2,529.46 2,529.46
30-Apr-1993 0.00% 100.00% 12,503.81 5.67 18.37% 18.37% 2,603.75 2,603.75
31-May-1993 0.00% 100.00% 12,503.81 5.59 17.56% 17.56% 2,469.65 2,469.65
30-Jun-1993 0.00% 100.00% 12,503.81 5.51 17.02% 17.02% 2,375.95 2,375.95
31-Jul-1993 0.00% 100.00% 12,503.81 5.42 16.05% 16.05% 2,241.08 2,241.08
31-Aug-1993 0.00% 100.00% 12,503.81 5.34 13.94% 13.94% 2,007.12 2,007.12
30-Sep-1993 0.00% 100.00% 12,503.81 5.25 13.19% 13.19% 1,917.50 1,917.50
31-Oct-1993 0.00% 100.00% 12,503.81 5.17 12.03% 12.03% 1,799.22 1,799.22
30-Nov-1993 0.00% 100.00% 12,503.81 5.09 12.52% 12.52% 1,822.55 1,822.55
31-Dec-1993 0.00% 100.00% 12,503.81 5.00 11.32% 11.32% 1,709.86 1,709.86
31-Jan-1994 4.00% 50.00% 12,449.83 4.92 10.55% 10.65% 1,637.83 1,644.93
28-Feb-1994 4.00% 50.00% 12,444.58 4.84 10.33% 10.44% 1,609.39 1,617.05
31-Mar-1994 4.00% 50.00% 12,457.82 4.76 11.57% 11.66% 1,683.14 1,689.35
30-Apr-1994 4.00% 50.00% 12,456.14 4.67 11.64% 11.74% 1,673.38 1,679.79
31-May-1994 4.00% 50.00% 12,454.29 4.59 11.72% 11.81% 1,662.80 1,669.41
30-Jun-1994 4.00% 50.00% 12,457.42 4.51 12.21% 12.30% 1,680.81 1,687.07
31-Jul-1994 4.00% 50.00% 12,451.86 4.42 11.98% 12.08% 1,649.15 1,656.03
31-Aug-1994 4.00% 50.00% 12,440.17 4.34 11.22% 11.35% 1,586.20 1,594.31
30-Sep-1994 4.00% 50.00% 12,439.21 4.25 11.37% 11.51% 1,581.22 1,589.43
31-Oct-1994 4.00% 50.00% 12,437.63 4.17 11.48% 11.62% 1,573.10 1,581.47
30-Nov-1994 4.00% 50.00% 12,451.46 4.09 12.98% 13.10% 1,646.88 1,653.81
31-Dec-1994 4.00% 50.00% 12,443.06 4.00 12.48% 12.62% 1,601.30 1,609.12
31-Jan-1995 5.00% 40.00% 12,374.00 3.92 13.26% 13.56% 1,628.65 1,645.74
28-Feb-1995 5.00% 40.00% 12,355.10 3.84 12.07% 12.42% 1,549.11 1,567.75
31-Mar-1995 5.00% 40.00% 12,343.89 3.76 11.51% 11.89% 1,505.38 1,524.89
30-Apr-1995 5.00% 40.00% 12,340.55 3.67 11.52% 11.92% 1,492.82 1,512.57
31-May-1995 5.00% 40.00% 12,338.18 3.59 11.63% 12.04% 1,484.00 1,503.92
30-Jun-1995 5.00% 40.00% 12,310.63 3.51 9.82% 10.30% 1,388.67 1,410.46
31-Jul-1995 5.00% 40.00% 12,279.55 3.42 7.83% 8.40% 1,294.41 1,318.05
31-Aug-1995 5.00% 40.00% 12,272.61 3.34 7.55% 8.16% 1,275.02 1,299.04
30-Sep-1995 5.00% 40.00% 12,260.94 3.25 6.93% 7.58% 1,243.65 1,268.29
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER VA - SMALL CAP SUBACCOUNT
---------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND 54M) Year Rate Available
---------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.071717 2 7.00% 20%
Units purchased 13,943.641 3 6.00% 30%
4 5.00% 40%
M & E Factor (Annual Rate) 5 4.00% 50%
M & E Factor (Monthly Rate) 0 6 0.00% 100%
7 0.00%
---------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Ending
Acct Value M & E M & E Adjusted Redeemable
Date AUV # Units Before Chrge Factor Deduction Acct Value Value
<S> <C> <C> <C> <C> <C> <C> <C>
30-Apr-1995 0.592858 13943.64098 8,266.60 0.00000000 0 8,266.60 12,503.81
31-May-1995 0,596267 13943.64098 8,314.14 0.00000000 0 8,314.14 12,503.81
30-Jun-1995 0.635778 13943.64098 8,865.06 0.00000000 0 8,865.06 12,503.81
31-Jul-1995 0.680352 13943.64098 9,486.58 0.00000000 0 9,486.58 12,503.81
31-Aug-1995 0.690308 13943.64098 9,625.41 0.00000000 0 9,625.41 12,503.81
30-Sep-1995 0.707048 13943.64098 9,858.82 0.00000000 0 9,858.82 12,503.81
31-Oct-1995 0.671173 13943.64098 9,358.59 0.00000000 0 9,358.59 12,503.81
30-Nov-1995 0.696343 13943.64098 9,709.56 0.00000000 0 9,709.56 12,503.81
31-Dec-1995 0.711200 13943.64098 9,916.72 0.00000000 0 9,916.72 12,503.81
31-Jan-1996 0.706824 13943.64098 9,855.70 0.00000000 0 9,855.70 12,503.81
29-Feb-1996 0.733872 13943.64098 10,232.85 0.00000000 0 10,232.85 12,503.81
31-Mar-1996 0.744552 13943.64098 10,381.77 0.00000000 0 10,381.77 12,503.81
30-Apr-1996 0.776871 13943.64098 10,832.41 0.00000000 0 10,832.41 12,503.81
31-May-1996 0.806812 13943.64098 11,249.90 0.00000000 0 11,249.90 12,503.81
30-Jun-1996 0.781650 13943.64098 10,899.04 0.00000000 0 10,899.04 12,503.81
31-Jul-1996 0.729904 13943.64098 10,177.51 0.00000000 0 10,177.51 12,503.81
31-Aug-1996 0.762389 13943.64098 10,630.48 0.00000000 0 10,630.48 12,503.81
30-Sep-1996 0.800569 13943.64098 11,162.85 0.00000000 0 11,162.85 12,503.81
31-Oct-1996 0.787218 13943.64098 10,976.68 0.00000000 0 10,976.68 12,503.81
30-Nov-1996 0.809268 13943.64098 11,284.14 0.00000000 0 11,284.14 12,503.81
31-Dec-1996 0.817807 13943.64098 11,403.21 0.00000000 0 11,403.21 12,503.81
31-Jan-1997 0.830358 13943.64098 11,578.21 0.00000000 0 11,578.21 12,503.81
28-Feb-1997 0.803195 13943.64098 11,199.46 0.00000000 0 11,199.46 12,503.81
31-Mar-1997 0.760430 13943.64098 10,603.16 0.00000000 0 10,603.16 12,503.81
30-Apr-1997 0.769869 13943.64098 10,734.78 0.00000000 0 10,734.78 12,503.81
31-May-1997 0.844145 13943.64098 11,770.46 0.00000000 0 11,770.46 12,503.81
30-Jun-1997 0.876414 13943.64098 12,220.40 0.00000000 0 12,220.40 12,503.81
31-Jul-1997 0.926230 13943.64098 12,915.02 0.00000000 0 12,915.02 12,503.81
31-Aug-1997 0.939481 13943.64098 13,099.78 0.00000000 0 13,099.78 12,503.81
30-Sep-1997 1.000000 13943.64098 13,943.64 0.00000000 0 13,943.64 12,503.81
31-Oct-1997 0.956278 13943.64098 13,334.00 0.00000000 0 13,334.00 12,503.81
30-Nov-1997 0.929671 13943.64098 12,963.00 0.00000000 0 12,963.00 12,503.81
31-Dec-1997 0.941704 13943.64098 13,130.78 0.00000000 0 13,130.78 12,503.81
31-Jan-1998 0.912312 13943.64098 12,720.95 0.00000000 0 12,720.95 12,503.81
28-Feb-1998 0.996689 13943.64098 13,897.47 0.00000000 0 13,897.47 12,503.81
31-Mar-1998 1.039824 13943.64098 14,498.93 0.00000000 0 14,498.93 12,503.81
30-Apr-1998 1.048315 13943.64098 14,617.33 0.00000000 0 14,617.33 12,503.81
31-May-1998 0.992909 13943.64098 13,844.77 0.00000000 0 13,844.77 12,503.81
30-Jun-1998 0.990881 13943.64098 13,816.49 0.00000000 0 13,816.49 12,503.81
31-Jul-1998 0.893091 13943.64098 12,452.94 0.00000000 0 12,452.94 12,503.81
31-Aug-1998 0.715023 13943.64098 9,970.02 0.00000000 0 9,970.02 12,503.81
30-Sep-1998 0.755823 13943.64098 10,538.92 0.00000000 0 10,538.92 12,503.81
31-Oct-1998 0.773804 13943.64098 10,789.65 0.00000000 0 10,789.65 12,503.81
30-Nov-1998 0.832181 13943.64098 11,603.63 0.00000000 0 11,603.63 12,503.81
31-Dec-1998 0.896739 13943.64098 12,503.81 0.00000000 0 12,503.81 12,503.81
31-Dec-1998 12,503.81
</TABLE>
<TABLE>
<CAPTION>
ERV of ERV of
Surrender W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Charge Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30-Apr-1995 5.00% 40.00% 12,340.55 3.67 11.52% 11.92% 1,492.82 1,152.57
31-May-1995 5.00% 40.00% 12,338.18 3.59 11.63% 12.04% 1,484.00 1,503.92
30-Jun-1995 5.00% 40.00% 12,310.63 3.51 9.82% 10.30% 1,388.67 1,410.46
31-Jul-1995 5.00% 40.00% 12,279.55 3.42 7.83% 8.40% 1,294.41 1,318.05
31-Aug-1995 5.00% 40.00% 12,272.61 3.34 7.55% 8.16% 1,275.02 1,299.04
30-Sep-1995 5.00% 40.00% 12,260.94 3.25 6.93% 7.58% 1,243.65 1,268.29
31-Oct-1995 5.00% 40.00% 12,285.95 3.17 8.97% 9.57% 1,312.80 1,336.08
30-Nov-1995 5.00% 40.00% 12,268.40 3.09 7.87% 8.54% 1,263.54 1,287.78
31-Dec-1995 5.00% 40.00% 12,258.05 3.00 7.31% 8.03% 1,236.10 1,260.88
31-Jan-1996 6.00% 30.00% 12,137.53 2.92 7.40% 8.50% 1,231.52 1,268.69
29-Feb-1996 6.00% 30.00% 12,114.90 2.84 6.13% 7.32% 1,183.92 1,221.93
31-Mar-1996 6.00% 30.00% 12,105.97 2.75 5.74% 6.99% 1,166.08 1,204.40
30-Apr-1996 6.00% 30.00% 12,078.93 2.67 4.16% 5.52% 1,115.07 1,154.30
31-May-1996 6.00% 30.00% 12,053.88 2.59 2.70% 4.17% 1,071.47 1,111.46
30-Jun-1996 6.00% 30.00% 12,074.93 2.50 4.18% 5.64% 1,107.89 1,147.24
31-Jul-1996 6.00% 30.00% 12,118.22 2.42 7.48% 8.88% 1,190.69 1,228.57
31-Aug-1996 6.00% 30.00% 12,091.05 2.33 5.67% 7.20% 1,137.39 1,176.22
30-Sep-1996 6.00% 30.00% 12,059.10 2.25 3.49% 5.17% 1,080.29 1,120.13
31-Oct-1996 6.00% 30.00% 12,070.27 2.17 4.48% 6.20% 1,099.63 1,139.12
30-Nov-1996 6.00% 30.00% 12,051.83 2.08 3.21% 5.05% 1,068.03 1,108.09
31-Dec-1996 6.00% 30.00% 12,044.68 2.00 2.77% 4.71% 1,056.25 1,096.52
31-Jan-1997 7.00% 20.00% 11,868.39 1.92 1.30% 4.10% 1,025.06 1,079.94
28-Feb-1997 7.00% 20.00% 11,894.90 1.84 3.33% 6.18% 1,062.10 1,116.46
31-Mar-1997 7.00% 20.00% 11,936.64 1.75 6.99% 9.86% 1,125.76 1,179.25
30-Apr-1997 7.00% 20.00% 11,927.43 1.67 6.51% 9.56% 1,111.10 1,164.79
31-May-1997 7.00% 20.00% 11,854.93 1.59 0.45% 3.88% 1,007.18 1,062.30
30-Jun-1997 7.00% 20.00% 11,823.43 1.50 -2.17% 1.54% 967.52 1,023.19
31-Jul-1997 7.00% 20.00% 11,774.81 1.42 -6.31% -2.25% 911.71 968.16
31-Aug-1997 7.00% 20.00% 11,761.88 1.33 -7.76% -3.43% 897.87 954.51
30-Sep-1997 7.00% 20.00% 11,702.81 1.25 -13.06% -8.34% 839.29 896.74
31-Oct-1997 7.00% 20.00% 11,745.48 1.17 -10.30% -5.36% 880.87 937.74
30-Nov-1997 7.00% 20.00% 11,771.45 1.08 -8.50% -3.27% 908.08 964.58
31-Dec-1997 7.00% 20.00% 11,759.71 1.00 -10.44% -4.77% 895.58 952.25
31-Jan-1998 7.00% 10.00% 11,700.87 0.92 -8.02% -1.71% 926.36 984.37
28-Feb-1998 7.00% 10.00% 11,618.51 0.84 -16.40% -10.03% 860.57 915.22
31-Mar-1998 7.00% 10.00% 11,576.41 0.75 -20.16% -13.76% 844.00 894.46
30-Apr-1998 7.00% 10.00% 11,568.12 0.67 -20.86% -14.46% 854.67 900.48
31-May-1998 7.00% 10.00% 11,622.20 0.59 -16.05% -9.69% 902.49 942.02
30-Jun-1998 7.00% 10.00% 11,624.18 0.50 -15.87% -9.50% 916.59 950.92
31-Jul-1998 7.00% 10.00% 11,719.63 0.42 -5.89% 0.41% 974.88 1,001.71
31-Aug-1998 7.00% 10.00% 11,893.43 0.33 19.29% 25.41% 1,060.74 1,078.63
30-Sep-1998 7.00% 10.00% 11,853.61 0.25 12.47% 18.64% 1,030.07 1,044.03
31-Oct-1998 7.00% 10.00% 11,836.06 0.17 9.70% 15.89% 1,015.59 1,024.95
30-Nov-1998 7.00% 10.00% 11,779.08 0.08 1.51% 7.76% 1,001.28 1,006.37
31-Dec-1998 7.00% 10.00% 11,716.07 0.00 -6.30% 0.00% 1,000.00 1,000.00
31-Dec-1998
</TABLE>
<TABLE>
<CAPTION>
Average
Annual
Beginning Ending Value Ending Value Return W/O Total Return Total Return
Years Value W/ Surrender W/O Surrender Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 0.08 11,603.63 11,779.08 12,503.81 1.51% 1.51% 7.76%
3 Months 30-Sep-1998 0.25 10,538.92 11,853.61 12,503.81 12.47% 12.47% 18.64%
6 Months 30-Jun-1998 0.50 13,816.49 11,624.18 12,503.81 -15.87% -15.87% -9.50%
9 Months 31-Mar-1998 0.75 14,498.93 11,576.41 12,503.81 -20.16% -20.16% -13.76%
YTD 31-Dec-1997 1.00 13,130.78 11,759.71 12,503.81 -10.44% -10.44% -4.77%
One Year 31-Dec-1997 1.00 13,130.78 11,759.71 12,503.81 -10.44% -10.44% -4.77%
Two Years 31-Dec-1996 2.00 11,403.21 12,044.68 12,503.81 2.77% 5.63% 9.65%
Three Years 31-Dec-1995 3.00 9,916.72 12,258.05 12,503.81 7.32% 23.61% 26.09%
Four Years 31-Dec-1994 4.00 7,770.59 12,443.06 12,503.81 12.49% 60.13% 60.91%
Five Years 31-Dec-1993 5.00 7,312.78 12,503.81 12,503.81 11.32% 70.99% 70.99%
Ten Years 31-Dec-1988 10.00 -- -- -- --
Inc to Date 31-Aug-1990 8.3 1,000.00 12,503.81 12,503.81 35.38% 1150.38% 1150.38%
30-Sep-1997 1.3 13,943.64 11,702.81 12,503.81 -13.06% -16.07% -10.33%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER VA - SMALL CAP VALUE SUBACCOUNT
PERFORMANCE CALCULATIONS
------------------------------------------
Surrender provisions: Withdrawal
Year Rate Available
------------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 1.000000 2 7.00% 20%
Units purchased 1,000.000 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
6 0.00% 100%
7 0.00%
------------------------------------------
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable Surrender W/D ERV
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge Available W/ Surr
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
04-May-1993 1.000000 1000 1,000.00 1,000.00 1,785.93 0.00% 100.00% 1,785.93
31-May-1993 0.999050 1000 999.05 0.00000000 0 999.05 1,785.93 0.00% 100.00% 1,785.93
30-Jun-1993 1.000790 1000 1,000.79 0.00000000 0 1,000.79 1,785.93 0.00% 100.00% 1,785.93
31-Jul-1993 1.034532 1000 1,034.53 0.00000000 0 1,034.53 1,785.93 0.00% 100.00% 1,785.93
31-Aug-1993 1.065127 1000 1,065.13 0.00000000 0 1,065.13 1,785.93 0.00% 100.00% 1,785.93
30-Sep-1993 1.093740 1000 1,093.74 0.00000000 0 1,093.74 1,785.93 0.00% 100.00% 1,785.93
31-Oct-1993 1.091540 1000 1,091.54 0.00000000 0 1,091.54 1,785.93 0.00% 100.00% 1,785.93
30-Nov-1993 1.064416 1000 1,064.42 0.00000000 0 1,064.42 1,785.93 0.00% 100.00% 1,785.93
31-Dec-1993 1.107447 1000 1,107.45 0.00000000 0 1,107.45 1,785.93 0.00% 100.00% 1,785.93
31-Jan-1994 1.134150 1000 1,134.15 0.00000000 0 1,134.15 1,785.93 4.00% 50.00% 1,776.28
28-Feb-1994 1.129975 1000 1,129.98 0.00000000 0 1,129.98 1,785.93 4.00% 50.00% 1,776.45
31-Mar-1994 1.063464 1000 1,063.46 0.00000000 0 1,063.46 1,785.93 4.00% 50.00% 1,779.11
30-Apr-1994 1.062289 1000 1,062.29 0.00000000 0 1,062.29 1,785.93 4.00% 50.00% 1,779.16
31-May-1994 1.047201 1000 1,047.20 0.00000000 0 1,047.20 1,785.93 4.00% 50.00% 1,779.76
30-Jun-1994 1.021404 1000 1,021.40 0.00000000 0 1,021.40 1,785.93 4.00% 50.00% 1,780.79
31-Jul-1994 1.040918 1000 1,040.92 0.00000000 0 1,040.92 1,785.93 4.00% 50.00% 1,780.01
31-Aug-1994 1.083789 1000 1,083.79 0.00000000 0 1,083.79 1,785.93 4.00% 50.00% 1,778.30
30-Sep-1994 1.091375 1000 1,091.38 0.00000000 0 1,091.38 1,785.93 4.00% 50.00% 1,777.99
31-Oct-1994 1.060702 1000 1,060.70 0.00000000 0 1,060.70 1,785.93 4.00% 50.00% 1,779.22
30-Nov-1994 1.045795 1000 1,045.80 0.00000000 0 1,045.80 1,785.93 4.00% 50.00% 1,779.82
31-Dec-1994 1.072941 1000 1,072.94 0.00000000 0 1,072.94 1,785.93 4.00% 50.00% 1,778.73
31-Jan-1995 1.036496 1000 1,036.50 0.00000000 0 1,036.50 1,785.93 5.00% 40.00% 1,769.82
28-Feb-1995 1.049039 1000 1,049.04 0.00000000 0 1,049.04 1,785.93 5.00% 40.00% 1,769.20
31-Mar-1995 1.050723 1000 1,050.72 0.00000000 0 1,050.72 1,785.93 5.00% 40.00% 1,769.11
30-Apr-1995 1.056414 1000 1,056.41 0.00000000 0 1,056.41 1,785.93 5.00% 40.00% 1,768.83
31-May-1995 1.103127 1000 1,103.13 0.00000000 0 1,103.13 1,785.93 5.00% 40.00% 1,766.49
30-Jun-1995 1.130708 1000 1,130.71 0.00000000 0 1,130.71 1,785.93 5.00% 40.00% 1,765.11
31-Jul-1995 1.167122 1000 1,167.12 0.00000000 0 1,167.12 1,785.93 5.00% 40.00% 1,763.29
31-Aug-1995 1.192534 1000 1,192.53 0.00000000 0 1,192.53 1,785.93 5.00% 40.00% 1,762.02
30-Sep-1995 1.197165 1000 1,197.17 0.00000000 0 1,197.17 1,785.93 5.00% 40.00% 1,761.79
31-Oct-1995 1.159078 1000 1,159.08 0.00000000 0 1,159.08 1,785.93 5.00% 40.00% 1,763.69
30-Nov-1995 1.172582 1000 1,172.58 0.00000000 0 1,172.58 1,785.93 5.00% 40.00% 1,763.02
31-Dec-1995 1.206843 1000 1,206.84 0.00000000 0 1,206.84 1,785.93 5.00% 40.00% 1,761.31
31-Jan-1996 1.188557 1000 1,188.56 0.00000000 0 1,188.56 1,785.93 6.00% 30.00% 1,746.76
29-Feb-1996 1.213847 1000 1,213.85 0.00000000 0 1,213.85 1,785.93 6.00% 30.00% 1,745.24
31-Mar-1996 1.249908 1000 1,249.91 0.00000000 0 1,249.91 1,785.93 6.00% 30.00% 1,743.08
30-Apr-1996 1.296553 1000 1,296.55 0.00000000 0 1,296.55 1,785.93 6.00% 30.00% 1,740.28
31-May-1996 1.349261 1000 1,349.26 0.00000000 0 1,349.26 1,785.93 6.00% 30.00% 1,737.12
30-Jun-1996 1.303747 1000 1,303.75 0.00000000 0 1,303.75 1,785.93 6.00% 30.00% 1,739.85
31-Jul-1996 1.255016 1000 1,255.02 0.00000000 0 1,255.02 1,785.93 6.00% 30.00% 1,742.77
31-Aug-1996 1.308801 1000 1,308.80 0.00000000 0 1,308.80 1,785.93 6.00% 30.00% 1,739.55
30-Sep-1996 1.336875 1000 1,336.88 0.00000000 0 1,336.88 1,785.93 6.00% 30.00% 1,737.86
31-Oct-1996 1.348560 1000 1,348.56 0.00000000 0 1,348.56 1,785.93 6.00% 30.00% 1,737.16
30-Nov-1996 1.471393 1000 1,471.39 0.00000000 0 1,471.39 1,785.93 6.00% 30.00% 1,729.79
31-Dec-1996 1.496065 1000 1,496.07 0.00000000 0 1,496.07 1,785.93 6.00% 30.00% 1,728.31
31-Jan-1997 1.566476 1000 1,566.48 0.00000000 0 1,566.48 1,785.93 7.00% 20.00% 1,701.28
28-Feb-1997 1.565821 1000 1,565.82 0.00000000 0 1,565.82 1,785.93 7.00% 20.00% 1,701.32
31-Mar-1997 1.519343 1000 1,519.34 0.00000000 0 1,519.34 1,785.93 7.00% 20.00% 1,704.58
30-Apr-1997 1.519632 1000 1,519.63 0.00000000 0 1,519.63 1,785.93 7.00% 20.00% 1,704.56
31-May-1997 1.660591 1000 1,660.59 0.00000000 0 1,660.59 1,785.93 7.00% 20.00% 1,694.69
30-Jun-1997 1.757456 1000 1,757.46 0.00000000 0 1,757.46 1,785.93 7.00% 20.00% 1,687.91
31-Jul-1997 1.850701 1000 1,850.70 0.00000000 0 1,850.70 1,785.93 7.00% 20.00% 1,681.38
31-Aug-1997 1.894000 1000 1,894.00 0.00000000 0 1,894.00 1,785.93 7.00% 20.00% 1,678.35
30-Sep-1997 1.968681 1000 1,968.68 0.00000000 0 1,968.68 1,785.93 7.00% 20.00% 1,673.12
31-Oct-1997 1.873624 1000 1,873.62 0.00000000 0 1,873.62 1,785.93 7.00% 20.00% 1,679.78
30-Nov-1997 1.865980 1000 1,865.98 0.00000000 0 1,865.98 1,785.93 7.00% 20.00% 1,680.31
31-Dec-1997 1.851229 1000 1,851.23 0.00000000 0 1,851.23 1,785.93 7.00% 20.00% 1,681.35
31-Jan-1998 1.822072 1000 1,822.07 0.00000000 0 1,822.07 1,785.93 7.00% 10.00% 1,670.89
28-Feb-1998 1.961967 1000 1,961.97 0.00000000 0 1,961.97 1,785.93 7.00% 10.00% 1,661.09
31-Mar-1998 2.056263 1000 2,056.26 0.00000000 0 2,056.26 1,785.93 7.00% 10.00% 1,654.49
<CAPTION>
ERV of ERV of
Avg Ann Avg Ann $1,000 $1,000
Date n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C>
04-May-1993 5.66 10.78% 10.78% 1,785.93 1,785.93
31-May-1993 5.59 10.95% 10.95% 1,787.63 1,787.63
30-Jun-1993 5.51 11.09% 11.09% 1,784.52 1,784.52
31-Jul-1993 5.42 10.59% 10.59% 1,726.32 1,726.32
31-Aug-1993 5.34 10.17% 10.17% 1,676.73 1,676.73
30-Sep-1993 5.25 9.78% 9.78% 1,632.86 1,632.86
31-Oct-1993 5.17 9.99% 9.99% 1,636.16 1,636.16
30-Nov-1993 5.09 10.71% 10.71% 1,677.85 1,677.85
31-Dec-1993 5.00 10.02% 10.02% 1,612.65 1,612.65
31-Jan-1994 4.92 9.55% 9.67% 1,566.18 1,574.69
28-Feb-1994 4.84 9.80% 9.92% 1,572.11 1,580.50
31-Mar-1994 4.76 11.43% 11.52% 1,672.94 1,679.35
30-Apr-1994 4.67 11.67% 11.76% 1,674.83 1,681.21
31-May-1994 4.59 12.25% 12.34% 1,699.54 1,705.43
30-Jun-1994 4.51 13.13% 13.20% 1,743.47 1,748.50
31-Jul-1994 4.42 12.90% 12.98% 1,710.04 1,715.72
31-Aug-1994 4.34 12.10% 12.21% 1,640.81 1,647.86
30-Sep-1994 4.25 12.15% 12.27% 1,629.13 1,636.40
31-Oct-1994 4.17 13.21% 13.31% 1,677.40 1,683.72
30-Nov-1994 4.09 13.89% 13.99% 1,701.88 1,707.72
31-Dec-1994 4.00 13.46% 13.58% 1,657.81 1,664.52
31-Jan-1995 3.92 14.63% 14.90% 1,707.51 1,723.04
28-Feb-1995 3.84 14.58% 14.86% 1,686.49 1,702.44
31-Mar-1995 3.76 14.88% 15.17% 1,683.71 1,699.71
30-Apr-1995 3.67 15.06% 15.36% 1,674.37 1,690.56
31-May-1995 3.59 14.02% 14.37% 1,601.35 1,618.97
30-Jun-1995 3.51 13.54% 13.92% 1,561.07 1,579.48
31-Jul-1995 3.42 12.82% 13.24% 1,510.80 1,530.20
31-Aug-1995 3.34 12.41% 12.87% 1,477.54 1,497.59
30-Sep-1995 3.25 12.60% 13.08% 1,471.63 1,491.80
31-Oct-1995 3.17 14.16% 14.61% 1,521.64 1,540.82
30-Nov-1995 3.09 14.12% 14.60% 1,503.54 1,523.07
31-Dec-1995 3.00 13.42% 13.94% 1,459.43 1,479.84
31-Jan-1996 2.92 14.11% 14.98% 1,469.65 1,502.60
29-Feb-1996 2.84 13.65% 14.57% 1,437.78 1,471.30
31-Mar-1996 2.75 12.84% 13.84% 1,394.57 1,428.85
30-Apr-1996 2.67 11.65% 12.74% 1,342.24 1,377.44
31-May-1996 2.59 10.26% 11.45% 1,287.46 1,323.63
30-Jun-1996 2.50 12.21% 13.39% 1,334.50 1,369.84
31-Jul-1996 2.42 14.54% 15.70% 1,388.65 1,423.03
31-Aug-1996 2.33 12.96% 14.24% 1,329.12 1,364.55
30-Sep-1996 2.25 12.35% 13.72% 1,299.94 1,335.90
31-Oct-1996 2.17 12.39% 13.84% 1,288.16 1,324.32
30-Nov-1996 2.08 8.07% 9.74% 1,175.62 1,213.77
31-Dec-1996 2.00 7.48% 9.26% 1,155.24 1,193.75
31-Jan-1997 1.92 4.40% 7.09% 1,086.05 1,140.09
28-Feb-1997 1.84 4.62% 7.42% 1,086.54 1,140.57
31-Mar-1997 1.75 6.78% 9.66% 1,121.92 1,175.46
30-Apr-1997 1.67 7.11% 10.14% 1,121.69 1,175.24
31-May-1997 1.59 1.29% 4.69% 1,020.53 1,075.48
30-Jun-1997 1.50 -2.65% 1.07% 960.43 1,016.20
31-Jul-1997 1.42 -6.54% -2.48% 908.51 965.00
31-Aug-1997 1.33 -8.66% -4.31% 886.14 942.94
30-Sep-1997 1.25 -12.18% -7.49% 849.87 907.17
31-Oct-1997 1.17 -8.93% -4.02% 896.54 953.19
30-Nov-1997 1.08 -9.21% -3.96% 900.50 957.10
31-Dec-1997 1.00 -9.18% -3.53% 908.23 964.73
31-Jan-1998 0.92 -8.30% -1.98% 923.80 981.83
28-Feb-1998 0.84 -15.34% -8.97% 869.74 924.21
31-Mar-1998 0.75 -19.54% -13.15% 848.92 899.25
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER VA - SMALL CAP VALUE SUBACCOUNT
PERFORMANCE CALCULATIONS
--------------------------------------------
Surrender provisions: Withdrawal
Year Rate Available
--------------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 1.000000 2 7.00% 20%
Units purchased 1,000.000 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
6 0.00% 100%
7 0.00%
--------------------------------------------
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable Surrender W/D ERV
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge Available W/ Surr
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Apr-1998 2.066263 1000 2,066.26 0.00000000 0 2,066.26 1,785.93 7.00% 10.00% 1,653.79
31-May-1998 1.985344 1000 1,985.34 0.00000000 0 1,985.34 1,785.93 7.00% 10.00% 1,659.46
30-Jun-1998 1.944761 1000 1,944.76 0.00000000 0 1,944.76 1,785.93 7.00% 10.00% 1,662.30
<CAPTION>
ERV of ERV of
Avg Ann Avg Ann $1,000 $1,000
Date n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C>
30-Apr-1998 0.67 -19.96% -13.57% 861.17 906.77
31-May-1998 0.59 -16.41% -10.04% 900.21 939.82
30-Jun-1998 0.50 -14.52% -8.17% 923.93 957.96
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER VA - SMALL CAP VALUE SUBACCOUNT
PERFORMANCE CALCULATIONS
--------------------------------------------
Surrender provisions: Withdrawal
Year Rate Available
--------------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 1.000000 2 7.00% 20%
Units purchased 1,000.000 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
6 0.00% 100%
7 0.00%
--------------------------------------------
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable Surrender W/D ERV
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge Available W/ Surr
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Apr-1998 2.066263 1000 2,066.26 0.00000000 0 2,066.26 1,785.93 7.00% 10.00% 1,653.79
31-Jul-1998 1.776036 1000 1,776.04 0.00000000 0 1,776.04 1,785.93 7.00% 10.00% 1,674.11
31-Aug-1998 1.371670 1000 1,371.67 0.00000000 0 1,371.67 1,785.93 7.00% 10.00% 1,702.41
30-Sep-1998 1.400531 1000 1,400.53 0.00000000 0 1,400.53 1,785.93 7.00% 10.00% 1,700.39
31-Oct-1998 1.549596 1000 1,549.60 0.00000000 0 1,549.60 1,785.93 7.00% 10.00% 1,689.96
30-Nov-1998 1.695726 1000 1,695.73 0.00000000 0 1,695.73 1,785.93 7.00% 10.00% 1,679.73
31-Dec-1998 1.785929 1000 1,785.93 0.00000000 0 1,785.93 1,785.93 7.00% 10.00% 1,673.42
31-Dec-1998 1,785.93
<CAPTION>
ERV of ERV of
Avg Ann Avg Ann $1,000 $1,000
Date n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C>
30-Apr-1998 0.67 -19.96% -13.57% 861.17 906.77
31-Jul-1998 0.42 -5.74% 0.56% 975.53 1,002.33
31-Aug-1998 0.33 24.11% 30.20% 1,074.87 1,092.22
30-Sep-1998 0.25 21.41% 27.52% 1,050.12 1,063.19
31-Oct-1998 0.17 9.06% 15.25% 1,014.60 1,024.01
30-Nov-1998 0.08 -0.94% 5.32% 999.20 1,004.41
31-Dec-1998 0.00 -6.30% 0.00% 1,000.00 1,000.00
31-Dec-1998
</TABLE>
<PAGE>
ATLAS PORTFOLIO BUILDER - BALANCED GROWTH
<TABLE>
<CAPTION>
--------------------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 53M) Year Rate Available
--------------------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 1.000000 2 7.00% 20%
Units purchased 1,000.000 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
6 0.00% 100%
7 0.00%
--------------------------------------------------
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable Surrender W/D
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge Available
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Sep-1997 1.000000 1000 1,000.00 1,000.00 1,093.40 7.00% 20.00%
31-Oct-1997 0.969851 1000 969.85 0 0 969.85 1,093.40 7.00% 20.00%
30-Nov-1997 0.978794 1000 978.79 0 0 978.79 1,093.40 7.00% 20.00%
31-Dec-1997 0.983756 1000 983.76 0 0 983.76 1,093.40 7.00% 20.00%
31-Jan-1998 0.991059 1000 991.06 0 0 991.06 1,093.40 7.00% 10.00%
28-Feb-1998 1.036296 1000 1,036.30 0 0 1,036.30 1,093.40 7.00% 10.00%
31-Mar-1998 1.069711 1000 1,069.71 0 0 1,069.71 1,093.40 7.00% 10.00%
30-Apr-1998 1.081085 1000 1,081.09 0 0 1,081.09 1,093.40 7.00% 10.00%
31-May-1998 1.065213 1000 1,065.21 0 0 1,065.21 1,093.40 7.00% 10.00%
30-Jun-1998 1.074388 1000 1,074.39 0 0 1,074.39 1,093.40 7.00% 10.00%
</TABLE>
ERV of ERV of
ERV Avg Ann Avg Ann $1,000 $1,000
Date W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
30-Sep-1997 1,038.71 1.25 3.08% 7.39% 1,038.71 1,093.40
31-Oct-1997 1,040.82 1.17 6.24% 10.82% 1,073.17 1,127.39
30-Nov-1997 1,040.19 1.08 5.77% 10.74% 1,062.73 1,117.09
31-Dec-1997 1,039.84 1.00 5.70% 11.15% 1,057.01 1,111.45
31-Jan-1998 1,031.68 0.92 4.10% 10.33% 1,037.44 1,094.09
28-Feb-1998 1,028.51 0.84 -0.75% 5.51% 993.70 1,045.99
31-Mar-1998 1,026.17 0.75 -4.07% 2.21% 969.18 1,016.64
30-Apr-1998 1,025.38 0.67 -5.15% 1.14% 965.11 1,007.63
31-May-1998 1,026.49 0.59 -3.64% 2.65% 978.52 1,015.43
30-Jun-1998 1,025.84 0.50 -4.52% 1.77% 976.96 1,008.88
<PAGE>
ATLAS PORTFOLIO BUILDER - BALANCED GROWTH
<TABLE>
<CAPTION>
--------------------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 53M) Year Rate Available
--------------------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 1.000000 2 7.00% 20%
Units purchased 1,000.000 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
6 0.00% 100%
7 0.00%
--------------------------------------------------
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable Surrender W/D
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge Available
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1998 1.060568 1000 1,060.57 0 0 1,060.57 1,093.40 7.00% 10.00%
31-Aug-1998 0.944393 1000 944.39 0 0 944.39 1,093.40 7.00% 10.00%
30-Sep-1998 0.970451 1000 970.45 0 0 970.45 1,093.40 7.00% 10.00%
31-Oct-1998 1.004783 1000 1,004.78 0 0 1,004.78 1,093.40 7.00% 10.00%
30-Nov-1998 1.042119 1000 1,042.12 0 0 1,042.12 1,093.40 7.00% 10.00%
31-Dec-1998 1.093398 1000 1,093.40 0 0 1,093.40 1,093.40 7.00% 10.00%
31-Dec-1998 1,093.40
</TABLE>
ERV of ERV of
ERV Avg Ann Avg Ann $1,000 $1,000
Date W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
31-Jul-1998 1,026.81 0.42 -3.18% 3.10% 986.53 1,012.86
31-Aug-1998 1,034.94 0.33 9.59% 15.78% 1,031.08 1,050.19
30-Sep-1998 1,033.12 0.25 6.46% 12.67% 1,015.90 1,030.52
31-Oct-1998 1,030.72 0.17 2.58% 8.82% 1,004.27 1,014.23
30-Nov-1998 1,028.10 0.08 -1.34% 4.92% 998.85 1,004.09
31-Dec-1998 1,024.51 0.00 -6.30% 0.00% 1,000.00 1,000.00
<TABLE>
<CAPTION>
Average Average
Annual Annual
Beginning Ending Value Ending Value Return Return Total Return Total Return
Years Value W/ Surrender W/O Surrender W/ Surrender W/O Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 0.08 1,042.12 1,028.10 1,093.40 -1.34% 4.92% -1.34% 4.92%
3 Months 30-Sep-1998 0.25 970.45 1,033.12 1,093.40 6.46% 12.67% 6.46% 12.67%
6 Months 30-Jun-1998 0.50 1,074.39 1,033.12 1,093.40 6.46% 12.67% -3.84% 1.77%
9 Months 31-Mar-1998 0.75 1,069.71 1,026.17 1,093.40 -4.07% 2.21% -4.07% 2.21%
YTD 31-Dec-1997 1.00 983.76 1,039.84 1,093.40 5.70% 11.15% 5.70% 11.15%
One Year 31-Dec-1997 1.00 983.76 1,039.84 1,093.40 5.70% 11.15% 5.70% 11.15%
Two Years 31-Dec-1996 2.00 -- -- -- -- --
Three Years 31-Dec-1995 3.00 -- -- -- -- --
Four Years 31-Dec-1994 4.00 -- -- -- -- --
Five Years 31-Dec-1993 5.00 -- -- -- -- --
Ten Years 31-Dec-1988 10.00 -- -- -- -- --
30-Sep-1997 1.3 1,000.00 1,038.71 1,093.40 3.08% 7.39% 3.87% 9.34%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------
SURRENDER PROVISIONS: Withdrawal
ATLAS PORTFOLIO BUILDER VA- WRL GROWTH SUBACCOUNT Year Rate Available
-------------------------------------------
<S> <C> <C> <C> <C>
PERFORMANCE CALCULATIONS 1 7.00% 10%
(FUND# 63M) 2 7.00% 20%
INITIAL INVESTMENT $1,000.00 3 6.00% 30%
4 5.00% 40%
Annual M&E Rate 5 4.00% 50%
Contract Charge Factor 0.00% 6 0.00% 100%
Monthly M & E Rate 0 7 0.00%
8 0.00%
--------------------------------------------
<CAPTION>
Ending Free
Acct Value M & E M & E Adjusted Redeemable Surrender W/D
Yr AUV Units Bfore Charge Factor Deduction Acct Value Value Charge Available
- ----------- -------- ------- ------------ --------- --------- ---------- ---------- --------- ---------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
02-Oct-1986 3.689420 271.045 1,000.00 1,000.00 8,645.89 0.00% 100.00%
31-Oct-1986 3.774784 271.045 1,023.14 0.0000000 0.00 1,023.14 8,645.89 0.00% 100.00%
30-Nov-1986 3.757505 271.045 1,018.45 0.0000000 0.00 1,018.45 8,645.89 0.00% 100.00%
31-Dec-1986 3.729662 271.045 1,010.91 0.0000000 0.00 1,010.91 8,645.89 0.00% 100.00%
31-Jan-1987 4.076688 271.045 1,104.97 0.0000000 0.00 1,104.97 8,645.89 0.00% 100.00%
28-Feb-1987 4.381593 271.045 1,187.61 0.0000000 0.00 1,187.61 8,645.89 0.00% 100.00%
31-Mar-1987 4.490528 271.045 1,217.14 0.0000000 0.00 1,217.14 8,645.89 0.00% 100.00%
30-Apr-1987 4.512444 271.045 1,223.08 0.0000000 0.00 1,223.08 8,645.89 0.00% 100.00%
31-May-1987 4.601304 271.045 1,247.16 0.0000000 0.00 1,247.16 8,645.89 0.00% 100.00%
30-Jun-1987 4.767713 271.045 1,292.27 0.0000000 0.00 1,292.27 8,645.89 0.00% 100.00%
31-Jul-1987 5.023332 271.045 1,361.55 0.0000000 0.00 1,361.55 8,645.89 0.00% 100.00%
31-Aug-1987 5.241541 271.045 1,420.70 0.0000000 0.00 1,420.70 8,645.89 0.00% 100.00%
30-Sep-1987 5.234890 271.045 1,418.89 0.0000000 0.00 1,418.89 8,645.89 0.00% 100.00%
31-Oct-1987 4.125350 271.045 1,118.16 0.0000000 0.00 1,118.16 8,645.89 0.00% 100.00%
30-Nov-1987 3.951132 271.045 1,070.94 0.0000000 0.00 1,070.94 8,645.89 0.00% 100.00%
31-Dec-1987 4.078784 271.045 1,105.54 0.0000000 0.00 1,105.54 8,645.89 0.00% 100.00%
31-Jan-1988 4.118387 271.045 1,116.27 0.0000000 0.00 1,116.27 8,645.89 0.00% 100.00%
29-Feb-1988 4.221983 271.045 1,144.35 0.0000000 0.00 1,144.35 8,645.89 0.00% 100.00%
31-Mar-1988 4.210125 271.045 1,141.13 0.0000000 0.00 1,141.13 8,645.89 0.00% 100.00%
30-Apr-1988 4.281992 271.045 1,160.61 0.0000000 0.00 1,160.61 8,645.89 0.00% 100.00%
31-May-1988 4.294550 271.045 1,164.02 0.0000000 0.00 1,164.02 8,645.89 0.00% 100.00%
30-Jun-1988 4.490154 271.045 1,217.04 0.0000000 0.00 1,217.04 8,645.89 0.00% 100.00%
31-Jul-1988 4.464469 271.045 1,210.07 0.0000000 0.00 1,210.07 8,645.89 0.00% 100.00%
31-Aug-1988 4.395571 271.045 1,191.40 0.0000000 0.00 1,191.40 8,645.89 0.00% 100.00%
30-Sep-1988 4.683184 271.045 1,269.36 0.0000000 0.00 1,269.36 8,645.89 0.00% 100.00%
31-Oct-1988 4.697317 271.045 1,273.19 0.0000000 0.00 1,273.19 8,645.89 0.00% 100.00%
30-Nov-1988 4.606248 271.045 1,248.50 0.0000000 0.00 1,248.50 8,645.89 0.00% 100.00%
31-Dec-1988 4.771790 271.045 1,293.37 0.0000000 0.00 1,293.37 8,645.89 0.00% 100.00%
31-Jan-1989 5.070466 271.045 1,374.33 0.0000000 0.00 1,374.33 8,645.89 0.00% 100.00%
28-Feb-1989 5.029015 271.045 1,363.09 0.0000000 0.00 1,363.09 8,645.89 0.00% 100.00%
31-Mar-1989 5.319936 271.045 1,441.94 0.0000000 0.00 1,441.94 8,645.89 0.00% 100.00%
30-Apr-1989 5.672362 271.045 1,537.47 0.0000000 0.00 1,537.47 8,645.89 0.00% 100.00%
31-May-1989 6.158711 271.045 1,669.29 0.0000000 0.00 1,669.29 8,645.89 0.00% 100.00%
30-Jun-1989 6.000373 271.045 1,626.37 0.0000000 0.00 1,626.37 8,645.89 0.00% 100.00%
31-Jul-1989 6.599094 271.045 1,788.65 0.0000000 0.00 1,788.65 8,645.89 0.00% 100.00%
31-Aug-1989 7.040252 271.045 1,908.23 0.0000000 0.00 1,908.23 8,645.89 0.00% 100.00%
30-Sep-1989 7.275117 271.045 1,971.89 0.0000000 0.00 1,971.89 8,645.89 0.00% 100.00%
31-Oct-1989 6.936428 271.045 1,880.09 0.0000000 0.00 1,880.09 8,645.89 0.00% 100.00%
30-Nov-1989 6.988241 271.045 1,894.13 0.0000000 0.00 1,894.13 8,645.89 0.00% 100.00%
31-Dec-1989 6.921689 271.045 1,876.09 0.0000000 0.00 1,876.09 8,645.89 0.00% 100.00%
31-Jan-1990 6.312648 271.045 1,711.01 0.0000000 0.00 1,711.01 8,645.89 0.00% 100.00%
28-Feb-1990 6.467158 271.045 1,752.89 0.0000000 0.00 1,752.89 8,645.89 0.00% 100.00%
31-Mar-1990 6.721282 271.045 1,821.77 0.0000000 0.00 1,821.77 8,645.89 0.00% 100.00%
30-Apr-1990 6.774505 271.045 1,836.20 0.0000000 0.00 1,836.20 8,645.89 0.00% 100.00%
31-May-1990 7.484539 271.045 2,028.65 0.0000000 0.00 2,028.65 8,645.89 0.00% 100.00%
30-Jun-1990 7.656536 271.045 2,075.27 0.0000000 0.00 2,075.27 8,645.89 0.00% 100.00%
31-Jul-1990 7.399894 271.045 2,005.71 0.0000000 0.00 2,005.71 8,645.89 0.00% 100.00%
31-Aug-1990 6.650200 271.045 1,802.51 0.0000000 0.00 1,802.51 8,645.89 0.00% 100.00%
30-Sep-1990 6.361776 271.045 1,724.33 0.0000000 0.00 1,724.33 8,645.89 0.00% 100.00%
31-Oct-1990 6.186733 271.045 1,676.89 0.0000000 0.00 1,676.89 8,645.89 0.00% 100.00%
30-Nov-1990 6.502239 271.045 1,762.40 0.0000000 0.00 1,762.40 8,645.89 0.00% 100.00%
31-Dec-1990 6.810267 271.045 1,845.89 0.0000000 0.00 1,845.89 8,645.89 0.00% 100.00%
31-Jan-1991 7.224467 271.045 1,958.16 0.0000000 0.00 1,958.16 8,645.89 0.00% 100.00%
<CAPTION>
ERV of ERV of
ERV Avg Ann Avg Ann $1,000 $1,000
Yr W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
- ----------- -------- ----- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
02-Oct-1986 8,645.89 12.25 19.25% 19.25% 8,645.89 8,645.89
31-Oct-1986 8,645.89 12.18 19.16% 19.16% 8,450.37 8,450.37
30-Nov-1986 8,645.89 12.09 19.35% 19.35% 8,489.23 8,489.23
31-Dec-1986 8,645.89 12.01 19.57% 19.57% 8,552.61 8,552.61
31-Jan-1987 8,645.89 11.92 18.83% 18.83% 7,824.57 7,824.57
28-Feb-1987 8,645.89 11.85 18.24% 18.24% 7,280.08 7,280.08
31-Mar-1987 8,645.89 11.76 18.14% 18.14% 7,103.47 7,103.47
30-Apr-1987 8,645.89 11.68 18.23% 18.23% 7,068.97 7,068.97
31-May-1987 8,645.89 11.59 18.17% 18.17% 6,932.46 6,932.46
30-Jun-1987 8,645.89 11.51 17.95% 17.95% 6,690.49 6,690.49
31-Jul-1987 8,645.89 11.43 17.56% 17.56% 6,350.04 6,350.04
31-Aug-1987 8,645.89 11.34 17.26% 17.26% 6,085.68 6,085.68
30-Sep-1987 8,645.89 11.26 17.41% 17.41% 6,093.41 6,093.41
31-Oct-1987 8,645.89 11.18 20.08% 20.08% 7,732.27 7,732.27
30-Nov-1987 8,645.89 11.09 20.72% 20.72% 8,073.21 8,073.21
31-Dec-1987 8,645.89 11.01 20.54% 20.54% 7,820.55 7,820.55
31-Jan-1988 8,645.89 10.92 20.61% 20.61% 7,745.35 7,745.35
29-Feb-1988 8,645.89 10.84 20.50% 20.50% 7,555.30 7,555.30
31-Mar-1988 8,645.89 10.76 20.71% 20.71% 7,576.58 7,576.58
30-Apr-1988 8,645.89 10.68 20.69% 20.69% 7,449.41 7,449.41
31-May-1988 8,645.89 10.59 20.84% 20.84% 7,427.63 7,427.63
30-Jun-1988 8,645.89 10.51 20.51% 20.51% 7,104.06 7,104.06
31-Jul-1988 8,645.89 10.42 20.76% 20.76% 7,144.93 7,144.93
31-Aug-1988 8,645.89 10.34 21.13% 21.13% 7,256.93 7,256.93
30-Sep-1988 8,645.89 10.26 20.57% 20.57% 6,811.25 6,811.25
31-Oct-1988 8,645.89 10.17 20.72% 20.72% 6,790.76 6,790.76
30-Nov-1988 8,645.89 10.09 21.14% 21.14% 6,925.01 6,925.01
31-Dec-1988 8,645.89 10.01 20.91% 20.91% 6,684.77 6,684.77
31-Jan-1989 8,645.89 9.92 20.37% 20.37% 6,291.01 6,291.01
28-Feb-1989 8,645.89 9.84 20.64% 20.64% 6,342.86 6,342.86
31-Mar-1989 8,645.89 9.76 20.15% 20.15% 5,996.00 5,996.00
30-Apr-1989 8,645.89 9.68 19.54% 19.54% 5,623.47 5,623.47
31-May-1989 8,645.89 9.59 18.70% 18.70% 5,179.38 5,179.38
30-Jun-1989 8,645.89 9.51 19.21% 19.21% 5,316.06 5,316.06
31-Jul-1989 8,645.89 9.42 18.20% 18.20% 4,833.74 4,833.74
31-Aug-1989 8,645.89 9.34 17.56% 17.56% 4,530.85 4,530.85
30-Sep-1989 8,645.89 9.26 17.31% 17.31% 4,384.58 4,384.58
31-Oct-1989 8,645.89 9.17 18.10% 18.10% 4,598.67 4,598.67
30-Nov-1989 8,645.89 9.09 18.18% 18.18% 4,564.57 4,564.57
31-Dec-1989 8,645.89 9.01 18.49% 18.49% 4,608.46 4,608.46
31-Jan-1990 8,645.89 8.92 19.91% 19.91% 5,053.08 5,053.08
28-Feb-1990 8,645.89 8.84 19.77% 19.77% 4,932.36 4,932.36
31-Mar-1990 8,645.89 8.76 19.46% 19.46% 4,745.87 4,745.87
30-Apr-1990 8,645.89 8.68 19.55% 19.55% 4,708.58 4,708.58
31-May-1990 8,645.89 8.59 18.38% 18.38% 4,261.90 4,261.90
30-Jun-1990 8,645.89 8.51 18.26% 18.26% 4,166.16 4,166.16
31-Jul-1990 8,645.89 8.42 18.94% 18.94% 4,310.65 4,310.65
31-Aug-1990 8,645.89 8.34 20.68% 20.68% 4,796.60 4,796.60
30-Sep-1990 8,645.89 8.26 21.56% 21.56% 5,014.06 5,014.06
31-Oct-1990 8,645.89 8.17 22.22% 22.22% 5,155.93 5,155.93
30-Nov-1990 8,645.89 8.09 21.72% 21.72% 4,905.75 4,905.75
31-Dec-1990 8,645.89 8.01 21.27% 21.27% 4,683.86 4,683.86
31-Jan-1991 8,645.89 7.92 20.62% 20.62% 4,415.32 4,415.32
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------
SURRENDER PROVISIONS: Withdrawal
ATLAS PORTFOLIO BUILDER VA- WRL GROWTH SUBACCOUNT Year Rate Available
--------------------------------------------
<S> <C> <C> <C> <C>
PERFORMANCE CALCULATIONS 1 7.00% 10%
(FUND# 63M) 2 7.00% 20%
INITIAL INVESTMENT $1,000.00 3 6.00% 30%
4 5.00% 40%
Annual M&E Rate 5 4.00% 50%
Contract Charge Factor 0.00% 6 0.00% 100%
Monthly M & E Rate 0 7 0.00%
8 0.00%
--------------------------------------------
<CAPTION>
Ending Free
Acct Value M & E M & E Adjusted Redeemable Surrender W/D
Yr AUV Units Bfore Charge Factor Deduction Acct Value Value Charge Available
- ----------- -------- ------- ------------ --------- --------- ---------- ---------- --------- ---------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
28-Feb-1991 7.813726 271.045 2,117.87 0.0000000 0.00 2,117.87 8,645.89 0.00% 100.00%
31-Mar-1991 8.199982 271.045 2,222.57 0.0000000 0.00 2,222.57 8,645.89 0.00% 100.00%
30-Apr-1991 8.222133 271.045 2,228.57 0.0000000 0.00 2,228.57 8,645.89 0.00% 100.00%
31-May-1991 8.661515 271.045 2,347.66 0.0000000 0.00 2,347.66 8,645.89 0.00% 100.00%
30-Jun-1991 8.217426 271.045 2,227.29 0.0000000 0.00 2,227.29 8,645.89 0.00% 100.00%
31-Jul-1991 8.837646 271.045 2,395.40 0.0000000 0.00 2,395.40 8,645.89 0.00% 100.00%
31-Aug-1991 9.303640 271.045 2,521.71 0.0000000 0.00 2,521.71 8,645.89 0.00% 100.00%
30-Sep-1991 9.302346 271.045 2,521.36 0.0000000 0.00 2,521.36 8,645.89 0.00% 100.00%
31-Oct-1991 9.720214 271.045 2,634.62 0.0000000 0.00 2,634.62 8,645.89 0.00% 100.00%
30-Nov-1991 9.312129 271.045 2,524.01 0.0000000 0.00 2,524.01 8,645.89 0.00% 100.00%
31-Dec-1991 10.736689 271.045 2,910.13 0.0000000 0.00 2,910.13 8,645.89 0.00% 100.00%
31-Jan-1992 10.453002 271.045 2,833.24 0.0000000 0.00 2,833.24 8,645.89 0.00% 100.00%
29-Feb-1992 10.361576 271.045 2,808.46 0.0000000 0.00 2,808.46 8,645.89 0.00% 100.00%
31-Mar-1992 10.000904 271.045 2,710.70 0.0000000 0.00 2,710.70 8,645.89 0.00% 100.00%
30-Apr-1992 9.930987 271.045 2,691.75 0.0000000 0.00 2,691.75 8,645.89 0.00% 100.00%
31-May-1992 10.151554 271.045 2,751.53 0.0000000 0.00 2,751.53 8,645.89 0.00% 100.00%
30-Jun-1992 9.922199 271.045 2,689.37 0.0000000 0.00 2,689.37 8,645.89 0.00% 100.00%
31-Jul-1992 10.086175 271.045 2,733.81 0.0000000 0.00 2,733.81 8,645.89 0.00% 100.00%
31-Aug-1992 9.814948 271.045 2,660.30 0.0000000 0.00 2,660.30 8,645.89 0.00% 100.00%
30-Sep-1992 9.885926 271.045 2,679.53 0.0000000 0.00 2,679.53 8,645.89 0.00% 100.00%
31-Oct-1992 10.034078 271.045 2,719.69 0.0000000 0.00 2,719.69 8,645.89 0.00% 100.00%
30-Nov-1992 10.618438 271.045 2,878.08 0.0000000 0.00 2,878.08 8,645.89 0.00% 100.00%
31-Dec-1992 10.835188 271.045 2,936.83 0.0000000 0.00 2,936.83 8,645.89 0.00% 100.00%
31-Jan-1993 10.995575 271.045 2,980.30 0.0000000 0.00 2,980.30 8,645.89 0.00% 100.00%
28-Feb-1993 10.531493 271.045 2,854.51 0.0000000 0.00 2,854.51 8,645.89 0.00% 100.00%
31-Mar-1993 10.791786 271.045 2,925.06 0.0000000 0.00 2,925.06 8,645.89 0.00% 100.00%
30-Apr-1993 10.333016 271.045 2,800.72 0.0000000 0.00 2,800.72 8,645.89 0.00% 100.00%
31-May-1993 10.677012 271.045 2,893.95 0.0000000 0.00 2,893.95 8,645.89 0.00% 100.00%
30-Jun-1993 10.863170 271.045 2,944.41 0.0000000 0.00 2,944.41 8,645.89 0.00% 100.00%
31-Jul-1993 10.820813 271.045 2,932.93 0.0000000 0.00 2,932.93 8,645.89 0.00% 100.00%
31-Aug-1993 11.040572 271.045 2,992.50 0.0000000 0.00 2,992.50 8,645.89 0.00% 100.00%
30-Sep-1993 11.251874 271.045 3,049.77 0.0000000 0.00 3,049.77 8,645.89 0.00% 100.00%
31-Oct-1993 11.225166 271.045 3,042.53 0.0000000 0.00 3,042.53 8,645.89 0.00% 100.00%
30-Nov-1993 10.868806 271.045 2,945.94 0.0000000 0.00 2,945.94 8,645.89 0.00% 100.00%
31-Dec-1993 11.110879 271.045 3,011.55 0.0000000 0.00 3,011.55 8,645.89 0.00% 100.00%
31-Jan-1994 11.623853 271.045 3,150.59 0.0000000 0.00 3,150.59 8,645.89 4.00% 50.00%
28-Feb-1994 11.321891 271.045 3,068.75 0.0000000 0.00 3,068.75 8,645.89 4.00% 50.00%
31-Mar-1994 10.536248 271.045 2,855.80 0.0000000 0.00 2,855.80 8,645.89 4.00% 50.00%
30-Apr-1994 10.397753 271.045 2,818.26 0.0000000 0.00 2,818.26 8,645.89 4.00% 50.00%
31-May-1994 10.273549 271.045 2,784.60 0.0000000 0.00 2,784.60 8,645.89 4.00% 50.00%
30-Jun-1994 9.873226 271.045 2,676.09 0.0000000 0.00 2,676.09 8,645.89 4.00% 50.00%
</TABLE>
ERV of ERV of
ERV Avg Ann Avg Ann $1,000 $1,000
Yr W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
- ----------- -------- ----- ------- -------- -------- --------
28-Feb-1991 8,645.89 7.84 19.64% 19.64% 4,082.35 4,082.35
31-Mar-1991 8,645.89 7.76 19.13% 19.13% 3,890.05 3,890.05
30-Apr-1991 8,645.89 7.68 19.32% 19.32% 3,879.57 3,879.57
31-May-1991 8,645.89 7.59 18.73% 18.73% 3,682.77 3,682.77
30-Jun-1991 8,645.89 7.51 19.79% 19.79% 3,881.79 3,881.79
31-Jul-1991 8,645.89 7.42 18.87% 18.87% 3,609.37 3,609.37
31-Aug-1991 8,645.89 7.34 18.28% 18.28% 3,428.59 3,428.59
30-Sep-1991 8,645.89 7.26 18.51% 18.51% 3,429.06 3,429.06
31-Oct-1991 8,645.89 7.17 18.02% 18.02% 3,281.65 3,281.65
30-Nov-1991 8,645.89 7.09 18.96% 18.96% 3,425.46 3,425.46
31-Dec-1991 8,645.89 7.01 16.82% 16.82% 2,970.97 2,970.97
31-Jan-1992 8,645.89 6.92 17.49% 17.49% 3,051.60 3,051.60
29-Feb-1992 8,645.89 6.84 17.86% 17.86% 3,078.52 3,078.52
31-Mar-1992 8,645.89 6.76 18.73% 18.73% 3,189.55 3,189.55
30-Apr-1992 8,645.89 6.67 19.11% 19.11% 3,212.00 3,212.00
31-May-1992 8,645.89 6.59 18.98% 18.98% 3,142.21 3,142.21
30-Jun-1992 8,645.89 6.51 19.66% 19.66% 3,214.85 3,214.85
31-Jul-1992 8,645.89 6.42 19.64% 19.64% 3,162.58 3,162.58
31-Aug-1992 8,645.89 6.34 20.44% 20.44% 3,249.97 3,249.97
30-Sep-1992 8,645.89 6.25 20.60% 20.60% 3,226.64 3,226.64
31-Oct-1992 8,645.89 6.17 20.62% 20.62% 3,179.00 3,179.00
30-Nov-1992 8,645.89 6.09 19.80% 19.80% 3,004.05 3,004.05
31-Dec-1992 8,645.89 6.00 19.71% 19.71% 2,943.96 2,943.96
31-Jan-1993 8,645.89 5.92 19.72% 19.72% 2,901.02 2,901.02
28-Feb-1993 8,645.89 5.84 20.89% 20.89% 3,028.85 3,028.85
31-Mar-1993 8,645.89 5.76 20.72% 20.72% 2,955.80 2,955.80
30-Apr-1993 8,645.89 5.67 21.98% 21.98% 3,087.03 3,087.03
31-May-1993 8,645.89 5.59 21.63% 21.63% 2,987.57 2,987.57
30-Jun-1993 8,645.89 5.51 21.60% 21.60% 2,936.37 2,936.37
31-Jul-1993 8,645.89 5.42 22.07% 22.07% 2,947.87 2,947.87
31-Aug-1993 8,645.89 5.34 21.99% 21.99% 2,889.19 2,889.19
30-Sep-1993 8,645.89 5.25 21.93% 21.93% 2,834.94 2,834.94
31-Oct-1993 8,645.89 5.17 22.39% 22.39% 2,841.68 2,841.68
30-Nov-1993 8,645.89 5.09 23.57% 23.57% 2,934.85 2,934.85
31-Dec-1993 8,645.89 5.00 23.47% 23.47% 2,870.91 2,870.91
31-Jan-1994 8,645.89 4.92 22.79% 22.79% 2,744.21 2,744.21
28-Feb-1994 8,645.89 4.84 23.86% 23.86% 2,817.40 2,817.40
31-Mar-1994 8,645.89 4.76 26.23% 26.23% 3,027.49 3,027.49
30-Apr-1994 8,645.89 4.67 27.10% 27.10% 3,067.81 3,067.81
31-May-1994 8,645.89 4.59 28.00% 28.00% 3,104.90 3,104.90
30-Jun-1994 8,645.89 4.51 29.72% 29.72% 3,230.79 3,230.79
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------
SURRENDER PROVISIONS: Withdrawal
ATLAS PORTFOLIO BUILDER VA- WRL GROWTH SUBACCOUNT Year Rate Available
--------------------------------------------
<S> <C> <C> <C> <C>
PERFORMANCE CALCULATIONS 1 7.00% 10%
(FUND# 63M) 2 7.00% 20%
INITIAL INVESTMENT $1,000.00 3 6.00% 30%
4 5.00% 40%
Annual M&E Rate 5 4.00% 50%
Contract Charge Factor 0.00% 6 0.00% 100%
Monthly M & E Rate 0 7 0.00%
8 0.00%
--------------------------------------------
<CAPTION>
Ending Free
Acct Value M & E M & E Adjusted Redeemable Surrender W/D
Yr AUV Units Bfore Charge Factor Deduction Acct Value Value Charge Available
- ----------- -------- ------- ------------ --------- --------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1994 10.141562 271.045 2,748.82 0.0000000 0.00 2,748.82 8,645.89 4.00% 50.00%
31-Aug-1994 10.501038 271.045 2,846.26 0.0000000 0.00 2,846.26 8,645.89 4.00% 50.00%
30-Sep-1994 10.184497 271.045 2,760.46 0.0000000 0.00 2,760.46 8,645.89 4.00% 50.00%
31-Oct-1994 10.553590 271.045 2,860.50 0.0000000 0.00 2,860.50 8,645.89 4.00% 50.00%
30-Nov-1994 10.095207 271.045 2,736.26 0.0000000 0.00 2,736.26 8,645.89 4.00% 50.00%
31-Dec-1994 10.045021 271.045 2,722.66 0.0000000 0.00 2,722.66 8,645.89 4.00% 50.00%
31-Jan-1995 10.091746 271.045 2,735.32 0.0000000 0.00 2,735.32 8,645.89 5.00% 40.00%
28-Feb-1995 10.390112 271.045 2,816.19 0.0000000 0.00 2,816.19 8,645.89 5.00% 40.00%
31-Mar-1995 10.662343 271.045 2,889.98 0.0000000 0.00 2,889.98 8,645.89 5.00% 40.00%
30-Apr-1995 11.063047 271.045 2,998.59 0.0000000 0.00 2,998.59 8,645.89 5.00% 40.00%
31-May-1995 11.521338 271.045 3,122.80 0.0000000 0.00 3,122.80 8,645.89 5.00% 40.00%
30-Jun-1995 12.331907 271.045 3,342.51 0.0000000 0.00 3,342.51 8,645.89 5.00% 40.00%
31-Jul-1995 13.299656 271.045 3,604.81 0.0000000 0.00 3,604.81 8,645.89 5.00% 40.00%
31-Aug-1995 13.203330 271.045 3,578.70 0.0000000 0.00 3,578.70 8,645.89 5.00% 40.00%
30-Sep-1995 13.929523 271.045 3,775.53 0.0000000 0.00 3,775.53 8,645.89 5.00% 40.00%
31-Oct-1995 14.121762 271.045 3,827.64 0.0000000 0.00 3,827.64 8,645.89 5.00% 40.00%
30-Nov-1995 14.626125 271.045 3,964.34 0.0000000 0.00 3,964.34 8,645.89 5.00% 40.00%
31-Dec-1995 14.579061 271.045 3,951.59 0.0000000 0.00 3,951.59 8,645.89 5.00% 40.00%
31-Jan-1996 14.894001 271.045 4,036.95 0.0000000 0.00 4,036.95 8,645.89 6.00% 30.00%
29-Feb-1996 15.403280 271.045 4,174.99 0.0000000 0.00 4,174.99 8,645.89 6.00% 30.00%
31-Mar-1996 15.244495 271.045 4,131.95 0.0000000 0.00 4,131.95 8,645.89 6.00% 30.00%
30-Apr-1996 16.099852 271.045 4,363.79 0.0000000 0.00 4,363.79 8,645.89 6.00% 30.00%
31-May-1996 16.883052 271.045 4,576.07 0.0000000 0.00 4,576.07 8,645.89 6.00% 30.00%
30-Jun-1996 16.688483 271.045 4,523.34 0.0000000 0.00 4,523.34 8,645.89 6.00% 30.00%
31-Jul-1996 15.275168 271.045 4,140.26 0.0000000 0.00 4,140.26 8,645.89 6.00% 30.00%
31-Aug-1996 15.837389 271.045 4,292.65 0.0000000 0.00 4,292.65 8,645.89 6.00% 30.00%
30-Sep-1996 16.913956 271.045 4,584.45 0.0000000 0.00 4,584.45 8,645.89 6.00% 30.00%
31-Oct-1996 16.741401 271.045 4,537.68 0.0000000 0.00 4,537.68 8,645.89 6.00% 30.00%
30-Nov-1996 17.611283 271.045 4,773.46 0.0000000 0.00 4,773.46 8,645.89 6.00% 30.00%
31-Dec-1996 16.960873 271.045 4,597.17 0.0000000 0.00 4,597.17 8,645.89 6.00% 30.00%
31-Jan-1997 17.788664 271.045 4,821.53 0.0000000 0.00 4,821.53 8,645.89 7.00% 20.00%
28-Feb-1997 17.254140 271.045 4,676.65 0.0000000 0.00 4,676.65 8,645.89 7.00% 20.00%
31-Mar-1997 16.176167 271.045 4,384.47 0.0000000 0.00 4,384.47 8,645.89 7.00% 20.00%
30-Apr-1997 17.099621 271.045 4,634.77 0.0000000 0.00 4,634.77 8,645.89 7.00% 20.00%
31-May-1997 18.043660 271.045 4,890.65 0.0000000 0.00 4,890.65 8,645.89 7.00% 20.00%
30-Jun-1997 18.784084 271.045 5,091.34 0.0000000 0.00 5,091.34 8,645.89 7.00% 20.00%
31-Jul-1997 20.679547 271.045 5,605.09 0.0000000 0.00 5,605.09 8,645.89 7.00% 20.00%
31-Aug-1997 19.133968 271.045 5,186.17 0.0000000 0.00 5,186.17 8,645.89 7.00% 20.00%
30-Sep-1997 20.501671 271.045 5,556.88 0.0000000 0.00 5,556.88 8,645.89 7.00% 20.00%
31-Oct-1997 19.338168 271.045 5,241.52 0.0000000 0.00 5,241.52 8,645.89 7.00% 20.00%
30-Nov-1997 19.607665 271.045 5,314.57 0.0000000 0.00 5,314.57 8,645.89 7.00% 20.00%
31-Dec-1997 19.665157 271.045 5,330.15 0.0000000 0.00 5,330.15 8,645.89 7.00% 20.00%
31-Jan-1998 20.442064 271.045 5,540.73 0.0000000 0.00 5,540.73 8,645.89 7.00% 10.00%
28-Feb-1998 22.183264 271.045 6,012.67 0.0000000 0.00 6,012.67 8,645.89 7.00% 10.00%
31-Mar-1998 23.457684 271.045 6,358.10 0.0000000 0.00 6,358.10 8,645.89 7.00% 10.00%
30-Apr-1998 24.865625 271.045 6,739.71 0.0000000 0.00 6,739.71 8,645.89 7.00% 10.00%
31-May-1998 24.107475 271.045 6,534.22 0.0000000 0.00 6,534.22 8,645.89 7.00% 10.00%
30-Jun-1998 26.567708 271.045 7,201.05 0.0000000 0.00 7,201.05 8,645.89 7.00% 10.00%
31-Jul-1998 27.287984 271.045 7,396.28 0.0000000 0.00 7,396.28 8,645.89 7.00% 10.00%
31-Aug-1998 22.643440 271.045 6,137.40 0.0000000 0.00 6,137.40 8,645.89 7.00% 10.00%
30-Sep-1998 24.866333 271.045 6,739.90 0.0000000 0.00 6,739.90 8,645.89 7.00% 10.00%
31-Oct-1998 25.765464 271.045 6,983.61 0.0000000 0.00 6,983.61 8,645.89 7.00% 10.00%
30-Nov-1998 27.424108 271.045 7,433.18 0.0000000 0.00 7,433.18 8,645.89 7.00% 10.00%
</TABLE>
ERV of ERV of
ERV Avg Ann Avg Ann $1,000 $1,000
Yr W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
- ----------- -------- ----- ------- -------- -------- --------
31-Jul-1994 8,645.89 4.42 29.58% 29.58% 3,145.31 3,145.31
31-Aug-1994 8,645.89 4.34 29.20% 29.20% 3,037.64 3,037.64
30-Sep-1994 8,645.89 4.25 30.78% 30.78% 3,132.05 3,132.05
31-Oct-1994 8,645.89 4.17 30.38% 30.38% 3,022.51 3,022.51
30-Nov-1994 8,645.89 4.09 32.51% 32.51% 3,159.75 3,159.75
31-Dec-1994 8,645.89 4.00 33.47% 33.47% 3,175.54 3,175.54
31-Jan-1995 8,645.89 3.92 34.14% 34.14% 3,160.83 3,160.83
28-Feb-1995 8,645.89 3.84 33.91% 33.91% 3,070.07 3,070.07
31-Mar-1995 8,645.89 3.76 33.88% 33.88% 2,991.68 2,991.68
30-Apr-1995 8,645.89 3.67 33.41% 33.41% 2,883.32 2,883.32
31-May-1995 8,645.89 3.59 32.81% 32.81% 2,768.63 2,768.63
30-Jun-1995 8,645.89 3.51 31.13% 31.13% 2,586.65 2,586.65
31-Jul-1995 8,638.57 3.42 29.10% 29.13% 2,396.40 2,398.43
31-Aug-1995 8,639.88 3.34 30.23% 30.26% 2,414.25 2,415.93
30-Sep-1995 8,630.04 3.25 28.92% 28.99% 2,285.78 2,289.98
31-Oct-1995 8,627.43 3.17 29.22% 29.31% 2,253.98 2,258.81
30-Nov-1995 8,620.59 3.09 28.61% 28.73% 2,174.53 2,180.91
31-Dec-1995 8,621.23 3.00 29.67% 29.79% 2,181.71 2,187.96
31-Jan-1996 8,559.30 2.92 29.38% 29.82% 2,120.24 2,141.69
29-Feb-1996 8,551.02 2.84 28.74% 29.24% 2,048.16 2,070.88
31-Mar-1996 8,553.60 2.75 30.25% 30.75% 2,070.11 2,092.45
30-Apr-1996 8,539.69 2.67 28.57% 29.17% 1,956.94 1,981.28
31-May-1996 8,526.96 2.59 27.21% 27.89% 1,863.38 1,889.37
30-Jun-1996 8,530.12 2.50 28.83% 29.53% 1,885.80 1,911.40
31-Jul-1996 8,553.10 2.42 34.97% 35.58% 2,065.84 2,088.25
31-Aug-1996 8,543.96 2.33 34.30% 34.98% 1,990.37 2,014.12
30-Sep-1996 8,526.45 2.25 31.72% 32.54% 1,859.86 1,885.92
31-Oct-1996 8,529.26 2.17 33.80% 34.65% 1,879.65 1,905.36
30-Nov-1996 8,515.11 2.08 32.00% 32.96% 1,783.85 1,811.24
31-Dec-1996 8,525.69 2.00 36.18% 37.14% 1,854.55 1,880.70
31-Jan-1997 8,429.43 1.92 33.87% 35.66% 1,748.29 1,793.18
28-Feb-1997 8,439.57 1.84 37.87% 39.69% 1,804.62 1,848.74
31-Mar-1997 8,460.02 1.75 45.48% 47.29% 1,929.54 1,971.93
30-Apr-1997 8,442.50 1.67 43.17% 45.22% 1,821.56 1,865.44
31-May-1997 8,424.59 1.59 40.89% 43.21% 1,722.59 1,767.84
30-Jun-1997 8,410.54 1.50 39.61% 42.20% 1,651.93 1,698.16
31-Jul-1997 8,374.58 1.42 32.70% 35.72% 1,494.10 1,542.51
31-Aug-1997 8,403.90 1.33 43.59% 46.68% 1,620.44 1,667.11
30-Sep-1997 8,377.96 1.25 38.81% 42.34% 1,507.67 1,555.89
31-Oct-1997 8,400.03 1.17 49.79% 53.54% 1,602.59 1,649.50
30-Nov-1997 8,394.92 1.08 52.41% 56.60% 1,579.61 1,626.83
31-Dec-1997 8,393.83 1.00 57.48% 62.21% 1,574.78 1,622.07
31-Jan-1998 8,318.56 0.92 50.13% 56.04% 1,450.42 1,502.56
28-Feb-1998 8,285.53 0.84 37.80% 43.79% 1,308.41 1,355.95
31-Mar-1998 8,261.35 0.75 29.93% 35.98% 1,218.10 1,260.58
30-Apr-1998 8,234.64 0.67 22.18% 28.28% 1,143.93 1,181.97
31-May-1998 8,249.02 0.59 26.24% 32.32% 1,146.41 1,178.43
30-Jun-1998 8,202.34 0.50 13.90% 20.06% 1,067.83 1,096.56
31-Jul-1998 8,188.68 0.42 10.71% 16.90% 1,043.58 1,067.63
31-Aug-1998 8,276.80 0.33 34.86% 40.87% 1,105.12 1,121.36
30-Sep-1998 8,234.62 0.25 22.18% 28.28% 1,051.78 1,064.78
31-Oct-1998 8,217.56 0.17 17.67% 23.80% 1,027.57 1,036.33
30-Nov-1998 8,186.09 0.08 10.13% 16.31% 1,008.23 1,012.92
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------
SURRENDER PROVISIONS: Withdrawal
ATLAS PORTFOLIO BUILDER VA- WRL GROWTH SUBACCOUNT Year Rate Available
--------------------------------------------
<S> <C> <C> <C> <C>
PERFORMANCE CALCULATIONS 1 7.00% 10%
(FUND# 63M) 2 7.00% 20%
INITIAL INVESTMENT $1,000.00 3 6.00% 30%
4 5.00% 40%
Annual M&E Rate 5 4.00% 50%
Contract Charge Factor 0.00% 6 0.00% 100%
Monthly M & E Rate 0 7 0.00%
8 0.00%
--------------------------------------------
<CAPTION>
Ending Free
Acct Value M & E M & E Adjusted Redeemable Surrender W/D
Yr AUV Units Bfore Charge Factor Deduction Acct Value Value Charge Available
- ----------- -------- ------- ------------ --------- --------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
31-Dec-1998 31.898334 271.045 8,645.89 0.0000000 0.00 8,645.89 8,645.89 7.00% 10.00%
31-Dec-1998 8,645.89
</TABLE>
ERV of ERV of
ERV Avg Ann Avg Ann $1,000 $1,000
Yr W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
- ----------- -------- ----- ------- -------- -------- --------
31-Dec-1998 8,101.20 0.00 -6.30% 0.00% 1,000.00 1,000.00
<TABLE>
<CAPTION>
Average Average
Annual Annual
Beginning Ending Value Ending Value Return Return Total Return Total Return
Years Value W/ Surrender W/O Surrender W/ Surrender W/O Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 0.08 7,433.18 8,186.09 8,645.89 10.13% 16.31% 10.13% 16.31%
3 Months 30-Sep-1998 0.25 6,739.90 8,234.62 8,645.89 22.18% 28.28% 22.18% 28.28%
6 Months 30-Jun-1998 0.50 7,201.05 8,202.34 8,645.89 13.90% 20.06% 13.90% 20.06%
9 Months 31-Mar-1998 0.75 6,358.10 8,261.35 8,645.89 29.93% 35.98% 29.93% 35.98%
YTD 31-Dec-1997 1.00 5,330.15 8,393.83 8,645.89 57.48% 62.21% 57.48% 62.21%
One Year 31-Dec-1997 1.0 5,330.15 8,393.83 8,645.89 57.48% 62.21% 57.48% 62.21%
Two Years 31-Dec-1996 2.0 4,597.17 8,525.69 8,645.89 36.18% 37.14% 85.46% 88.07%
Three Years 31-Dec-1995 3.0 3,951.59 8,621.23 8,645.89 29.70% 29.82% 118.17% 118.80%
Four Years 31-Dec-1994 4.0 2,722.66 8,645.89 8,645.89 33.49% 33.49% 217.55% 217.55%
Five Years 31-Dec-1993 5.0 3,011.55 8,645.89 8,645.89 23.48% 23.48% 187.09% 187.09%
Ten Years 31-Dec-1988 10.0 1,293.37 8,645.89 8,645.89 20.92% 20.92% 568.48% 568.48%
Inc to Date 02-Oct-1986 12.3 1,000.00 8,645.89 8,645.89 19.25% 19.25% 764.59% 764.59%
30-Sep-1997 1.3 5,556.88 8,377.96 8,645.89 38.81% 42.34% 50.77% 55.59%
</TABLE>
<PAGE>
ATLAS PORTFOLIO BUILDER VA - CAPITAL APPRECIATION SUBACCOUNT GROWTH
<TABLE>
<CAPTION>
---------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 55M) Year Rate Available
---------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.456657 2 7.00% 20%
Units purchased 2,189.826 3 6.00% 30%
4 5.00% 40%
M & E Factor (Annual Rate) 0.00% 5 4.00% 50%
M & E Factor (Monthly Rate) 0 6 0.00% 100%
7 0.00%
---------------------------------------
<CAPTION>
Ending
Actual Acct Value M & E M & E Adjusted Redeemable Surrender W/D
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge Available
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
05-Apr-1993 0.456657 2189.826091 1,000.00 1,000.00 2,839.46 0.00% 100.00%
30-Apr-1993 0.457586 2189.826091 1,002.03 0.00000000 0 1,002.03 2,839.46 0.00% 100.00%
31-May-1993 0.464350 2189.826091 1,016.85 0.00000000 0 1,016.85 2,839.46 0.00% 100.00%
30-Jun-1993 0.461621 2189.826091 1,010.87 0.00000000 0 1,010.87 2,839.46 0.00% 100.00%
31-Jul-1993 0.453438 2189.826091 992.95 0.00000000 0 992.95 2,839.46 0.00% 100.00%
31-Aug-1993 0.466726 2189.826091 1,022.05 0.00000000 0 1,022.05 2,839.46 0.00% 100.00%
30-Sep-1993 0.464003 2189.826091 1,016.08 0.00000000 0 1,016.08 2,839.46 0.00% 100.00%
31-Oct-1993 0.477247 2189.826091 1,045.09 0.00000000 0 1,045.09 2,839.46 0.00% 100.00%
30-Nov-1993 0.475241 2189.826091 1,040.69 0.00000000 0 1,040.69 2,839.46 0.00% 100.00%
31-Dec-1993 0.482364 2189.826091 1,056.29 0.00000000 0 1,056.29 2,839.46 0.00% 100.00%
31-Jan-1994 0.494523 2189.826091 1,082.92 0.00000000 0 1,082.92 2,839.46 4.00% 50.00%
28-Feb-1994 0.481965 2189.826091 1,055.42 0.00000000 0 1,055.42 2,839.46 4.00% 50.00%
31-Mar-1994 0.463270 2189.826091 1,014.48 0.00000000 0 1,014.48 2,839.46 4.00% 50.00%
30-Apr-1994 0.469249 2189.826091 1,027.57 0.00000000 0 1,027.57 2,839.46 4.00% 50.00%
31-May-1994 0.473405 2189.826091 1,036.67 0.00000000 0 1,036.67 2,839.46 4.00% 50.00%
30-Jun-1994 0.465263 2189.826091 1,018.85 0.00000000 0 1,018.85 2,839.46 4.00% 50.00%
31-Jul-1994 0.478437 2189.826091 1,047.69 0.00000000 0 1,047.69 2,839.46 4.00% 50.00%
31-Aug-1994 0.494103 2189.826091 1,082.00 0.00000000 0 1,082.00 2,839.46 4.00% 50.00%
30-Sep-1994 0.487872 2189.826091 1,068.35 0.00000000 0 1,068.35 2,839.46 4.00% 50.00%
31-Oct-1994 0.499176 2189.826091 1,093.11 0.00000000 0 1,093.11 2,839.46 4.00% 50.00%
30-Nov-1994 0.483859 2189.826091 1,059.57 0.00000000 0 1,059.57 2,839.46 4.00% 50.00%
31-Dec-1994 0.490127 2189.826091 1,073.29 0.00000000 0 1,073.29 2,839.46 4.00% 50.00%
31-Jan-1995 0.495390 2189.826091 1,084.82 0.00000000 0 1,084.82 2,839.46 5.00% 40.00%
28-Feb-1995 0.511932 2189.826091 1,121.04 0.00000000 0 1,121.04 2,839.46 5.00% 40.00%
31-Mar-1995 0.525160 2189.826091 1,150.01 0.00000000 0 1,150.01 2,839.46 5.00% 40.00%
30-Apr-1995 0.536541 2189.826091 1,174.93 0.00000000 0 1,174.93 2,839.46 5.00% 40.00%
31-May-1995 0.559511 2189.826091 1,225.23 0.00000000 0 1,225.23 2,839.46 5.00% 40.00%
30-Jun-1995 0.570099 2189.826091 1,248.42 0.00000000 0 1,248.42 2,839.46 5.00% 40.00%
31-Jul-1995 0.582184 2189.826091 1,274.88 0.00000000 0 1,274.88 2,839.46 5.00% 40.00%
31-Aug-1995 0.577886 2189.826091 1,265.47 0.00000000 0 1,265.47 2,839.46 5.00% 40.00%
30-Sep-1995 0.611545 2189.826091 1,339.18 0.00000000 0 1,339.18 2,839.46 5.00% 40.00%
31-Oct-1995 0.609027 2189.826091 1,333.66 0.00000000 0 1,333.66 2,839.46 5.00% 40.00%
30-Nov-1995 0.636081 2189.826091 1,392.91 0.00000000 0 1,392.91 2,839.46 5.00% 40.00%
31-Dec-1995 0.645535 2189.826091 1,413.61 0.00000000 0 1,413.61 2,839.46 5.00% 40.00%
31-Jan-1996 0.671026 2189.826091 1,469.43 0.00000000 0 1,469.43 2,839.46 6.00% 30.00%
29-Feb-1996 0.678254 2189.826091 1,485.26 0.00000000 0 1,485.26 2,839.46 6.00% 30.00%
31-Mar-1996 0.681099 2189.826091 1,491.49 0.00000000 0 1,491.49 2,839.46 6.00% 30.00%
30-Apr-1996 0.683937 2189.826091 1,497.70 0.00000000 0 1,497.70 2,839.46 6.00% 30.00%
31-May-1996 0.704909 2189.826091 1,543.63 0.00000000 0 1,543.63 2,839.46 6.00% 30.00%
30-Jun-1996 0.713219 2189.826091 1,561.83 0.00000000 0 1,561.83 2,839.46 6.00% 30.00%
31-Jul-1996 0.693923 2189.826091 1,519.57 0.00000000 0 1,519.57 2,839.46 6.00% 30.00%
31-Aug-1996 0.703238 2189.826091 1,539.97 0.00000000 0 1,539.97 2,839.46 6.00% 30.00%
30-Sep-1996 0.741065 2189.826091 1,622.80 0.00000000 0 1,622.80 2,839.46 6.00% 30.00%
31-Oct-1996 0.760405 2189.826091 1,665.16 0.00000000 0 1,665.16 2,839.46 6.00% 30.00%
30-Nov-1996 0.814656 2189.826091 1,783.95 0.00000000 0 1,783.95 2,839.46 6.00% 30.00%
31-Dec-1996 0.799443 2189.826091 1,750.64 0.00000000 0 1,750.64 2,839.46 6.00% 30.00%
31-Jan-1997 0.852340 2189.826091 1,866.48 0.00000000 0 1,866.48 2,839.46 7.00% 20.00%
28-Feb-1997 0.858975 2189.826091 1,881.01 0.00000000 0 1,881.01 2,839.46 7.00% 20.00%
31-Mar-1997 0.821902 2189.826091 1,799.82 0.00000000 0 1,799.82 2,839.46 7.00% 20.00%
30-Apr-1997 0.873875 2189.826091 1,913.64 0.00000000 0 1,913.64 2,839.46 7.00% 20.00%
31-May-1997 0.918849 2189.826091 2,012.12 0.00000000 0 2,012.12 2,839.46 7.00% 20.00%
</TABLE>
ERV of ERV of
ERV Avg Ann Avg Ann $1,000 $1,000
Date W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
05-Apr-1993 2,839.46 5.74 19.93% 19.93% 2,839.46 2,839.46
30-Apr-1993 2,839.46 5.67 20.15% 20.15% 2,833.70 2,833.70
31-May-1993 2,839.46 5.59 20.17% 20.17% 2,792.42 2,792.42
30-Jun-1993 2,839.46 5.51 20.63% 20.63% 2,808.92 2,808.92
31-Jul-1993 2,839.46 5.42 21.38% 21.38% 2,859.62 2,859.62
31-Aug-1993 2,839.46 5.34 21.10% 21.10% 2,778.20 2,778.20
30-Sep-1993 2,839.46 5.25 21.60% 21.60% 2,794.51 2,794.51
31-Oct-1993 2,839.46 5.17 21.33% 21.33% 2,716.96 2,716.96
30-Nov-1993 2,839.46 5.09 21.81% 21.81% 2,728.43 2,728.43
31-Dec-1993 2,839.46 5.00 21.85% 21.85% 2,688.14 2,688.14
31-Jan-1994 2,839.46 4.92 21.65% 21.65% 2,622.04 2,622.04
28-Feb-1994 2,839.46 4.84 22.68% 22.68% 2,690.36 2,690.36
31-Mar-1994 2,839.46 4.76 24.16% 24.16% 2,798.93 2,798.93
30-Apr-1994 2,839.46 4.67 24.29% 24.29% 2,763.27 2,763.27
31-May-1994 2,839.46 4.59 24.55% 24.55% 2,739.01 2,739.01
30-Jun-1994 2,839.46 4.51 25.54% 25.54% 2,786.94 2,786.94
31-Jul-1994 2,839.46 4.42 25.29% 25.29% 2,710.20 2,710.20
31-Aug-1994 2,839.46 4.34 24.91% 24.91% 2,624.27 2,624.27
30-Sep-1994 2,839.46 4.25 25.83% 25.83% 2,657.79 2,657.79
31-Oct-1994 2,839.46 4.17 25.72% 25.72% 2,597.60 2,597.60
30-Nov-1994 2,839.46 4.09 27.27% 27.27% 2,679.83 2,679.83
31-Dec-1994 2,839.46 4.00 27.51% 27.51% 2,645.56 2,645.56
31-Jan-1995 2,839.46 3.92 27.84% 27.84% 2,617.45 2,617.45
28-Feb-1995 2,839.46 3.84 27.37% 27.37% 2,532.87 2,532.87
31-Mar-1995 2,838.75 3.76 27.20% 27.20% 2,468.45 2,469.07
30-Apr-1995 2,837.50 3.67 27.12% 27.15% 2,415.03 2,416.70
31-May-1995 2,834.99 3.59 26.33% 26.39% 2,313.83 2,317.48
30-Jun-1995 2,833.83 3.51 26.33% 26.41% 2,269.93 2,274.44
31-Jul-1995 2,832.50 3.42 26.28% 26.37% 2,221.78 2,227.23
31-Aug-1995 2,832.97 3.34 27.32% 27.40% 2,238.67 2,243.80
30-Sep-1995 2,829.29 3.25 25.84% 25.97% 2,112.70 2,120.30
31-Oct-1995 2,829.56 3.17 26.78% 26.92% 2,121.65 2,129.07
30-Nov-1995 2,826.60 3.09 25.76% 25.94% 2,029.28 2,038.51
31-Dec-1995 2,825.57 3.00 25.94% 26.15% 1,998.83 2,008.66
31-Jan-1996 2,802.40 2.92 24.77% 25.33% 1,907.13 1,932.35
29-Feb-1996 2,801.45 2.84 25.05% 25.65% 1,886.17 1,911.76
31-Mar-1996 2,801.08 2.75 25.72% 26.34% 1,878.04 1,903.77
30-Apr-1996 2,800.71 2.67 26.41% 27.06% 1,870.00 1,895.87
31-May-1996 2,797.95 2.59 25.86% 26.57% 1,812.58 1,839.47
30-Jun-1996 2,796.86 2.50 26.20% 26.96% 1,790.76 1,818.04
31-Jul-1996 2,799.39 2.42 28.73% 29.49% 1,842.23 1,868.59
31-Aug-1996 2,798.17 2.33 29.16% 29.97% 1,817.03 1,843.84
30-Sep-1996 2,793.20 2.25 27.27% 28.20% 1,721.22 1,749.72
31-Oct-1996 2,790.66 2.17 26.91% 27.92% 1,675.92 1,705.22
30-Nov-1996 2,783.53 2.08 23.79% 24.97% 1,560.31 1,591.66
31-Dec-1996 2,785.53 2.00 26.14% 27.36% 1,591.15 1,621.95
31-Jan-1997 2,748.56 1.92 22.40% 24.49% 1,472.59 1,521.29
28-Feb-1997 2,747.54 1.84 22.89% 25.11% 1,460.68 1,509.54
31-Mar-1997 2,753.22 1.75 27.43% 29.70% 1,529.72 1,577.63
30-Apr-1997 2,745.26 1.67 24.10% 26.63% 1,434.58 1,483.80
31-May-1997 2,738.36 1.59 21.44% 24.25% 1,360.93 1,411.18
<PAGE>
ATLAS PORTFOLIO BUILDER VA - CAPITAL APPRECIATION SUBACCOUNT
<TABLE>
<CAPTION>
---------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 55M) Year Rate Available
---------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.456657 2 7.00% 20%
Units purchased 2,189.826 3 6.00% 30%
4 5.00% 40%
M & E Factor (Annual Rate) 0.00% 5 4.00% 50%
M & E Factor (Monthly Rate) 0 6 0.00% 100%
7 0.00%
---------------------------------------
<CAPTION>
Ending
Actual Acct Value M & E M & E Adjusted Redeemable Surrender W/D
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge Available
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Jun-1997 0.959017 2189.826091 2,100.08 0.00000000 0 2,100.08 2,839.46 7.00% 20.00%
31-Jul-1997 1.025831 2189.826091 2,246.39 0.00000000 0 2,246.39 2,839.46 7.00% 20.00%
31-Aug-1997 0.953526 2189.826091 2,088.06 0.00000000 0 2,088.06 2,839.46 7.00% 20.00%
30-Sep-1997 1.000000 2189.826091 2,189.83 0.00000000 0 2,189.83 2,839.46 7.00% 20.00%
31-Oct-1997 0.959248 2189.826091 2,100.59 0.00000000 0 2,100.59 2,839.46 7.00% 20.00%
30-Nov-1997 0.993438 2189.826091 2,175.46 0.00000000 0 2,175.46 2,839.46 7.00% 20.00%
31-Dec-1997 1.009698 2189.826091 2,211.06 0.00000000 0 2,211.06 2,839.46 7.00% 20.00%
31-Jan-1998 1.033855 2189.826091 2,263.96 0.00000000 0 2,263.96 2,839.46 7.00% 10.00%
28-Feb-1998 1.115451 2189.826091 2,442.64 0.00000000 0 2,442.64 2,839.46 7.00% 10.00%
31-Mar-1998 1.160727 2189.826091 2,541.79 0.00000000 0 2,541.79 2,839.46 7.00% 10.00%
30-Apr-1998 1.172016 2189.826091 2,566.51 0.00000000 0 2,566.51 2,839.46 7.00% 10.00%
31-May-1998 1.165320 2189.826091 2,551.85 0.00000000 0 2,551.85 2,839.46 7.00% 10.00%
30-Jun-1998 1.210643 2189.826091 2,651.10 0.00000000 0 2,651.10 2,839.46 7.00% 10.00%
31-Jul-1998 1.199877 2189.826091 2,627.52 0.00000000 0 2,627.52 2,839.46 7.00% 10.00%
31-Aug-1998 1.025192 2189.826091 2,244.99 0.00000000 0 2,244.99 2,839.46 7.00% 10.00%
30-Sep-1998 1.077417 2189.826091 2,359.36 0.00000000 0 2,359.36 2,839.46 7.00% 10.00%
31-Oct-1998 1.168169 2189.826091 2,558.09 0.00000000 0 2,558.09 2,839.46 7.00% 10.00%
30-Nov-1998 1.244009 2189.826091 2,724.16 0.00000000 0 2,724.16 2,839.46 7.00% 10.00%
31-Dec-1998 1.296659 2189.826091 2,839.46 0.00000000 0 2,839.46 2,839.46 7.00% 10.00%
31-Dec-1998 2,839.46
</TABLE>
ERV of ERV of
ERV Avg Ann Avg Ann $1,000 $1,000
Date W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
30-Jun-1997 2,732.20 1.50 19.12% 22.21% 1,301.00 1,352.07
31-Jul-1997 2,721.96 1.42 14.49% 17.95% 1,211.70 1,264.01
31-Aug-1997 2,733.05 1.33 22.35% 25.91% 1,308.89 1,359.86
30-Sep-1997 2,725.92 1.25 19.11% 23.06% 1,244.81 1,296.66
31-Oct-1997 2,732.17 1.17 25.26% 29.46% 1,300.67 1,351.75
30-Nov-1997 2,726.93 1.08 23.15% 27.83% 1,253.50 1,305.22
31-Dec-1997 2,724.44 1.00 23.22% 28.42% 1,232.18 1,284.20
31-Jan-1998 2,700.86 0.92 19.30% 25.42% 1,175.23 1,230.30
28-Feb-1998 2,688.35 0.84 10.06% 16.25% 1,083.67 1,134.51
31-Mar-1998 2,681.41 0.75 5.49% 11.71% 1,041.11 1,087.02
30-Apr-1998 2,679.68 0.67 4.41% 10.63% 1,029.39 1,070.19
31-May-1998 2,680.70 0.59 5.05% 11.27% 1,029.30 1,064.62
30-Jun-1998 2,673.76 0.50 0.85% 7.10% 1,004.30 1,035.21
31-Jul-1998 2,675.41 0.42 1.82% 8.07% 1,007.60 1,033.05
31-Aug-1998 2,702.18 0.33 20.36% 26.48% 1,063.91 1,081.68
30-Sep-1998 2,694.18 0.25 14.19% 20.35% 1,034.01 1,047.79
31-Oct-1998 2,680.27 0.17 4.78% 11.00% 1,007.83 1,017.59
30-Nov-1998 2,668.64 0.08 -2.04% 4.23% 998.25 1,003.53
31-Dec-1998 2,660.57 0.00 -6.30% 0.00% 1,000.00 1,000.00
<TABLE>
<CAPTION>
Average Average
Annual Annual
Beginning Ending Value Ending Value Return Return Total Return Total Return
Years Value W/ Surrender W/O Surrender W/ Surrender W/O Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 0.08 2,724.16 2,668.64 2,839.46 -2.04% 4.23% -2.04% 4.23%
3 Months 30-Sep-1998 0.25 2,359.36 2,694.18 2,839.46 14.19% 20.35% 14.19% 20.35%
6 Months 30-Jun-1998 0.50 2,651.10 2,673.76 2,839.46 0.85% 7.10% 0.85% 7.10%
9 Months 31-Mar-1998 0.75 2,541.79 2,681.41 2,839.46 5.49% 11.71% 5.49% 11.71%
YTD 31-Dec-1997 1.00 2,211.06 2,724.44 2,839.46 23.22% 28.42% 23.22% 28.42%
One Year 31-Dec-1997 1.00 2,211.06 2,724.44 2,839.46 23.22% 28.42% 23.22% 28.42%
Two Years 31-Dec-1996 2.00 1,750.64 2,785.53 2,839.46 26.14% 27.36% 59.11% 62.20%
Three Years 31-Dec-1995 3.00 1,413.61 2,825.57 2,839.46 25.97% 26.17% 99.88% 100.87%
Four Years 31-Dec-1994 4.00 1,073.29 2,839.46 2,839.46 27.54% 27.54% 164.56% 164.56%
Five Years 31-Dec-1993 5.00 1,056.29 2,839.46 2,839.46 21.87% 21.87% 168.81% 168.81%
Ten Years 31-Dec-1988 10.00 -- -- -- -- --
Inc to Date 05-Apr-1993 5.6 1,000.00 2,839.46 2,839.46 20.58% 20.58% 183.95% 183.95%
30-Sep-1997 1.3 2,189.83 2,725.92 2,839.46 19.11% 23.06% 24.48% 29.67%
</TABLE>
<PAGE>
ATLAS PORTFOLIO BUILDER VA - DISCIPLINED STOCK SUBACCOUNT
---------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 56M) Year Rate Available
---------------------------------------
Initial investment $1,000 1 7.00% 10%
AUV 0.667515 2 7.00% 20%
Units purchased 1,498.093 3 6.00% 30%
4 5.00% 40%
M & E Factor (Annual Rate) 0.00% 5 4.00% 50%
M & E Factor (Monthly Rate) 0 6 0.00% 100%
7 0.00%
---------------------------------------
<TABLE>
<CAPTION>
Ending
Actual Acct Value M & E M & E Adjusted Redeemable Surrender W/D
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge Available
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Apr-1996 0.667515 1498.092651 1,000.00 1,000.00 1,909.38 6.00% 30.00%
31-May-1996 0.697175 1498.092651 1,044.43 0.00000000 0 1,044.43 1,909.38 6.00% 30.00%
30-Jun-1996 0.700096 1498.092651 1,048.81 0.00000000 0 1,048.81 1,909.38 6.00% 30.00%
31-Jul-1996 0.667844 1498.092651 1,000.49 0.00000000 0 1,000.49 1,909.38 6.00% 30.00%
31-Aug-1996 0.681965 1498.092651 1,021.65 0.00000000 0 1,021.65 1,909.38 6.00% 30.00%
30-Sep-1996 0.718377 1498.092651 1,076.20 0.00000000 0 1,076.20 1,909.38 6.00% 30.00%
31-Oct-1996 0.741963 1498.092651 1,111.53 0.00000000 0 1,111.53 1,909.38 6.00% 30.00%
30-Nov-1996 0.798906 1498.092651 1,196.83 0.00000000 0 1,196.83 1,909.38 6.00% 30.00%
31-Dec-1996 0.786214 1498.092651 1,177.82 0.00000000 0 1,177.82 1,909.38 6.00% 30.00%
31-Jan-1997 0.830481 1498.092651 1,244.14 0.00000000 0 1,244.14 1,909.38 7.00% 20.00%
28-Feb-1997 0.830575 1498.092651 1,244.28 0.00000000 0 1,244.28 1,909.38 7.00% 20.00%
31-Mar-1997 0.788819 1498.092651 1,181.72 0.00000000 0 1,181.72 1,909.38 7.00% 20.00%
30-Apr-1997 0.828297 1498.092651 1,240.87 0.00000000 0 1,240.87 1,909.38 7.00% 20.00%
31-May-1997 0.878302 1498.092651 1,315.78 0.00000000 0 1,315.78 1,909.38 7.00% 20.00%
30-Jun-1997 0.916526 1498.092651 1,373.04 0.00000000 0 1,373.04 1,909.38 7.00% 20.00%
31-Jul-1997 0.997573 1498.092651 1,494.46 0.00000000 0 1,494.46 1,909.38 7.00% 20.00%
31-Aug-1997 0.949308 1498.092651 1,422.15 0.00000000 0 1,422.15 1,909.38 7.00% 20.00%
30-Sep-1997 1.000000 1498.092651 1,498.09 0.00000000 0 1,498.09 1,909.38 7.00% 20.00%
31-Oct-1997 0.965591 1498.092651 1,446.54 0.00000000 0 1,446.54 1,909.38 7.00% 20.00%
30-Nov-1997 1.008289 1498.092651 1,510.51 0.00000000 0 1,510.51 1,909.38 7.00% 20.00%
31-Dec-1997 1.019838 1498.092651 1,527.81 0.00000000 0 1,527.81 1,909.38 7.00% 20.00%
31-Jan-1998 1.029809 1498.092651 1,542.75 0.00000000 0 1,542.75 1,909.38 7.00% 10.00%
28-Feb-1998 1.105453 1498.092651 1,656.07 0.00000000 0 1,656.07 1,909.38 7.00% 10.00%
31-Mar-1998 1.164088 1498.092651 1,743.91 0.00000000 0 1,743.91 1,909.38 7.00% 10.00%
30-Apr-1998 1.177823 1498.092651 1,764.49 0.00000000 0 1,764.49 1,909.38 7.00% 10.00%
31-May-1998 1.150324 1498.092651 1,723.29 0.00000000 0 1,723.29 1,909.38 7.00% 10.00%
30-Jun-1998 1.192898 1498.092651 1,787.07 0.00000000 0 1,787.07 1,909.38 7.00% 10.00%
31-Jul-1998 1.166472 1498.092651 1,747.48 0.00000000 0 1,747.48 1,909.38 7.00% 10.00%
31-Aug-1998 0.984599 1498.092651 1,475.02 0.00000000 0 1,475.02 1,909.38 7.00% 10.00%
30-Sep-1998 1.042282 1498.092651 1,561.44 0.00000000 0 1,561.44 1,909.38 7.00% 10.00%
31-Oct-1998 1.126976 1498.092651 1,688.31 0.00000000 0 1,688.31 1,909.38 7.00% 10.00%
30-Nov-1998 1.189844 1498.092651 1,782.50 0.00000000 0 1,782.50 1,909.38 7.00% 10.00%
31-Dec-1998 1.274542 1498.092651 1,909.38 0.00000000 0 1,909.38 1,909.38 7.00% 10.00%
31-Dec-1998 1,909.38
47.5735%
-147.5735%
<CAPTION>
ERV of ERV of
ERV Avg Ann Avg Ann $1,000 $1,000
Date W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C>
30-Apr-1996 1,883.75 2.67 26.75% 27.40% 1,883.75 1,909.38
31-May-1996 1,881.08 2.59 25.55% 26.27% 1,801.06 1,828.15
30-Jun-1996 1,880.82 2.50 26.27% 27.03% 1,793.29 1,820.52
31-Jul-1996 1,883.72 2.42 29.90% 30.62% 1,882.79 1,908.44
31-Aug-1996 1,882.45 2.33 29.93% 30.72% 1,842.57 1,868.93
30-Sep-1996 1,879.18 2.25 28.08% 28.99% 1,746.13 1,774.20
31-Oct-1996 1,877.06 2.17 27.35% 28.36% 1,688.72 1,717.80
30-Nov-1996 1,871.94 2.08 23.93% 25.11% 1,564.08 1,595.36
31-Dec-1996 1,873.08 2.00 26.11% 27.32% 1,590.29 1,621.11
31-Jan-1997 1,849.02 1.92 22.99% 25.07% 1,486.19 1,534.70
28-Feb-1997 1,849.01 1.84 24.04% 26.23% 1,486.01 1,534.53
31-Mar-1997 1,853.39 1.75 29.26% 31.47% 1,568.38 1,615.76
30-Apr-1997 1,849.25 1.67 26.96% 29.42% 1,490.29 1,538.75
31-May-1997 1,844.01 1.59 23.71% 26.46% 1,401.46 1,451.14
30-Jun-1997 1,840.00 1.50 21.49% 24.51% 1,340.09 1,390.62
31-Jul-1997 1,831.50 1.42 15.41% 18.84% 1,225.53 1,277.64
31-Aug-1997 1,836.56 1.33 21.13% 24.71% 1,291.40 1,342.60
30-Sep-1997 1,831.25 1.25 17.40% 21.38% 1,222.39 1,274.54
31-Oct-1997 1,834.86 1.17 22.60% 26.85% 1,268.44 1,319.96
30-Nov-1997 1,830.38 1.08 19.37% 24.11% 1,211.76 1,264.06
31-Dec-1997 1,829.17 1.00 19.72% 24.97% 1,197.25 1,249.75
31-Jan-1998 1,814.76 0.92 17.63% 23.76% 1,160.20 1,215.44
28-Feb-1998 1,806.82 0.84 9.10% 15.30% 1,075.77 1,126.74
31-Mar-1998 1,800.67 0.75 3.25% 9.49% 1,024.43 1,070.68
30-Apr-1998 1,799.23 0.67 1.97% 8.21% 1,013.18 1,054.40
31-May-1998 1,802.12 0.59 4.57% 10.80% 1,026.57 1,061.97
30-Jun-1998 1,797.65 0.50 0.59% 6.84% 1,002.98 1,033.94
31-Jul-1998 1,800.42 0.42 3.03% 9.26% 1,012.59 1,037.84
31-Aug-1998 1,819.50 0.33 23.35% 29.45% 1,072.67 1,090.10
30-Sep-1998 1,813.45 0.25 16.14% 22.28% 1,038.43 1,052.01
31-Oct-1998 1,804.57 0.17 6.89% 13.09% 1,011.19 1,020.78
30-Nov-1998 1,797.97 0.08 0.87% 7.12% 1,000.73 1,005.86
31-Dec-1998 1,789.09 0.00 -6.30% 0.00% 1,000.00 1,000.00
31-Dec-1998
</TABLE>
<TABLE>
<CAPTION>
Average Average
Annual Annual
Beginning Ending Value Ending Value Return Return Total Return Total Return
Years Value W/ Surrender W/O Surrender W/ Surrender W/O Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 0.08 1,782.50 1,797.97 1,909.38 0.87% 7.12% 0.87% 7.12%
3 Months 30-Sep-1998 0.25 1,561.44 1,813.45 1,909.38 16.14% 22.28% 16.14% 22.28%
6 Months 30-Jun-1998 0.50 1,787.07 1,797.65 1,909.38 0.59% 6.84% 0.59% 6.84%
9 Months 31-Mar-1998 0.75 1,743.91 1,800.67 1,909.38 3.25% 9.49% 3.25% 9.49%
YTD 31-Dec-1997 1.00 1,527.81 1,829.17 1,909.38 19.72% 24.97% 19.72% 24.97%
One Year 31-Dec-1997 1.00 1,527.81 1,829.17 1,909.38 19.72% 24.97% 19.72% 24.97%
Two Years 31-Dec-1996 2.00 1,177.82 1,873.08 1,909.38 26.11% 27.32% 59.03% 62.11%
Three Years 31-Dec-1995 3.00 -- -- -- -- --
Four Years 31-Dec-1994 4.00 -- -- -- -- --
Five Years 31-Dec-1993 5.00 -- -- -- -- --
Ten years 31-Dec-1988 10.00 -- -- -- -- --
Inc to Date 30-Apr-1996 2.7 1,000.00 1,883.75 1,909.38 26.75% 27.40% 88.38% 90.94%
30-Sep-1997 1.25 1,498.09 1,831.25 1,909.38 17.40% 21.38% 22.24% 27.45%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER - GLOBAL SUBACCOUNT
-----------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 62M) Year Rate Available
-----------------------------------------
<S> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.399363 2 7.00% 20%
Units purchased 2,503.990 3 6.00% 30%
4 5.00% 40%
5 4.00% 50%
M&E factor - Annual 0.0000% 6 0.00% 100%
M&E factor - Monthly 0.0000% 7 0.00%
Contract charge factor 0.00% -----------------------------------------
WRL model has 1.40% M & E 8 0.00%
<CAPTION>
Contract Contract Ending
Acct Value Charge Charge Adjusted Redeemable Surrender W/D ERV
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge Available W/ Surr
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
03-Dec-1992 0.399363 2504 1,000.00 1,000.00 3,067.28 0.00% 100.00% 3,067.28
31-Dec-1992 0.405387 2504 1,015.08 0.00000 0 1,015.08 3,067.28 0.00% 100.00% 3,067.28
31-Jan-1993 0.406589 2504 1,018.09 0.00000 0 1,018.09 3,067.28 0.00% 100.00% 3,067.28
28-Feb-1993 0.403587 2504 1,010.58 0.00000 0 1,010.58 3,067.28 0.00% 100.00% 3,067.28
31-Mar-1993 0.426847 2504 1,068.82 0.00000 0 1,068.82 3,067.28 0.00% 100.00% 3,067.28
30-Apr-1993 0.419812 2504 1,051.21 0.00000 0 1,051.21 3,067.28 0.00% 100.00% 3,067.28
31-May-1993 0.427550 2504 1,070.58 0.00000 0 1,070.58 3,067.28 0.00% 100.00% 3,067.28
30-Jun-1993 0.433488 2504 1,085.45 0.00000 0 1,085.45 3,067.28 0.00% 100.00% 3,067.28
31-Jul-1993 0.434297 2504 1,087.47 0.00000 0 1,087.47 3,067.28 0.00% 100.00% 3,067.28
31-Aug-1993 0.454412 2504 1,137.84 0.00000 0 1,137.84 3,067.28 0.00% 100.00% 3,067.28
30-Sep-1993 0.463569 2504 1,160.77 0.00000 0 1,160.77 3,067.28 0.00% 100.00% 3,067.28
31-Oct-1993 0.494499 2504 1,238.22 0.00000 0 1,238.22 3,067.28 0.00% 100.00% 3,067.28
30-Nov-1993 0.490928 2504 1,229.28 0.00000 0 1,229.28 3,067.28 0.00% 100.00% 3,067.28
31-Dec-1993 0.539870 2504 1,351.83 0.00000 0 1,351.83 3,067.28 0.00% 100.00% 3,067.28
31-Jan-1994 0.566846 2504 1,419.38 0.00000 0 1,419.38 3,067.28 4.00% 50.00% 3,067.28
28-Feb-1994 0.547866 2504 1,371.85 0.00000 0 1,371.85 3,067.28 4.00% 50.00% 3,067.28
31-Mar-1994 0.525058 2504 1,314.74 0.00000 0 1,314.74 3,067.28 4.00% 50.00% 3,067.28
30-Apr-1994 0.544191 2504 1,362.65 0.00000 0 1,362.65 3,067.28 4.00% 50.00% 3,067.28
31-May-1994 0.533854 2504 1,336.76 0.00000 0 1,336.76 3,067.28 4.00% 50.00% 3,067.28
30-Jun-1994 0.514991 2504 1,289.53 0.00000 0 1,289.53 3,067.28 4.00% 50.00% 3,067.28
31-Jul-1994 0.527321 2504 1,320.40 0.00000 0 1,320.40 3,067.28 4.00% 50.00% 3,067.28
31-Aug-1994 0.549789 2504 1,376.66 0.00000 0 1,376.66 3,067.28 4.00% 50.00% 3,067.28
30-Sep-1994 0.540362 2504 1,353.06 0.00000 0 1,353.06 3,067.28 4.00% 50.00% 3,067.28
31-Oct-1994 0.556706 2504 1,393.98 0.00000 0 1,393.98 3,067.28 4.00% 50.00% 3,067.28
30-Nov-1994 0.541052 2504 1,354.79 0.00000 0 1,354.79 3,067.28 4.00% 50.00% 3,067.28
31-Dec-1994 0.533714 2504 1,336.41 0.00000 0 1,336.41 3,067.28 4.00% 50.00% 3,067.28
31-Jan-1995 0.518086 2504 1,297.28 0.00000 0 1,297.28 3,067.28 5.00% 40.00% 3,063.76
28-Feb-1995 0.520423 2504 1,303.13 0.00000 0 1,303.13 3,067.28 5.00% 40.00% 3,063.47
31-Mar-1995 0.526696 2504 1,318.84 0.00000 0 1,318.84 3,067.28 5.00% 40.00% 3,062.68
30-Apr-1995 0.542657 2504 1,358.81 0.00000 0 1,358.81 3,067.28 5.00% 40.00% 3,060.68
31-May-1995 0.552949 2504 1,384.58 0.00000 0 1,384.58 3,067.28 5.00% 40.00% 3,059.40
30-Jun-1995 0.576471 2504 1,443.48 0.00000 0 1,443.48 3,067.28 5.00% 40.00% 3,056.45
31-Jul-1995 0.613306 2504 1,535.71 0.00000 0 1,535.71 3,067.28 5.00% 40.00% 3,051.84
31-Aug-1995 0.612905 2504 1,534.71 0.00000 0 1,534.71 3,067.28 5.00% 40.00% 3,051.89
30-Sep-1995 0.623011 2504 1,560.01 0.00000 0 1,560.01 3,067.28 5.00% 40.00% 3,050.62
31-Oct-1995 0.608029 2504 1,522.50 0.00000 0 1,522.50 3,067.28 5.00% 40.00% 3,052.50
30-Nov-1995 0.622673 2504 1,559.17 0.00000 0 1,559.17 3,067.28 5.00% 40.00% 3,050.67
31-Dec-1995 0.647665 2504 1,621.74 0.00000 0 1,621.74 3,067.28 5.00% 40.00% 3,047.54
31-Jan-1996 0.668361 2504 1,673.57 0.00000 0 1,673.57 3,067.28 6.00% 30.00% 3,022.08
29-Feb-1996 0.690328 2504 1,728.57 0.00000 0 1,728.57 3,067.28 6.00% 30.00% 3,018.78
31-Mar-1996 0.720045 2504 1,802.98 0.00000 0 1,802.98 3,067.28 6.00% 30.00% 3,014.31
30-Apr-1996 0.738669 2504 1,849.62 0.00000 0 1,849.62 3,067.28 6.00% 30.00% 3,011.51
31-May-1996 0.761013 2504 1,905.57 0.00000 0 1,905.57 3,067.28 6.00% 30.00% 3,008.16
30-Jun-1996 0.773641 2504 1,937.19 0.00000 0 1,937.19 3,067.28 6.00% 30.00% 3,006.26
31-Jul-1996 0.743247 2504 1,861.08 0.00000 0 1,861.08 3,067.28 6.00% 30.00% 3,010.83
31-Aug-1996 0.769336 2504 1,926.41 0.00000 0 1,926.41 3,067.28 6.00% 30.00% 3,006.91
30-Sep-1996 0.784412 2504 1,964.16 0.00000 0 1,964.16 3,067.28 6.00% 30.00% 3,004.64
31-Oct-1996 0.786230 2504 1,968.71 0.00000 0 1,968.71 3,067.28 6.00% 30.00% 3,004.37
</TABLE>
ERV of ERV of
Avg Ann Avg Ann $1,000 $1,000
Date n W/ Surr W/O Surr W/ Surr W/O Surr
03-Dec-1992 6.08 20.24% 20.24% 3,067.28 3,067.28
31-Dec-1992 6.00 20.23% 20.23% 3,021.70 3,021.70
31-Jan-1993 5.92 20.49% 20.49% 3,012.77 3,012.77
28-Feb-1993 5.84 20.93% 20.93% 3,035.18 3,035.18
31-Mar-1993 5.76 20.10% 20.10% 2,869.78 2,869.78
30-Apr-1993 5.67 20.77% 20.77% 2,917.87 2,917.87
31-May-1993 5.59 20.72% 20.72% 2,865.06 2,865.06
30-Jun-1993 5.51 20.76% 20.76% 2,825.82 2,825.82
31-Jul-1993 5.42 21.08% 21.08% 2,820.56 2,820.56
31-Aug-1993 5.34 20.42% 20.42% 2,695.70 2,695.70
30-Sep-1993 5.25 20.31% 20.31% 2,642.45 2,642.45
31-Oct-1993 5.17 19.18% 19.18% 2,477.17 2,477.17
30-Nov-1993 5.09 19.69% 19.69% 2,495.19 2,495.19
31-Dec-1993 5.00 17.80% 17.80% 2,268.99 2,268.99
31-Jan-1994 4.92 16.96% 16.96% 2,161.01 2,161.01
28-Feb-1994 4.84 18.08% 18.08% 2,235.87 2,235.87
31-Mar-1994 4.76 19.50% 19.50% 2,333.00 2,333.00
30-Apr-1994 4.67 18.96% 18.96% 2,250.97 2,250.97
31-May-1994 4.59 19.84% 19.84% 2,294.56 2,294.56
30-Jun-1994 4.51 21.20% 21.20% 2,378.60 2,378.60
31-Jul-1994 4.42 21.00% 21.00% 2,322.99 2,322.99
31-Aug-1994 4.34 20.29% 20.29% 2,228.05 2,228.05
30-Sep-1994 4.25 21.21% 21.21% 2,266.92 2,266.92
31-Oct-1994 4.17 20.82% 20.82% 2,200.37 2,200.37
30-Nov-1994 4.09 22.13% 22.13% 2,264.03 2,264.03
31-Dec-1994 4.00 23.07% 23.07% 2,295.16 2,295.16
31-Jan-1995 3.92 24.53% 24.56% 2,361.68 2,364.39
28-Feb-1995 3.84 24.92% 24.96% 2,350.85 2,353.77
31-Mar-1995 3.76 25.15% 25.20% 2,322.25 2,325.74
30-Apr-1995 3.67 24.74% 24.81% 2,252.48 2,257.34
31-May-1995 3.59 24.72% 24.81% 2,209.63 2,215.32
30-Jun-1995 3.51 23.85% 23.98% 2,117.43 2,124.93
31-Jul-1995 3.42 22.22% 22.41% 1,987.25 1,997.30
31-Aug-1995 3.34 22.88% 23.06% 1,988.58 1,998.61
30-Sep-1995 3.25 22.88% 23.09% 1,955.52 1,966.19
31-Oct-1995 3.17 24.54% 24.73% 2,004.93 2,014.64
30-Nov-1995 3.09 24.28% 24.50% 1,956.60 1,967.26
31-Dec-1995 3.00 23.38% 23.64% 1,879.17 1,891.35
31-Jan-1996 2.92 22.45% 23.08% 1,805.77 1,832.78
29-Feb-1996 2.84 21.71% 22.39% 1,746.40 1,774.46
31-Mar-1996 2.75 20.52% 21.29% 1,671.85 1,701.22
30-Apr-1996 2.67 20.02% 20.85% 1,628.18 1,658.33
31-May-1996 2.59 19.31% 20.21% 1,578.62 1,609.64
30-Jun-1996 2.50 19.18% 20.14% 1,551.87 1,583.37
31-Jul-1996 2.42 22.00% 22.94% 1,617.78 1,648.12
31-Aug-1996 2.33 21.02% 22.05% 1,560.89 1,592.23
30-Sep-1996 2.25 20.77% 21.89% 1,529.74 1,561.63
31-Oct-1996 2.17 21.54% 22.70% 1,526.06 1,558.01
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER - GLOBAL SUBACCOUNT
-----------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
Year Rate Available
-----------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.399363 2 7.00% 20%
Units purchased 2,503.990 3 6.00% 30%
4 5.00% 40%
5 4.00% 50%
M&E factor - Annual 0.0000% 6 0.00% 100%
M&E factor - Monthly 0.0000% 7 0.00%
-----------------------------------------
Contract charge factor 0.00% 8 0.00%
WRL model has 1.40% M & E
<CAPTION>
Contract Contract Ending
Acct Value Charge Charge Adjusted Redeemable Surrender W/D ERV
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge Available W/ Surr
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Nov-1996 0.816327 2504 2,044.07 0.00000 0 2,044.07 3,067.28 6.00% 30.00% 2,999.85
31-Dec-1996 0.815805 2504 2,042.77 0.00000 0 2,042.77 3,067.28 6.00% 30.00% 2,999.92
31-Jan-1997 0.850015 2504 2,128.43 0.00000 0 2,128.43 3,067.28 7.00% 20.00% 2,961.23
28-Feb-1997 0.856044 2504 2,143.52 0.00000 0 2,143.52 3,067.28 7.00% 20.00% 2,960.17
31-Mar-1997 0.850795 2504 2,130.38 0.00000 0 2,130.38 3,067.28 7.00% 20.00% 2,961.10
30-Apr-1997 0.854243 2504 2,139.01 0.00000 0 2,139.01 3,067.28 7.00% 20.00% 2,960.49
31-May-1997 0.897150 2504 2,246.45 0.00000 0 2,246.45 3,067.28 7.00% 20.00% 2,952.97
30-Jun-1997 0.947676 2504 2,372.97 0.00000 0 2,372.97 3,067.28 7.00% 20.00% 2,944.11
31-Jul-1997 1.005431 2504 2,517.59 0.00000 0 2,517.59 3,067.28 7.00% 20.00% 2,933.99
31-Aug-1997 0.927431 2504 2,322.28 0.00000 0 2,322.28 3,067.28 7.00% 20.00% 2,947.66
30-Sep-1997 1.000000 2504 2,503.99 0.00000 0 2,503.99 3,067.28 7.00% 20.00% 2,934.94
31-Oct-1997 0.943715 2504 2,363.05 0.00000 0 2,363.05 3,067.28 7.00% 20.00% 2,944.81
30-Nov-1997 0.940815 2504 2,355.79 0.00000 0 2,355.79 3,067.28 7.00% 20.00% 2,945.32
31-Dec-1997 0.955350 2504 2,392.18 0.00000 0 2,392.18 3,067.28 7.00% 20.00% 2,942.77
31-Jan-1998 0.994495 2504 2,490.20 0.00000 0 2,490.20 3,067.28 7.00% 10.00% 2,914.44
28-Feb-1998 1.071183 2504 2,682.23 0.00000 0 2,682.23 3,067.28 7.00% 10.00% 2,900.99
31-Mar-1998 1.124590 2504 2,815.96 0.00000 0 2,815.96 3,067.28 7.00% 10.00% 2,891.63
30-Apr-1998 1.153944 2504 2,889.46 0.00000 0 2,889.46 3,067.28 7.00% 10.00% 2,886.49
31-May-1998 1.193557 2504 2,988.65 0.00000 0 2,988.65 3,067.28 7.00% 10.00% 2,879.54
30-Jun-1998 1.223011 2504 3,062.40 0.00000 0 3,062.40 3,067.28 7.00% 10.00% 2,874.38
31-Jul-1998 1.233065 2504 3,087.58 0.00000 0 3,087.58 3,067.28 7.00% 10.00% 2,872.62
31-Aug-1998 1.054737 2504 2,641.05 0.00000 0 2,641.05 3,067.28 7.00% 10.00% 2,903.88
30-Sep-1998 1.017441 2504 2,547.66 0.00000 0 2,547.66 3,067.28 7.00% 10.00% 2,910.41
31-Oct-1998 1.058289 2504 2,649.94 0.00000 0 2,649.94 3,067.28 7.00% 10.00% 2,903.25
30-Nov-1998 1.131905 2504 2,834.28 0.00000 0 2,834.28 3,067.28 7.00% 10.00% 2,890.35
31-Dec-1998 1.224958 2504 3,067.28 0.00000 0 3,067.28 3,067.28 7.00% 10.00% 2,874.04
<CAPTION>
ERV of ERV of
Avg Ann Avg Ann $1,000 $1,000
Date n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C>
30-Nov-1996 2.08 20.20% 21.49% 1,467.58 1,500.57
31-Dec-1996 2.00 21.18% 22.54% 1,468.56 1,501.53
31-Jan-1997 1.92 18.82% 21.02% 1,391.28 1,441.10
28-Feb-1997 1.84 19.19% 21.52% 1,380.99 1,430.95
31-Mar-1997 1.75 20.66% 23.11% 1,389.94 1,439.78
30-Apr-1997 1.67 21.47% 24.07% 1,384.04 1,433.97
31-May-1997 1.59 18.81% 21.69% 1,314.50 1,365.39
30-Jun-1997 1.50 15.42% 18.61% 1,240.69 1,292.59
31-Jul-1997 1.42 11.39% 14.93% 1,165.40 1,218.34
31-Aug-1997 1.33 19.57% 23.19% 1,269.30 1,320.81
30-Sep-1997 1.25 13.52% 17.59% 1,172.11 1,224.96
31-Oct-1997 1.17 20.75% 25.04% 1,246.19 1,298.02
30-Nov-1997 1.08 22.86% 27.54% 1,250.25 1,302.02
31-Dec-1997 1.00 23.02% 28.22% 1,230.16 1,282.21
31-Jan-1998 0.92 17.04% 23.17% 1,154.83 1,210.13
28-Feb-1998 0.84 8.16% 14.36% 1,067.94 1,119.03
31-Mar-1998 0.75 2.69% 8.92% 1,020.18 1,066.53
30-Apr-1998 0.67 -0.10% 6.15% 999.31 1,040.90
31-May-1998 0.59 -3.65% 2.63% 978.43 1,015.34
30-Jun-1998 0.50 -6.14% 0.16% 968.56 1,000.80
31-Jul-1998 0.42 -6.96% -0.66% 970.20 997.24
31-Aug-1998 0.33 9.95% 16.14% 1,032.22 1,051.28
30-Sep-1998 0.25 14.24% 20.40% 1,034.12 1,047.90
31-Oct-1998 0.17 9.56% 15.75% 1,015.37 1,024.74
30-Nov-1998 0.08 1.98% 8.22% 1,001.67 1,006.73
31-Dec-1998 0.00 -6.30% 0.00% 1,000.00 1,000.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER - GLOBAL SUBACCOUNT
-----------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 62M) Year Rate Available
-----------------------------------------
<S> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.399363 2 7.00% 20%
Units purchased 2,503.990 3 6.00% 30%
4 5.00% 40%
5 4.00% 50%
M&E factor - Annual 0.0000% 6 0.00% 100%
M&E factor - Monthly 0.0000% 7 0.00%
Contract charge factor 0.00% -----------------------------------------
WRL model has 1.40% M & E 8 0.00%
<CAPTION>
Contract Contract Ending
Acct Value Charge Charge Adjusted Redeemable Surrender W/D ERV
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge Available W/ Surr
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1998 1.233065 2504 3,087.58 0.00000 0 3,087.58 3,067.28 7.00% 10.00% 2,872.62
31-Aug-1998 1.054737 2504 2,641.05 0.00000 0 2,641.05 3,067.28 7.00% 10.00% 2,903.88
30-Sep-1998 1.017441 2504 2,547.66 0.00000 0 2,547.66 3,067.28 7.00% 10.00% 2,910.41
31-Oct-1998 1.058289 2504 2,649.94 0.00000 0 2,649.94 3,067.28 7.00% 10.00% 2,903.25
30-Nov-1998 1.131905 2504 2,834.28 0.00000 0 2,834.28 3,067.28 7.00% 10.00% 2,890.35
31-Dec-1998 1.224958 2504 3,067.28 0.00000 0 3,067.28 3,067.28 7.00% 10.00% 2,874.04
31-Dec-1998 3,067.28
<CAPTION>
ERV of ERV of
Avg Ann Avg Ann $1,000 $1,000
Date n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C>
31-Jul-1998 0.42 -6.96% -0.66% 970.20 997.24
31-Aug-1998 0.33 9.95% 16.14% 1,032.22 1,051.28
30-Sep-1998 0.25 14.24% 20.40% 1,034.12 1,047.90
31-Oct-1998 0.17 9.56% 15.75% 1,015.37 1,024.74
30-Nov-1998 0.08 1.98% 8.22% 1,001.67 1,006.73
31-Dec-1998 0.00 -6.30% 0.00% 1,000.00 1,000.00
31-Dec-1998
<CAPTION>
Average Average
Annual Annual
Beginning Ending Value Ending Value Return Return Total Return Total Return
Years Value W/ Surrender W/O Surrender W/ Surrender W/O Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30-Nov-1998 0.08 One Month 2,834.28 2,890.35 3,067.28 1.98% 8.22% 1.98% 8.22%
30-Sep-1998 0.25 3 Months 2,547.66 2,910.41 3,067.28 14.24% 20.40% 14.24% 20.40%
30-Jun-1998 0.50 6 Months 3,062.40 2,874.38 3,067.28 -6.14% 0.16% -6.14% 0.16%
31-Mar-1998 0.75 9 Months 2,815.96 2,891.63 3,067.28 2.69% 8.92% 2.69% 8.92%
31-Dec-1997 1.00 YTD 2,392.18 2,942.77 3,067.28 23.02% 28.22% 23.02% 28.22%
31-Dec-1997 1.00 One Year 2,392.18 2,942.77 3,067.28 23.02% 28.22% 23.02% 28.22%
31-Dec-1996 2.00 Two Years 2,042.77 2,999.92 3,067.28 21.18% 22.54% 46.86% 50.15%
31-Dec-1995 3.00 Three Years 1,621.74 3,047.54 3,067.28 23.40% 23.67% 87.92% 89.13%
31-Dec-1994 4.00 Four Years 1,336.41 3,067.28 3,067.28 23.08% 23.08% 129.52% 129.52%
31-Dec-1993 5.00 Five Years 1,351.83 3,067.28 3,067.28 17.81% 17.81% 126.90% 126.90%
31-Dec-1988 10.00 Ten Years -- -- -- -- --
03-Dec-1992 6.1 Inc to Date 1,000.00 3,067.28 3,067.28 20.24% 20.24% 206.73% 206.73%
30-Sep-1997 1.3 2,503.99 2,934.94 3,067.28 13.52% 17.59% 17.21% 22.50%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER VA - VALUE EQUITY SUBACCOUNT
---------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 64M) Year Rate Available
---------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 1.000000 2 7.00% 20%
Units purchased 1,000.000 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
6 0.00% 100%
7 0.00%
---------------------------------------
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable
Date AUV # Units Before Chrge Factor Deduction Acct Value Value
<S> <C> <C> <C> <C> <C> <C> <C>
27-May-1993 1.000000 1000 1,000.00 1,000.00 2,212.93
31-May-1993 0.999050 1000 999.05 0.00000000 0 999.05 2,212.93
30-Jun-1993 1.004782 1000 1,004.78 0.00000000 0 1,004.78 2,212.93
31-Jul-1993 0.997653 1000 997.65 0.00000000 0 997.65 2,212.93
31-Aug-1993 1.021325 1000 1,021.33 0.00000000 0 1,021.33 2,212.93
30-Sep-1993 1.009223 1000 1,009.22 0.00000000 0 1,009.22 2,212.93
31-Oct-1993 1.012084 1000 1,012.08 0.00000000 0 1,012.08 2,212.93
30-Nov-1993 1.008866 1000 1,008.87 0.00000000 0 1,008.87 2,212.93
31-Dec-1993 1.018576 1000 1,018.58 0.00000000 0 1,018.58 2,212.93
31-Jan-1994 1.046074 1000 1,046.07 0.00000000 0 1,046.07 2,212.93
28-Feb-1994 1.035073 1000 1,035.07 0.00000000 0 1,035.07 2,212.93
31-Mar-1994 0.998303 1000 998.30 0.00000000 0 998.30 2,212.93
30-Apr-1994 1.031724 1000 1,031.72 0.00000000 0 1,031.72 2,212.93
31-May-1994 1.046247 1000 1,046.25 0.00000000 0 1,046.25 2,212.93
30-Jun-1994 1.011559 1000 1,011.56 0.00000000 0 1,011.56 2,212.93
31-Jul-1994 1.032087 1000 1,032.09 0.00000000 0 1,032.09 2,212.93
31-Aug-1994 1.075994 1000 1,075.99 0.00000000 0 1,075.99 2,212.93
30-Sep-1994 1.043354 1000 1,043.35 0.00000000 0 1,043.35 2,212.93
31-Oct-1994 1.064670 1000 1,064.67 0.00000000 0 1,064.67 2,212.93
30-Nov-1994 1.030159 1000 1,030.16 0.00000000 0 1,030.16 2,212.93
31-Dec-1994 1.045610 1000 1,045.61 0.00000000 0 1,045.61 2,212.93
31-Jan-1995 1.073646 1000 1,073.65 0.00000000 0 1,073.65 2,212.93
28-Feb-1995 1.115441 1000 1,115.44 0.00000000 0 1,115.44 2,212.93
31-Mar-1995 1.141416 1000 1,141.42 0.00000000 0 1,141.42 2,212.93
30-Apr-1995 1.152859 1000 1,152.86 0.00000000 0 1,152.86 2,212.93
31-May-1995 1.220199 1000 1,220.20 0.00000000 0 1,220.20 2,212.93
30-Jun-1995 1.261038 1000 1,261.04 0.00000000 0 1,261.04 2,212.93
31-Jul-1995 1.311545 1000 1,311.55 0.00000000 0 1,311.55 2,212.93
31-Aug-1995 1.309995 1000 1,310.00 0.00000000 0 1,310.00 2,212.93
30-Sep-1995 1.339871 1000 1,339.87 0.00000000 0 1,339.87 2,212.93
31-Oct-1995 1.309888 1000 1,309.89 0.00000000 0 1,309.89 2,212.93
30-Nov-1995 1.368933 1000 1,368.93 0.00000000 0 1,368.93 2,212.93
31-Dec-1995 1.387903 1000 1,387.90 0.00000000 0 1,387.90 2,212.93
31-Jan-1996 1.455329 1000 1,455.33 0.00000000 0 1,455.33 2,212.93
29-Feb-1996 1.483885 1000 1,483.89 0.00000000 0 1,483.89 2,212.93
31-Mar-1996 1.509467 1000 1,509.47 0.00000000 0 1,509.47 2,212.93
30-Apr-1996 1.511511 1000 1,511.51 0.00000000 0 1,511.51 2,212.93
31-May-1996 1.549864 1000 1,549.86 0.00000000 0 1,549.86 2,212.93
30-Jun-1996 1.542260 1000 1,542.26 0.00000000 0 1,542.26 2,212.93
31-Jul-1996 1.481871 1000 1,481.87 0.00000000 0 1,481.87 2,212.93
31-Aug-1996 1.541527 1000 1,541.53 0.00000000 0 1,541.53 2,212.93
30-Sep-1996 1.600985 1000 1,600.99 0.00000000 0 1,600.99 2,212.93
31-Oct-1996 1.628709 1000 1,628.71 0.00000000 0 1,628.71 2,212.93
30-Nov-1996 1.711712 1000 1,711.71 0.00000000 0 1,711.71 2,212.93
31-Dec-1996 1.694854 1000 1,694.85 0.00000000 0 1,694.85 2,212.93
31-Jan-1997 1.754824 1000 1,754.82 0.00000000 0 1,754.82 2,212.93
28-Feb-1997 1.755903 1000 1,755.90 0.00000000 0 1,755.90 2,212.93
31-Mar-1997 1.697885 1000 1,697.89 0.00000000 0 1,697.89 2,212.93
30-Apr-1997 1.731240 1000 1,731.24 0.00000000 0 1,731.24 2,212.93
31-May-1997 1.816418 1000 1,816.42 0.00000000 0 1,816.42 2,212.93
30-Jun-1997 1.912022 1000 1,912.02 0.00000000 0 1,912.02 2,212.93
31-Jul-1997 2.028368 1000 2,028.37 0.00000000 0 2,028.37 2,212.93
31-Aug-1997 1.975499 1000 1,975.50 0.00000000 0 1,975.50 2,212.93
30-Sep-1997 2.048951 1000 2,048.95 0.00000000 0 2,048.95 2,212.93
31-Oct-1997 2.008141 1000 2,008.14 0.00000000 0 2,008.14 2,212.93
<CAPTION>
ERV of ERV of
Surrender W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Charge Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C> <C>
27-May-1993 0.00% 100.00% 2,212.93 5.60 15.24% 15.24% 2,212.93 2,212.93 6
31-May-1993 0.00% 100.00% 2,212.93 5.59 15.29% 15.29% 2,215.03 2,215.03 6
30-Jun-1993 0.00% 100.00% 2,212.93 5.51 15.42% 15.42% 2,202.40 2,202.40 6
31-Jul-1993 0.00% 100.00% 2,212.93 5.42 15.83% 15.83% 2,218.13 2,218.13 6
31-Aug-1993 0.00% 100.00% 2,212.93 5.34 15.59% 15.59% 2,166.72 2,166.72 6
30-Sep-1993 0.00% 100.00% 2,212.93 5.25 16.12% 16.12% 2,192.70 2,192.70 6
31-Oct-1993 0.00% 100.00% 2,212.93 5.17 16.34% 16.34% 2,186.51 2,186.51 6
30-Nov-1993 0.00% 100.00% 2,212.93 5.09 16.69% 16.69% 2,193.48 2,193.48 6
31-Dec-1993 0.00% 100.00% 2,212.93 5.00 16.78% 16.78% 2,172.57 2,172.57 6
31-Jan-1994 4.00% 50.00% 2,212.93 4.92 16.46% 16.46% 2,115.46 2,115.46 5
28-Feb-1994 4.00% 50.00% 2,212.93 4.84 16.99% 16.99% 2,137.94 2,137.94 5
31-Mar-1994 4.00% 50.00% 2,212.93 4.76 18.22% 18.22% 2,216.69 2,216.69 5
30-Apr-1994 4.00% 50.00% 2,212.93 4.67 17.73% 17.73% 2,144.88 2,144.88 5
31-May-1994 4.00% 50.00% 2,212.93 4.59 17.73% 17.73% 2,115.11 2,115.11 5
30-Jun-1994 4.00% 50.00% 2,212.93 4.51 18.97% 18.97% 2,187.64 2,187.64 5
31-Jul-1994 4.00% 50.00% 2,212.93 4.42 18.83% 18.83% 2,144.13 2,144.13 5
31-Aug-1994 4.00% 50.00% 2,212.93 4.34 18.09% 18.09% 2,056.64 2,056.64 5
30-Sep-1994 4.00% 50.00% 2,212.93 4.25 19.33% 19.33% 2,120.98 2,120.98 5
31-Oct-1994 4.00% 50.00% 2,212.93 4.17 19.18% 19.18% 2,078.51 2,078.51 5
30-Nov-1994 4.00% 50.00% 2,212.93 4.09 20.57% 20.57% 2,148.14 2,148.14 5
31-Dec-1994 4.00% 50.00% 2,212.93 4.00 20.60% 20.60% 2,116.40 2,116.40 5
31-Jan-1995 5.00% 40.00% 2,203.50 3.92 20.14% 20.27% 2,052.36 2,061.13 4
28-Feb-1995 5.00% 40.00% 2,201.41 3.84 19.36% 19.52% 1,973.58 1,983.90 4
31-Mar-1995 5.00% 40.00% 2,200.12 3.76 19.09% 19.27% 1,927.53 1,938.76 4
30-Apr-1995 5.00% 40.00% 2,199.54 3.67 19.22% 19.42% 1,907.90 1,919.51 4
31-May-1995 5.00% 40.00% 2,196.18 3.59 17.79% 18.04% 1,799.85 1,813.58 4
30-Jun-1995 5.00% 40.00% 2,194.13 3.51 17.11% 17.39% 1,739.94 1,754.85 4
31-Jul-1995 5.00% 40.00% 2,191.61 3.42 16.19% 16.52% 1,671.01 1,687.27 4
31-Aug-1995 5.00% 40.00% 2,191.69 3.34 16.68% 17.01% 1,673.05 1,689.26 4
30-Sep-1995 5.00% 40.00% 2,190.19 3.25 16.30% 16.67% 1,634.63 1,651.60 4
31-Oct-1995 5.00% 40.00% 2,191.69 3.17 17.63% 17.99% 1,673.19 1,689.40 4
30-Nov-1995 5.00% 40.00% 2,188.74 3.09 16.41% 16.83% 1,598.87 1,616.53 4
31-Dec-1995 5.00% 40.00% 2,187.79 3.00 16.36% 16.81% 1,576.33 1,594.44 4
31-Jan-1996 6.00% 30.00% 2,165.44 2.92 14.59% 15.45% 1,487.94 1,520.57 3
29-Feb-1996 6.00% 30.00% 2,163.73 2.84 14.21% 15.12% 1,458.15 1,491.31 3
31-Mar-1996 6.00% 30.00% 2,162.19 2.75 13.94% 14.91% 1,432.42 1,466.03 3
30-Apr-1996 6.00% 30.00% 2,162.07 2.67 14.34% 15.34% 1,430.40 1,464.05 3
31-May-1996 6.00% 30.00% 2,159.77 2.59 13.69% 14.76% 1,393.52 1,427.82 3
30-Jun-1996 6.00% 30.00% 2,160.23 2.50 14.40% 15.51% 1,400.69 1,434.86 3
31-Jul-1996 6.00% 30.00% 2,163.85 2.42 16.94% 18.03% 1,460.21 1,493.33 3
31-Aug-1996 6.00% 30.00% 2,160.27 2.33 15.55% 16.75% 1,401.38 1,435.54 3
30-Sep-1996 6.00% 30.00% 2,156.70 2.25 14.15% 15.46% 1,347.11 1,382.23 3
31-Oct-1996 6.00% 30.00% 2,155.04 2.17 13.79% 15.19% 1,323.16 1,358.70 3
30-Nov-1996 6.00% 30.00% 2,150.06 2.08 11.56% 13.11% 1,256.09 1,292.82 3
31-Dec-1996 6.00% 30.00% 2,151.07 2.00 12.66% 14.27% 1,269.18 1,305.67 3
31-Jan-1997 7.00% 20.00% 2,121.07 1.92 10.40% 12.88% 1,208.71 1,261.05 2
28-Feb-1997 7.00% 20.00% 2,121.00 1.84 10.82% 13.41% 1,207.92 1,260.28 2
31-Mar-1997 7.00% 20.00% 2,125.06 1.75 13.65% 16.31% 1,251.59 1,303.34 2
30-Apr-1997 7.00% 20.00% 2,122.72 1.67 12.97% 15.82% 1,226.13 1,278.23 2
31-May-1997 7.00% 20.00% 2,116.76 1.59 10.13% 13.26% 1,165.35 1,218.29 2
30-Jun-1997 7.00% 20.00% 2,110.07 1.50 6.77% 10.20% 1,103.58 1,157.38 2
31-Jul-1997 7.00% 20.00% 2,101.92 1.42 2.54% 6.33% 1,036.26 1,090.99 2
31-Aug-1997 7.00% 20.00% 2,105.62 1.33 4.90% 8.88% 1,065.87 1,120.19 2
30-Sep-1997 7.00% 20.00% 2,100.48 1.25 2.00% 6.34% 1,025.15 1,080.03 2
31-Oct-1997 7.00% 20.00% 2,103.34 1.17 4.05% 8.68% 1,047.41 1,101.98 2
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ATLAS PORTFOLIO BUILDER VA - VALUE EQUITY SUBACCOUNT
---------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 64M) Year Rate Available
---------------------------------------
Initial investment $1,000 1 7.00% 10%
AUV 1.000000 2 7.00% 20%
Units purchased 1,000.000 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
6 0.00% 100%
7 0.00%
---------------------------------------
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable
Date AUV # Units Before Chrge Factor Deduction Acct Value Value
<S> <C> <C> <C> <C> <C> <C> <C>
30-Nov-1997 2.045357 1000 2,045.36 0.00000000 0 2,045.36 2,212.93
31-Dec-1997 2.086130 1000 2,086.13 0.00000000 0 2,086.13 2,212.93
31-Jan-1998 2.058583 1000 2,058.58 0.00000000 0 2,058.58 2,212.93
28-Feb-1998 2.197181 1000 2,197.18 0.00000000 0 2,197.18 2,212.93
31-Mar-1998 2.301976 1000 2,301.98 0.00000000 0 2,301.98 2,212.93
30-Apr-1998 2.317404 1000 2,317.40 0.00000000 0 2,317.40 2,212.93
31-May-1998 2.275459 1000 2,275.46 0.00000000 0 2,275.46 2,212.93
30-Jun-1998 2.301469 1000 2,301.47 0.00000000 0 2,301.47 2,212.93
<CAPTION>
ERV of ERV of
Surrender W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Charge Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Nov-1997 7.00% 20.00% 2,100.73 1.08 2.49% 7.53% 1,027.07 1,081.93 2
31-Dec-1997 7.00% 20.00% 2,097.88 1.00 0.56% 6.08% 1,005.63 1,060.78 2
31-Jan-1998 7.00% 10.00% 2,084.32 0.92 1.25% 7.50% 1,011.43 1,068.40 1
28-Feb-1998 7.00% 10.00% 2,074.62 0.84 -5.58% 0.72% 953.02 1,006.00 1
31-Mar-1998 7.00% 10.00% 2,067.28 0.75 -10.20% -3.87% 922.18 970.71 1
30-Apr-1998 7.00% 10.00% 2,066.20 0.67 -10.84% -4.51% 925.88 969.51 1
31-May-1998 7.00% 10.00% 2,069.14 0.59 -9.07% -2.75% 945.80 983.80 1
30-Jun-1998 7.00% 10.00% 2,067.32 0.50 -10.17% -3.85% 947.35 980.42 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER VA - VALUE EQUITY SUBACCOUNT
---------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 64M) Year Rate Available
---------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 1.000000 2 7.00% 20%
Units purchased 1,000.000 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
6 0.00% 100%
7 0.00%
---------------------------------------
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable
Date AUV # Units Before Chrge Factor Deduction Acct Value Value
<S> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1998 2.215591 1000 2,215.59 0.00000000 0 2,215.59 2,212.93
31-Aug-1998 1.878649 1000 1,878.65 0.00000000 0 1,878.65 2,212.93
30-Sep-1998 1.932855 1000 1,932.86 0.00000000 0 1,932.86 2,212.93
31-Oct-1998 2.128123 1000 2,128.12 0.00000000 0 2,128.12 2,212.93
30-Nov-1998 2.206348 1000 2,206.35 0.00000000 0 2,206.35 2,212.93
31-Dec-1998 2.212928 1000 2,212.93 0.00000000 0 2,212.93 2,212.93
31-Dec-1998 2,212.93
<CAPTION>
ERV of ERV of
Surrender W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Charge Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1998 7.00% 10.00% 2,073.33 0.42 -6.42% -0.12% 972.56 999.50 1
31-Aug-1998 7.00% 10.00% 2,096.91 0.33 11.62% 17.79% 1,037.42 1,056.26 1
30-Sep-1998 7.00% 10.00% 2,093.12 0.25 8.29% 14.49% 1,020.28 1,034.70 1
31-Oct-1998 7.00% 10.00% 2,079.45 0.17 -2.29% 3.98% 996.14 1,006.55 1
30-Nov-1998 7.00% 10.00% 2,073.97 0.08 -6.00% 0.30% 994.76 1,000.25 1
31-Dec-1998 7.00% 10.00% 2,073.51 0.00 -6.30% 0.00% 1,000.00 1,000.00 1
</TABLE>
<TABLE>
<CAPTION>
Beginning Ending Value Ending Value
Years Value W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 0.08 2,206.35 2,073.97 2,212.93
3 Months 30-Sep-1998 0.25 1,932.86 2,093.12 2,212.93
6 Months 30-Jun-1998 0.50 2,301.47 2,067.32 2,212.93
9 Months 31-Mar-1998 0.75 2,301.98 2,067.28 2,212.93
YTD 31-Dec-1997 1.00 2,086.13 2,097.88 2,212.93
One Year 31-Dec-1997 1.00 2,086.13 2,097.88 2,212.93
Two Years 31-Dec-1996 2.00 1,694.85 2,151.07 2,212.93
Three Years 31-Dec-1995 3.00 1,387.90 2,187.79 2,212.93
Four Years 31-Dec-1994 4.00 1,045.61 2,212.93 2,212.93
Five Years 31-Dec-1993 5.00 1,018.58 2,212.93 2,212.93
Ten Years 31-Dec-1988 10.00 -- -- --
Inc to Date 27-May-1993 5.60 1,000.00 2,212.93 2,212.93
30-Sep-1997 1.25 2,048.95 2,100.48 2,212.93
<CAPTION>
Average Average
Annual Annual
Return Return Total Return Total Return
W/ Surrender W/O Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 -6.00% 0.30% -6.00% 0.30%
3 Months 30-Sep-1998 8.29% 14.49% 8.29% 14.49%
6 Months 30-Jun-1998 -10.17% -3.85% -10.17% -3.85%
9 Months 31-Mar-1998 -10.20% -3.87% -10.20% -3.87%
YTD 31-Dec-1997 0.56% 6.08% 0.56% 6.08%
One Year 31-Dec-1997 0.56% 6.08% 0.56% 6.08%
Two Years 31-Dec-1996 12.66% 14.27% 26.92% 30.57%
Three Years 31-Dec-1995 16.38% 16.83% 57.63% 59.44%
Four Years 31-Dec-1994 20.61% 20.61% 111.64% 111.64%
Five Years 31-Dec-1993 16.79% 16.79% 117.26% 117.26%
Ten Years 31-Dec-1988 -- --
Inc to Date 27-May-1993 15.24% 15.24% 121.29% 121.29%
30-Sep-1997 2.00% 6.34% 2.52% 8.00%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER VA - T ROWE PRICE GROWTH STOCK
-------------------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 66M) Year Rate Available
-------------------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 1.000000 2 7.00% 20%
Units purchased 1,000.000 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
6 0.00% 100%
7 0.00%
-------------------------------------------------
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
03-Jan-1995 1.000000 1000 1,000.00 1,000.00 2,593.12 5.00%
31-Jan-1995 0.999935 1000 999.94 0.00000000 0 999.94 2,593.12 5.00%
28-Feb-1995 1.065730 1000 1,065.73 0.00000000 0 1,065.73 2,593.12 5.00%
31-Mar-1995 1.134246 1000 1,134.25 0.00000000 0 1,134.25 2,593.12 5.00%
30-Apr-1995 1.145983 1000 1,145.98 0.00000000 0 1,145.98 2,593.12 5.00%
31-May-1995 1.169406 1000 1,169.41 0.00000000 0 1,169.41 2,593.12 5.00%
30-Jun-1995 1.212767 1000 1,212.77 0.00000000 0 1,212.77 2,593.12 5.00%
31-Jul-1995 1.253007 1000 1,253.01 0.00000000 0 1,253.01 2,593.12 5.00%
31-Aug-1995 1.256482 1000 1,256.48 0.00000000 0 1,256.48 2,593.12 5.00%
30-Sep-1995 1.294690 1000 1,294.69 0.00000000 0 1,294.69 2,593.12 5.00%
31-Oct-1995 1.290145 1000 1,290.15 0.00000000 0 1,290.15 2,593.12 5.00%
30-Nov-1995 1.329158 1000 1,329.16 0.00000000 0 1,329.16 2,593.12 5.00%
31-Dec-1995 1.353339 1000 1,353.34 0.00000000 0 1,353.34 2,593.12 5.00%
31-Jan-1996 1.387105 1000 1,387.11 0.00000000 0 1,387.11 2,593.12 6.00%
29-Feb-1996 1.403287 1000 1,403.29 0.00000000 0 1,403.29 2,593.12 6.00%
31-Mar-1996 1.406656 1000 1,406.66 0.00000000 0 1,406.66 2,593.12 6.00%
30-Apr-1996 1.443233 1000 1,443.23 0.00000000 0 1,443.23 2,593.12 6.00%
31-May-1996 1.457237 1000 1,457.24 0.00000000 0 1,457.24 2,593.12 6.00%
30-Jun-1996 1.450703 1000 1,450.70 0.00000000 0 1,450.70 2,593.12 6.00%
31-Jul-1996 1.384191 1000 1,384.19 0.00000000 0 1,384.19 2,593.12 6.00%
31-Aug-1996 1.437279 1000 1,437.28 0.00000000 0 1,437.28 2,593.12 6.00%
30-Sep-1996 1.513026 1000 1,513.03 0.00000000 0 1,513.03 2,593.12 6.00%
31-Oct-1996 1.525121 1000 1,525.12 0.00000000 0 1,525.12 2,593.12 6.00%
30-Nov-1996 1.622493 1000 1,622.49 0.00000000 0 1,622.49 2,593.12 6.00%
31-Dec-1996 1.611613 1000 1,611.61 0.00000000 0 1,611.61 2,593.12 6.00%
31-Jan-1997 1.667027 1000 1,667.03 0.00000000 0 1,667.03 2,593.12 7.00%
28-Feb-1997 1.669202 1000 1,669.20 0.00000000 0 1,669.20 2,593.12 7.00%
31-Mar-1997 1.603139 1000 1,603.14 0.00000000 0 1,603.14 2,593.12 7.00%
30-Apr-1997 1.667294 1000 1,667.29 0.00000000 0 1,667.29 2,593.12 7.00%
31-May-1997 1.784427 1000 1,784.43 0.00000000 0 1,784.43 2,593.12 7.00%
30-Jun-1997 1.869689 1000 1,869.69 0.00000000 0 1,869.69 2,593.12 7.00%
31-Jul-1997 1.992117 1000 1,992.12 0.00000000 0 1,992.12 2,593.12 7.00%
31-Aug-1997 1.888144 1000 1,888.14 0.00000000 0 1,888.14 2,593.12 7.00%
30-Sep-1997 1.990457 1000 1,990.46 0.00000000 0 1,990.46 2,593.12 7.00%
31-Oct-1997 1.932903 1000 1,932.90 0.00000000 0 1,932.90 2,593.12 7.00%
30-Nov-1997 1.999770 1000 1,999.77 0.00000000 0 1,999.77 2,593.12 7.00%
31-Dec-1997 2.043487 1000 2,043.49 0.00000000 0 2,043.49 2,593.12 7.00%
31-Jan-1998 2.079466 1000 2,079.47 0.00000000 0 2,079.47 2,593.12 7.00%
28-Feb-1998 2.247012 1000 2,247.01 0.00000000 0 2,247.01 2,593.12 7.00%
31-Mar-1998 2.356003 1000 2,356.00 0.00000000 0 2,356.00 2,593.12 7.00%
30-Apr-1998 2.367010 1000 2,367.01 0.00000000 0 2,367.01 2,593.12 7.00%
31-May-1998 2.304058 1000 2,304.06 0.00000000 0 2,304.06 2,593.12 7.00%
30-Jun-1998 2.381692 1000 2,381.69 0.00000000 0 2,381.69 2,593.12 7.00%
<CAPTION>
ERV of ERV of
W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C> <C>
03-Jan-1995 40.00% 2,593.12 3.99 26.94% 26.94% 2,593.12 2,593.12 4
31-Jan-1995 40.00% 2,593.12 3.92 27.54% 27.54% 2,593.29 2,593.29 4
28-Feb-1995 40.00% 2,591.70 3.84 26.03% 26.05% 2,431.85 2,433.19 4
31-Mar-1995 40.00% 2,588.27 3.76 24.56% 24.63% 2,281.93 2,286.21 4
30-Apr-1995 40.00% 2,587.68 3.67 24.82% 24.89% 2,258.05 2,262.79 4
31-May-1995 40.00% 2,586.51 3.59 24.75% 24.84% 2,211.82 2,217.47 4
30-Jun-1995 40.00% 2,584.35 3.51 24.08% 24.20% 2,130.95 2,138.19 4
31-Jul-1995 40.00% 2,582.33 3.42 23.53% 23.68% 2,060.91 2,069.52 4
31-Aug-1995 40.00% 2,582.16 3.34 24.09% 24.25% 2,055.07 2,063.79 4
30-Sep-1995 40.00% 2,580.25 3.25 23.60% 23.79% 1,992.95 2,002.89 4
31-Oct-1995 40.00% 2,580.48 3.17 24.44% 24.64% 2,000.14 2,009.95 4
30-Nov-1995 40.00% 2,578.53 3.09 23.94% 24.17% 1,939.97 1,950.95 4
31-Dec-1995 40.00% 2,577.32 3.00 23.93% 24.18% 1,904.41 1,916.09 4
31-Jan-1996 30.00% 2,556.57 2.92 23.31% 23.91% 1,843.10 1,869.45 3
29-Feb-1996 30.00% 2,555.60 2.84 23.52% 24.15% 1,821.15 1,847.89 3
31-Mar-1996 30.00% 2,555.40 2.75 24.21% 24.87% 1,816.65 1,843.46 3
30-Apr-1996 30.00% 2,553.20 2.67 23.81% 24.53% 1,769.09 1,796.74 3
31-May-1996 30.00% 2,552.36 2.59 24.20% 24.96% 1,751.51 1,779.48 3
30-Jun-1996 30.00% 2,552.75 2.50 25.32% 26.10% 1,759.67 1,787.49 3
31-Jul-1996 30.00% 2,556.75 2.42 28.87% 29.63% 1,847.10 1,873.38 3
31-Aug-1996 30.00% 2,553.56 2.33 27.92% 28.76% 1,776.66 1,804.19 3
30-Sep-1996 30.00% 2,549.02 2.25 26.06% 27.03% 1,684.71 1,713.86 3
31-Oct-1996 30.00% 2,548.29 2.17 26.73% 27.75% 1,670.88 1,700.27 3
30-Nov-1996 30.00% 2,542.45 2.08 24.04% 25.22% 1,567.00 1,598.23 3
31-Dec-1996 30.00% 2,543.10 2.00 25.62% 26.85% 1,577.98 1,609.02 3
31-Jan-1997 20.00% 2,512.73 1.92 23.89% 25.95% 1,507.31 1,555.54 2
28-Feb-1997 20.00% 2,512.58 1.84 24.91% 27.08% 1,505.26 1,553.51 2
31-Mar-1997 20.00% 2,517.20 1.75 29.35% 31.56% 1,570.17 1,617.53 2
30-Apr-1997 20.00% 2,512.71 1.67 27.82% 30.25% 1,507.06 1,555.29 2
31-May-1997 20.00% 2,504.51 1.59 23.83% 26.57% 1,403.54 1,453.20 2
30-Jun-1997 20.00% 2,498.55 1.50 21.26% 24.29% 1,336.34 1,386.93 2
31-Jul-1997 20.00% 2,489.98 1.42 17.02% 20.42% 1,249.91 1,301.69 2
31-Aug-1997 20.00% 2,497.25 1.33 23.31% 26.84% 1,322.60 1,373.37 2
30-Sep-1997 20.00% 2,490.09 1.25 19.59% 23.52% 1,251.02 1,302.78 2
31-Oct-1997 20.00% 2,494.12 1.17 24.41% 28.63% 1,290.35 1,341.57 2
30-Nov-1997 20.00% 2,489.44 1.08 22.37% 27.06% 1,244.86 1,296.71 2
31-Dec-1997 20.00% 2,486.38 1.00 21.67% 26.90% 1,216.73 1,268.97 2
31-Jan-1998 10.00% 2,465.71 0.92 18.57% 24.70% 1,168.71 1,223.85 1
28-Feb-1998 10.00% 2,453.98 0.84 9.21% 15.40% 1,076.66 1,127.61 1
31-Mar-1998 10.00% 2,446.35 0.75 3.83% 10.06% 1,028.76 1,074.92 1
30-Apr-1998 10.00% 2,445.58 0.67 3.32% 9.55% 1,022.16 1,063.15 1
31-May-1998 10.00% 2,449.99 0.59 6.33% 12.55% 1,036.66 1,071.75 1
30-Jun-1998 10.00% 2,444.55 0.50 2.64% 8.88% 1,013.22 1,043.81 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER VA - T ROWE PRICE GROWTH STOCK
-------------------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 66M) Year Rate Available
-------------------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 1.000000 2 7.00% 20%
Units purchased 1,000.000 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
6 0.00% 100%
7 0.00%
-------------------------------------------------
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1998 2.360576 1000 2,360.58 0.00000000 0 2,360.58 2,593.12 7.00%
31-Aug-1998 1.996126 1000 1,996.13 0.00000000 0 1,996.13 2,593.12 7.00%
30-Sep-1998 2.109207 1000 2,109.21 0.00000000 0 2,109.21 2,593.12 7.00%
31-Oct-1998 2.282456 1000 2,282.46 0.00000000 0 2,282.46 2,593.12 7.00%
30-Nov-1998 2.418705 1000 2,418.71 0.00000000 0 2,418.71 2,593.12 7.00%
31-Dec-1998 2.593121 1000 2,593.12 0.00000000 0 2,593.12 2,593.12 7.00%
31-Dec 2,593.12
<CAPTION>
ERV of ERV of
W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
31-Jul-1998 10.00% 2,446.03 0.42 3.62% 9.85% 1,015.02 1.040.17
31-Aug-1998 10.00% 2,471.54 0.33 23.82% 29.91% 1,074.02 1,091.40
30-Sep-1998 10.00% 2,463.63 0.25 16.80% 22.94% 1,039.93 1,053.44
31-Oct-1998 10.00% 2,451.50 0.17 7.41% 13.61% 1,012.01 1,021.56
30-Nov-1998 10.00% 2,441.96 0.08 0.96% 7.21% 1,000.81 1,005.93
31-Dec-1998 10.00% 2,429.75 0.00 -6.30% 0.00% 1,000.00 1,000.00
</TABLE>
<TABLE>
<CAPTION>
Beginning Ending Value Ending Value
Years Value W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 0.08 2,418.71 2,441.96 2,593.12
3 Months 30-Sep-1998 0.25 2,109.21 2,463.63 2,593.12
6 Months 30-Jun-1998 0.50 2,381.69 2,444.55 2,593.12
9 Months 31-Mar-1998 0.75 2,356.00 2,446.35 2,593.12
YTD 31-Dec-1997 1.00 2,043.49 2,486.38 2,593.12
One Year 31-Dec-1997 1.00 2,043.49 2,486.38 2,593.12
Two Years 31-Dec-1996 2.00 1,611.61 2,543.10 2,593.12
Three Years 31-Dec-1995 3.00 1,353.34 2,577.32 2,593.12
Four Years 31-Dec-1994 4.00 -- -- --
Five Years 31-Dec-1993 5.00 -- -- --
Ten Years 31-Dec-1988 10.00 -- -- --
Inc to Date 03-Jan-1995 4.0 1,000.00 2,593.12 2,593.12
30-Sep-1997 1.3 1,990.46 2,490.09 2,593.12
<CAPTION>
Average Average
Annual Annual
Return Return Total Return Total Return
W/ Surrender W/O Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 0.96% 7.21% 0.96% 7.21%
3 Months 30-Sep-1998 16.80% 22.94% 16.80% 22.94%
6 Months 30-Jun-1998 2.64% 8.88% 2.64% 8.88%
9 Months 31-Mar-1998 3.83% 10.06% 3.83% 10.06%
YTD 31-Dec-1997 21.67% 26.90% 21.67% 26.90%
One Year 31-Dec-1997 21.67% 26.90% 21.67% 26.90%
Two Years 31-Dec-1996 25.62% 26.85% 57.80% 60.90%
Three Years 31-Dec-1995 23.95% 24.20% 90.44% 91.61%
Four Years 31-Dec-1994 -- --
Five Years 31-Dec-1993 -- --
Ten Years 31-Dec-1988 -- --
Inc to Date 03-Jan-1995 26.94% 26.94% 159.31% 159.31%
30-Sep-1997 19.59% 23.52% 25.10% 30.28%
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ATLAS PORTFOLIO BUILDER VA - GROWTH & INCOME SUBACCOUNT
---------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 57M) Year Rate Available
---------------------------------------
Initial investment $1,000 1 7.00% 10%
AUV 0.465510 2 7.00% 20%
Units purchased 2,148.180 3 6.00% 30%
4 5.00% 40%
M & E Factor (Annual Rate) 0.00% 5 4.00% 50%
M & E Factor (Monthly Rate) 0 6 0.00% 100%
7 0.00%
---------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Monthly Ending
Actual Acct Value M & E M & E Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
02-May-1994 0.465510 2148.180147 1,000.00 1,000.00 2,352.90 4.00%
31-May-1994 0.466457 2148.180147 1,002.03 0.00000000 0 1,002.03 2,352.90 4.00%
30-Jun-1994 0.461375 2148.180147 991.12 0.00000000 0 991.12 2,352.90 4.00%
31-Jul-1994 0.474285 2148.180147 1,018.85 0.00000000 0 1,018.85 2,352.90 4.00%
31-Aug-1994 0.485673 2148.180147 1,043.31 0.00000000 0 1,043.31 2,352.90 4.00%
30-Sep-1994 0.473924 2148.180147 1,018.07 0.00000000 0 1,018.07 2,352.90 4.00%
31-Oct-1994 0.472149 2148.180147 1,014.26 0.00000000 0 1,014.26 2,352.90 4.00%
30-Nov-1994 0.459972 2148.180147 988.10 0.00000000 0 988.10 2,352.90 4.00%
31-Dec-1994 0.455566 2148.180147 978.64 0.00000000 0 978.64 2,352.90 4.00%
31-Jan-1995 0.464161 2148.180147 997.10 0.00000000 0 997.10 2,352.90 5.00%
28-Feb-1995 0.510719 2148.180147 1,097.12 0.00000000 0 1,097.12 2,352.90 5.00%
31-Mar-1995 0.531903 2148.180147 1,142.62 0.00000000 0 1,142.62 2,352.90 5.00%
30-Apr-1995 0.565525 2148.180147 1,214.85 0.00000000 0 1,214.85 2,352.90 5.00%
31-May-1995 0.581208 2148.180147 1,248.54 0.00000000 0 1,248.54 2,352.90 5.00%
30-Jun-1995 0.609343 2148.180147 1,308.98 0.00000000 0 1,308.98 2,352.90 5.00%
31-Jul-1995 0.651340 2148.180147 1,399.19 0.00000000 0 1,399.19 2,352.90 5.00%
31-Aug-1995 0.670006 2148.180147 1,439.29 0.00000000 0 1,439.29 2,352.90 5.00%
30-Sep-1995 0.669985 2148.180147 1,439.25 0.00000000 0 1,439.25 2,352.90 5.00%
31-Oct-1995 0.676825 2148.180147 1,453.94 0.00000000 0 1,453.94 2,352.90 5.00%
30-Nov-1995 0.698876 2148.180147 1,501.31 0.00000000 0 1,501.31 2,352.90 5.00%
31-Dec-1995 0.727666 2148.180147 1,563.16 0.00000000 0 1,563.16 2,352.90 5.00%
31-Jan-1996 0.755399 2148.180147 1,622.73 0.00000000 0 1,622.73 2,352.90 6.00%
29-Feb-1996 0.785844 2148.180147 1,688.14 0.00000000 0 1,688.14 2,352.90 6.00%
31-Mar-1996 0.799702 2148.180147 1,717.90 0.00000000 0 1,717.90 2,352.90 6.00%
30-Apr-1996 0.810290 2148.180147 1,740.65 0.00000000 0 1,740.65 2,352.90 6.00%
31-May-1996 0.841486 2148.180147 1,807.66 0.00000000 0 1,807.66 2,352.90 6.00%
30-Jun-1996 0.849383 2148.180147 1,824.63 0.00000000 0 1,824.63 2,352.90 6.00%
31-Jul-1996 0.796635 2148.180147 1,711.32 0.00000000 0 1,711.32 2,352.90 6.00%
31-Aug-1996 0.826962 2148.180147 1,776.46 0.00000000 0 1,776.46 2,352.90 6.00%
30-Sep-1996 0.857299 2148.180147 1,841.63 0.00000000 0 1,841.63 2,352.90 6.00%
31-Oct-1996 0.859912 2148.180147 1,847.25 0.00000000 0 1,847.25 2,352.90 6.00%
30-Nov-1996 0.886182 2148.180147 1,903.68 0.00000000 0 1,903.68 2,352.90 6.00%
31-Dec-1996 0.866634 2148.180147 1,861.69 0.00000000 0 1,861.69 2,352.90 6.00%
31-Jan-1997 0.884684 2148.180147 1,900.46 0.00000000 0 1,900.46 2,352.90 7.00%
28-Feb-1997 0.893835 2148.180147 1,920.12 0.00000000 0 1,920.12 2,352.90 7.00%
31-Mar-1997 0.852988 2148.180147 1,832.37 0.00000000 0 1,832.37 2,352.90 7.00%
30-Apr-1997 0.860065 2148.180147 1,847.57 0.00000000 0 1,847.57 2,352.90 7.00%
31-May-1997 0.911920 2148.180147 1,958.97 0.00000000 0 1,958.97 2,352.90 7.00%
30-Jun-1997 0.940075 2148.180147 2,019.45 0.00000000 0 2,019.45 2,352.90 7.00%
31-Jul-1997 0.997761 2148.180147 2,143.37 0.00000000 0 2,143.37 2,352.90 7.00%
31-Aug-1997 0.973289 2148.180147 2,090.80 0.00000000 0 2,090.80 2,352.90 7.00%
30-Sep-1997 1.000000 2148.180147 2,148.18 0.00000000 0 2,148.18 2,352.90 7.00%
31-Oct-1997 0.946857 2148.180147 2,034.02 0.00000000 0 2,034.02 2,352.90 7.00%
30-Nov-1997 0.973146 2148.180147 2,090.49 0.00000000 0 2,090.49 2,352.90 7.00%
31-Dec-1997 0.993285 2148.180147 2,133.76 0.00000000 0 2,133.76 2,352.90 7.00%
31-Jan-1998 0.988810 2148.180147 2,124.14 0.00000000 0 2,124.14 2,352.90 7.00%
28-Feb-1998 1.066937 2148.180147 2,291.97 0.00000000 0 2,291.97 2,352.90 7.00%
31-Mar-1998 1.097841 2148.180147 2,358.36 0.00000000 0 2,358.36 2,352.90 7.00%
30-Apr-1998 1.106774 2148.180147 2,377.55 0.00000000 0 2,377.55 2,352.90 7.00%
31-May-1998 1.059017 2148.180147 2,274.96 0.00000000 0 2,274.96 2,352.90 7.00%
30-Jun-1998 1.050464 2148.180147 2,256.59 0.00000000 0 2,256.59 2,352.90 7.00%
<CAPTION>
ERV of ERV of
W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C> <C>
02-May-1994 50.00% 2,352.90 4.67 20.12% 20.12% 2,352.90 2,352.90 5
31-May-1994 50.00% 2,352.90 4.59 20.44% 20.44% 2,348.13 2,348.13 5
30-Jun-1994 50.00% 2,352.90 4.51 21.15% 21.15% 2,373.99 2,373.99 5
31-Jul-1994 50.00% 2,352.90 4.42 20.84% 20.84% 2,309.37 2,309.37 5
31-Aug-1994 50.00% 2,352.90 4.34 20.62% 20.62% 2,255.22 2,255.22 5
30-Sep-1994 50.00% 2,352.90 4.25 21.76% 21.76% 2,311.13 2,311.13 5
31-Oct-1994 50.00% 2,352.90 4.17 22.36% 22.36% 2,319.82 2,319.82 5
30-Nov-1994 50.00% 2,352.90 4.09 23.65% 23.65% 2,381.23 2,381.23 5
31-Dec-1994 50.00% 2,352.90 4.00 24.50% 24.50% 2,404.26 2,404.26 5
31-Jan-1995 40.00% 2,350.10 3.92 24.46% 24.50% 2,356.93 2,359.74 4
28-Feb-1995 40.00% 2,345.10 3.84 21.87% 21.97% 2,137.51 2,144.62 4
31-Mar-1995 40.00% 2,342.83 3.76 21.07% 21.20% 2,050.39 2,059.21 4
30-Apr-1995 40.00% 2,339.22 3.67 19.52% 19.71% 1,925.52 1,936.78 4
31-May-1995 40.00% 2,337.53 3.59 19.09% 19.31% 1,872.21 1,884.52 4
30-Jun-1995 40.00% 2,334.51 3.51 17.94% 18.20% 1,783.46 1,797.51 4
31-Jul-1995 40.00% 2,330.00 3.42 16.07% 16.40% 1,665.24 1,681.61 4
31-Aug-1995 40.00% 2,327.99 3.34 15.50% 15.87% 1,617.46 1,634.76 4
30-Sep-1995 40.00% 2,328.00 3.25 15.92% 16.30% 1,617.51 1,634.81 4
31-Oct-1995 40.00% 2,327.26 3.17 16.00% 16.40% 1,600.65 1,618.29 4
30-Nov-1995 40.00% 2,324.89 3.09 15.22% 15.66% 1,548.57 1,567.23 4
31-Dec-1995 40.00% 2,321.80 3.00 14.08% 14.59% 1,485.33 1,505.22 4
31-Jan-1996 30.00% 2,297.89 2.92 12.66% 13.58% 1,416.06 1,449.96 3
29-Feb-1996 30.00% 2,293.96 2.84 11.41% 12.41% 1,358.87 1,393.79 3
31-Mar-1996 30.00% 2,292.18 2.75 11.04% 12.10% 1,334.29 1,369.63 3
30-Apr-1996 30.00% 2,290.81 2.67 10.83% 11.94% 1,316.07 1,351.74 3
31-May-1996 30.00% 2,286.79 2.59 9.52% 10.73% 1,265.05 1,301.62 3
30-Jun-1996 30.00% 2,285.77 2.50 9.42% 10.69% 1,252.73 1,289.52 3
31-Jul-1996 30.00% 2,292.57 2.42 12.85% 14.07% 1,339.65 1,374.91 3
31-Aug-1996 30.00% 2,288.66 2.33 11.46% 12.79% 1,288.33 1,324.48 3
30-Sep-1996 30.00% 2,284.75 2.25 10.05% 11.49% 1,240.61 1,277.62 3
31-Oct-1996 30.00% 2,284.42 2.17 10.30% 11.81% 1,236.66 1,273.73 3
30-Nov-1996 30.00% 2,281.03 2.08 9.06% 10.70% 1,198.22 1,235.97 3
31-Dec-1996 30.00% 2,283.55 2.00 10.75% 12.42% 1,226.60 1,263.85 3
31-Jan-1997 20.00% 2,252.81 1.92 9.29% 11.80% 1,185.40 1,238.07 2
28-Feb-1997 20.00% 2,251.43 1.84 9.04% 11.69% 1,172.55 1,225.39 2
31-Mar-1997 20.00% 2,257.57 1.75 12.64% 15.33% 1,232.05 1,284.07 2
30-Apr-1997 20.00% 2,256.51 1.67 12.71% 15.57% 1,221.34 1,273.51 2
31-May-1997 20.00% 2,248.71 1.59 9.08% 12.24% 1,147.91 1,201.09 2
30-Jun-1997 20.00% 2,244.48 1.50 7.28% 10.69% 1,111.43 1,165.12 2
31-Jul-1997 20.00% 2,235.80 1.42 3.02% 6.79% 1,043.13 1,097.76 2
31-Aug-1997 20.00% 2,239.48 1.33 5.28% 9.26% 1,071.11 1,125.36 2
30-Sep-1997 20.00% 2,235.47 1.25 3.23% 7.54% 1,040.63 1,095.30 2
31-Oct-1997 20.00% 2,243.46 1.17 8.76% 13.29% 1,102.97 1,156.77 2
30-Nov-1997 20.00% 2,239.51 1.08 6.55% 11.52% 1,071.28 1,125.52 2
31-Dec-1997 20.00% 2,236.48 1.00 4.81% 10.27% 1,048.14 1,102.70 2
31-Jan-1998 10.00% 2,220.68 0.92 4.54% 10.77% 1,041.51 1,098.11 1
28-Feb-1998 10.00% 2,208.93 0.84 -3.62% 2.66% 969.54 1,022.24 1
31-Mar-1998 10.00% 2,204.28 0.75 -6.53% -0.23% 950.37 998.25 1
30-Apr-1998 10.00% 2,202.94 0.67 -7.34% -1.04% 950.09 993.03 1
31-May-1998 10.00% 2,210.12 0.59 -2.85% 3.43% 983.19 1,019.95 1
30-Jun-1998 10.00% 2,211.41 0.50 -2.00% 4.27% 989.86 1,021.29 1
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ATLAS PORTFOLIO BUILDER VA - GROWTH & INCOME SUBACCOUNT
---------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 57M) Year Rate Available
---------------------------------------
Initial investment $1,000 1 7.00% 10%
AUV 0.465510 2 7.00% 20%
Units purchased 2,148.180 3 6.00% 30%
4 5.00% 40%
M & E Factor (Annual Rate) 0.00% 5 4.00% 50%
M & E Factor (Monthly Rate) 0 6 0.00% 100%
7 0.00%
---------------------------------------
<CAPTION>
Monthly Ending
Actual Acct Value M & E M & E Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1998 1.024516 2148.1801 2,200.84 0.00000000 0 2,200.84 2,352.90 7.00%
31-Aug-1998 0.865571 2148.1801 1,859.40 0.00000000 0 1,859.40 2,352.90 7.00%
30-Sep-1998 0.926936 2148.1801 1,991.23 0.00000000 0 1,991.23 2,352.90 7.00%
31-Oct-1998 0.996541 2148.1801 2,140.75 0.00000000 0 2,140.75 2,352.90 7.00%
30-Nov-1998 1.049995 2148.1801 2,255.58 0.00000000 0 2,255.58 2,352.90 7.00%
31-Dec-1998 1.095299 2148.1801 2,352.90 0.00000000 0 2,352.90 2,352.90 7.00%
31-Dec-1998 2,352.90
<CAPTION>
ERV of ERV of
W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1998 10.00% 2,215.31 0.42 0.66% 6.91% 1,002.75 1,028.40 1
31-Aug-1998 10.00% 2,239.21 0.33 20.43% 26.54% 1,064.10 1,081.86 1
30-Sep-1998 10.00% 2,229.98 0.25 11.99% 18.16% 1,028.96 1,042.96 1
31-Oct-1998 10.00% 2,219.52 0.17 3.68% 9.91% 1,006.06 1,015.92 1
30-Nov-1998 10.00% 2,211.48 0.08 -1.96% 4.31% 998.32 1,003.59 1
31-Dec-1998 10.00% 2,204.67 0.00 -6.30% 0.00% 1,000.00 1,000.00 1
31-Dec-1998
</TABLE>
<TABLE>
<CAPTION>
Beginning Ending Value Ending Value
Years Value W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 0.08 2,255.58 2,211.48 2,352.90
3 Months 30-Sep-1998 0.25 1,991.23 2,229.98 2,352.90
6 Months 30-Jun-1998 0.50 2,256.59 2,211.41 2,352.90
9 Months 31-Mar-1998 0.75 2,358.36 2,204.28 2,352.90
YTD 31-Dec-1997 1.00 2,133.76 2,236.48 2,352.90
One Year 31-Dec-1997 1.00 2,133.76 2,236.48 2,352.90
Two Years 31-Dec-1996 2.00 1,861.69 2,283.55 2,352.90
Three Years 31-Dec-1995 3.00 1,563.16 2,321.80 2,352.90
Four Years 31-Dec-1994 4.00 978.64 2,352.90 2,352.90
Five Years 31-Dec-1993 5.00 -- -- --
Ten Years 31-Dec-1988 10.00 -- -- --
Inc to Date 02-May-1994 4.7 1,000.00 2,352.90 2,352.90
30-Sep-1997 1.3 2,148.18 2,235.47 2,352.90
<CAPTION>
Average Average
Annual Annual
Return Return Total Return Total Return
W/ Surrender W/O Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 -1.96% 4.31% -1.96% 4.31%
3 Months 30-Sep-1998 11.99% 18.16% 11.99% 18.16%
6 Months 30-Jun-1998 -2.00% 4.27% -2.00% 4.27%
9 Months 31-Mar-1998 -6.53% -0.23% -6.53% -0.23%
YTD 31-Dec-1997 4.81% 10.27% 4.81% 10.27%
One Year 31-Dec-1997 4.81% 10.27% 4.81% 10.27%
Two Years 31-Dec-1996 10.75% 12.42% 22.66% 26.39%
Three Years 31-Dec-1995 14.10% 14.60% 48.53% 50.52%
Four Years 31-Dec-1994 24.52% 24.52% 140.43% 140.43%
Five Years 31-Dec-1993 -- --
Ten Years 31-Dec-1988 -- --
Inc to Date 02-May-1994 20.12% 20.12% 135.29% 135.29%
30-Sep-1997 3.23% 7.54% 4.06% 9.53%
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ATLAS PORTFOLIO BUILDER VA - UTILITY FUND SUBACCOUNT
----------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 60M) Year Rate Available
----------------------------------------
Initial investment $1,000 1 7.00% 10%
AUV 0.689637 2 7.00% 20%
Units purchased 1,450.038 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
Monthly contract charge factor - 6 0.00% 100%
7 0.00%
----------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
28-Feb-1994 0.689637 1450.037515 1,000.00 1,000.00 1,834.32 4.00%
31-Mar-1994 0.668440 1450.037515 969.26 0.0000000015 0 969.26 1,834.32 4.00%
30-Apr-1994 0.674390 1450.037515 977.89 0.0000000015 0 977.89 1,834.32 4.00%
31-May-1994 0.669117 1450.037515 970.25 0.0000000015 0 970.25 1,834.32 4.00%
30-Jun-1994 0.650672 1450.037515 943.50 0.0000000015 0 943.50 1,834.32 4.00%
31-Jul-1994 0.676498 1450.037515 980.95 0.0000000015 0 980.95 1,834.32 4.00%
31-Aug-1994 0.686770 1450.037515 995.84 0.0000000015 0 995.84 1,834.32 4.00%
30-Sep-1994 0.675725 1450.037515 979.83 0.0000000015 0 979.83 1,834.32 4.00%
31-Oct-1994 0.686766 1450.037515 995.84 0.0000000015 0 995.84 1,834.32 4.00%
30-Nov-1994 0.667470 1450.037515 967.86 0.0000000015 0 967.86 1,834.32 4.00%
31-Dec-1994 0.668842 1450.037515 969.85 0.0000000015 0 969.85 1,834.32 4.00%
31-Jan-1995 0.686173 1450.037515 994.98 0.0000000015 0 994.98 1,834.32 5.00%
28-Feb-1995 0.691889 1450.037515 1,003.27 0.0000000015 0 1,003.27 1,834.32 5.00%
31-Mar-1995 0.693729 1450.037515 1,005.93 0.0000000015 0 1,005.93 1,834.32 5.00%
30-Apr-1995 0.704911 1450.037515 1,022.15 0.0000000015 0 1,022.15 1,834.32 5.00%
31-May-1995 0.727079 1450.037515 1,054.29 0.0000000015 0 1,054.29 1,834.32 5.00%
30-Jun-1995 0.727345 1450.037515 1,054.68 0.0000000015 0 1,054.68 1,834.32 5.00%
31-Jul-1995 0.734947 1450.037515 1,065.70 0.0000000015 0 1,065.70 1,834.32 5.00%
31-Aug-1995 0.737553 1450.037515 1,069.48 0.0000000015 0 1,069.48 1,834.32 5.00%
30-Sep-1995 0.773300 1450.037515 1,121.31 0.0000000015 0 1,121.31 1,834.32 5.00%
31-Oct-1995 0.775265 1450.037515 1,124.16 0.0000000015 0 1,124.16 1,834.32 5.00%
30-Nov-1995 0.792043 1450.037515 1,148.49 0.0000000015 0 1,148.49 1,834.32 5.00%
31-Dec-1995 0.819232 1450.037515 1,187.92 0.0000000015 0 1,187.92 1,834.32 5.00%
31-Jan-1996 0.840912 1450.037515 1,219.35 0.0000000015 0 1,219.35 1,834.32 6.00%
29-Feb-1996 0.823063 1450.037515 1,193.47 0.0000000015 0 1,193.47 1,834.32 6.00%
31-Mar-1996 0.816169 1450.037515 1,183.48 0.0000000015 0 1,183.48 1,834.32 6.00%
30-Apr-1996 0.821086 1450.037515 1,190.61 0.0000000015 0 1,190.61 1,834.32 6.00%
31-May-1996 0.828213 1450.037515 1,200.94 0.0000000015 0 1,200.94 1,834.32 6.00%
30-Jun-1996 0.850471 1450.037515 1,233.21 0.0000000015 0 1,233.21 1,834.32 6.00%
31-Jul-1996 0.812629 1450.037515 1,178.34 0.0000000015 0 1,178.34 1,834.32 6.00%
31-Aug-1996 0.815490 1450.037515 1,182.49 0.0000000015 0 1,182.49 1,834.32 6.00%
30-Sep-1996 0.823660 1450.037515 1,194.34 0.0000000015 0 1,194.34 1,834.32 6.00%
31-Oct-1996 0.853830 1450.037515 1,238.09 0.0000000015 0 1,238.09 1,834.32 6.00%
30-Nov-1996 0.887805 1450.037515 1,287.35 0.0000000015 0 1,287.35 1,834.32 6.00%
31-Dec-1996 0.901363 1450.037515 1,307.01 0.0000000015 0 1,307.01 1,834.32 6.00%
31-Jan-1997 0.917165 1450.037515 1,329.92 0.0000000015 0 1,329.92 1,834.32 7.00%
28-Feb-1997 0.927242 1450.037515 1,344.54 0.0000000015 0 1,344.54 1,834.32 7.00%
31-Mar-1997 0.897015 1450.037515 1,300.71 0.0000000015 0 1,300.71 1,834.32 7.00%
30-Apr-1997 0.906690 1450.037515 1,314.73 0.0000000015 0 1,314.73 1,834.32 7.00%
31-May-1997 0.950938 1450.037515 1,378.90 0.0000000015 0 1,378.90 1,834.32 7.00%
30-Jun-1997 0.975517 1450.037515 1,414.54 0.0000000015 0 1,414.54 1,834.32 7.00%
31-Jul-1997 0.993862 1450.037515 1,441.14 0.0000000015 0 1,441.14 1,834.32 7.00%
31-Aug-1997 0.959175 1450.037515 1,390.84 0.0000000015 0 1,390.84 1,834.32 7.00%
30-Sep-1997 1.000000 1450.037515 1,450.04 0.0000000015 0 1,450.04 1,834.32 7.00%
31-Oct-1997 1.000397 1450.037515 1,450.61 0.0000000015 0 1,450.61 1,834.32 7.00%
30-Nov-1997 1.069532 1450.037515 1,550.86 0.0000000015 0 1,550.86 1,834.32 7.00%
31-Dec-1997 1.125700 1450.037515 1,632.31 0.0000000015 0 1,632.31 1,834.32 7.00%
31-Jan-1998 1.105530 1450.037515 1,603.06 0.0000000015 0 1,603.06 1,834.32 7.00%
28-Feb-1998 1.126361 1450.037515 1,633.27 0.0000000015 0 1,633.27 1,834.32 7.00%
31-Mar-1998 1.192115 1450.037515 1,728.61 0.0000000015 0 1,728.61 1,834.32 7.00%
30-Apr-1998 1.161482 1450.037515 1,684.19 0.0000000015 0 1,684.19 1,834.32 7.00%
31-May-1998 1.154350 1450.037515 1,673.85 0.0000000015 0 1,673.85 1,834.32 7.00%
30-Jun-1998 1.172967 1450.037515 1,700.85 0.0000000015 0 1,700.85 1,834.32 7.00%
<CAPTION>
ERV of ERV of
W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C>
28-Feb-1994 50.00% 1,831.01 4.84 13.31% 13.35% 1,831.01 1,834.32
31-Mar-1994 50.00% 1,832.24 4.76 14.33% 14.35% 1,890.34 1,892.49
30-Apr-1994 50.00% 1,831.89 4.67 14.37% 14.41% 1,873.31 1,875.79
31-May-1994 50.00% 1,832.20 4.59 14.86% 14.89% 1,888.39 1,890.58
30-Jun-1994 50.00% 1,833.27 4.51 15.88% 15.90% 1,943.05 1,944.17
31-Jul-1994 50.00% 1,831.77 4.42 15.17% 15.21% 1,867.35 1,869.95
31-Aug-1994 50.00% 1,831.17 4.34 15.08% 15.12% 1,838.82 1,841.98
30-Sep-1994 50.00% 1,831.82 4.25 15.84% 15.88% 1,869.53 1,872.09
31-Oct-1994 50.00% 1,831.18 4.17 15.73% 15.78% 1,838.83 1,841.99
30-Nov-1994 50.00% 1,832.29 4.09 16.90% 16.93% 1,893.15 1,895.24
31-Dec-1994 50.00% 1,832.21 4.00 17.23% 17.26% 1,889.18 1,891.35
31-Jan-1995 40.00% 1,821.26 3.92 16.69% 16.90% 1,830.45 1,843.58
28-Feb-1995 40.00% 1,820.85 3.84 16.79% 17.01% 1,814.92 1,828.35
31-Mar-1995 40.00% 1,820.71 3.76 17.11% 17.34% 1,809.97 1,823.50
30-Apr-1995 40.00% 1,819.90 3.67 17.00% 17.25% 1,780.47 1,794.58
31-May-1995 40.00% 1,818.29 3.59 16.40% 16.68% 1,724.66 1,739.86
30-Jun-1995 40.00% 1,818.27 3.51 16.80% 17.10% 1,724.01 1,739.23
31-Jul-1995 40.00% 1,817.72 3.42 16.89% 17.20% 1,705.66 1,721.24
31-Aug-1995 40.00% 1,817.53 3.34 17.22% 17.55% 1,699.46 1,715.16
30-Sep-1995 40.00% 1,814.94 3.25 15.95% 16.32% 1,618.59 1,635.87
31-Oct-1995 40.00% 1,814.80 3.17 16.31% 16.70% 1,614.36 1,631.72
30-Nov-1995 40.00% 1,813.58 3.09 15.95% 16.37% 1,579.10 1,597.16
31-Dec-1995 40.00% 1,811.61 3.00 15.09% 15.57% 1,525.03 1,544.15
31-Jan-1996 30.00% 1,794.18 2.92 14.15% 15.02% 1,471.42 1,504.34
29-Feb-1996 30.00% 1,795.73 2.84 15.48% 16.35% 1,504.63 1,536.96
31-Mar-1996 30.00% 1,796.33 2.75 16.36% 17.25% 1,517.84 1,549.95
30-Apr-1996 30.00% 1,795.90 2.67 16.63% 17.56% 1,508.39 1,540.66
31-May-1996 30.00% 1,795.28 2.59 16.82% 17.79% 1,494.90 1,527.41
30-Jun-1996 30.00% 1,793.35 2.50 16.13% 17.18% 1,454.21 1,487.43
31-Jul-1996 30.00% 1,796.64 2.42 19.05% 20.07% 1,524.72 1,556.70
31-Aug-1996 30.00% 1,796.39 2.33 19.62% 20.69% 1,519.16 1,551.24
30-Sep-1996 30.00% 1,795.68 2.25 19.85% 20.99% 1,503.49 1,535.85
31-Oct-1996 30.00% 1,793.05 2.17 18.64% 19.89% 1,448.25 1,481.58
30-Nov-1996 30.00% 1,790.10 2.08 17.13% 18.51% 1,390.53 1,424.88
31-Dec-1996 30.00% 1,788.92 2.00 16.99% 18.47% 1,368.71 1,403.45
31-Jan-1997 20.00% 1,766.91 1.92 15.99% 18.28% 1,328.58 1,379.27
28-Feb-1997 20.00% 1,765.89 1.84 15.98% 18.41% 1,313.38 1,364.28
31-Mar-1997 20.00% 1,768.95 1.75 19.17% 21.66% 1,359.99 1,410.25
30-Apr-1997 20.00% 1,767.97 1.67 19.39% 22.05% 1,344.74 1,395.20
31-May-1997 20.00% 1,763.48 1.59 16.78% 19.71% 1,278.91 1,330.28
30-Jun-1997 20.00% 1,760.99 1.50 15.68% 18.86% 1,244.92 1,296.77
31-Jul-1997 20.00% 1,759.12 1.42 15.08% 18.53% 1,220.65 1,272.83
31-Aug-1997 20.00% 1,762.64 1.33 19.43% 23.05% 1,267.32 1,318.86
30-Sep-1997 20.00% 1,758.50 1.25 16.65% 20.65% 1,212.73 1,265.02
31-Oct-1997 20.00% 1,758.46 1.17 17.93% 22.27% 1,212.22 1,264.51
30-Nov-1997 20.00% 1,751.44 1.08 11.86% 16.73% 1,129.34 1,182.78
31-Dec-1997 20.00% 1,745.74 1.00 6.95% 12.38% 1,069.49 1,123.76
31-Jan-1998 10.00% 1,734.95 0.92 8.23% 14.43% 1,075.03 1,131.24
28-Feb-1998 10.00% 1,732.83 0.84 6.10% 12.31% 1,050.86 1,102.22
31-Mar-1998 10.00% 1,726.16 0.75 -0.14% 6.12% 998.93 1,045.74
30-Apr-1998 10.00% 1,729.27 0.67 2.68% 8.91% 1,017.89 1,058.99
31-May-1998 10.00% 1,729.99 0.59 3.35% 9.59% 1,019.53 1,055.14
30-Jun-1998 10.00% 1,728.10 0.50 1.60% 7.85% 1,008.05 1,038.82
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ATLAS PORTFOLIO BUILDER VA - UTILITY FUND SUBACCOUNT
----------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 60M) Year Rate Available
----------------------------------------
Initial investment $1,000 1 7.00% 10%
AUV 0.689637 2 7.00% 20%
Units purchased 1,450.038 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
Monthly contract charge factor - 6 0.00% 100%
7 0.00%
----------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1998 1.136584 1450.037515 1,648.09 0.00000000 0 1,648.09 1,834.32 7.00%
31-Aug-1998 1.093625 1450.037515 1,585.80 0.00000000 0 1,585.80 1,834.32 7.00%
30-Sep-1998 1.190480 1450.037515 1,726.24 0.00000000 0 1,726.24 1,834.32 7.00%
31-Oct-1998 1.202405 1450.037515 1,743.53 0.00000000 0 1,743.53 1,834.32 7.00%
30-Nov-1998 1.222554 1450.037515 1,772.75 0.00000000 0 1,772.75 1,834.32 7.00%
31-Dec-1998 1.265017 1450.037515 1,834.32 0.00000000 0 1,834.32 1,834.32 7.00%
31-Dec-1998 1,834.32
<CAPTION>
ERV of ERV of
W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1998 10.00% 1,731.80 0.42 5.08% 11.30% 1,020.98 1,045.90
31-Aug-1998 10.00% 1,736.16 0.33 9.48% 15.67% 1,030.74 1,049.87
30-Sep-1998 10.00% 1,726.33 0.25 0.00% 6.26% 1,000.01 1,015.42
31-Oct-1998 10.00% 1,725.12 0.17 -1.06% 5.21% 998.23 1,008.52
30-Nov-1998 10.00% 1,723.07 0.08 -2.80% 3.47% 997.59 1,002.90
31-Dec-1998 10.00% 1,718.76 0.00 -6.30% 0.00% 1,000.00 1,000.00
31-Dec-1998
</TABLE>
<TABLE>
<CAPTION>
Beginning Ending Value Ending Value
Years Value W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 0.08 1,772.75 1,723.07 1,834.32
3 Months 30-Sep-1998 0.25 1,726.24 1,726.33 1,834.32
6 Months 30-Jun-1998 0.50 1,700.85 1,728.10 1,834.32
9 Months 31-Mar-1998 0.75 1,728.61 1,726.16 1,834.32
YTD 31-Dec-1997 1.00 1,632.31 1,745.74 1,834.32
One Year 31-Dec-1997 1.00 1,632.31 1,745.74 1,834.32
Two Years 31-Dec-1996 2.00 1,307.01 1,788.92 1,834.32
Three Years 31-Dec-1995 3.00 1,187.92 1,811.61 1,834.32
Four Years 31-Dec-1994 4.00 969.85 1,832.21 1,834.32
Five Years 31-Dec-1993 5.00 -- -- --
Ten Years 31-Dec-1993 10.00 -- -- --
Inc to Date 28-Feb-1994 4.8 1,000.00 1,831.01 1,834.32
30-Sep-1997 1.3 1,450.04 1,758.50 1,834.32
<CAPTION>
Average Average
Annual Annual
Return Return Total Return Total Return
W/ Surrender W/O Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 -2.80% 3.47% -2.80% 3.47%
3 Months 30-Sep-1998 0.00% 6.26% 0.00% 6.26%
6 Months 30-Jun-1998 1.60% 7.85% 1.60% 7.85%
9 Months 31-Mar-1998 -0.14% 6.12% -0.14% 6.12%
YTD 31-Dec-1997 6.95% 12.38% 6.95% 12.38%
One Year 31-Dec-1997 6.95% 12.38% 6.95% 12.38%
Two Years 31-Dec-1996 16.99% 18.47% 36.87% 40.34%
Three Years 31-Dec-1995 15.10% 15.58% 52.50% 54.42%
Four Years 31-Dec-1994 17.24% 17.27% 88.92% 89.14%
Five Years 31-Dec-1993 -- --
Ten Years 31-Dec-1993 -- --
Inc to Date 28-Feb-1994 13.31% 13.35% 83.10% 83.43%
30-Sep-1997 16.65% 20.65% 21.27% 26.50%
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ATLAS PORTFOLIO BUILDER - T ROWE PRICE EQUITY INCOME
------------------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 65M) Year Rate Available
------------------------------------------------
Initial investment $1,000 1 7.00% 10%
AUV 1.000000 2 7.00% 20%
Units purchased 1,000.000 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
6 0.00% 100%
7 0.00%
------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
03-Jan-1995 1.000000 1000 1,000.00 1,000.00 2,065.62 5.00%
31-Jan-1995 0.999935 1000 999.94 0.00000000 0 999.94 2,065.62 5.00%
28-Feb-1995 1.038787 1000 1,038.79 0.00000000 0 1,038.79 2,065.62 5.00%
31-Mar-1995 1.052511 1000 1,052.51 0.00000000 0 1,052.51 2,065.62 5.00%
30-Apr-1995 1.075282 1000 1,075.28 0.00000000 0 1,075.28 2,065.62 5.00%
31-May-1995 1.108737 1000 1,108.74 0.00000000 0 1,108.74 2,065.62 5.00%
30-Jun-1995 1.115419 1000 1,115.42 0.00000000 0 1,115.42 2,065.62 5.00%
31-Jul-1995 1.135928 1000 1,135.93 0.00000000 0 1,135.93 2,065.62 5.00%
31-Aug-1995 1.151435 1000 1,151.44 0.00000000 0 1,151.44 2,065.62 5.00%
30-Sep-1995 1.193717 1000 1,193.72 0.00000000 0 1,193.72 2,065.62 5.00%
31-Oct-1995 1.202148 1000 1,202.15 0.00000000 0 1,202.15 2,065.62 5.00%
30-Nov-1995 1.248176 1000 1,248.18 0.00000000 0 1,248.18 2,065.62 5.00%
31-Dec-1995 1.287240 1000 1,287.24 0.00000000 0 1,287.24 2,065.62 5.00%
31-Jan-1996 1.323061 1000 1,323.06 0.00000000 0 1,323.06 2,065.62 6.00%
29-Feb-1996 1.325533 1000 1,325.53 0.00000000 0 1,325.53 2,065.62 6.00%
31-Mar-1996 1.342750 1000 1,342.75 0.00000000 0 1,342.75 2,065.62 6.00%
30-Apr-1996 1.349950 1000 1,349.95 0.00000000 0 1,349.95 2,065.62 6.00%
31-May-1996 1.370709 1000 1,370.71 0.00000000 0 1,370.71 2,065.62 6.00%
30-Jun-1996 1.378153 1000 1,378.15 0.00000000 0 1,378.15 2,065.62 6.00%
31-Jul-1996 1.337880 1000 1,337.88 0.00000000 0 1,337.88 2,065.62 6.00%
31-Aug-1996 1.365965 1000 1,365.97 0.00000000 0 1,365.97 2,065.62 6.00%
30-Sep-1996 1.420548 1000 1,420.55 0.00000000 0 1,420.55 2,065.62 6.00%
31-Oct-1996 1.451366 1000 1,451.37 0.00000000 0 1,451.37 2,065.62 6.00%
30-Nov-1996 1.532388 1000 1,532.39 0.00000000 0 1,532.39 2,065.62 6.00%
31-Dec-1996 1.521680 1000 1,521.68 0.00000000 0 1,521.68 2,065.62 6.00%
31-Jan-1997 1.560117 1000 1,560.12 0.00000000 0 1,560.12 2,065.62 7.00%
28-Feb-1997 1.595705 1000 1,595.71 0.00000000 0 1,595.71 2,065.62 7.00%
31-Mar-1997 1.560536 1000 1,560.54 0.00000000 0 1,560.54 2,065.62 7.00%
30-Apr-1997 1.595918 1000 1,595.92 0.00000000 0 1,595.92 2,065.62 7.00%
31-May-1997 1.669314 1000 1,669.31 0.00000000 0 1,669.31 2,065.62 7.00%
30-Jun-1997 1.730058 1000 1,730.06 0.00000000 0 1,730.06 2,065.62 7.00%
31-Jul-1997 1.827135 1000 1,827.14 0.00000000 0 1,827.14 2,065.62 7.00%
31-Aug-1997 1.777115 1000 1,777.12 0.00000000 0 1,777.12 2,065.62 7.00%
30-Sep-1997 1.857860 1000 1,857.86 0.00000000 0 1,857.86 2,065.62 7.00%
31-Oct-1997 1.806777 1000 1,806.78 0.00000000 0 1,806.78 2,065.62 7.00%
30-Nov-1997 1.871627 1000 1,871.63 0.00000000 0 1,871.63 2,065.62 7.00%
31-Dec-1997 1.925022 1000 1,925.02 0.00000000 0 1,925.02 2,065.62 7.00%
31-Jan-1998 1.906920 1000 1,906.92 0.00000000 0 1,906.92 2,065.62 7.00%
28-Feb-1998 1.999245 1000 1,999.25 0.00000000 0 1,999.25 2,065.62 7.00%
31-Mar-1998 2.090058 1000 2,090.06 0.00000000 0 2,090.06 2,065.62 7.00%
30-Apr-1998 2.070824 1000 2,070.82 0.00000000 0 2,070.82 2,065.62 7.00%
31-May-1998 2.034882 1000 2,034.88 0.00000000 0 2,034.88 2,065.62 7.00%
30-Jun-1998 2.026172 1000 2,026.17 0.00000000 0 2,026.17 2,065.62 7.00%
<CAPTION>
ERV of ERV of
W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C>
03-Jan-1995 40.00% 2,056.94 3.99 19.79% 19.91% 2,056.94 2,065.62 4
31-Jan-1995 40.00% 2,056.94 3.92 20.21% 20.34% 2,057.07 2,065.76 4
28-Feb-1995 40.00% 2,055.00 3.84 19.44% 19.60% 1,978.27 1,988.50 4
31-Mar-1995 40.00% 2,054.31 3.76 19.49% 19.66% 1,951.82 1,962.57 4
30-Apr-1995 40.00% 2,053.17 3.67 19.25% 19.45% 1,909.43 1,921.01 4
31-May-1995 40.00% 2,051.50 3.59 18.70% 18.93% 1,850.30 1,863.04 4
30-Jun-1995 40.00% 2,051.16 3.51 18.97% 19.21% 1,838.92 1,851.88 4
31-Jul-1995 40.00% 2,050.14 3.42 18.83% 19.09% 1,804.81 1,818.45 4
31-Aug-1995 40.00% 2,049.36 3.34 18.86% 19.14% 1,779.83 1,793.96 4
30-Sep-1995 40.00% 2,047.25 3.25 18.03% 18.35% 1,715.02 1,730.41 4
31-Oct-1995 40.00% 2,046.83 3.17 18.28% 18.62% 1,702.64 1,718.28 4
30-Nov-1995 40.00% 2,044.53 3.09 17.33% 17.72% 1,638.01 1,654.91 4
31-Dec-1995 40.00% 2,042.57 3.00 16.62% 17.06% 1,586.79 1,604.69 4
31-Jan-1996 30.00% 2,023.42 2.92 15.67% 16.49% 1,529.35 1,561.25 3
29-Feb-1996 30.00% 2,023.27 2.84 16.07% 16.92% 1,526.38 1,558.33 3
31-Mar-1996 30.00% 2,022.24 2.75 16.03% 16.93% 1,506.04 1,538.35 3
30-Apr-1996 30.00% 2,021.81 2.67 16.32% 17.26% 1,497.69 1,530.15 3
31-May-1996 30.00% 2,020.56 2.59 16.19% 17.18% 1,474.10 1,506.97 3
30-Jun-1996 30.00% 2,020.12 2.50 16.50% 17.54% 1,465.81 1,498.83 3
31-Jul-1996 30.00% 2,022.53 2.42 18.63% 19.67% 1,511.74 1,543.95 3
31-Aug-1996 30.00% 2,020.85 2.33 18.27% 19.38% 1,479.43 1,512.21 3
30-Sep-1996 30.00% 2,017.57 2.25 16.86% 18.09% 1,420.28 1,454.10 3
31-Oct-1996 30.00% 2,015.72 2.17 16.37% 17.69% 1,388.84 1,423.23 3
30-Nov-1996 30.00% 2,010.86 2.08 13.92% 15.40% 1,312.24 1,347.98 3
31-Dec-1996 30.00% 2,011.50 2.00 14.97% 16.51% 1,321.90 1,357.46 3
31-Jan-1997 20.00% 1,985.33 1.92 13.41% 15.78% 1,272.55 1,324.02 2
28-Feb-1997 20.00% 1,982.84 1.84 12.54% 15.07% 1,242.61 1,294.49 2
31-Mar-1997 20.00% 1,985.30 1.75 14.72% 17.34% 1,272.19 1,323.66 2
30-Apr-1997 20.00% 1,982.83 1.67 13.87% 16.69% 1,242.44 1,294.32 2
31-May-1997 20.00% 1,977.69 1.59 11.28% 14.37% 1,184.73 1,237.41 2
30-Jun-1997 20.00% 1,973.44 1.50 9.15% 12.51% 1,140.68 1,193.96 2
31-Jul-1997 20.00% 1,966.64 1.42 5.32% 9.03% 1,076.35 1,130.53 2
31-Aug-1997 20.00% 1,970.14 1.33 8.03% 11.94% 1,108.62 1,162.35 2
30-Sep-1997 20.00% 1,964.49 1.25 4.56% 8.84% 1,057.39 1,111.83 2
31-Oct-1997 20.00% 1,968.07 1.17 7.60% 12.16% 1,089.27 1,143.26 2
30-Nov-1997 20.00% 1,963.53 1.08 4.52% 9.52% 1,049.10 1,103.65 2
31-Dec-1997 20.00% 1,959.79 1.00 1.81% 7.30% 1,018.06 1,073.04 2
31-Jan-1998 10.00% 1,946.60 0.92 2.08% 8.32% 1,019.02 1,075.89 1
28-Feb-1998 10.00% 1,940.14 0.84 -2.96% 3.32% 975.15 1,027.76 1
31-Mar-1998 10.00% 1,933.78 0.75 -7.48% -1.17% 943.13 991.18 1
30-Apr-1998 10.00% 1,935.12 0.67 -6.55% -0.25% 955.53 998.31 1
31-May-1998 10.00% 1,937.64 0.59 -4.78% 1.51% 971.70 1,008.83 1
30-Jun-1998 10.00% 1,938.25 0.50 -4.34% 1.95% 977.88 1,009.77 1
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ATLAS PORTFOLIO BUILDER - T ROWE PRICE EQUITY INCOME
------------------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 65M) Year Rate Available
------------------------------------------------
Initial investment $1,000 1 7.00% 10%
AUV 1.000000 2 7.00% 20%
Units purchased 1,000.000 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00% 5 4.00% 50%
6 0.00% 100%
7 0.00%
------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1998 1.965718 1000 1,965.72 0.00000000 0 1,965.72 2,065.62 7.00%
31-Aug-1998 1.774917 1000 1,774.92 0.00000000 0 1,774.92 2,065.62 7.00%
30-Sep-1998 1.867029 1000 1,867.03 0.00000000 0 1,867.03 2,065.62 7.00%
31-Oct-1998 1.977517 1000 1,977.52 0.00000000 0 1,977.52 2,065.62 7.00%
30-Nov-1998 2.054647 1000 2,054.65 0.00000000 0 2,054.65 2,065.62 7.00%
31-Dec-1998 2.065623 1000 2,065.62 0.00000000 0 2,065.62 2,065.62 7.00%
31-Dec-1998 2,065.62
<CAPTION>
ERV of ERV of
W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1998 10.00% 1,942.48 0.42 -1.18% 5.08% 995.03 1,021.00
31-Aug-1998 10.00% 1,955.84 0.33 10.19% 16.38% 1,032.98 1,052.01
30-Sep-1998 10.00% 1,949.39 0.25 4.41% 10.64% 1,010.94 1,025.81
31-Oct-1998 10.00% 1,941.66 0.17 -1.81% 4.46% 996.95 1,007.31
30-Nov-1998 10.00% 1,936.26 0.08 -5.76% 0.53% 994.97 1,000.45
31-Dec-1998 10.00% 1,935.49 0.00 -6.30% 0.00% 1,000.00 1,000.00
31-Dec-1998
</TABLE>
<TABLE>
<CAPTION>
Beginning Ending Value Ending Value
Years Value W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 0.08 2,054.65 1,936.26 2,065.62
3 Months 30-Sep-1998 0.25 1,867.03 1,949.39 2,065.62
6 Months 30-Jun-1998 0.50 2,026.17 1,938.25 2,065.62
9 Months 31-Mar-1998 0.75 2,090.06 1,933.78 2,065.62
YTD 31-Dec-1997 1.00 1,925.02 1,959.79 2,065.62
One Year 31-Dec-1997 1.00 1,925.02 1,959.79 2,065.62
Two Years 31-Dec-1996 2.00 1,521.68 2,011.50 2,065.62
Three Years 31-Dec-1995 3.00 1,287.24 2,042.57 2,065.62
Four Years 31-Dec-1994 4.00 -- -- --
Five Years 31-Dec-1993 5.00 -- -- --
Ten Years 31-Dec-1988 10.00 -- -- --
Inc to date 03-Jan-1995 4.0 1,000.00 2,056.94 2,065.62
30-Sep-1997 1.3 1,857.86 1,964.49 2,065.62
<CAPTION>
Average Average
Annual Annual
Return Return Total Return Total Return
W/ Surrender W/O Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 -5.76% 0.53% -5.76% 0.53%
3 Months 30-Sep-1998 4.41% 10.64% 4.41% 10.64%
6 Months 30-Jun-1998 -4.34% 1.95% -4.34% 1.95%
9 Months 31-Mar-1998 -7.48% -1.17% -7.48% -1.17%
YTD 31-Dec-1997 1.81% 7.30% 1.81% 7.30%
One Year 31-Dec-1997 1.81% 7.30% 1.81% 7.30%
Two Years 31-Dec-1996 14.97% 16.51% 32.19% 35.75%
Three Years 31-Dec-1995 16.64% 17.07% 58.68% 60.47%
Four Years 31-Dec-1994 -- --
Five Years 31-Dec-1993 -- --
Ten Years 31-Dec-1988 -- --
Inc to date 03-Jan-1995 19.79% 19.91% 105.69% 106.56%
30-Sep-1997 4.56% 8.84% 5.74% 11.18%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER VA - QUALITY BOND SUBACCOUNT
----------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 59M) Year Rate Available
----------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.584160 2 7.00% 20%
Units purchased 1,711.860 3 6.00% 30%
4 5.00% 40%
M & E Factor (Annual Rate) 5 4.00% 50%
M & E Factor (Monthly Rate) 0 6 0.00% 100%
7 0.00%
----------------------------------------
<CAPTION>
Monthly Ending
Actual Acct Value M & E M & E Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value harge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
31-Aug-1990 0.584160 1711.860376 1,000.00 1,000.00 1,824.93 0.00%
30-Sep-1990 0.586399 1711.860376 1,003.83 0.00000000 0 1,003.83 1,824.93 0.00%
31-Oct-1990 0.589876 1711.860376 1,009.78 0.00000000 0 1,009.78 1,824.93 0.00%
30-Nov-1990 0.592664 1711.860376 1,014.56 0.00000000 0 1,014.56 1,824.93 0.00%
31-Dec-1990 0.594715 1711.860376 925.92 0.00000000 0 925.92 1,824.93 0.00%
31-Jan-1991 0.597586 1711.860376 1,022.98 0.00000000 0 1,022.98 1,824.93 0.00%
28-Feb-1991 0.599692 1711.860376 1,026.59 0.00000000 0 1,026.59 1,824.93 0.00%
31-Mar-1991 0.601441 1711.860376 1,029.58 0.00000000 0 1,029.58 1,824.93 0.00%
30-Apr-1991 0.606724 1711.860376 1,038.63 0.00000000 0 1,038.63 1,824.93 0.00%
31-May-1991 0.607823 1711.860376 1,040.51 0.00000000 0 1,040.51 1,824.93 0.00%
30-Jun-1991 0.608148 1711.860376 1,041.06 0.00000000 0 1,041.06 1,824.93 0.00%
31-Jul-1991 0.612603 1711.860376 1,048.69 0.00000000 0 1,048.69 1,824.93 0.00%
31-Aug-1991 0.620316 1711.860376 1,061.89 0.00000000 0 1,061.89 1,824.93 0.00%
30-Sep-1991 0.632962 1711.860376 1,083.54 0.00000000 0 1,083.54 1,824.93 0.00%
31-Oct-1991 0.638257 1711.860376 1,092.61 0.00000000 0 1,092.61 1,824.93 0.00%
30-Nov-1991 0.645204 1711.860376 1,104.50 0.00000000 0 1,104.50 1,824.93 0.00%
31-Dec-1991 0.668589 1711.860376 1,144.53 0.00000000 0 1,144.53 1,824.93 0.00%
31-Jan-1992 0.657783 1711.860376 1,126.03 0.00000000 0 1,126.03 1,824.93 0.00%
29-Feb-1992 0.662006 1711.860376 1,133.26 0.00000000 0 1,133.26 1,824.93 0.00%
31-Mar-1992 0.654032 1711.860376 1,119.61 0.00000000 0 1,119.61 1,824.93 0.00%
30-Apr-1992 0.656493 1711.860376 1,123.83 0.00000000 0 1,123.83 1,824.93 0.00%
31-May-1992 0.677709 1711.860376 1,160.14 0.00000000 0 1,160.14 1,824.93 0.00%
30-Jun-1992 0.686624 1711.860376 1,175.40 0.00000000 0 1,175.40 1,824.93 0.00%
31-Jul-1992 0.718793 1711.860376 1,230.47 0.00000000 0 1,230.47 1,824.93 0.00%
31-Aug-1992 0.725927 1711.860376 1,242.69 0.00000000 0 1,242.69 1,824.93 0.00%
30-Sep-1992 0.738935 1711.860376 1,264.95 0.00000000 0 1,264.95 1,824.93 0.00%
31-Oct-1992 0.726000 1711.860376 1,242.81 0.00000000 0 1,242.81 1,824.93 0.00%
30-Nov-1992 0.723837 1711.860376 1,239.11 0.00000000 0 1,239.11 1,824.93 0.00%
31-Dec-1992 0.738181 1711.860376 1,263.66 0.00000000 0 1,263.66 1,824.93 0.00%
31-Jan-1993 0.754863 1711.860376 1,292.22 0.00000000 0 1,292.22 1,824.93 0.00%
28-Feb-1993 0.774948 1711.860376 1,326.60 0.00000000 0 1,326.60 1,824.93 0.00%
31-Mar-1993 0.778179 1711.860376 1,332.13 0.00000000 0 1,332.13 1,824.93 0.00%
30-Apr-1993 0.784139 1711.860376 1,342.34 0.00000000 0 1,342.34 1,824.93 0.00%
31-May-1993 0.783200 1711.860376 1,340.73 0.00000000 0 1,340.73 1,824.93 0.00%
30-Jun-1993 0.801426 1711.860376 1,371.93 0.00000000 0 1,371.93 1,824.93 0.00%
31-Jul-1993 0.810659 1711.860376 1,387.74 0.00000000 0 1,387.74 1,824.93 0.00%
31-Aug-1993 0.842698 1711.860376 1,442.58 0.00000000 0 1,442.58 1,824.93 0.00%
30-Sep-1993 0.844942 1711.860376 1,446.42 0.00000000 0 1,446.42 1,824.93 0.00%
31-Oct-1993 0.850690 1711.860376 1,456.26 0.00000000 0 1,456.26 1,824.93 0.00%
30-Nov-1993 0.836806 1711.860376 1,432.49 0.00000000 0 1,432.49 1,824.93 0.00%
31-Dec-1993 0.838676 1711.860376 1,435.70 0.00000000 0 1,435.70 1,824.93 0.00%
31-Jan-1994 0.854741 1711.860376 1,463.20 0.00000000 0 1,463.20 1,824.93 4.00%
28-Feb-1994 0.825601 1711.860376 1,413.31 0.00000000 0 1,413.31 1,824.93 4.00%
31-Mar-1994 0.797534 1711.860376 1,365.27 0.00000000 0 1,365.27 1,824.93 4.00%
30-Apr-1994 0.785902 1711.860376 1,345.35 0.00000000 0 1,345.35 1,824.93 4.00%
31-May-1994 0.786788 1711.860376 1,346.87 0.00000000 0 1,346.87 1,824.93 4.00%
30-Jun-1994 0.784265 1711.860376 1,342.55 0.00000000 0 1,342.55 1,824.93 4.00%
<CAPTION>
ERV of ERV of
W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C>
31-Aug-1990 100.00% 1,824.93 8.34 7.48% 7.48% 1,824.93 1,824.93 9
30-Sep-1990 100.00% 1,824.93 8.26 7.51% 7.51% 1,817.97 1,817.97 9
31-Oct-1990 100.00% 1,824.93 8.17 7.51% 7.51% 1,807.25 1,807.25 9
30-Nov-1990 100.00% 1,824.93 8.09 7.53% 7.53% 1,798.75 1,798.75 9
31-Dec-1990 100.00% 1,824.93 8.01 8.85% 8.85% 1,970.93 1,970.93 9
31-Jan-1991 100.00% 1,824.93 7.92 7.58% 7.58% 1,783.93 1,783.93 8
28-Feb-1991 100.00% 1,824.93 7.84 7.61% 7.61% 1,777.67 1,777.67 8
31-Mar-1991 100.00% 1,824.93 7.76 7.66% 7.66% 1,772.50 1,772.50 8
30-Apr-1991 100.00% 1,824.93 7.68 7.62% 7.62% 1,757.06 1,757.06 8
31-May-1991 100.00% 1,824.93 7.59 7.68% 7.68% 1,753.89 1,753.89 8
30-Jun-1991 100.00% 1,824.93 7.51 7.76% 7.76% 1,752.95 1,752.95 8
31-Jul-1991 100.00% 1,824.93 7.42 7.75% 7.75% 1,740.20 1,740.20 8
31-Aug-1991 100.00% 1,824.93 7.34 7.66% 7.66% 1,718.57 1,718.57 8
30-Sep-1991 100.00% 1,824.93 7.26 7.45% 7.45% 1,684.23 1,684.23 8
31-Oct-1991 100.00% 1,824.93 7.17 7.41% 7.41% 1,670.26 1,670.26 8
30-Nov-1991 100.00% 1,824.93 7.09 7.34% 7.34% 1,652.27 1,652.27 8
31-Dec-1991 100.00% 1,824.93 7.01 6.89% 6.89% 1,594.48 1,594.48 8
31-Jan-1992 100.00% 1,824.93 6.92 7.23% 7.23% 1,620.68 1,620.68 7
29-Feb-1992 100.00% 1,824.93 6.84 7.21% 7.21% 1,610.34 1,610.34 7
31-Mar-1992 100.00% 1,824.93 6.76 7.50% 7.50% 1,629.97 1,629.97 7
30-Apr-1992 100.00% 1,824.93 6.67 7.53% 7.53% 1,623.86 1,623.86 7
31-May-1992 100.00% 1,824.93 6.59 7.12% 7.12% 1,573.03 1,573.03 7
30-Jun-1992 100.00% 1,824.93 6.51 6.99% 6.99% 1,552.60 1,552.60 7
31-Jul-1992 100.00% 1,824.93 6.42 6.33% 6.33% 1,483.12 1,483.12 7
31-Aug-1992 100.00% 1,824.93 6.34 6.25% 6.25% 1,468.54 1,468.54 7
30-Sep-1992 100.00% 1,824.93 6.25 6.03% 6.03% 1,442.69 1,442.69 7
31-Oct-1992 100.00% 1,824.93 6.17 6.42% 6.42% 1,468.39 1,468.39 7
30-Nov-1992 100.00% 1,824.93 6.09 6.57% 6.57% 1,472.78 1,472.78 7
31-Dec-1992 100.00% 1,824.93 6.00 6.31% 6.31% 1,444.16 1,444.16 7
31-Jan-1993 100.00% 1,824.93 5.92 6.01% 6.01% 1,412.25 1,412.25 6
28-Feb-1993 100.00% 1,824.93 5.84 5.61% 5.61% 1,375.65 1,375.65 6
31-Mar-1993 100.00% 1,824.93 5.76 5.62% 5.62% 1,369.93 1,369.93 6
30-Apr-1993 100.00% 1,824.93 5.67 5.56% 5.56% 1,359.52 1,359.52 6
31-May-1993 100.00% 1,824.93 5.59 5.67% 5.67% 1,361.15 1,361.15 6
30-Jun-1993 100.00% 1,824.93 5.51 5.32% 5.32% 1,330.20 1,330.20 6
31-Jul-1993 100.00% 1,824.93 5.42 5.18% 5.18% 1,315.04 1,315.04 6
31-Aug-1993 100.00% 1,824.93 5.34 4.50% 4.50% 1,265.05 1,265.05 6
30-Sep-1993 100.00% 1,824.93 5.25 4.52% 4.52% 1,261.69 1,261.69 6
31-Oct-1993 100.00% 1,824.93 5.17 4.46% 4.46% 1,253.16 1,253.16 6
30-Nov-1993 100.00% 1,824.93 5.09 4.87% 4.87% 1,273.96 1,273.96 6
31-Dec-1993 100.00% 1,824.93 5.00 4.91% 4.91% 1,271.11 1,271.11 6
31-Jan-1994 50.00% 1,802.90 4.92 4.34% 4.59% 1,232.17 1,247.22 5
28-Feb-1994 50.00% 1,804.90 4.84 5.18% 5.42% 1,277.07 1,291.24 5
31-Mar-1994 50.00% 1,806.82 4.76 6.07% 6.29% 1,323.42 1,336.69 5
30-Apr-1994 50.00% 1,807.62 4.67 6.52% 6.74% 1,343.60 1,356.47 5
31-May-1994 50.00% 1,807.56 4.59 6.62% 6.84% 1,342.04 1,354.94 5
30-Jun-1994 50.00% 1,807.73 4.51 6.82% 7.05% 1,346.49 1,359.30 5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER VA - QUALITY BOND SUBACCOUNT
----------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 59M) Year Rate Available
----------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.584160 2 7.00% 20%
Units purchased 1,711.860 3 6.00% 30%
4 5.00% 40%
M & E Factor (Annual Rate) 5 4.00% 50%
M & E Factor (Monthly Rate) 0 6 0.00% 100%
7 0.00%
----------------------------------------
<CAPTION>
Monthly Ending
Actual Acct Value M & E M & E Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1994 0.797692 1711.860376 1,365.54 0.00000000 0 1,365.54 1,824.93 4.00%
31-Aug-1994 0.798078 1711.860376 1,366.20 0.00000000 0 1,366.20 1,824.93 4.00%
30-Sep-1994 0.785396 1711.860376 1,344.49 0.00000000 0 1,344.49 1,824.93 4.00%
31-Oct-1994 0.782573 1711.860376 1,339.66 0.00000000 0 1,339.66 1,824.93 4.00%
30-Nov-1994 0.781903 1711.860376 1,338.51 0.00000000 0 1,338.51 1,824.93 4.00%
31-Dec-1994 0.788124 1711.860376 1,349.16 0.00000000 0 1,349.16 1,824.93 4.00%
31-Jan-1995 0.802173 1711.860376 1,373.21 0.00000000 0 1,373.21 1,824.93 5.00%
28-Feb-1995 0.818555 1711.860376 1,401.25 0.00000000 0 1,401.25 1,824.93 5.00%
31-Mar-1995 0.825682 1711.860376 1,413.45 0.00000000 0 1,413.45 1,824.93 5.00%
30-Apr-1995 0.834335 1711.860376 1,428.27 0.00000000 0 1,428.27 1,824.93 5.00%
31-May-1995 0.876554 1711.860376 1,500.54 0.00000000 0 1,500.54 1,824.93 5.00%
30-Jun-1995 0.884533 1711.860376 1,514.20 0.00000000 0 1,514.20 1,824.93 5.00%
31-Jul-1995 0.878587 1711.860376 1,504.02 0.00000000 0 1,504.02 1,824.93 5.00%
31-Aug-1995 0.889668 1711.860376 1,522.99 0.00000000 0 1,522.99 1,824.93 5.00%
30-Sep-1995 0.897509 1711.860376 1,536.41 0.00000000 0 1,536.41 1,824.93 5.00%
31-Oct-1995 0.910033 1711.860376 1,557.85 0.00000000 0 1,557.85 1,824.93 5.00%
30-Nov-1995 0.924146 1711.860376 1,582.01 0.00000000 0 1,582.01 1,824.93 5.00%
31-Dec-1995 0.934970 1711.860376 1,600.54 0.00000000 0 1,600.54 1,824.93 5.00%
31-Jan-1996 0.938629 1711.860376 1,606.80 0.00000000 0 1,606.80 1,824.93 6.00%
29-Feb-1996 0.920378 1711.860376 1,575.56 0.00000000 0 1,575.56 1,824.93 6.00%
31-Mar-1996 0.913941 1711.860376 1,564.54 0.00000000 0 1,564.54 1,824.93 6.00%
30-Apr-1996 0.905911 1711.860376 1,550.79 0.00000000 0 1,550.79 1,824.93 6.00%
31-May-1996 0.902690 1711.860376 1,545.28 0.00000000 0 1,545.28 1,824.93 6.00%
30-Jun-1996 0.910822 1711.860376 1,559.20 0.00000000 0 1,559.20 1,824.93 6.00%
31-Jul-1996 0.913396 1711.860376 1,563.61 0.00000000 0 1,563.61 1,824.93 6.00%
31-Aug-1996 0.910432 1711.860376 1,558.53 0.00000000 0 1,558.53 1,824.93 6.00%
30-Sep-1996 0.924597 1711.860376 1,582.78 0.00000000 0 1,582.78 1,824.93 6.00%
31-Oct-1996 0.941989 1711.860376 1,612.55 0.00000000 0 1,612.55 1,824.93 6.00%
30-Nov-1996 0.960183 1711.860376 1,643.70 0.00000000 0 1,643.70 1,824.93 6.00%
31-Dec-1996 0.949686 1711.860376 1,625.73 0.00000000 0 1,625.73 1,824.93 6.00%
31-Jan-1997 0.949404 1711.860376 1,625.25 0.00000000 0 1,625.25 1,824.93 7.00%
28-Feb-1997 0.950676 1711.860376 1,627.42 0.00000000 0 1,627.42 1,824.93 7.00%
31-Mar-1997 0.938499 1711.860376 1,606.58 0.00000000 0 1,606.58 1,824.93 7.00%
30-Apr-1997 0.951438 1711.860376 1,628.73 0.00000000 0 1,628.73 1,824.93 7.00%
31-May-1997 0.957790 1711.860376 1,639.60 0.00000000 0 1,639.60 1,824.93 7.00%
30-Jun-1997 0.968462 1711.860376 1,657.87 0.00000000 0 1,657.87 1,824.93 7.00%
31-Jul-1997 0.997004 1711.860376 1,706.73 0.00000000 0 1,706.73 1,824.93 7.00%
31-Aug-1997 0.983229 1711.860376 1,683.15 0.00000000 0 1,683.15 1,824.93 7.00%
30-Sep-1997 1.000000 1711.860376 1,711.86 0.00000000 0 1,711.86 1,824.93 7.00%
31-Oct-1997 1.012541 1711.860376 1,733.33 0.00000000 0 1,733.33 1,824.93 7.00%
30-Nov-1997 1.013289 1711.860376 1,734.61 0.00000000 0 1,734.61 1,824.93 7.00%
31-Dec-1997 1.024710 1711.860376 1,754.16 0.00000000 0 1,754.16 1,824.93 7.00%
31-Jan-1998 1.038377 1711.860376 1,777.56 0.00000000 0 1,777.56 1,824.93 7.00%
28-Feb-1998 1.037110 1711.860376 1,775.39 0.00000000 0 1,775.39 1,824.93 7.00%
31-Mar-1998 1.038324 1711.860376 1,777.47 0.00000000 0 1,777.47 1,824.93 7.00%
30-Apr-1998 1.041193 1711.860376 1,782.38 0.00000000 0 1,782.38 1,824.93 7.00%
31-May-1998 1.052273 1711.860376 1,801.34 0.00000000 0 1,801.34 1,824.93 7.00%
30-Jun-1998 1.059617 1711.860376 1,813.92 0.00000000 0 1,813.92 1,824.93 7.00%
<CAPTION>
ERV of ERV of
W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1994 50.00% 1,806.81 4.42 6.54% 6.78% 1,323.15 1,336.42
31-Aug-1994 50.00% 1,806.78 4.34 6.66% 6.90% 1,322.49 1,335.77
30-Sep-1994 50.00% 1,807.65 4.25 7.20% 7.44% 1,344.49 1,357.35
31-Oct-1994 50.00% 1,807.85 4.17 7.45% 7.70% 1,349.49 1,362.24
30-Nov-1994 50.00% 1,807.89 4.09 7.63% 7.88% 1,350.68 1,363.41
31-Dec-1994 50.00% 1,807.47 4.00 7.58% 7.84% 1,339.70 1,352.65
31-Jan-1995 40.00% 1,792.77 3.92 7.04% 7.53% 1,305.53 1,328.96
28-Feb-1995 40.00% 1,791.37 3.84 6.60% 7.12% 1,278.41 1,302.36
31-Mar-1995 40.00% 1,790.76 3.76 6.50% 7.04% 1,266.94 1,291.12
30-Apr-1995 40.00% 1,790.02 3.67 6.34% 6.90% 1,253.28 1,277.73
31-May-1995 40.00% 1,786.41 3.59 4.98% 5.60% 1,190.51 1,216.19
30-Jun-1995 40.00% 1,785.72 3.51 4.82% 5.47% 1,179.32 1,205.22
31-Jul-1995 40.00% 1,786.23 3.42 5.15% 5.81% 1,187.64 1,213.37
31-Aug-1995 40.00% 1,785.28 3.34 4.88% 5.57% 1,172.23 1,198.26
30-Sep-1995 40.00% 1,784.61 3.25 4.71% 5.43% 1,161.55 1,187.79
31-Oct-1995 40.00% 1,783.54 3.17 4.36% 5.12% 1,144.87 1,171.44
30-Nov-1995 40.00% 1,782.33 3.09 3.94% 4.74% 1,126.63 1,153.56
31-Dec-1995 40.00% 1,781.41 3.00 3.63% 4.47% 1,113.00 1,140.20
31-Jan-1996 30.00% 1,761.37 2.92 3.20% 4.46% 1,096.20 1,135.76
29-Feb-1996 30.00% 1,763.25 2.84 4.04% 5.31% 1,119.13 1,158.28
31-Mar-1996 30.00% 1,763.91 2.75 4.45% 5.75% 1,127.43 1,166.44
30-Apr-1996 30.00% 1,764.74 2.67 4.96% 6.28% 1,137.96 1,176.77
31-May-1996 30.00% 1,765.07 2.59 5.28% 6.64% 1,142.23 1,180.97
30-Jun-1996 30.00% 1,764.23 2.50 5.06% 6.49% 1,131.50 1,170.43
31-Jul-1996 30.00% 1,763.97 2.42 5.11% 6.60% 1,128.14 1,167.13
31-Aug-1996 30.00% 1,764.27 2.33 5.46% 6.99% 1,132.01 1,170.93
30-Sep-1996 30.00% 1,762.82 2.25 4.90% 6.53% 1,113.75 1,152.99
31-Oct-1996 30.00% 1,761.03 2.17 4.15% 5.88% 1,092.08 1,131.70
30-Nov-1996 30.00% 1,759.16 2.08 3.31% 5.14% 1,070.24 1,110.26
31-Dec-1996 30.00% 1,760.24 2.00 4.05% 5.95% 1,082.74 1,122.53
31-Jan-1997 20.00% 1,736.72 1.92 3.52% 6.24% 1,068.59 1,122.87
28-Feb-1997 20.00% 1,736.56 1.84 3.59% 6.43% 1,067.06 1,121.36
31-Mar-1997 20.00% 1,738.02 1.75 4.59% 7.54% 1,081.82 1,135.91
30-Apr-1997 20.00% 1,736.47 1.67 3.91% 7.04% 1,066.15 1,120.47
31-May-1997 20.00% 1,735.71 1.59 3.66% 6.98% 1,058.62 1,113.03
30-Jun-1997 20.00% 1,734.43 1.50 3.05% 6.59% 1,046.18 1,100.77
31-Jul-1997 20.00% 1,731.01 1.42 1.00% 4.83% 1,014.23 1,069.26
31-Aug-1997 20.00% 1,732.66 1.33 2.20% 6.25% 1,029.42 1,084.24
30-Sep-1997 20.00% 1,730.65 1.25 0.88% 5.24% 1,010.98 1,066.05
31-Oct-1997 20.00% 1,729.15 1.17 -0.21% 4.51% 997.59 1,052.85
30-Nov-1997 20.00% 1,729.06 1.08 -0.29% 4.79% 996.80 1,052.07
31-Dec-1997 20.00% 1,727.69 1.00 -1.51% 4.03% 984.91 1,040.35
31-Jan-1998 10.00% 1,713.28 0.92 -3.62% 2.67% 966.86 1,024.36
28-Feb-1998 10.00% 1,713.43 0.84 -3.49% 2.79% 970.66 1,023.34
31-Mar-1998 10.00% 1,713.29 0.75 -3.61% 2.67% 972.67 1,020.06
30-Apr-1998 10.00% 1,712.94 0.67 -3.90% 2.39% 973.68 1,015.96
31-May-1998 10.00% 1,711.61 0.59 -4.98% 1.31% 970.49 1,007.66
30-Jun-1998 10.00% 1,710.73 0.50 -5.69% 0.61% 970.91 1,003.06
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATLAS PORTFOLIO BUILDER VA - QUALITY BOND SUBACCOUNT
----------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 59M) Year Rate Available
----------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.584160 2 7.00% 20%
Units purchased 1,711.860 3 6.00% 30%
4 5.00% 40%
M & E Factor (Annual Rate) 5 4.00% 50%
M & E Factor (Monthly Rate) 0 6 0.00% 100%
7 0.00%
----------------------------------------
<CAPTION>
Monthly Ending
Actual Acct Value M & E M & E Adjusted Redeemable Surrender
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1998 1.060686 1711.860376 1,815.75 0.00000000 0 1,815.75 1,824.93 7.00%
31-Aug-1998 1.072502 1711.860376 1,835.97 0.00000000 0 1,835.97 1,824.93 7.00%
30-Sep-1998 1.078850 1711.860376 1,846.84 0.00000000 0 1,846.84 1,824.93 7.00%
31-Oct-1998 1.057030 1711.860376 1,809.49 0.00000000 0 1,809.49 1,824.93 7.00%
30-Nov-1998 1.065068 1711.860376 1,823.25 0.00000000 0 1,823.25 1,824.93 7.00%
31-Dec-1998 1.066053 1711.860376 1,824.93 0.00000000 0 1,824.93 1,824.93 7.00%
31-Dec-1998 1,824.93
<CAPTION>
ERV of ERV of
W/D ERV Avg Ann Avg Ann $1,000 $1,000
Date Available W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
<S> <C> <C> <C> <C> <C> <C> <C>
31-Jul-1998 10.00% 1,710.61 0.42 -5.79% 0.51% 975.31 1,002.12
31-Aug-1998 10.00% 1,709.19 0.33 -6.91% -0.60% 976.37 997.99
30-Sep-1998 10.00% 1,708.43 0.25 -7.49% -1.19% 980.56 997.00
31-Oct-1998 10.00% 1,711.04 0.17 -5.44% 0.85% 990.69 1,001.42
30-Nov-1998 10.00% 1,710.08 0.08 -6.21% 0.09% 994.57 1,000.08
31-Dec-1998 10.00% 1,709.96 0.00 -6.30% 0.00% 1,000.00 1,000.00
31-Dec-1998
</TABLE>
<TABLE>
<CAPTION>
Beginning Ending Value Ending Value
Years Value W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 0.08 1,823.25 1,710.08 1,824.93
3 Months 30-Sep-1998 0.25 1,846.84 1,708.43 1,824.93
6 Months 30-Jun-1998 0.50 1,813.92 1,710.73 1,824.93
9 Months 31-Mar-1998 0.75 1,777.47 1,713.29 1,824.93
YTD 31-Dec-1997 1.00 1,754.16 1,727.69 1,824.93
One Year 31-Dec-1997 1.00 1,754.16 1,727.69 1,824.93
Two Years 31-Dec-1996 2.00 1,625.73 1,760.24 1,824.93
Three Years 31-Dec-1995 3.00 1,600.54 1,781.41 1,824.93
Four Years 31-Dec-1994 4.00 1,349.16 1,807.47 1,824.93
Five Years 31-Dec-1993 5.00 1,435.70 1,824.93 1,824.93
Ten Years 31-Dec-1988 10.00 -- -- --
Inc to Date 31-Aug-1990 8.3 1,000.00 1,824.93 1,824.93
30-Sep-1997 1.3 1,711.86 1,730.65 1,824.93
<CAPTION>
Average Average
Annual Annual
Return Return Total Return Total Return
W/ Surrender W/O Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 -6.21% 0.09% -6.21% 0.09%
3 Months 30-Sep-1998 -7.49% -1.19% -7.49% -1.19%
6 Months 30-Jun-1998 -5.69% 0.61% -5.69% 0.61%
9 Months 31-Mar-1998 -3.61% 2.67% -3.61% 2.67%
YTD 31-Dec-1997 -1.51% 4.03% -1.51% 4.03%
One Year 31-Dec-1997 -1.51% 4.03% -1.51% 4.03%
Two Years 31-Dec-1996 4.05% 5.95% 8.27% 12.25%
Three Years 31-Dec-1995 3.63% 4.47% 11.30% 14.02%
Four Years 31-Dec-1994 7.59% 7.84% 33.97% 35.26%
Five Years 31-Dec-1993 4.91% 4.91% 27.11% 27.11%
Ten Years 31-Dec-1988 -- --
Inc to Date 31-Aug-1990 7.48% 7.48% 82.49% 82.49%
30-Sep-1997 0.88% 5.24% 1.10% 6.61%
</TABLE>
<PAGE>
ATLAS PORTFOLIO BUILDER VA - HIGH INCOME BOND FUND II SUBACCOUNT
<TABLE>
<CAPTION>
--------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 61M) Year Rate Available
--------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.716946 2 7.00% 20%
Units purchased 1,394.805 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00000% 5 4.00% 50%
Monthly contract charge factor 0.00000% 6 0.00% 100%
7 0.00%
--------------------------------------
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable Surrender W/D
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge Available
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
02-Feb-1994 0.716946 1394.804726 1,000.00 1,000.00 1,436.59 4.00% 50.00%
28-Feb-1994 0.713242 1394.804726 994.83 0.00000000 0 994.83 1,436.59 4.00% 50.00%
31-Mar-1994 0.680865 1394.804726 949.67 0.00000000 0 949.67 1,436.59 4.00% 50.00%
30-Apr-1994 0.676543 1394.804726 943.65 0.00000000 0 943.65 1,436.59 4.00% 50.00%
31-May-1994 0.683213 1394.804726 952.95 0.00000000 0 952.95 1,436.59 4.00% 50.00%
30-Jun-1994 0.686416 1394.804726 957.42 0.00000000 0 957.42 1,436.59 4.00% 50.00%
31-Jul-1994 0.682401 1394.804726 951.82 0.00000000 0 951.82 1,436.59 4.00% 50.00%
31-Aug-1994 0.686492 1394.804726 957.52 0.00000000 0 957.52 1,436.59 4.00% 50.00%
30-Sep-1994 0.689093 1394.804726 961.15 0.00000000 0 961.15 1,436.59 4.00% 50.00%
31-Oct-1994 0.685680 1394.804726 956.39 0.00000000 0 956.39 1,436.59 4.00% 50.00%
30-Nov-1994 0.672138 1394.804726 937.50 0.00000000 0 937.50 1,436.59 4.00% 50.00%
31-Dec-1994 0.676732 1394.804726 943.91 0.00000000 0 943.91 1,436.59 4.00% 50.00%
31-Jan-1995 0.684347 1394.804726 954.53 0.00000000 0 954.53 1,436.59 5.00% 40.00%
28-Feb-1995 0.706632 1394.804726 985.61 0.00000000 0 985.61 1,436.59 5.00% 40.00%
31-Mar-1995 0.712468 1394.804726 993.75 0.00000000 0 993.75 1,436.59 5.00% 40.00%
30-Apr-1995 0.730814 1394.804726 1,019.34 0.00000000 0 1,019.34 1,436.59 5.00% 40.00%
31-May-1995 0.747673 1394.804726 1,042.86 0.00000000 0 1,042.86 1,436.59 5.00% 40.00%
30-Jun-1995 0.749668 1394.804726 1,045.64 0.00000000 0 1,045.64 1,436.59 5.00% 40.00%
31-Jul-1995 0.763698 1394.804726 1,065.21 0.00000000 0 1,065.21 1,436.59 5.00% 40.00%
31-Aug-1995 0.765828 1394.804726 1,068.18 0.00000000 0 1,068.18 1,436.59 5.00% 40.00%
30-Sep-1995 0.776167 1394.804726 1,082.60 0.00000000 0 1,082.60 1,436.59 5.00% 40.00%
31-Oct-1995 0.786551 1394.804726 1,097.08 0.00000000 0 1,097.08 1,436.59 5.00% 40.00%
30-Nov-1995 0.791321 1394.804726 1,103.74 0.00000000 0 1,103.74 1,436.59 5.00% 40.00%
31-Dec-1995 0.803486 1394.804726 1,120.71 0.00000000 0 1,120.71 1,436.59 5.00% 40.00%
31-Jan-1996 0.818171 1394.804726 1,141.19 0.00000000 0 1,141.19 1,436.59 6.00% 30.00%
29-Feb-1996 0.822984 1394.804726 1,147.90 0.00000000 0 1,147.90 1,436.59 6.00% 30.00%
31-Mar-1996 0.817053 1394.804726 1,139.63 0.00000000 0 1,139.63 1,436.59 6.00% 30.00%
30-Apr-1996 0.819898 1394.804726 1,143.60 0.00000000 0 1,143.60 1,436.59 6.00% 30.00%
31-May-1996 0.826103 1394.804726 1,152.25 0.00000000 0 1,152.25 1,436.59 6.00% 30.00%
30-Jun-1996 0.826442 1394.804726 1,152.73 0.00000000 0 1,152.73 1,436.59 6.00% 30.00%
31-Jul-1996 0.833578 1394.804726 1,162.68 0.00000000 0 1,162.68 1,436.59 6.00% 30.00%
31-Aug-1996 0.848491 1394.804726 1,183.48 0.00000000 0 1,183.48 1,436.59 6.00% 30.00%
30-Sep-1996 0.871311 1394.804726 1,215.31 0.00000000 0 1,215.31 1,436.59 6.00% 30.00%
31-Oct-1996 0.875078 1394.804726 1,220.56 0.00000000 0 1,220.56 1,436.59 6.00% 30.00%
30-Nov-1996 0.892622 1394.804726 1,245.03 0.00000000 0 1,245.03 1,436.59 6.00% 30.00%
31-Dec-1996 0.905859 1394.804726 1,263.50 0.00000000 0 1,263.50 1,436.59 6.00% 30.00%
31-Jan-1997 0.912075 1394.804726 1,272.17 0.00000000 0 1,272.17 1,436.59 7.00% 20.00%
28-Feb-1997 0.931210 1394.804726 1,298.86 0.00000000 0 1,298.86 1,436.59 7.00% 20.00%
31-Mar-1997 0.910037 1394.804726 1,269.32 0.00000000 0 1,269.32 1,436.59 7.00% 20.00%
30-Apr-1997 0.915996 1394.804726 1,277.64 0.00000000 0 1,277.64 1,436.59 7.00% 20.00%
31-May-1997 0.940183 1394.804726 1,311.37 0.00000000 0 1,311.37 1,436.59 7.00% 20.00%
30-Jun-1997 0.954174 1394.804726 1,330.89 0.00000000 0 1,330.89 1,436.59 7.00% 20.00%
31-Jul-1997 0.978493 1394.804726 1,364.81 0.00000000 0 1,364.81 1,436.59 7.00% 20.00%
31-Aug-1997 0.977815 1394.804726 1,363.86 0.00000000 0 1,363.86 1,436.59 7.00% 20.00%
30-Sep-1997 1.000000 1394.804726 1,394.80 0.00000000 0 1,394.80 1,436.59 7.00% 20.00%
31-Oct-1997 0.996961 1394.804726 1,390.57 0.00000000 0 1,390.57 1,436.59 7.00% 20.00%
30-Nov-1997 1.005198 1394.804726 1,402.05 0.00000000 0 1,402.05 1,436.59 7.00% 20.00%
31-Dec-1997 1.016935 1394.804726 1,418.43 0.00000000 0 1,418.43 1,436.59 7.00% 20.00%
31-Jan-1998 1.037112 1394.804726 1,446.57 0.00000000 0 1,446.57 1,436.59 7.00% 10.00%
28-Feb-1998 1.040639 1394.804726 1,451.49 0.00000000 0 1,451.49 1,436.59 7.00% 10.00%
31-Mar-1998 1.049384 1394.804726 1,463.69 0.00000000 0 1,463.69 1,436.59 7.00% 10.00%
30-Apr-1998 1.049138 1394.804726 1,463.34 0.00000000 0 1,463.34 1,436.59 7.00% 10.00%
31-May-1998 1.049882 1394.804726 1,464.38 0.00000000 0 1,464.38 1,436.59 7.00% 10.00%
30-Jun-1998 1.050503 1394.804726 1,465.25 0.00000000 0 1,465.25 1,436.59 7.00% 10.00%
31-Jul-1998 1.063494 1394.804726 1,483.37 0.00000000 0 1,483.37 1,436.59 7.00% 10.00%
</TABLE>
ERV of ERV of
ERV Avg Ann Avg Ann $1,000 $1,000
Date W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
02-Feb-1994 1,425.32 4.91 7.48% 7.65% 1,425.32 1,436.59
28-Feb-1994 1,425.53 4.84 7.71% 7.89% 1,432.93 1,444.05
31-Mar-1994 1,427.34 4.76 8.94% 9.09% 1,502.98 1,512.72
30-Apr-1994 1,427.58 4.67 9.26% 9.41% 1,512.83 1,522.39
31-May-1994 1,427.21 4.59 9.20% 9.36% 1,497.67 1,507.52
30-Jun-1994 1,427.03 4.51 9.26% 9.42% 1,490.50 1,500.49
31-Jul-1994 1,427.25 4.42 9.59% 9.76% 1,499.50 1,509.32
31-Aug-1994 1,427.02 4.34 9.64% 9.81% 1,490.33 1,500.32
30-Sep-1994 1,426.88 4.25 9.73% 9.91% 1,484.55 1,494.66
31-Oct-1994 1,427.07 4.17 10.07% 10.25% 1,492.14 1,502.10
30-Nov-1994 1,427.82 4.09 10.84% 11.01% 1,523.01 1,532.36
31-Dec-1994 1,427.57 4.00 10.89% 11.06% 1,512.40 1,521.96
31-Jan-1995 1,417.60 3.92 10.62% 11.00% 1,485.13 1,505.02
28-Feb-1995 1,416.04 3.84 9.89% 10.31% 1,436.71 1,457.56
31-Mar-1995 1,415.64 3.76 9.88% 10.31% 1,424.53 1,445.62
30-Apr-1995 1,414.36 3.67 9.32% 9.79% 1,387.52 1,409.33
31-May-1995 1,413.18 3.59 8.84% 9.33% 1,355.10 1,377.55
30-Jun-1995 1,413.04 3.51 8.97% 9.48% 1,351.37 1,373.89
31-Jul-1995 1,412.06 3.42 8.59% 9.13% 1,325.62 1,348.65
31-Aug-1995 1,411.91 3.34 8.72% 9.29% 1,321.79 1,344.90
30-Sep-1995 1,411.19 3.25 8.48% 9.08% 1,303.52 1,326.98
31-Oct-1995 1,410.47 3.17 8.25% 8.88% 1,285.65 1,309.46
30-Nov-1995 1,410.14 3.09 8.26% 8.91% 1,277.60 1,301.57
31-Dec-1995 1,409.29 3.00 7.93% 8.62% 1,257.50 1,281.86
31-Jan-1996 1,393.98 2.92 7.10% 8.21% 1,221.51 1,258.85
29-Feb-1996 1,393.58 2.84 7.07% 8.22% 1,214.02 1,251.49
31-Mar-1996 1,394.07 2.75 7.59% 8.77% 1,223.27 1,260.58
30-Apr-1996 1,393.83 2.67 7.69% 8.91% 1,218.82 1,256.20
31-May-1996 1,393.32 2.59 7.62% 8.90% 1,209.21 1,246.77
30-Jun-1996 1,393.29 2.50 7.86% 9.19% 1,208.69 1,246.26
31-Jul-1996 1,392.69 2.42 7.75% 9.14% 1,197.83 1,235.59
31-Aug-1996 1,391.44 2.33 7.18% 8.66% 1,175.72 1,213.87
30-Sep-1996 1,389.53 2.25 6.13% 7.71% 1,143.36 1,182.08
31-Oct-1996 1,389.22 2.17 6.15% 7.81% 1,138.18 1,176.99
30-Nov-1996 1,387.75 2.08 5.34% 7.11% 1,114.63 1,153.86
31-Dec-1996 1,386.64 2.00 4.76% 6.63% 1,097.46 1,137.00
31-Jan-1997 1,367.65 1.92 3.85% 6.55% 1,075.06 1,129.25
28-Feb-1997 1,365.78 1.84 2.77% 5.64% 1,051.53 1,106.04
31-Mar-1997 1,367.85 1.75 4.36% 7.32% 1,077.62 1,131.78
30-Apr-1997 1,367.27 1.67 4.14% 7.27% 1,070.16 1,124.41
31-May-1997 1,364.91 1.59 2.55% 5.92% 1,040.82 1,095.49
30-Jun-1997 1,363.54 1.50 1.62% 5.21% 1,024.54 1,079.42
31-Jul-1997 1,361.17 1.42 -0.19% 3.68% 997.33 1,052.60
31-Aug-1997 1,361.23 1.33 -0.14% 3.97% 998.07 1,053.33
30-Sep-1997 1,359.07 1.25 -2.05% 2.39% 974.38 1,029.96
31-Oct-1997 1,359.36 1.17 -1.93% 2.83% 977.56 1,033.10
30-Nov-1997 1,358.56 1.08 -2.86% 2.27% 968.98 1,024.63
31-Dec-1997 1,357.41 1.00 -4.30% 1.28% 956.99 1,012.81
31-Jan-1998 1,345.39 0.92 -6.99% -0.69% 935.80 993.69
28-Feb-1998 1,345.04 0.84 -7.33% -1.03% 938.14 991.39
31-Mar-1998 1,344.19 0.75 -8.16% -1.85% 937.85 986.02
30-Apr-1998 1,344.21 0.67 -8.14% -1.83% 944.60 987.69
31-May-1998 1,344.14 0.59 -8.21% -1.90% 951.01 988.83
30-Jun-1998 1,344.08 0.50 -8.27% -1.96% 957.42 990.09
31-Jul-1998 1,342.81 0.42 -9.48% -3.15% 959.13 986.66
<PAGE>
ATLAS PORTFOLIO BUILDER VA - HIGH INCOME BOND FUND II SUBACCOUNT
<TABLE>
<CAPTION>
--------------------------------------
PERFORMANCE CALCULATIONS Surrender provisions: Withdrawal
(FUND# 61M) Year Rate Available
--------------------------------------
<S> <C> <C> <C> <C>
Initial investment $1,000 1 7.00% 10%
AUV 0.716946 2 7.00% 20%
Units purchased 1,394.805 3 6.00% 30%
4 5.00% 40%
Contract charge factor 0.00000% 5 4.00% 50%
Monthly contract charge factor 0.00000% 6 0.00% 100%
7 0.00%
--------------------------------------
<CAPTION>
Contract Contract Ending
Actual Acct Value Charge Charge Adjusted Redeemable Surrender W/D
Date AUV # Units Before Chrge Factor Deduction Acct Value Value Charge Available
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
31-Aug-1998 0.995903 1394.804726 1,389.09 0.00000000 0 1,389.09 1,436.59 7.00% 10.00%
30-Sep-1998 1.003284 1394.804726 1,399.39 0.00000000 0 1,399.39 1,436.59 7.00% 10.00%
31-Oct-1998 0.977556 1394.804726 1,363.50 0.00000000 0 1,363.50 1,436.59 7.00% 10.00%
30-Nov-1998 1.034008 1394.804726 1,442.24 0.00000000 0 1,442.24 1,436.59 7.00% 10.00%
31-Dec-1998 1.029959 1394.804726 1,436.59 0.00000000 0 1,436.59 1,436.59 7.00% 10.00%
31-Dec-1998 1,436.59
</TABLE>
ERV of ERV of
ERV Avg Ann Avg Ann $1,000 $1,000
Date W/ Surr n W/ Surr W/O Surr W/ Surr W/O Surr
31-Aug-1998 1,349.41 0.33 -2.86% 3.42% 990.36 1,011.30
30-Sep-1998 1,348.69 0.25 -3.62% 2.66% 990.74 1,006.64
31-Oct-1998 1,351.20 0.17 -0.90% 5.36% 998.49 1,008.77
30-Nov-1998 1,345.69 0.08 -6.69% -0.39% 994.13 999.67
31-Dec-1998 1,346.09 0.00 -6.30% 0.00% 1,000.00 1,000.00
<TABLE>
<CAPTION>
Average Average
Annual Annual
Beginning Ending Value Ending Value Return Return Total Return Total Return
Years Value W/ Surrender W/O Surrender W/ Surrender W/O Surrender W/ Surrender W/O Surrender
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One Month 30-Nov-1998 0.08 1,442.24 1,345.69 1,436.59 -6.69% -0.39% -6.69% -0.39%
3 Months 30-Sep-1998 0.25 1,399.39 1,348.69 1,436.59 -3.62% 2.66% -3.62% 2.66%
6 Months 30-Jun-1998 0.50 1,465.25 1,344.08 1,436.59 -8.27% -1.96% -8.27% -1.96%
9 Months 31-Mar-1998 0.75 1,463.69 1,344.19 1,436.59 -8.16% -1.85% -8.16% -1.85%
YTD 31-Dec-1997 1.00 1,418.43 1,357.41 1,436.59 -4.30% 1.28% -4.30% 1.28%
One Year 31-Dec-1997 1.00 1,418.43 1,357.41 1,436.59 -4.30% 1.28% -4.30% 1.28%
Two Years 31-Dec-1996 2.00 1,263.50 1,386.64 1,436.59 4.76% 6.63% 9.75% 13.70%
Three Years 31-Dec-1995 3.00 1,120.71 1,409.29 1,436.59 7.94% 8.63% 25.75% 28.19%
Four Years 31-Dec-1994 4.00 943.91 1,427.57 1,436.59 10.90% 11.07% 51.24% 52.20%
Five Years 31-Dec-1993 5.00 -- -- -- -- --
Ten Years 31-Dec-1993 10.00 -- -- -- -- --
Inc to Date 02-Feb-1994 4.9 1,000.00 1,425.32 1,436.59 7.48% 7.65% 42.53% 43.66%
30-Sep-1997 1.3 1,394.80 1,359.07 1,436.59 -2.05% 2.39% -2.56% 3.00%
</TABLE>
<PAGE>
Exhibit 14
----------
Power of Attorney
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
PFL LIFE VARIABLE ANNUITY ACCOUNT A
Know all men by these presents that Larry N. Norman, whose signature appears
below, constitutes and appoints Craig D. Vermie and Brenda K. Clancy, and each
of them, his attorneys-in-fact, each with the power of substitution, for him in
any and all capacities, to sign any registration statements and amendments
thereto for the PFL Life Variable Annuity Account A, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute, may do or cause to be done by
virtue hereof.
/s/ Larry N. Norman
--------------------------------
Larry N. Norman
Executive Vice President
PFL Life Insurance Company
April 27, 1999
- -----------------------------------
Date
