<PAGE>
As filed with the Securities and Exchange Commission on April 28, 1998
Registration Nos. 333-26341
811-08205
________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. l X
-
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 3 X
-
FIRST INVESTORS LIFE VARIABLE ANNUITY FUND D
(Exact Name of Registrant)
FIRST INVESTORS LIFE INSURANCE COMPANY
(Name of Depositor)
95 Wall Street, 22nd Floor, New York, New York 10005
(Address of Depositor's Principal Executive Offices)
(212) 858-8200
(Depositor's Telephone Number, including Area Code)
Richard H. Gaebler, President
FIRST INVESTORS LIFE INSURANCE COMPANY
95 Wall Street, 22nd Floor
New York, New York 10005
(Name and Address of Agent for Service)
Copies of all communications to:
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue
Washington, D.C. 20036-5366
Attn: Gary O. Cohen, Esq.
<PAGE>
Approximate Date of Proposed Public Offering: Continuous.
It is proposed that this filing will become effective (check the appropriate
box):
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/X/ on April 30, 1998 pursuant to paragraph (b) of Rule 485
/ / 60 days after filing pursuant to paragraph (a)(1) of Rule 485
/ / on (date) pursuant to paragraph (a)(1) 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.
Title of Securities Being Registered: Units of interest in First Investors Life
Variable Annuity Fund D under deferred variable annuity contracts.
<PAGE>
FIRST INVESTORS LIFE VARIABLE ANNUITY FUND D
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
N-4 Item No. Location
- ------------ --------
<C> <S> <C>
PART A: PROSPECTUS
1. Cover Page.................................................... Cover Page
2. Definitions................................................... Glossary of Special Terms
3. Synopsis...................................................... Fee Table
4. Condensed Financial Information............................... Condensed Financial Information
5. General Description of Registrant, Depositor, and
Portfolio Companies........................................... General Descriptions
6. Deductions.................................................... Purchases, Charges and Expenses
7. General Description of Variable Annuity Contracts............. Variable Annuity Contracts
8. Annuity Period................................................ Variable Annuity Contracts
9. Death Benefit................................................. Variable Annuity Contracts
10. Purchases and Contract Value.................................. Purchases, Charges and Expenses;
Variable Annuity Contracts
11. Redemptions................................................... Variable Annuity Contracts
12. Taxes......................................................... Federal Income Tax Status
13. Legal Proceedings............................................. Not Applicable
14. Table of Contents of the Statement of
Additional Information........................................ Table of Contents of the Statement
of Additional Information
PART B: STATEMENT OF ADDITIONAL INFORMATION
15. Cover Page.................................................... Cover Page
16. Table of Contents............................................. Table of Contents
17. General Information and History............................... General Description; Other
Information
18. Services...................................................... Services
19. Purchase of Securities Being Offered.......................... Not Applicable
20. Underwriters.................................................. Services
21. Calculation of Performance Data............................... Performance Information
22. Annuity Payments.............................................. Annuity Payments
23. Financial Statements.......................................... Relevance of Financial Statements;
Financial Statements
</TABLE>
<PAGE>
FIRST INVESTORS LIFE VARIABLE ANNUITY FUND D
INDIVIDUAL VARIABLE ANNUITY CONTRACTS
OFFERED BY
FIRST INVESTORS LIFE INSURANCE COMPANY
95 Wall Street, New York, New York 10005/(212) 858-8200
This Prospectus describes Variable Annuity Contracts (the "Contracts")
offered by First Investors Life Insurance Company ("First Investors Life"). The
Contracts are designed for individual investors who desire to accumulate capital
on a tax-deferred basis for retirement or other long-term purposes. The
Contracts may be purchased on a nonqualified basis. The Contracts may also be
purchased through (1) qualified individual retirement accounts and (2) qualified
corporate employee pension and profit-sharing plans. The Contracts offered are
flexible premium deferred variable annuity contracts ("Deferred Variable Annuity
Contracts") under which annuity payments will begin on a selected future date.
A PENALTY MAY BE ASSESSED ON EARLY WITHDRAWALS (SEE "FEDERAL INCOME TAX
STATUS"). THE CONTRACTS CONTAIN A 10-DAY REVOCATION RIGHT (SEE "VARIABLE
ANNUITY CONTRACTS--TEN-DAY REVOCATION RIGHT"). The Contracts provide for the
accumulation of values on a variable basis. Payment of annuity benefits will be
on a variable basis, unless a fixed basis or a combination of variable and fixed
bases is selected by the Contractowner. Unless otherwise stated, this
Prospectus describes only the variable aspects of the Contracts. The Contracts
contain information on the fixed aspects.
Contractowners' purchase payments are paid into a unit investment trust,
First Investors Life Variable Annuity Fund D ("Separate Account D"). A
Contractowner elects to have his or her purchase payments paid into any one or
more of the eleven subaccounts of Separate Account D (the "Subaccounts"). The
assets of each Subaccount are invested at net asset value in shares of the
related series of First Investors Life Series Fund (the "Life Series Fund"), an
open-end, diversified management investment company.
This Prospectus sets forth the information about Separate Account D that a
prospective investor should know before investing and should be kept for future
reference. A Statement of Additional Information, dated April 30, 1998, has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference in its entirety. (See page 23 of this Prospectus for the
Table of Contents of the Statement of Additional Information.) The Statement of
Additional Information is available at no charge upon request to First Investors
Life at the address or telephone number indicated above. Additional information
about Separate Account D has been filed with the Securities and Exchange
Commission.
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.
THIS PROSPECTUS IS VALID ONLY WHEN ATTACHED TO THE CURRENT
PROSPECTUS OF FIRST INVESTORS LIFE SERIES FUND.
The date of this Prospectus is April 30, 1998
<PAGE>
GLOSSARY OF SPECIAL TERMS
ACCUMULATED VALUE - The value of all the Accumulation Units credited to the
Contract.
ACCUMULATION PERIOD - The period between the date of issue of a Contract and
the Annuity Commencement Date.
ACCUMULATION UNIT - A unit used to measure the value of a Contractowner's
interest in a Subaccount of Separate Account D prior to the Annuity Commencement
Date.
ADDITIONAL PAYMENT - A purchase payment made to First Investors Life after
issuance of a deferred annuity.
ANNUITANT - The person designated to receive or the person who is actually
receiving annuity payments under a Contract.
ANNUITY COMMENCEMENT DATE - The date on which annuity payments are to
commence.
ANNUITY UNIT - A unit used to determine the amount of each annuity payment
after the first.
BENEFICIARY - The person designated to receive any benefits under a Contract
upon the death of the Annuitant in accordance with the terms of the Contract.
CONTRACT - An individual variable annuity contract offered by this
Prospectus.
CONTRACTOWNER - The person or entity with legal rights of ownership of the
Contract.
FIXED ANNUITY - An annuity with annuity payments which remain fixed as to
dollar amount throughout the payment period.
GENERAL ACCOUNT - All assets of First Investors Life other than those
allocated to Separate Account D and other segregated investment accounts of
First Investors Life.
JOINT ANNUITANT - The designated second person under joint and survivor life
annuity.
SEPARATE ACCOUNT D - The segregated investment account entitled "First
Investors Life Variable Annuity Fund D," established by First Investors Life
pursuant to applicable law and registered as a unit investment trust under the
Investment Company Act of 1940, as amended.
SINGLE PAYMENT - A one-time purchase payment made to First Investors Life to
purchase a deferred annuity.
SUBACCOUNT - A segregated investment subaccount under Separate Account D
which corresponds to a series of the Life Series Fund. The assets of the
Subaccount are invested in shares of the corresponding series of the Life Series
Fund.
VALUATION DATE - Any date on which the New York Stock Exchange ("NYSE") is
open for regular trading. Each Valuation Date ends as of the close of regular
trading on the NYSE (normally 4:00 p.m., Eastern Time). The NYSE currently
observes the following holidays: New Year's Day, Martin Luther King Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
VALUATION PERIOD - The period beginning on the date after any Valuation Date
and ending at the end of the next Valuation Date.
VARIABLE ANNUITY - An annuity with annuity payments varying in amount in
accordance with the net investment experience of the Subaccounts.
2
<PAGE>
FEE TABLE
The following table has been prepared to assist the investor in
understanding the various costs and expenses a Contractowner will directly or
indirectly bear. The table reflects expenses of Separate Account D as well as
the series (each a "Fund" and collectively "Funds") of the Life Series Fund.
The Fee Table reflects Fund expenses expected to be incurred in 1998.
CONTRACTOWNER TRANSACTION EXPENSES
Sales Load Imposed on Purchases (as a percentage of purchase payments)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .None
Maximum Contingent Deferred Sales Charge . . . . . . . . . . . . .7.00%*
ANNUAL CONTRACT MAINTENANCE CHARGE. . . . . . . . . . . . . . . . . .$30.00**
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and Expense Risk Charges . . . . . . . . . . . . . . . . 1.25%
Administrative Charge. . . . . . . . . . . . . . . . . . . . . . . . 15%
-----
-----
Total Separate Account Annual Expenses . . . . . . . . . . . . . . 1.40%
FUND ANNUAL EXPENSES
(as a percentage of Fund average net assets)
TOTAL FUND
MANAGEMENT OTHER OPERATING
FEES(1) EXPENSES(2) EXPENSES(3)
---------- ---------- ----------
Blue Chip Fund . . . . . . . . . . . . 0.75% 0.06% 0.81%
Cash Management Fund . . . . . . . . . 0.60+ 0.10+ 0.70+
Discovery Fund . . . . . . . . . . . . 0.75 0.07 0.82
Government Fund. . . . . . . . . . . . 0.60+ 0.10+ 0.70+
Growth Fund. . . . . . . . . . . . . . 0.75 0.07 0.82
High Yield Fund. . . . . . . . . . . . 0.75 0.08 0.83
International Securities Fund. . . . . 0.75 0.38 1.13
Investment Grade Fund. . . . . . . . . 0.60+ 0.10+ 0.70+
Target Maturity 2007 Fund. . . . . . . 0.60+ 0.10+ 0.70+
Target Maturity 2010 Fund. . . . . . . 0.60+ 0.10+ 0.70+
Utilities Income Fund. . . . . . . . . 0.60+ 0.10 0.70+
* The Maximum Contingent Deferred Sales Charge is a percentage of the value
of the Accumulation Units surrendered (not to exceed the aggregate amount of the
purchase payments made for such Units). It decreases 1% each year so that there
is no charge after 7 years. Each year up to 10% of total purchase payments may
be surrendered without a contingent deferred sales charge. Additional purchase
payments do not cause the contingent deferred sales charge percentages to start
over on prior purchase payments.
**The Contract Maintenance Charge of $30 will be deducted from the Accumulated
Value, provided that in no case will this charge exceed 2% of such value. For
more information, see "Contract Maintenance Charge."
+ Net of waiver and/or reimbursement.
(1) For the fiscal year ended December 31, 1997, the Adviser reimbursed Cash
Management Fund, Government Fund, Investment Grade Fund, Target Maturity
2007 Fund, and Target Maturity 2010 Fund for certain Other Expenses. For
the fiscal year ended December 31,
3
<PAGE>
1997, the Adviser waived Management Fees in excess of 0.60% for Cash
Management Fund, Government Fund, Investment Grade Fund, Target Maturity
2007 Fund, Target Maturity 2010 Fund and Utilities Income Fund. Absent the
waiver, Management Fees would have been 0.75% for each of these Funds. The
Adviser will continue to waive such fees for a minimum period ending
December 31, 1998.
(2) Other Expenses have been restated for Government Fund, Investment Grade
Fund, Target Maturity 2007 Fund and Target Maturity 2010 Fund. For the
fiscal year ended December 31, 1997, the Adviser reimbursed Cash
Management Fund, Government Fund, Investment Grade Fund, Target
Maturity 2007 Fund and Target Maturity 2010 Fund for certain Other
Expenses. Absent such reimbursement, Other Expenses would have been
0.31% for Cash Management Fund, 0.17% for Government Fund, 0.12% for
Investment Grade Fund, 0.07% for Target Maturity 2007 Fund and 0.12%
for Target Maturity 2010 Fund. The Adviser will reimburse Cash
Management Fund, Government Fund, Investment Grade Fund, Target
Maturity 2007 Fund and Target Maturity 2010 for Other Expenses in
excess of 0.10% for a minimum period ending December 31, 1998.
(3) If certain fees and expenses were not waived or reimbursed, Total Fund
Operating Expenses would have been 1.06% for Cash Management Fund, 0.92%
for Government Fund, 0.87% for Investment Grade Fund, 0.82% for Target
Maturity 2007 Fund, 0.87% for Target Maturity 2010 Fund and 0.85% for
Utilities Income Fund.
For more complete descriptions of the various costs and expenses shown, please
refer to "Purchases, Charges and Expenses." In addition, Premium taxes may be
applicable (see "Other Charges").
EXAMPLE
If you surrender your Contract at the end of the period shown, you would pay the
following expenses on a $1,000 investment, assuming 5% annual return on assets:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Blue Chip Subaccount . . . . . . . . . . . . . . $122 $209
Cash Management Subaccount . . . . . . . . . . . 121 206
Discovery Subaccount . . . . . . . . . . . . . . 123 209
Government Subaccount. . . . . . . . . . . . . . 121 206
Growth Subaccount. . . . . . . . . . . . . . . . 123 209
High Yield Subaccount. . . . . . . . . . . . . . 123 210
International Securities Subaccount. . . . . . . 126 219
Investment Grade Subaccount. . . . . . . . . . . 121 206
Target Maturity 2007 Subaccount. . . . . . . . . 121 206
Target Maturity 2010 Subaccount. . . . . . . . . 121 206
Utilities Income Subaccount. . . . . . . . . . . 121 206
</TABLE>
4
<PAGE>
EXAMPLE
If you do not surrender your contract (or if you annuitize) at the end of the
period shown, you would pay the following expenses on a $1,000 investment,
assuming 5% annual return on assets:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Blue Chip Subaccount . . . . . . . . . . . $ 52 $159
Cash Management Subaccount . . . . . . . . 51 156
Discovery Subaccount . . . . . . . . . . . 53 159
Government Subaccount. . . . . . . . . . . 51 156
Growth Subaccount. . . . . . . . . . . . . 53 159
High Yield Subaccount. . . . . . . . . . . 53 160
International Securities Subaccount. . . . 56 169
Investment Grade Subaccount. . . . . . . . 51 156
Target Maturity 2007 Subaccount. . . . . . 51 156
Target Maturity 2010 Subaccount. . . . . . 51 156
Utilities Income Subaccount. . . . . . . . 51 156
</TABLE>
THE EXPENSES IN THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES. ACTUAL EXPENSES IN FUTURE YEARS MAY BE GREATER OR LESS
THAN THOSE SHOWN.
CONDENSED FINANCIAL INFORMATION
ACCUMULATION UNIT VALUES
The following shows the accumulation unit values and the number of
accumulation units outstanding for each Subaccount of Separate Account D, as of
December 31, 1997, from July 28, 1997, the date when the accumulation unit value
for each Subaccount was initially set at $10.00:
<TABLE>
<CAPTION>
NUMBER OF
ACCUMULATION ACCUMULATION
SUBACCOUNT UNIT VALUE($) UNITS
- ------------------ ------------- -----
<S> <C> <C>
Blue Chip Subaccount. . . . . . . . . . 10.18519950 426,185.6
Cash Management Subaccount. . . . . . . 10.15474840 28,344.4
Discovery Subaccount. . . . . . . . . . 10.23140687 205,814.9
Government Subaccount . . . . . . . . . 10.28895863 13,321.1
Growth Subaccount . . . . . . . . . . . 10.33626489 346,768.7
High Yield Subaccount . . . . . . . . . 10.42338850 60,209.4
International Securities Subaccount . . 9.30734342 196,448.9
Investment Grade Subaccount . . . . . . 10.33902780 22,448.4
Target Maturity 2007 Subaccount . . . . 10.62155299 62,839.0
Target Maturity 2010 Subaccount . . . . 10.79920122 43,680.6
Utilities Income Subaccount . . . . . . 11.67391319 33,306.9
</TABLE>
5
<PAGE>
GENERAL DESCRIPTION
FIRST INVESTORS LIFE INSURANCE COMPANY. First Investors Life Insurance
Company, 95 Wall Street, New York, New York 10005 ("First Investors Life"),
a stock life insurance company incorporated under the laws of the State of
New York in 1962, writes life insurance, annuities and accident and health
insurance. First Investors Consolidated Corporation ("FICC"), a holding
company, owns all of the voting common stock of First Investors Management
Company, Inc. ("FIMCO" or "Adviser") and all of the outstanding stock of
First Investors Life, First Investors Corporation ("FIC" or "Underwriter")
and Administrative Data Management Corp., the transfer agent for the Life
Series Fund. Mr. Glenn O. Head, Chairman of FICC, controls FICC, and,
therefore, controls the Adviser and First Investors Life.
SEPARATE ACCOUNT D. First Investors Life Variable Annuity Fund D, also
known by its proprietary name, the "Tax Tamer II" ("Separate Account D"), was
established on April 8, 1997 under the provisions of the New York Insurance
Law. The assets of Separate Account D are segregated from the assets of First
Investors Life, and that portion of such assets having a value equal to, or
approximately equal to, the reserves and contract liabilities under the
Contracts are not chargeable with liabilities arising out of any other
business of First Investors Life. Separate Account D is registered with the
Securities and Exchange Commission ("Commission") as a unit investment trust
under the Investment Company Act of 1940, as amended ("1940 Act"), but such
registration does not involve any supervision by the Commission of the
management or investment practices or policies of Separate Account D.
The assets of each Subaccount of Separate Account D are invested at net
asset value in shares of the corresponding Fund of Life Series Fund. For
example, the Blue Chip Subaccount invests in the Blue Chip Fund, the
Government Subaccount invests in the Government Fund, and so on. The Life
Series Fund's Prospectus describes the risks attendant to an investment in
each Fund of the Life Series Fund.
Income, gains and losses, whether or not realized, from assets allocated
to the Subaccounts of Separate Account D are, in accordance with the
applicable Contracts, credited to or charged against the Subaccounts of
Separate Account D without regard to other income, gains or losses of First
Investors Life. The obligations under the Contracts are obligations of First
Investors Life.
Any and all distributions received from a Fund will be paid in shares of
the distributing Fund or if in cash, will be reinvested in shares of that
Fund at net asset value for the corresponding Subaccount. Accordingly, no
cash distributions will be made to Contractowners. Deductions and
redemptions from any Subaccount of Separate Account D may be effected by
redeeming the number of applicable Fund shares, at net asset value, necessary
to satisfy the amount to be deducted or redeemed. Shares of the Funds in the
Subaccounts will be valued at their net asset values.
Separate Account D is divided into the following Subaccounts, each of
which corresponds to the following Funds of the Life Series Fund:
6
<PAGE>
SEPARATE ACCOUNT D SUBACCOUNT FUND
- ----------------------------- ----
Blue Chip Subaccount Blue Chip Fund
Cash Management Subaccount Cash Management Fund
Discovery Subaccount Discovery Fund
Government Subaccount Government Fund
Growth Subaccount Growth Fund
High Yield Subaccount High Yield Fund
International Securities Subaccount International Securities Fund
Investment Grade Subaccount Investment Grade Fund
Target Maturity 2007 Subaccount Target Maturity 2007 Fund
Target Maturity 2010 Subaccount Target Maturity 2010 Fund
Utilities Income Subaccount Utilities Income Fund
Each Contractowner designates the Subaccount in which his or her
purchase payment will be invested. That Subaccount in turn invests in the
corresponding Fund of the Life Series Fund as set forth above.
Subject to applicable law, First Investors Life reserves the right to
make certain changes if, in its judgment, they would best serve the interests
of the Contractowners and Annuitants or would be appropriate in carrying out
the purposes of the Contracts. First Investors Life will obtain, when
required, the necessary Contractowner approval or regulatory approval for any
changes and provide, when required, the appropriate notification to
Contractowners prior to making such changes. Examples of the changes First
Investors Life may make include, but are not limited to:
- To operate Separate Account D in any form permitted under the
1940 Act or in any other form permitted by law.
- To add, delete, combine, or modify the Subaccounts in Separate
Account D.
- To add, delete, or substitute for the Fund shares held in any
Subaccount, the shares of any investment company or series
thereof, or any investment permitted by law.
- To make any amendments to the Contracts necessary for the
Contracts to comply with the provisions of the Internal Revenue
Code or any other applicable Federal or state law.
YOUR CHOICE OF INVESTMENT OBJECTIVE. When you purchase a Contract you
decide to place your purchase payment and any additional purchase payments
into at least one but not more than five of the Subaccounts of Separate
Account D, provided the allocation to any one Subaccount is not less than 10%
of the purchase payment. Each Subaccount corresponds to a Fund of the Life
Series Fund. The investment objectives of each Fund of the Life Series Fund
are set forth below. There is no assurance that the investment objective of
any Fund of the Life Series Fund will be realized. Because each Fund of the
Life Series Fund is intended to serve a different investment objective, each
is subject to varying degrees of financial and market risks. In addition,
total operating expenses vary by Fund. Twelve (12) times during any Contract
year, you may transfer part or all of your cash value from the Subaccounts
you are in to other Subaccounts provided the cash value is not allocated to
more than five of the Subaccounts, and provided the allocation to any one
Subaccount is not less than 10% of the cash value of the Contract. The cash
value of the Contract may increase or decrease depending on the investment
performance of the Subaccounts selected.
7
<PAGE>
First Investors Life reserves the right to adjust allocations to eliminate
fractional percentages.
THE FUND. First Investors Life Series Fund is a diversified open-end
management investment company registered under the 1940 Act. Registration of
the Life Series Fund with the Commission does not involve supervision by the
Commission of the management or investment practices or policies of the Life
Series Fund. The Life Series Fund consists of eleven separate Funds. The
shares of the Funds are not sold directly to the general public but are
available only through the purchase of an annuity contract or a variable life
insurance policy issued by First Investors Life. Life Series Fund reserves
the right to offer shares of its Funds to other separate accounts of First
Investors Life or directly to First Investors Life.
The investment objectives of each Fund of the Life Series Fund are as
follows:
BLUE CHIP FUND. The investment objective of Blue Chip Fund is to seek
high total investment return consistent with the preservation of capital.
This goal will be sought by investing, under normal market conditions,
primarily in equity securities of "Blue Chip" companies that the Adviser
believes have potential earnings growth that is greater than the average
company included in the Standard & Poor's 500 Composite Stock Price Index.
CASH MANAGEMENT FUND. The objective of Cash Management Fund is to seek
to earn a high rate of current income consistent with the preservation of
capital and maintenance of liquidity. The Cash Management Fund will invest in
money market obligations, including high quality securities issued or
guaranteed by the U.S. Government or its agencies and instrumentalities, bank
obligations and high grade corporate instruments. An investment in the Fund
is neither insured nor guaranteed by the U.S. Government. There can be no
assurance that the Fund will be able to maintain a stable net asset value of
$1.00 per share.
DISCOVERY FUND. The investment objective of Discovery Fund is to seek
long-term capital appreciation, without regard to dividend or interest
income, through investment in the common stock of companies with small to
medium market capitalization that the Adviser considers to be undervalued or
less well known in the current marketplace and to have the potential for
capital growth.
GOVERNMENT FUND. The investment objective of Government Fund is to seek
to achieve a significant level of current income which is consistent with
security and liquidity of principal by investing, under normal market
conditions, primarily in obligations issued or guaranteed as to principal and
interest by the U.S. Government, its agencies or instrumentalities (including
mortgage-backed securities).
GROWTH FUND. The investment objective of Growth Fund is to seek
long-term capital appreciation. This goal will be sought by investing, under
normal market conditions, primarily in common stocks of companies and
industries selected for their growth potential.
HIGH YIELD FUND. The primary objective of High Yield Fund is to seek to
earn a high level of current income. The Fund actively seeks to achieve its
secondary objective of capital appreciation to the extent consistent with its
primary objective. The Fund seeks to attain its objectives primarily through
investments in lower-grade, high-yielding, high risk debt securities.
Investments in high yield, high risk securities, commonly referred to as
"junk bonds," may entail risks that are different or more pronounced than
those involved in higher-rated securities. See "Description of
8
<PAGE>
Certain Securities, Other Investment Policies and Risk Factors -- High Yield
Securities " in the Life Series Fund's Prospectus.
INTERNATIONAL SECURITIES FUND. The primary objective of International
Securities Fund is to seek long-term capital growth. As a secondary
objective, the Fund seeks to earn a reasonable level of current income.
These objectives are sought, under normal market conditions, through
investment in common stocks, rights and warrants, preferred stocks, bonds and
other debt obligations issued by companies or governments of any nation,
subject to certain restrictions with respect to concentration and
diversification.
INVESTMENT GRADE FUND. The investment objective of Investment Grade
Fund is to seek a maximum level of income consistent with investment in
investment grade debt securities. The Fund seeks to achieve its objective
primarily by investing, under normal market conditions, in debt securities of
U.S. issuers that are rated in one of the four highest rating categories by
Moody's Investors Service, Inc. or Standard & Poor's Ratings Group or, if
unrated, are deemed to be of comparable quality by the Adviser.
TARGET MATURITY 2007 FUND. The investment objective of Target Maturity
2007 Fund is to seek a predictable compounded investment return for investors
who hold their Fund shares until the Fund's maturity, consistent with the
preservation of capital. The Fund will seek its objective by investing,
under normal market conditions, in zero coupon securities which are issued by
the U.S. Government, its agencies or instrumentalities or created by third
parties using securities issued by the U.S. Government, its agencies or
instrumentalities.
TARGET MATURITY 2010 FUND. The investment objective of Target Maturity
2010 Fund is to seek a predictable compounded investment return for investors
who hold their Fund shares until the Fund's maturity, consistent with the
preservation of capital. The Fund will seek its objective by investing,
under normal market conditions, in zero coupon securities which are issued by
the U.S. Government, its agencies or instrumentalities or created by third
parties using securities issued by the U.S. Government, its agencies or
instrumentalities.
UTILITIES INCOME FUND. The primary objective of Utilities Income Fund
is to seek high current income. Long-term capital appreciation is a
secondary objective. These objectives are sought, under normal market
conditions, through investment in equity and debt securities issued by
companies primarily engaged in the public utilities industry.
No offer is made of a Contract funded by the underlying Fund unless a
current Life Series Fund Prospectus has been delivered. Each Fund of the
Life Series Fund may be referred to as "Fund" or "Series" in the Contracts.
For more complete information about each of the Funds underlying
Separate Account D, including management fees and other expenses, see the
Life Series Fund's Prospectus. The Prospectus details each Fund's investment
goals, management strategies, investment restrictions, portfolio turnover
rate, the market and financial risks of an investment in the Fund's shares,
as well as the risk of investing in a fund that sells its shares to other
separate accounts, including variable life insurance company separate
accounts. Because the Life Series Fund sells its shares to more than one
separate account funding variable annuity contracts or variable life
insurance policies, the possibility arises that violation of the Federal tax
laws by another separate account investing in the Life Series Fund could
cause the Contracts funded through Separate Account D to
9
<PAGE>
lose their tax-deferred status, unless remedial action were taken. It is
important to read the Prospectus carefully before you decide to invest.
Additional copies of the Life Series Fund's Prospectus, which is attached
hereto, may be obtained by writing to First Investors Life Insurance Company,
95 Wall Street, New York, New York 10005 or by calling (212) 858-8200. There
can be no assurance that any of the objectives of the Funds will be achieved.
ADVISER. First Investors Management Company, Inc. (the "Adviser"), an
affiliate of First Investors Life, is the investment adviser of each Fund.
The Adviser supervises and manages the investments and operations of each
Fund, except for International Securities Fund and Growth Fund. The Adviser
is a New York corporation located at 95 Wall Street, New York, NY 10005.
SUBADVISER. Wellington Management Company, LLP ("WMC" or "Subadviser")
has been retained by the Adviser and the Life Series Fund, on behalf of
International Securities Fund and Growth Fund, as each of those Funds'
investment subadviser. The Adviser has delegated discretionary trading
authority to WMC with respect to all the assets of International Securities
Fund and Growth Fund, subject to the continuing oversight and supervision of
the Adviser and the Life Series Fund's Board of Trustees. As compensation
for its services, WMC is paid by the Adviser, and not by either Fund, a fee
which is computed daily and paid monthly.
WMC, located at 75 State Street, Boston, MA 02109, is a Massachusetts
limited liability partnership of which Robert W. Doran, Duncan M. McFarland
and John R. Ryan are Managing Partners. WMC is a professional investment
counseling firm which provides investment services to investment companies,
employee benefit plans, endowment funds, foundations and other institutions
and individuals. As of January 31, 1998, WMC held investment management
authority with respect to approximately $178 billion of assets. Of that
amount, WMC acted as investment adviser or subadviser to approximately 93
registered investment companies or series of such companies, with net assets
of approximately $117 billion as of December 31, 1997. WMC is not affiliated
with the Adviser or any of its affiliates.
UNDERWRITER. First Investors Life and Separate Account D have entered
into an Underwriting Agreement with their affiliate, FIC, 95 Wall Street, New
York, New York 10005. First Investors Life has reserved the right in the
Underwriting Agreement to sell the Contracts directly. The Contracts are
sold by insurance agents licensed to sell variable annuities, who are
registered representatives of the Underwriter.
YEAR 2000. Like other separate accounts, Separate Account D could be
adversely affected if the computer and other information processing systems
used by First Investors Life, the underlying Funds, the Adviser, Transfer
Agent and other service providers are not properly programmed to process
date-related information on and after January 1, 2000. Such systems
typically have been programmed to use a two-digit number to represent the
year for any date. As a result, computer systems could incorrectly
misidentify "00" as 1900, rather than 2000, and make mistakes when performing
operations. First Investors Life the Funds, the Adviser and Transfer Agent
are taking steps that they believe are reasonably designed to address the
Year 2000 problem for computer and other systems used by them and are
obtaining assurances that comparable steps are being taken by other service
providers. However, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the Separate Account D. Nor can
the Separate Account D estimate the extent of any impact.
10
<PAGE>
VOTING RIGHTS. First Investors Life will vote the shares of any Fund
held in a corresponding Subaccount or directly, at any Fund shareholders
meeting, in accordance with its view of present law. It will vote Fund
shares held in any corresponding Subaccount as follows: shares attributable
to Contractowners for which it receives instructions, in accordance with the
instructions; shares attributable to Contractowners for which it does not
receive instructions, in the same proportion that it votes shares held in the
Subaccount for which it receives instructions; and shares not attributable to
Contractowners, in the same proportion that it votes shares held in the
Subaccount that are attributable to Contractowners and for which it receives
instructions. It will vote Fund shares held directly in the same proportion
that it votes shares held in any corresponding Subaccounts that are
attributable to Contractowners and for which it receives instructions, except
that where there are no shares held in any Subaccount it will vote its own
shares as it deems appropriate. All of the shares of any Fund held by First
Investors Life through a Subaccount or directly will be presented at any Fund
shareholders meeting for purposes of determining a quorum.
Prior to the Annuity Commencement Date, the number of Fund shares held
in a corresponding Subaccount that is attributable to each Contractowner is
determined by dividing the Subaccount's Accumulated Value by the net asset
value of one Fund share. After the Annuity Commencement Date, the number of
Fund shares held in a corresponding Subaccount that is attributable to each
Contractowner is determined by dividing the reserve held in the Subaccount
for the variable annuity payment under the Contract by the net asset value of
one Fund share. As this reserve fluctuates, the number of votes fluctuates.
The number of votes that a Contractowner has the right to cast will be
determined as of the record date established by Life Series Fund.
Voting instructions will be solicited by written communication prior to
the date of the meeting at which votes are to be cast. Each Contractowner
having a voting interest in a Subaccount will be sent meeting and other
materials relating to the corresponding Fund.
First Investors Life reserves the right to proceed other than as
described above, including the right to vote shares of any Fund in its own
right, to the extent permitted by law.
PURCHASES, CHARGES AND EXPENSES
PURCHASE PAYMENTS. Purchase payments are used to purchase Accumulation
Units of one or more Subaccounts and not shares of the Fund or Funds in
which the Subaccount or Subaccounts invest.
The minimum initial purchase payment is $25,000 for a Deferred Variable
Annuity Contract. Additional Payments under a Deferred Variable Annuity
Contract in the minimum amount of $200 may be made at any time after the
issuance of the Contract.
Initial purchase payments will be credited to a Contractowner's Account
on the Valuation Date they are received by First Investors Life, provided
that First Investors Life has received a duly completed application.
Additional payments will be credited to a Contractowner's Account on the
Valuation Date they are received by First Investors Life. In the event First
Investors Life receives an incomplete application, all required information
shall be provided not later than five business days following the receipt of
such application or the purchase payment will be returned to the applicant at
the end of such five-day period.
11
<PAGE>
Purchase payments will be allocated to the appropriate Subaccount or
Subaccounts based upon the next computed value of an Accumulation Unit
following receipt by First Investors Life at its Executive Office or other
designated office. Accumulation Units are valued at the end of each
Valuation Date (i.e., as of the close of regular trading on the NYSE,
normally 4:00 p.m., Eastern Time).
CONTINGENT DEFERRED SALES CHARGE. The Contracts are sold without an
initial sales charge, but may be subject to a contingent deferred sales
charge ("CDSC") upon a full or partial surrender of the Contract. The CDSC
is a percentage of the value of the Accumulation Units surrendered (not to
exceed the aggregate amount of the purchase payments made for such Units) and
declines, in accordance with the Table below, from 7% to 0% over a seven year
period. Purchase payments will be deemed surrendered in the order in which
they were received (first-in, first-out) and all surrenders will be first
from purchase payments and then from other contract values.
CONTINGENT DEFERRED SALES CHARGE TABLE
<TABLE>
<CAPTION>
Contingent Deferred Sales Charge
as a Percentage of Purchase Length of Time from Purchase
Payments Surrendered Payment in Years
<S> <C>
7% Less than 1
6% 1-2
5% 2-3
4% 3-4
3% 4-5
2% 5-6
1% 6-7
0% More than 7
</TABLE>
No CDSC will be assessed (i) in the event of the death of the
Annuitant or the Contractowner, as applicable, (ii) if the contract values
are applied to an annuity option provided for under this contract, (iii) for
surrenders up to the annual limit of the Withdrawal Privilege, or (iv) for
surrenders used to pay Premium taxes. For information concerning the Annuity
Options and the Withdrawal Privilege, see "Annuity Options" and "Surrender
and Termination (Redemption) During the Accumulation Period."
MORTALITY AND EXPENSE RISK CHARGES. Although the amount of each
variable annuity payment made to an Annuitant will vary in accordance with
the investment performance of the Subaccounts, the amount will not be
affected by the mortality experience (death rate) of persons receiving such
payments or of the general population. First Investors Life assumes this
"mortality risk" by virtue of annuity rates incorporated in the Contracts
which cannot be changed.
The mortality risk assumed by First Investors Life arises from its
obligation to continue to make fixed or variable annuity payments, determined
in accordance with the annuity tables and other provisions of the Contracts,
to each Annuitant regardless of how long that person lives and regardless of
how long all payees as a group live. This assures an Annuitant that neither
the Annuitant's own longevity nor an improvement in life expectancy generally
will have any adverse effect on the variable annuity payments the Annuitant
will receive under the Contract, and may reduce the risk that the Annuitant
will outlive the funds that the Annuitant has accumulated for
12
<PAGE>
retirement. First Investors Life also assumes mortality risk as a result of
its guarantee of a minimum payment in the event the Annuitant or the
Contractowner named in the original application for the Contract dies prior
to the Annuity Commencement Date.
In addition, First Investors Life assumes the risk that the
charges for administrative expenses may not be adequate to cover such
expenses and assures that it will not increase the amount charged for
administrative expenses. In consideration for its assumption of these
mortality and expense risks, First Investors Life deducts an amount equal on
an annual basis to 1.25% of the daily Accumulation Unit value of the
Subaccounts. Of such charge, approximately 0.85% is for assuming the
mortality risk and 0.4% is for assuming the expense risk.
First Investors Life guarantees that it will not increase the
mortality and expense risk charges during the term of any Contract. If the
charges are insufficient to cover the actual cost of the mortality and
expense risks, the loss will fall on First Investors Life; conversely, if the
deductions prove more than sufficient, the excess will be a profit to First
Investors Life. Any profits resulting to First Investors Life for
over-estimates of the actual costs of the mortality and expense risks can be
used by First Investors Life for any business purpose, including the payment
of expenses of distributing the Contracts, and will not remain in Separate
Account D.
ADMINISTRATIVE CHARGE. First Investors Life deducts an amount
equal on an annual basis to .15% of the daily net asset value of the
Subaccounts as an administrative charge. This charge will not be increased
during the term of any Contract.
CONTRACT MAINTENANCE CHARGE. On the last business day of each
Contract Year or on the date of surrender of the Contract, if earlier, the
Company deducts a $30.00 Contract Maintenance Charge from the Accumulated
Value, provided that in no case will this charge exceed 2% of such value. It
will be charged against the Accumulated Value by proportionately reducing the
number of Accumulation Units held on that date with respect to each active
Subaccount of Separate Account D. This charge will not be increased during
the term of any Contract.
OTHER CHARGES. Some states assess Premium taxes which presently
range from 0% to 2.35% at the time purchase payments are made; others assess
Premium taxes at the time of surrender or when annuity payments begin. First
Investors Life currently advances any Premium taxes due at the time purchase
payments are made and then deducts Premium taxes from the Accumulated Value
of the Contract at the time of surrender, upon death of the Annuitant or when
annuity payments begin. First Investors Life, however, reserves the right to
deduct Premium taxes when incurred. See "Appendix I" for Premium tax table.
EXPENSES. The total expenses of Separate Account D for the fiscal
year ended December 31, 1997 amounted to $41,042 or 0.59% of average net
assets. There are deductions from and expenses paid out of the assets of the
Funds that are described in the Prospectus for the Funds.
VARIABLE ANNUITY CONTRACTS
This Prospectus offers individual Deferred Variable Annuity
Contracts under which annuity payments will begin on a selected future date.
First Investors Life is offering the Contracts in states where it has the
authority to issue the Contracts. The individual Deferred Variable Annuity
Contracts offered by this Prospectus are designed to provide lifetime annuity
payments to Annuitants in accordance with the plan adopted by the
Contractowner. The amount of annuity
13
<PAGE>
payments will vary with the investment performance of the Subaccounts. The
Contracts obligate First Investors Life to make payments for the lifetime of
the Annuitant in accordance with the annuity rates contained in the Contract,
regardless of actual mortality experience (see "Annuity Period"). Upon the
death of the Annuitant under a Contract before the Annuity Commencement Date,
First Investors Life will pay a death benefit to the Beneficiary designated
by the Contractowner. For a discussion of the amount and manner of payment of
this benefit, see "Death of Annuitant."
All or a portion of the Accumulated Value may be surrendered
during the Accumulation Period. For a discussion on withdrawals during the
Accumulation Period, see "Surrender and Termination (Redemption) During the
Accumulation Period." For Federal income tax consequences of a withdrawal,
see "Federal Income Tax Status." The exercise of Contract rights herein
described, including the right to make a withdrawal during the Accumulation
Period, will be subject to the terms and conditions of any qualified trust or
plan under which the Contracts are purchased. This Prospectus contains no
information concerning such trust or plan.
First Investors Life reserves the right to amend the Contracts to
meet the requirements of the 1940 Act or other applicable Federal or state
laws or regulations.
Contractowners with any inquiries concerning their account should
write to First Investors Life Insurance Company at its Executive Office, 95
Wall Street, New York, New York 10005.
DEFERRED VARIABLE ANNUITIES--ACCUMULATION PERIOD
CREDITING ACCUMULATION UNITS. During the Accumulation Period,
purchase payments on Deferred Variable Annuity Contracts are credited to the
Contractowner's Account in the form of Accumulation Units. The number of
Accumulation Units credited to a Contractowner for the Subaccounts is
determined by dividing the purchase payment by the value of an Accumulation
Unit for the Subaccount based upon the next computed value of an Accumulation
Unit following receipt of the purchase payment by First Investors Life at its
Executive Office or other designated office. The value of the
Contractowner's Individual Account varies with the value of the assets of the
Subaccounts. The investment performance of the Subaccounts, expenses and
deduction of certain charges affect the value of an Accumulation Unit. There
is no assurance that the value of a Contractowner's Individual Account will
equal or exceed purchase payments. The value of a Contractowner's Individual
Account for a Valuation Period can be determined by multiplying the total
number of Accumulation Units credited to the account for the Subaccount by
the value of an Accumulation Unit for the Subaccount for the Valuation Period.
ANNUITY PERIOD
COMMENCEMENT DATE. Annuity payments will begin on the Annuity
Commencement Date selected by the Contractowner. Not later than 30 days
prior to the Annuity Commencement Date, the Contractowner may elect in
writing to advance or defer the Annuity Commencement Date. The Annuity
Commencement Date may not be deferred beyond the Contract anniversary date
following the Annuitant's 90th birthday. If no other date is elected,
annuity payments will commence on the Contract anniversary date following the
Annuitant's 90th birthday.
If the Net Accumulated Value on the Annuity Commencement Date is
less than $2,000, First Investors Life may pay such value in one sum in lieu
of annuity payments. If the Net Accumulated
14
<PAGE>
Value is not less than $2,000 but the variable annuity payments provided for
would be or become less than $20, First Investors Life may change the
frequency of annuity payments to such intervals as will result in payments of
at least $20.
ASSUMED INVESTMENT RATE. A 3.5% assumed investment rate is built
into the Annuity Tables in the Contract. This is based on First Investors
Life's opinion that it is the average result to be expected from a
diversified portfolio of common stocks during a relatively stable economy. A
higher assumption would mean a higher initial payment but more slowly rising
and more rapidly falling subsequent variable annuity payments. A lower
assumption would have the opposite effect. If the actual net investment rate
of the respective Subaccount is at the annual rate of 3.5%, the variable
annuity payments will be level. A fixed annuity is an annuity with annuity
payments which remain fixed as to dollar amount throughout the payment period
and is based on an assumed interest rate of 3.5% per year built into the
Annuity Tables in the Contract.
ANNUITY OPTIONS. The Contractowner may, at any time at least 30
days prior to the Annuity Commencement Date upon written notice to First
Investors Life at its Executive Office or other designated office, elect to
have payments made under any one of the Annuity Options provided in the
Contract. If no election is in effect on the Annuity Commencement Date,
annuity payments will be made on a variable basis only under Annuity Option 3
below, Life Annuity with 120 Monthly Payments Guaranteed, which is the Basic
Annuity.
The material factors that determine the level of annuity
benefits are (i) the value of a Contractowner's Individual Account determined
in the manner described in this Prospectus before the Annuity Commencement
Date, (ii) the Annuity Option selected by the Contractowner, (iii) the
frequency and duration of annuity payments, (iv) the sex and adjusted age of
the Annuitant and any Joint Annuitant at the Annuity Commencement Date and,
(v) in the case of a variable annuity, the investment performance of the
Subaccounts selected.
On the Annuity Commencement Date, First Investors Life shall apply
the Accumulated Value, reduced by any applicable Premium taxes not previously
deducted, to provide the Basic Annuity or, if an Annuity Option has been
elected, to provide one of the Annuity Options described below.
The Contracts provide for the six Annuity Options described below:
Option 1 - LIFE ANNUITY - An annuity payable monthly during the
lifetime of the Annuitant, ceasing with the last payment due prior to the
death of the Annuitant. If this Option is elected, annuity payments
terminate automatically and immediately on the death of the Annuitant without
regard to the number or total amount of payments received.
Option 2a - JOINT AND SURVIVOR LIFE ANNUITY - An annuity payable
monthly during the joint lifetime of the Annuitant and the Joint Annuitant
and continuing thereafter during the lifetime of the survivor, ceasing with
the last payment due prior to the death of the survivor.
Option 2b - JOINT AND TWO-THIRDS TO SURVIVOR LIFE ANNUITY - An
annuity payable monthly during the joint lifetime of the Annuitant and the
Joint Annuitant and continuing thereafter during the lifetime of the survivor
at an amount equal to two-thirds of the joint annuity payment, ceasing with
the last payment due prior to the death of the survivor.
Option 2c - JOINT AND ONE-HALF TO SURVIVOR LIFE ANNUITY - An
annuity payable monthly
15
<PAGE>
during the joint lifetime of the Annuitant and the Joint Annuitant and
continuing thereafter during the lifetime of the survivor at an amount equal
to one-half of the joint annuity payment, ceasing with the last payment due
prior to the death of the survivor.
Under Annuity Options 2a, 2b and 2c, annuity payments terminate
automatically and immediately on the deaths of both the Annuitant and the
Joint Annuitant without regard to the number or total amount of payments
received.
Option 3 - LIFE ANNUITY WITH 60, 120 OR 240 MONTHLY PAYMENTS
GUARANTEED - An annuity payable monthly during the lifetime of the Annuitant,
with the guarantee that if, at his or her death, payments have been made for
less than 60, 120 or 240 monthly periods, as elected, any guaranteed annuity
payments will be continued during the remainder at the selected period to the
Beneficiary.
Option 4 - UNIT REFUND LIFE ANNUITY - An annuity payable monthly
during the lifetime of the Annuitant, terminating with the last payment due
prior to the death of the Annuitant. An additional annuity payment will be
made to the Beneficiary equal to the Annuity Unit Value of the Subaccount or
Subaccounts as of the date that notice of death in writing is received by
First Investors Life at its Executive Office or other designated office,
multiplied by the excess, if any, of (a) over (b) where (a) is the Net
Accumulated Value allocated to each Subaccount and applied under the option
at the Annuity Commencement Date, divided by the corresponding Annuity Unit
Value as of the Annuity Commencement Date, and (b) is the product of the
number of Annuity Units applicable under the Subaccount represented by each
annuity payment and the number of annuity payments made. (For an
illustration of this calculation, see Appendix II, Example A, in the
Statement of Additional Information.)
ALLOCATION OF ANNUITY. The Contractowner may elect to have the
Net Accumulated Value applied at the Annuity Commencement Date to provide a
Fixed Annuity, a Variable Annuity, or any combination thereof. After the
Annuity Commencement Date, no transfers or redemptions are allowed. Such
elections must be made in writing to First Investors Life at its Executive
Office or other designated office, at least 30 days prior to the Annuity
Commencement Date. In the absence of an election, annuity payments will be
made on a variable basis only under Annuity Option 3 above, Life Annuity with
120 Monthly Payments Guaranteed, which is the Basic Annuity.
DEATH OF ANNUITANT
If the Annuitant dies prior to the Annuity Commencement Date,
First Investors Life will pay a Death Benefit to the Beneficiary designated
by the Contractowner upon receipt of a death certificate or similar proof of
the death of the Annuitant ("Due Proof of Death") and notification of the
Beneficiary's election to receive payment in either the form of a single sum
settlement or an annuity option ("Notification"). The value of the Death
Benefit will be determined as of the next computed value of the Accumulation
Units following receipt of Due Proof of Death and Notification by First
Investors Life at its Executive Office or other designated office.
If payment of the Death Benefit under one of the Annuity Options
was not elected by the Contractowner prior to the Annuitant's death, the
Beneficiary may elect to have the Death Benefit paid in a single sum or
applied to provide an annuity under one of the Annuity Options or as
otherwise permitted by First Investors Life. If a single sum settlement is
requested, the amount of the Death Benefit will be paid within seven days of
receipt of Due Proof of Death and Notification.
16
<PAGE>
In the event that only Due Proof of Death or Notification is received, the
Death Benefit will remain invested in the Separate Account in accordance with
the original investment choices of the Contractowner until both pieces of
information are received by First Investors Life at its Executive Office or
other designated office. If an Annuity Option is elected, the Beneficiary
will have up to ninety days commencing with the date of receipt of Due Proof
of Death and Notification in which to select from among the available
options. During the ninety-day period, the Death Benefit will remain
invested in the Separate Account in accordance with the original investment
choices of the Contractowner. If such a selection is not made by the end of
the ninety-day period, a single sum settlement will be made to the
Beneficiary. If any Annuity Option is selected, the Annuity Commencement
Date shall be the date specified in the election but no later than ninety
days after receipt by First Investors Life of Due Proof of Death and
Notification.
The amount of the Death Benefit payable upon the death of the Annuitant
will be the greatest of (1) the Accumulated Value on the date of receipt of
Due Proof of Death and Notification at the Executive Office of First
Investors Life or other designated office, (2) the Accumulated Value on the
preceding Specified Contract Anniversary, increased by any additional
purchase payments and decreased by any partial surrenders since that
anniversary, or (3) the sum of all purchase payments made under the Contract,
decreased by any partial surrenders. The Specified Contract Anniversary is
every seventh contract anniversary (i.e., 7th, 14th, 21st, etc.).
On receipt of Due Proof of Death of the Annuitant after Annuity Payments
have begun under an Annuity Option, if any payments remain under the Option
they will be paid to the Beneficiary as provided by the Option.
Unless otherwise provided in the Beneficiary designation, if no
Beneficiary survives the Annuitant, the proceeds will be paid in one sum to
the Contractowner, if living; otherwise, to the Contractowner's estate.
SURRENDER AND TERMINATION (REDEMPTION) DURING THE ACCUMULATION PERIOD
A Contractowner may elect, at any time before the earlier of the Annuity
Commencement Date or the death of the Annuitant, to surrender the Contract
for all or any part of the Contractowner's Individual Account. In the case
of a partial surrender, the amount remaining after the surrender must be at
least equal to First Investors Life's minimum amount rule then in effect
(currently $5,000). In the event of the termination of the Contract, First
Investors Life will, upon due surrender of the Contract at the Executive
Office of First Investors Life or other designated office, pay to the
Contractowner the Accumulated Value of the Contract less (1) any applicable
CDSC, (2) the Contract Maintenance Charge and (3) any applicable Premium
taxes not previously deducted. For a more detailed discussion of these
charges see "Purchases, Charges and Expenses." However, on a non-cumulative
basis, the Contractowner may make partial surrenders during any Contract Year
up to the annual Withdrawal Privilege Amount of 10% of Purchase Payments and
not incur CDSC on this amount. Amounts surrendered pursuant to this
Withdrawal Privilege will be deemed to be from Accumulated Values other than
Purchase Payments.
Any amount requested as a partial surrender shall be deducted from
the Subaccount resulting in a corresponding reduction in the number of
Accumulation Units credited to the Contractowner in the Subaccount. For any
partial or full surrender, the deduction will be based upon the next computed
value of an Accumulation Unit following receipt of a written request by First
Investors Life at its Executive Office or other designated office. First
Investors Life may defer any such
17
<PAGE>
payment for a period of not more than seven days. However, First Investors
Life may postpone such payment during any period when (a) trading on the NYSE
is restricted as determined by the Commission or the NYSE is closed for other
than weekends and holidays, (b) the Commission has by order permitted such
suspension or (c) any emergency, as defined by the rules of the Commission,
exists during which time the sale of portfolio securities or calculation of
securities is not reasonably practicable. For information as to Federal tax
consequences resulting from surrenders, see "Federal Income Tax Status." For
information as to State Premium tax consequences, see "Other Charge" and
"Appendix I."
ANNUITY COMMENCEMENT DATE EXCHANGE PRIVILEGE. If this Contract is
liquidated during the one-year period preceding its Annuity Commencement Date,
the proceeds can be used to purchase Class A shares of First Investors mutual
funds without incurring a sales charge.
DEATH OF CONTRACTOWNER
If the Contractowner dies before the entire interest in the Contract has
been distributed, the value of the Contract must be distributed to the
Beneficiary as provided below so that the Contract qualifies as an annuity
under Section 72(s) of the Internal Revenue Code of 1986, as amended (the
"Code"). If the Contractowner who dies is the one named in the original
application for the Contract, the entire interest of that Contractowner in
the Contract will be the same as if the Contractowner had been the Annuitant;
if the Contractowner who dies is not the one named in the original
application for the Contract, the entire interest of that Contractowner shall
be the Accumulated Value of the Contract.
If the death of the Contractowner occurs on or after the Annuity
Commencement Date, the entire interest in the Contract will be distributed at
least as rapidly as under the Annuity Option in effect on the date of death.
If the death of the Contractowner occurs prior to the Annuity
Commencement Date, the entire interest in the Contract will be (1)
distributed to the Beneficiary within five years, or (2) distributed to the
Beneficiary, beginning within one year of death, under an Annuity Option
which provides that annuity payments will be made over a period not longer
than the life or life expectancy of the Beneficiary. If the Contract is
payable to (or for the benefit of) the Contractowner's surviving spouse, no
distributions will be required and the Contract may be continued with the
surviving spouse as the new Contractowner. If the Contractowner is also the
Annuitant, such spouse shall have the right to become the Annuitant under the
Contract. Likewise, if the Annuitant dies and the Contractowner is not a
natural person, the Annuitant's surviving spouse shall have the right to
become the Contractowner and the Annuitant.
TEN-DAY REVOCATION RIGHT
A Contractowner may, within ten days from the date the Contract is
delivered to the Contractowner (or longer as required by applicable state
law), elect to cancel the Contract. First Investors Life will, upon
surrender of the Contract, together with a written request for cancellation,
at the Executive Office of First Investors Life or other designated office,
pay to the Contractowner an amount equal to the sum of (1) the difference
between the purchase payment(s) made under the Contract and the amount
allocated to Separate Account D under the Contract and (2) the Accumulated
Value of the Contract on the date of surrender. The amount refunded to
Contractowners may be more or less than their initial purchase payment
depending on the
18
<PAGE>
investment results of the designated Subaccount(s). In those states where a
full refund of premiums is required if the Contractowner elects to exercise
to cancel the Contract under the ten-day revocation right, such Contractowner
shall be entitled to a full refund of premiums paid upon such cancellation.
FEDERAL INCOME TAX STATUS
The Contracts are designed for use by individuals who desire to
accumulate capital on a tax-deferred basis for retirement or other long-term
purposes. The Contracts may be purchased on a nonqualified basis or through
the following retirement plans qualified for special tax treatment under the
Code (1) individual retirement accounts and (2) qualified corporate employee
pension and profit-sharing plans.
In general, a Contract acquired by a person who is not an individual will
be treated as one which is not an annuity to the extent of contributions made
after February 28, 1986, and any income credited to a Contractowner's
Individual Account will accordingly be includable in the Contractowner's
gross income on a current basis in accordance with that person's method of
accounting. The preceding sentence will not apply to any annuity contract
that is (i) acquired by a decedent's estate by reason of the decedent's
death, (ii) held under a qualified pension, profit-sharing or stock bonus
plan described under Section 401(a) of the Code or an employee annuity
program described under Section 403(a) of the Code (or that is purchased by
an employer upon the termination of such plan or program and that is held by
the employer until all amounts under a Contract are distributed to the
employee for whom the Contract was purchased or the employee's beneficiary),
(iii) held under an individual retirement plan or an employee annuity program
described under Section 403(b) of the Code, or (iv) an immediate annuity (as
defined in Section 72(u)(4) of the Code).
The ultimate effect of Federal income taxes on Accumulated Values, on
annuity payments and on the economic benefit to the Contractowner, Annuitant
or Beneficiary depends on the tax status of both First Investors Life and the
individual concerned. The discussion contained herein is general in nature
and is not intended as tax advice. No attempt is made to consider any
applicable state or other tax laws. Moreover, the discussion herein is based
upon First Investors Life's understanding of Federal income tax laws as they
are currently interpreted. No representation is made regarding the
likelihood of continuation of current Federal income tax laws or the current
interpretations of the Internal Revenue Service. Prospective Contractowners
should consult their tax advisors as to the tax consequences of purchasing
Contracts.
First Investors Life is taxed as a life insurance company under the Code.
Since Separate Account D is not a separate entity from First Investors Life
and its operation forms part of First Investors Life, it will not be taxed
separately as a "regulated investment company" under Subchapter M of the
Code. Under existing Federal income tax law, investment income of the
Subaccounts of Separate Account D, to the extent that it is applied (after
taking into account the mortality risk and expense risk charges) to increase
reserves under the Contract, is not taxed and may be compounded through
reinvestment without additional tax to First Investors Life to the extent
income is so applied. Thus, the Funds may realize net investment income and
pay dividends and the Subaccounts of Separate Account D may receive and
reinvest them on behalf of Contractowners, all without Federal income tax
consequences for Separate Account D or the Contractowner.
Under current interpretations of the Code, the Contractowner is not
subject to income tax on
19
<PAGE>
increases in the value of the Contractowner's Individual Account until
payments are received by the Contractowner under the Contract. Annuity
payments received after the Annuity Commencement Date will be taxed to the
Contractowner as ordinary income in accordance with Section 72 of the Code.
However, that portion of each payment which represents the Contractowner's
investment in the Contract, which is ordinarily the amount of purchase
payments made under the Contract with certain adjustments, will be excluded
from gross income. The investment in the Contract is divided by the
Contractowner's life expectancy or other period for which annuity payments
are expected to be made, in the case of variable annuity payments, and by the
expected return, in the case of fixed annuity payments, to determine the
annual exclusion. Annuity payments received each year in excess of this
annual exclusion, and all payments after the investment in the Contract has
been reduced to zero, are taxable as ordinary income as provided in Section
72 of the Code. The investment in the Contract is an amount equal to total
purchase payments less any previous distributions from the Contract that were
not included in gross income.
In order that the Contracts be treated as annuities for Federal income
tax purposes, other than Contracts issued in connection with retirement plans
that are qualified under the Code, Separate Account D must satisfy certain
diversification requirements that are generally applicable to variable
annuity contract segregated asset accounts under Subchapter L of the Code.
Ownership by the Subaccounts of shares of the Funds will not fail the
diversification requirements provided that each Fund is taxed as a regulated
investment company under Subchapter M of the Code, and that each Fund meets
such diversification requirements, and all shares of the Funds are owned only
by the Subaccounts (and similar accounts of First Investors Life or other
insurance companies), and access to the Funds is available exclusively
through the purchase of Contracts (and additional variable annuity or life
insurance products of First Investors Life or other insurance companies).
Fund shares also may be held by the Adviser provided such shares are being
held in connection with the creation or management of the Fund and the
Adviser does not intend to sell any Fund shares it owns to the general
public. It is expected that the Adviser will cause the assets of the Funds
to be invested in a manner that complies with the asset diversification
requirements.
The Treasury Department has indicated that the diversification
regulations do not provide guidance as to any circumstances in which a
Contractowner's control over allocation of account value among underlying
investments may cause an owner to be treated as the owner of the separate
account assets. Such treatment would result in current taxation of the owner
on increases in the account value. We reserve the right to amend the
Contracts in any way necessary to avoid such result. As of the date of this
prospectus, no regulation or ruling has been issued on the subject, although
the Treasury Department has informally indicated that a regulation or ruling
could limit the number of underlying funds or the frequency of transfers
among those funds. Such regulation or ruling may apply only prospectively,
although retroactive effect is possible if the regulation or ruling is
considered not to embody a new position.
With respect to withdrawals before the start of annuity payments, the
Code currently provides that: (i) withdrawals from an annuity contract are
taxable as ordinary income in the year of receipt to the extent that the
Contract's Accumulated Value exceeds the investment in the Contract, (ii) a
loan under, or an assignment or pledge of an annuity contract is treated as a
distribution, and (iii) a 10 percent penalty will be assessed, subject to
certain exceptions, on the taxable portion of withdrawals made prior to the
taxpayer's attainment of age 59 1/2.
In determining the amount of any distribution that is includable in gross
income, all annuity contracts issued by the same company to the same
Contractowner during any calendar year will be
20
<PAGE>
treated as one annuity contract. Contractowners should consult their tax
advisors before purchasing more than one Contract during any calendar year.
Under the Code, income tax must generally be withheld from all
"designated distributions." A designated distribution includes the taxable
portion of any distribution or payment from an annuity. A partial surrender
of an annuity contract is considered a distribution subject to withholding.
The amount of withholding depends on the type of payment: "periodic" or
"non-periodic." For a periodic payment (E.G., an annuity payment), unless
the recipient files an appropriate withholding certificate, the tax withheld
from the taxable portion of the payment is based on a payroll withholding
schedule which assumes a married recipient claiming three withholding
exemptions. For a non-periodic payment distribution (E.G., a partial
surrender of an annuity contract), the tax withheld will generally be 10
percent of the taxable portion of the payment.
A recipient may elect not to have the withholding rules apply. For
periodic payments, an election is effective for the calendar year for which
it is made and for each necessary year until amended or modified. For
non-periodic distributions, an election is effective only for the
distribution for which it is made. Payors must notify recipients of their
right to elect not to have taxes withheld.
Insurers are required to report all designated distribution payments to
the Internal Revenue Service.
With respect to the Contracts issued in connection with retirement or
deferred compensation plans which do not meet the requirements applicable to
tax qualified plans, the tax status of the Annuitant is determined by the
provisions of the plan. In general, the Annuitant is not taxed until the
Annuitant receives annuity payments. The rules for taxation of payments
under non-qualified plans are, in general, similar to those for taxation of
payments under a qualified plan; however, the special income averaging
treatment available for certain lump sum payments under qualified plans is
not available for similar payments under nonqualified plans.
The Contracts may be purchased in connection with the following types of
tax-favored retirement plans: (1) individual retirement annuities and (2)
pension and profit-sharing plans of corporations qualified under Section
401(a) or employee annuity programs described in Section 403(a) of the Code.
The tax rules applicable to these plans, including restrictions on
contributions and benefits, taxation of distribution and any tax penalties,
vary according to the type of plan and its terms and conditions.
Participants under such plans, as well as Contractowners, Annuitants and
Beneficiaries, should be aware that the rights of any person to any benefits
under such plans may be subject to the terms and conditions of the plans
themselves, regardless of the terms and conditions of the Contracts.
Purchasers of Contracts for use with any qualified plan, as well as plan
participants and Beneficiaries, should consult counsel and other competent
advisors as to the suitability of the Contracts to their special needs, and
as to applicable Code limitations and tax consequences.
It should be noted that the laws and regulations with respect to the
foregoing tax matters are subject to change at any time by Congress and the
Treasury Department, respectively, and that the interpretations of such laws
and regulations now in effect are subject to change by judicial decision or
by the Treasury Department.
21
<PAGE>
PERFORMANCE INFORMATION
From time to time, Separate Account D may advertise several types of
performance information for the Subaccounts. Each Subaccount (other than the
Cash Management Subaccount) may advertise "average annual total return" and
"total return". The High Yield Subaccount, Investment Grade Subaccount and
Government Subaccount may also advertise "yield." The Cash Management
Subaccount may advertise "yield" and "effective yield." Each of these
figures is based upon historical results and is not intended to indicate
future performance.
The "total return" of a Subaccount is the total change in value of an
investment in the Subaccount over a period of time, expressed as a
percentage. "Average annual total return" is the rate of return that would
produce that change in value over the specified period, if compounded
annually. Average annual total return figures may reflect the effect of the
CDSC (pursuant to a standardized formula prescribed by the Commission), or
may not reflect the effect of the CDSC (non-standardized performance
information). Total return figures may also be advertised on the same basis
as average annual total return figures (with or without showing the effect of
the CDSC). Quotations of return not reflecting the CDSC will be greater than
those reflecting the CDSC.
The "yield" of a Subaccount refers to the income generated by an investment
in the Subaccount over a period of time excluding realized and unrealized
capital gains and losses in the corresponding Fund's investments. This
income is then "annualized" and shown as a percentage of the investment. The
"effective yield" of the Cash Management Subaccount is calculated similarly
but, when annualized, the income earned by an investment in the Subaccount is
assumed to be reinvested. The Cash Management Subaccount's effective yield
will be slightly higher than its yield due to the compounding effect of this
assumed reinvestment.
Neither the total return nor the yield figures reflect deductions for premium
taxes, since most states do not impose such taxes.
For further information on performance calculations, see "Performance
Information" in the Statement of Additional Information.
FINANCIAL STATEMENTS
The financial statements for First Investors Life and the accompanying
Report of Independent Certified Public Accountants are included in the
Statement of Additional Information, dated April 30, 1998. The financial
statements for the Separate Account D and the accompanying Report of
Independent Certified Public Accountants are also included in the Statement
of Additional Information, dated April 30, 1998. The Statement of Additional
Information is available at no charge upon request to First Investors Life at
the address or telephone number indicated on the coverpage of this Prospectus.
22
<PAGE>
TABLE OF CONTENTS
OF THE STATEMENT OF ADDITIONAL
INFORMATION
<TABLE>
<CAPTION>
Item Page Page
--------- ----
<S> <C>
General Description.................................................. 2
Services............................................................. 2
Annuity Payments..................................................... 3
Other Information.................................................... 4
Performance Information.............................................. 5
Relevance of Financial Statements.................................... 9
Appendices...........................................................10
Financial Statements.................................................15
</TABLE>
APPENDIX I
STATE AND LOCAL TAXES*
<TABLE>
<S> <C> <C> <C>
Alabama.......................-- Mississippi...................--
Alaska........................-- Missouri......................--
Arizona.......................-- Nebraska......................--
Arkansas......................-- New Jersey....................--
California....................2.35% New Mexico....................--
Colorado......................-- New York......................--
Connecticut...................-- North Carolina................--
Delaware......................-- Ohio..........................--
District of Columbia..........2.25% Oklahoma......................--
Florida.......................1.00% Oregon........................--
Georgia.......................-- Pennsylvania..................--
Illinois......................-- Rhode Island..................--
Indiana.......................-- South Carolina................--
Iowa..........................-- Tennessee.....................--
Kentucky......................2.00% Texas.........................--
Louisiana.....................-- Utah..........................--
Maryland......................-- Virginia......................--
Massachusetts.................-- Washington....................--
Michigan......................-- West Virginia.................1.00%
Minnesota.....................-- Wisconsin.....................--
Wyoming.......................1.00%
</TABLE>
Note: The foregoing rates are subject to amendment by legislation and the
applicability of the stated rates may be subject to administrative
interpretation.
* Includes local annuity Premium taxation.
23
<PAGE>
First Investors Life
Variable Annuity
Fund D
- -----------------------------
First Investors
Life Series Fund
- -----------------------------
Blue Chip Fund
Cash Management Fund
Discovery Fund
Government Fund
Growth Fund
High Yield Fund
International Securities Fund
Investment Grade Fund
Target Maturity 2007 Fund
Target Maturity 2010 Fund
Utilities Income Fund
- -----------------------------
Prospectuses
- -----------------------------
April 30, 1998
First Investors Logo
Logo is described as follows: the arabic numeral one separated into seven
vertical segments followed by the words "First Investors."
Verticle line from top to bottom in center of page about 1/2 inch in thickness
The following language appears to the left of the above language in the printed
piece:
The words "BULK RATE U.S. POSTAGE PAID PERMIT NO. 7379" in a box to the right
of a circle containing the words "MAILED FROM ZIP CODE 11201" appears on the
righthand side.
The following language appears on the lefthand side.
FIRST INVESTORS LIFE SERIES FUND
95 WALL STREET
NEW YORK, NY 10005
First Investors Logo (as described above)
A MEMBER OF THE FIRST INVESTORS FINANCIAL NETWORK
LIFE078
<PAGE>
FIRST INVESTORS LIFE VARIABLE ANNUITY FUND D
INDIVIDUAL VARIABLE ANNUITY CONTRACTS
OFFERED BY
FIRST INVESTORS LIFE INSURANCE COMPANY
STATEMENT OF ADDITIONAL INFORMATION DATED APRIL 30, 1998
This Statement of Additional Information is not a Prospectus and should be
read in conjunction with the Prospectus for First Investors Life Variable
Annuity Fund D, dated April 30, 1998, which may be obtained at no cost by
writing to First Investors Life Insurance Company, 95 Wall Street, New York, New
York 10005, or by telephoning (212) 858-8200.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
General Description. . . . . . . . . . . . . . . . . . . . . . . 2
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Annuity Payments . . . . . . . . . . . . . . . . . . . . . . . . 3
Other Information. . . . . . . . . . . . . . . . . . . . . . . . 4
Performance Information. . . . . . . . . . . . . . . . . . . . . 5
Relevance of Financial Statements. . . . . . . . . . . . . . . . 9
Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Financial Statements . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
1
<PAGE>
GENERAL DESCRIPTION
FIRST INVESTORS LIFE INSURANCE COMPANY. First Investors Life Insurance
Company, 95 Wall Street, New York, New York 10005 ("First Investors Life"),
a stock life insurance company incorporated under the laws of the State of
New York in 1962, writes life insurance, annuities and accident and health
insurance. First Investors Consolidated Corporation ("FICC"), a holding
company, owns all of the voting common stock of First Investors Management
Company, Inc. ("FIMCO" or "Adviser") and all of the outstanding stock of
First Investors Life, First Investors Corporation ("FIC" or "Underwriter")
and Administrative Data Management Corp., the transfer agent for First
Investors Life Series Fund ("Life Series Fund"). Mr. Glenn O. Head, Chairman
of FICC, controls FICC and, therefore, controls the Adviser and First
Investors Life.
SEPARATE ACCOUNT D. First Investors Life Variable Annuity Fund D
("Separate Account D") was established on April 8, 1997 under the provisions
of the New York Insurance Law. The assets of Separate Account D are
segregated from the assets of First Investors Life, and that portion of such
assets having a value equal to, or approximately equal to, the reserves and
contract liabilities under the Contracts are not chargeable with liabilities
arising out of any other business of First Investors Life. Separate Account D
is registered with the Securities and Exchange Commission ("Commission") as a
unit investment trust under the Investment Company Act of 1940, as amended
(the "1940 Act"), but such registration does not involve any supervision by
the Commission of the management or investment practices or policies of
Separate Account D.
The assets of each Subaccount of Separate Account D are invested at net
asset value in shares of the corresponding series (each a "Fund" and
collectively "Funds") of Life Series Fund. For example, the Blue Chip
Subaccount invests in the Blue Chip Fund, the Government Subaccount invests
in the Government Fund, and so on. The Life Series Fund's Prospectus
describes the risks attendant to an investment in each Fund of Life Series
Fund. The eleven Funds of Life Series Fund may be referred to as: First
Investors Life Blue Chip Fund, First Investors Life Cash Management Fund,
First Investors Life Discovery Fund, First Investors Life Government Fund,
First Investors Life Growth Fund, First Investors Life High Yield Fund, First
Investors Life International Securities Fund, First Investors Life Investment
Grade Fund, First Investors Life Target Maturity 2007 Fund, First Investors
Life Target Maturity 2010 Fund and First Investors Life Utilities Income Fund.
SERVICES
CUSTODIAN. First Investors Life, subject to applicable laws and
regulations, is the custodian of the securities of the Subaccounts of
Separate Account D.
INDEPENDENT PUBLIC ACCOUNTANTS. Tait, Weller & Baker, Two Penn Center
Plaza, Philadelphia, PA 19102, independent certified public accountants, has
been selected as the independent accountants for Separate Account D. First
Investors Life pays Tait, Weller & Baker a fee for serving as the independent
accountants for Separate Account D which is set by the Audit Committee of the
Board of Directors of First Investors Life.
UNDERWRITER. First Investors Life and Separate Account D have entered
into an Underwriting Agreement with FIC. FIC, an affiliate of First
Investors Life, and of the Adviser, has its principal business address at 95
Wall Street, New York, New York 10005. For the fiscal year ended December
31, 1997, FIC received fees of $766,531 in connection with the distribution
of the Contracts in a continuous offering.
The Contracts are sold by insurance agents licensed to sell variable
annuities, who are registered representatives of the Underwriter.
2
<PAGE>
ANNUITY PAYMENTS
VALUE OF AN ACCUMULATION UNIT. For each Subaccount of Separate Account
D, the value of an Accumulation Unit was arbitrarily initially set at $10.00.
The value of an Accumulation Unit for any subsequent Valuation Period is
determined by multiplying the value of an Accumulation Unit for the
immediately preceding Valuation Period by the Net Investment Factor for the
Valuation Period for which the Accumulation Unit Value is being calculated
(see Appendix I, Example B). The investment performance of each Fund,
expenses and deductions of certain charges affect the Accumulation Unit
Value. The value of an Accumulation Unit for the Subaccounts may increase or
decrease from Valuation Period to Valuation Period.
NET INVESTMENT FACTOR. The Net Investment Factor for each 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 applicable Fund determined at the
end of the current Valuation Period, plus
(2) the per share amount of any dividend or capital gains distributions
made by the applicable Fund if the "ex-dividend" date occurs during the
current Valuation Period.
(b) is the net asset value per share of the applicable Fund determined as of
the end of the immediately preceding Valuation Period.
(c) is a factor representing the charges deducted for mortality and expense
risks and administration. Such factor is equal on an annual basis to 1.40%
of the daily net asset value of the applicable Subaccount. This percentage
represents approximately a 0.85% charge for the mortality risk assumed, a
0.4% charge for the expense risk assumed, and a 0.15% charge for
administration.
The Net Investment Factor may be greater or less than one, and
therefore, the value of an Accumulation Unit for any Subaccount may increase
or decrease. (For an illustration of this calculation, see Appendix I,
Example A.)
VALUE OF AN ANNUITY UNIT. For each Subaccount of Separate Account D,
the value of an Annuity Unit was arbitrarily initially set at $10.00. The
value of an Annuity Unit for any subsequent Valuation Period is determined by
multiplying the Annuity Unit Value for the immediately preceding Valuation
Period by the Net Investment Factor for the Valuation Period for which the
Annuity Unit Value is being calculated, and multiplying the result by an
interest factor to offset the effect of an investment earnings rate of 3.5%
per annum, which is assumed in the Annuity Tables contained in the Contract.
(For an illustration of this calculation, see Appendix III, Example A.)
AMOUNT OF ANNUITY PAYMENTS. When annuity payments are to commence, the
Accumulated Value to be applied to a variable annuity option will be
determined by multiplying the value of an Accumulation Unit for the Valuation
Date on or immediately preceding the seventh day before the Annuity
Commencement Date by the number of Accumulation Units owned. This seven day
period is used to permit calculation of amounts of annuity payments and
mailing of checks in advance of the due date. At that time, any applicable
Premium taxes not previously deducted will be deducted from the Accumulated
Value to determine the Net Accumulated Value. The resultant value is then
applied to the Annuity Tables set forth in the Contract to determine the
amount of the first monthly annuity payment. The Contract contains Annuity
Tables setting forth the amount of the first monthly installment for each
$1,000 of Accumulated Value applied. These Annuity Tables vary according to
the Annuity Option selected by the Contractowner and according to the sex and
adjusted age of the
3
<PAGE>
Annuitant and any Joint Annuitant at the Annuity Commencement Date. The
Contract contains a formula for determining the adjusted age, and the Annuity
Tables are determined from the Progressive Annuity Table with interest at
3.5% per year and assumes births prior to 1900, adjusted by a setback of four
years of age for persons born 1900 and later and an additional setback of one
year of age for each completed five years by which the year of birth is later
than 1900. Annuity Tables used by other insurers may provide greater or less
benefits to the Annuitant.
The dollar amount of the first monthly Variable Payment, based on the
Subaccount determined as above, is divided by the value of an Annuity Unit
for the Subaccount for the Valuation Date on or immediately preceding the
seventh day before the Annuity Commencement Date to establish the number of
Annuity Units representing each monthly payment under the Subaccount. This
seven day period is used to permit calculation of amounts of annuity payments
and mailing of checks in advance of the due date. This number of Annuity
Units remains fixed for all variable annuity payments. The dollar amount of
the second and subsequent variable annuity payments is determined by
multiplying the fixed number of Annuity Units for the Subaccount by the
applicable value of an Annuity Unit Value for the Valuation Date on or
immediately preceding the seventh day before the due date of the payment. The
value of an Annuity Unit will vary with the investment performance of the
corresponding Fund, and, therefore, the dollar amount of the second and
subsequent variable annuity payments may change from month to month. (For an
illustration of the calculation of the first and subsequent Variable
Payments, see Appendix III, Examples B, C and D.)
A fixed annuity is an annuity with annuity payments which remain fixed
as to dollar amount throughout the payment period and is based on an assumed
interest rate of 3.5% per year built into the Annuity Tables in the Contract.
OTHER INFORMATION
TIME OF PAYMENTS. All payments due under the Contracts will ordinarily
be made within seven days of the payment due date or within seven days after
the date of receipt of a request for partial surrender or termination.
However, First Investors Life reserves the right to suspend or postpone the
date of any payment due under the Contracts (1) for any period during which
the New York Stock Exchange ("NYSE") is closed (other than customary weekend
and holiday closings) or during which trading on the NYSE, as determined by
the Commission, is restricted; (2) for any period during which an emergency,
as determined by the Commission, exists as a result of which disposal of
securities held by the Fund are not reasonably practical or it is not
reasonably practical to determine the value of the Fund's net assets; or (3)
for such other periods as the Commission may by order permit for the
protection of security holders or as may be permitted under the 1940 Act.
REPORTS TO CONTRACTOWNERS. First Investors Life will mail to each
Contractowner, at the last known address of record at the Home Office of
First Investors Life, at least annually, a report containing such information
as may be required by any applicable law or regulation and a statement of the
Accumulation Units credited to the Contract for each Subaccount and the
Accumulation Unit Values. In addition, latest available reports of Life
Series Fund will be mailed to each Contractowner.
ASSIGNMENT. Any amounts payable under the Contracts may not be
commuted, alienated, assigned or otherwise encumbered before they are due.
To the extent permitted by law, no such payments shall be subject in any way
to any legal process to subject them to payment of any claims against any
Annuitant, Joint Annuitant or Beneficiary. The Contracts may be assigned.
No assignment of a Contract shall be binding on First Investors Life unless
such assignment is in writing and is filed with First Investors Life at its
Home Office
4
<PAGE>
PERFORMANCE INFORMATION
Separate Account D may advertise the performance of the Subaccounts in
various ways.
The yield for a Subaccount (other than the Cash Management Subaccount)
is presented for a specified thirty-day period (the "base period"). Yield is
based on the amount determined by (i) calculating the aggregate amount of net
investment income earned by the Subaccount during the base period less
expenses accrued for that period (net of reimbursement), and (ii) dividing
that amount by the product of (A) the average daily number of Accumulation
Units of the Subaccount outstanding during the base period and (B) the net
asset value per Accumulation Unit on the last day of the base period. The
result is annualized by compounding on a semi-annual basis to determine the
Subaccount's yield. For this calculation, interest earned on debt obligations
held by the underlying Fund is generally calculated using the yield to
maturity (or first expected call date) of such obligations based on their
market values (or, in the case of receivables-backed securities such as
GNMA's, based on cost). Dividends on equity securities are accrued daily at
their estimated stated dividend rates.
For a Subaccount, other than the Cash Management Subaccount, the
Subaccount's "average annual total return" ("T") is an average annual
compounded rate of return. The calculation produces an average annual total
return for the number of years measured. It is the rate of return based on
factors which include a hypothetical initial investment of $1,000 ("P" in the
formula below) over a number of years ("n") with an Ending Redeemable Value
("ERV") of that investment, according to the following formula:
T=[(ERV/P)1/n]-1
The "total return" uses the same factors, but does not average the rate
of return on an annual basis. Total return is determined as follows:
[ERV-P]/P = TOTAL RETURN
In providing such performance data, each Subaccount, other than the Cash
Management Subaccount, will assume the payment of the applicable CDSC imposed
on a surrender of purchase payments for the applicable period, the payment of
applicable Mortality and Expense Risk and administrative charges of 1.40%
("P"), and the payment of the $30 annual contract maintenance charge. Each
Subaccount, other than the Cash Management Subaccount, will assume that
during the period covered all dividends and capital gain distributions are
paid at net asset value per Accumulation Unit, and that the investment is
redeemed at the end of the period.
Average annual total return and total return computed at the public
offering price (using the applicable CDSC) for the period ended December 31,
1997 for each Subaccount, other than the Cash Management Subaccount, are set
forth in the tables below:
5
<PAGE>
AVERAGE ANNUAL TOTAL RETURN (1)
<TABLE>
<CAPTION>
Life of
Subaccount (2)
-------------
<S> <C>
Blue Chip Subaccount (5.27%)
Discovery Subaccount (4.81%)
Government Subaccount (4.23%)
Growth Subaccount (3.76%)
High Yield Subaccount (2.89%)
International Securities Subaccount (13.55%)
Investment Grade Subaccount (3.73%)
Target Maturity 2007 Subaccount (.90%)
Target Maturity 2010 Subaccount .87%
Utilities Income Subaccount 9.62%
</TABLE>
TOTAL RETURN (1)
<TABLE>
<CAPTION>
Life of
Subaccount (2)
-------------
<S> <C>
Blue Chip Subaccount (5.27%)
Discovery Subaccount (4.81%)
Government Subaccount (4.23%)
Growth Subaccount (3.76%)
High Yield Subaccount (2.89%)
International Securities Subaccount (13.55%)
Investment Grade Subaccount (3.73%)
Target Maturity 2007 Subaccount (.90%)
Target Maturity 2010 Subaccount .87%
Utilities Income Subaccount 9.62%
</TABLE>
Nonstandardized average annual total return and total return may also be
advertised using net asset value per Accumulation Unit at the end of the
relevant base period --- i.e., without deducting any applicable CDSC. The
calculation will be made using the standardized formula except that ending
net asset value per Accumulation Unit will be substituted for ending
redeemable value. Any quotation of return not reflecting an applicable CDSC
will be greater than if the CDSC were reflected. Nonstandardized average
annual total return and total return computed at net asset value for the
period ended December 31, 1997 for each Subaccount, other than the Cash
Management Subaccount, are set forth in the tables below:
- ---------------------------
(1) Some of the expenses for the underlying Funds were waived or reimbursed
from commencement of operations through December 31, 1997. Accordingly,
return figures for the Subaccounts are higher than they would have been had
such expenses not been waived or reimbursed.
(2) The inception date for each of the Subaccounts is July 28, 1997.
6
<PAGE>
NONSTANDARDIZED AVERAGE ANNUAL TOTAL RETURN (1)
<TABLE>
<CAPTION>
Life of
Subaccount (2)
-------------
<S> <C>
Blue Chip Subaccount 1.73%
Discovery Subaccount 2.19%
Government Subaccount 2.77%
Growth Subaccount 3.24%
High Yield Subaccount 4.11%
International Securities Subaccount (7.05%)
Investment Grade Subaccount 3.27%
Target Maturity 2007 Subaccount 6.10%
Target Maturity 2010 Subaccount 7.87%
Utilities Income Subaccount 16.62%
</TABLE>
TOTAL RETURN (1)
<TABLE>
<CAPTION>
Life of
Subaccount (2)
-------------
<S> <C>
Blue Chip Subaccount 1.73%
Discovery Subaccount 2.19%
Government Subaccount 2.77%
Growth Subaccount 3.24%
High Yield Subaccount 4.11%
International Securities Subaccount (7.05%)
Investment Grade Subaccount 3.27%
Target Maturity 2007 Subaccount 6.10%
Target Maturity 2010 Subaccount 7.87%
Utilities Income Subaccount 16.62%
</TABLE>
Return information may be useful to investors in reviewing a
Subaccount's performance. However, the total return and average annual total
return will fluctuate over time and the return figures for any given past
period is not an indication or representation by Separate Account D of future
rates of return of any Subaccount.
At times, the Adviser may reduce its compensation or assume expenses of
a Fund in order to reduce such Fund's expenses. Any such waiver or
reimbursement would increase the corresponding Subacount's total return,
average annual total return and yield during the period of the waiver or
reimbursement.
Each Subaccount may include in advertisements and sales literature,
examples, information and statistics that illustrate the effect of taxable
versus tax-deferred compounding income at a fixed rate of return to
demonstrate the growth of an investment over a stated period of time
resulting from the payment of dividends and capital gains distributions in
additional Accumulation Units. The examples may include hypothetical returns
comparing taxable versus tax-deferred growth. The examples used will be for
illustrative purposes only and are not representations by any Subaccount of
past or future yield or return of any of the Subaccounts.
- ---------------------------
(1) Some of the expenses for the underlying Funds were waived or reimbursed
from commencement of operations through December 31, 1997. Accordingly,
return figures for the Subaccounts are higher than they would have been had
such expenses not been waived or reimbursed.
(2) The inception date for each of the Subaccounts is July 28, 1997
<PAGE>
From time to time, in reports and promotional literature, Separate
Account D may compare the performance of its Subaccounts to, or cite the
historical performance of, other variable annuities. The performance
rankings and ratings of variable annuities reported in L-VIPPAS, a monthly
publication for insurance companies and money managers published by Lipper
Analytical Services, Inc. and in Morningstar Variable Annuity Performance
Report, also a monthly publication published by Morningstar, Inc., may be
used. Additionally, performance rankings and ratings reported periodically
in national financial publications such as MONEY, FORBES, BUSINESS WEEK,
BARRON'S, FINANCIAL TIMES, CHANGING TIMES, FORTUNE, NATIONAL UNDERWRITER,
etc., may also be used. Quotations from articles appearing in daily
newspaper publications such as THE NEW YORK TIMES, THE WALL STREET JOURNAL
and THE NEW YORK DAILY NEWS may be cited.
DETERMINATION OF CURRENT AND EFFECTIVE YIELD. Separate Account D
provides current yield quotations for the Cash Management Subaccount based on
the underlying Fund's daily dividends. The underlying Fund declares
dividends from net investment income daily and pays them monthly.
For purposes of current yield quotations, dividends per Accumulation
Unit for a seven-day period are annualized (using a 365-day year basis) and
divided by the average value of an Accumulation Unit for the seven-day period.
The current yield quoted will be for a recent seven day period. Current
yields will fluctuate from time to time and are not necessarily
representative of future results. The investor should remember that yield is
a function of the type and quality of the instruments in the portfolio,
portfolio maturity and operating expenses. Current yield information is
useful in reviewing the Cash Management Subaccount's performance but, because
current yield will fluctuate, such information may not provide a basis for
comparison with bank deposits or other investments which may pay a fixed
yield for a stated period of time, or other investment companies, which may
use a different method of calculating yield.
In addition to providing current yield quotations, Separate Account D
provides effective yield quotations for the Cash Management Subaccount for a
base period return of seven days. An effective yield quotation is determined
by a formula which requires the compounding of the unannualized base period
return. Compounding is computed by adding 1 to the unannualized base period
return, raising the sum to a power equal to 365 divided by 7 and subtracting
1 from the result.
8
<PAGE>
The following is an example, for purposes of illustration only, of the
current and effective yield calculation for the seven day period ended
December 31, 1997.
<TABLE>
<S> <C>
Dividends per accumulation unit from net investment income
(seven calendar days ended December 31, 1997)
(Base Period)....................................................$.00098011
Annualized (365 day basis)*......................................$.050758442
Average value per accumulation unit for the
seven calendar days ended December 31, 1997......................$1.00
Annualized historical yield per accumulation unit for the
seven calendar days ended December 31, 1997......................5.11%
Effective Yield**................................................5.23%
Weighted average life to maturity of the
portfolio on December 31, 1997 was 56 days
</TABLE>
*This represents the average of annualized net investment income per
accumulation unit for the seven calendar days ended December 31, 1997.
**Effective Yield=[ (Base Period Return + 1)365/7] -1
The figures in the above example do not include the CDSC. Accordingly,
all yield quotations are higher than they would have been had such CDSC been
included.
Separate Account D's Prospectus and Statement of Additional Information
may be in use for a full year and, accordingly, it can be expected that
yields will fluctuate substantially from the example shown above.
RELEVANCE OF FINANCIAL STATEMENTS
The values of the interests of Contractowners under the variable portion
of the Contracts will be affected solely by the investment results of the
Subaccounts. The financial statements of First Investors Life as contained
herein should be considered only as bearing upon First Investors Life's
ability to meet its obligations to Contractowners under the Contracts, and
they should not be considered as bearing on the investment performance of the
Subaccounts.
9
<PAGE>
APPENDICES
10
<PAGE>
APPENDIX I
EXAMPLE A
FORMULA AND ILLUSTRATION FOR DETERMINING
THE NET INVESTMENT FACTOR OF A SUBACCOUNT
OF SEPARATE ACCOUNT D
Net Investment Factor = A + B
----- - D
C
Where:
<TABLE>
<S> <C>
A = The Net Asset Value of a Fund share as of the end of the current
Valuation Period.
Assume........................................................ = $8.51000000
B = The per share amount of any dividend or capital gains distribution
since the end of the immediately preceding Valuation Period.
Assume........................................................ = 0
C = The Net Asset Value of a Fund share at the end of the immediately
preceding Valuation Period.
Assume........................................................ = $8.39000000
D = The daily deduction for charges for mortality and expense risks
and administration, which totals 1.4% on an annual basis.
On a daily basis.............................................. = .00003836
Then, the Net Investment Factor = 8.51000000 + 0..................... = 1.01426438
-------------- - .00003836
8.39000000
</TABLE>
EXAMPLE B
FORMULA AND ILLUSTRATION FOR DETERMINING
ACCUMULATION UNIT VALUE OF A SUBACCOUNT
OF SEPARATE ACCOUNT D
Accumulation Unit Value = A x B
Where:
<TABLE>
<S> <C>
A = The Accumulation Unit Value for the immediately preceding Valuation
Period.
Assume........................................................... = $1.46328760
B = The Net Investment Factor for the current Valuation Period.
Assume........................................................... = 1.01426438
Then, the Accumulation Unit Value = $1.46328760 x 1.01426438............ = 1.48416049
</TABLE>
11
<PAGE>
APPENDIX II
EXAMPLE A
FORMULA AND ILLUSTRATION FOR DETERMINING
DEATH BENEFIT PAYABLE UNDER
ANNUITY OPTION 4-UNIT REFUND LIFE ANNUITY
Upon the death of the Annuitant, the designated Beneficiary under this option
will receive under a Separate Account a lump sum death benefit of the then
dollar value of a number of Annuity Units computed using the following formula:
A A
Annuity Units Payable = - - (CxD), if - is greater than CxD
B B
Where:
<TABLE>
<S> <C>
A = The Net Accumulated Value applied on the Annuity Commencement Date to
purchase the Variable Annuity.
Assume................................................................ = $20,000.00
B = The Annuity Unit Value at the Annuity Commencement Date.
Assume................................................................ = $1.08353012
C = The number of Annuity Units represented by each payment made.
Assume................................................................ = 116.61488844
D = The total number of monthly Variable Annuity Payments made prior
to the Annuitant's death.
Assume................................................................ = 30
</TABLE>
Then the number of Annuity Units Payable:
<TABLE>
<S> <C>
$20,000.00
----------- - (116.61488844 x 30)
$1.08353012
= 18,458.18554633 - 3,498.44665320
= 14,959.73889313
</TABLE>
If the value of an Annuity Unit on the date of receipt of notification of death
was $1.12173107 then the amount of the death benefit under the Separate Account
would be:
14,959.73889313 x $1.12173107 = $16,780.80
12
<PAGE>
APPENDIX III
EXAMPLE A
FORMULA AND ILLUSTRATION FOR DETERMINING
ANNUITY UNIT VALUE OF
SEPARATE ACCOUNT D
Annuity Unit Value = A x B x C
Where:
<TABLE>
<S> <C>
A = Annuity Unit Value of the immediately preceding Valuation Period.
Assume............................................................. = $1.10071211
B = Net Investment Factor for the Valuation Period for which the Annuity
Unit is being calculated.
Assume............................................................. = 1.00083530
C = A factor to neutralize the assumed interest rate of 31/2% built into
the Annuity Tables used.
Daily factor equals................................................ = 0.99990575
Then, the Annuity Value is:
$1.10071211 x 1.00083530 x 0.99990575 = $1.10152771
</TABLE>
EXAMPLE B
FORMULA AND ILLUSTRATION FOR DETERMINING
AMOUNT OF FIRST MONTHLY VARIABLE ANNUITY PAYMENT FROM
SEPARATE ACCOUNT D
A
First Monthly Variable Annuity Payment = ------ x B
$1,000
Where:
<TABLE>
<S> <C>
A = The Net Accumulated Value allocated to Separate Account D for the
Valuation Date on or immediately preceding the seventh day
before the Annuity Commencement Date.
Assume........................................................... = $20,000.00
B = The Annuity purchase rate per $1,000 based upon the option
selected, the sex and adjusted age of the Annuitant
according to the Annuity Tables contained in the Contract.
Assume........................................................... = $6.40
</TABLE>
$20,000
Then, the first Monthly Variable Payment = ------- x $6.40 = $128.00
$1,000
13
<PAGE>
EXAMPLE C
FORMULA AND ILLUSTRATION FOR DETERMINING
THE NUMBER OF ANNUITY UNITS FOR SEPARATE ACCOUNT D
REPRESENTED BY EACH MONTHLY VARIABLE ANNUITY PAYMENT
A
Number of Annuity Units = -
B
Where:
<TABLE>
<S> <C>
A = The dollar amount of the first monthly Variable Annuity Payment.
Assume................................................................. = $128.00
B = The Annuity Unit Value for the Valuation Date on or immediately
preceding the seventh day before the Annuity Commencement Date.
Assume................................................................. = $1.09763000
</TABLE>
$128.00
Then, the number of Annuity Units = ----------- = 116.61488844
$1.09763000
EXAMPLE D
FORMULA AND ILLUSTRATION FOR DETERMINING
THE AMOUNT OF SECOND AND SUBSEQUENT MONTHLY VARIABLE
ANNUITY PAYMENTS FROM SEPARATE ACCOUNT D
Second Monthly Variable Annuity Payment = A x B
Where:
<TABLE>
<S> <C>
A = The Number of Annuity Units represented by each monthly
Variable Annuity Payment.
Assume.......................................................... = 116.61488844
B = The Annuity Unit Value for the Valuation Date on or immediately
preceding the seventh day before the date on which the
second (or subsequent) Variable Annuity Payment is due.
Assume............................................................ = $1.11834234
</TABLE>
Then, the second monthly Variable Annuity Payment = 116.61488844 x $1.11834234 =
$130.42
The above example was based upon the assumption of an increase in the Annuity
Unit Value since the initial Variable Annuity Payment due to favorable
investment results of the Separate Account and the Fund. If the investment
results were less favorable, a decrease in the Annuity Unit Value and in the
second monthly Variable Annuity Payment could result. Assume B above was
$1.08103230.
Then, the second monthly Variable Annuity
Payment = 116.61488844 x $1.08103230 = $126.06
14
<PAGE>
Financial Statements as of
December 31, 1997
15
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
First Investors Life Insurance Company
New York, New York
We have audited the accompanying balance sheets of First Investors Life
Insurance Company as of December 31, 1997 and 1996, and the related statements
of income, stockholder's equity and cash flows for each of the three years in
the period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of First Investors Life
Insurance Company as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
February 19, 1998
16
<PAGE>
FIRST INVESTORS LIFE INSURANCE COMPANY
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- -----------------
<S> <C> <C>
Investments (note 2):
Available-for-sale securities. . . . . . . . . . . . . . . $125,380,627 $114,011,891
Held-to-maturity securities. . . . . . . . . . . . . . . . 5,529,687 5,549,214
Short term investments . . . . . . . . . . . . . . . . . . 3,083,769 7,667,491
Policy loans . . . . . . . . . . . . . . . . . . . . . . . 21,527,810 18,865,648
------------- ------------
Total investments . . . . . . . . . . . . . . . . . . . 155,521,893 146,094,244
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,145,215 901,980
Premiums and other receivables, net of allowances of
$30,000 in 1997 and 1996 . . . . . . . . . . . . . . . . . 4,749,099 3,998,210
Accrued investment income. . . . . . . . . . . . . . . . . . 3,180,924 2,903,566
Deferred policy acquisition costs (note 6) . . . . . . . . . 18,446,716 17,547,129
Deferred Federal income taxes (note 7) . . . . . . . . . 1,039,000 934,000
Furniture, fixtures and equipment, at cost, less accumulated
depreciation of $1,075,336 in 1997 and $925,736 in 1996. . 97,379 146,078
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 120,044 136,302
Separate account assets. . . . . . . . . . . . . . . . . . . 642,453,414 465,456,848
------------ ------------
Total assets. . . . . . . . . . . . . . . . . . . . . . $826,753,684 $638,118,357
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Policyholder account balances (note 6) . . . . . . . . . . . $115,281,318 $113,295,474
Claims and other contract liabilities. . . . . . . . . . . . 12,548,096 12,190,281
Accounts payable and accrued liabilities . . . . . . . . . . 4,426,355 3,730,943
Separate account liabilities . . . . . . . . . . . . . . . . 642,453,314 464,852,507
------------ ------------
Total liabilities . . . . . . . . . . . . . . . . . . . 774,709,083 594,069,205
------------ ------------
STOCKHOLDER'S EQUITY:
Common Stock, par value $4.75; authorized,
issued and outstanding 534,350 shares. . . . . . . . . . . 2,538,163 2,538,163
Additional paid in capital . . . . . . . . . . . . . . . . . 6,496,180 6,496,180
Unrealized holding gains (losses) on available-for-sale
securities (note 2). . . . . . . . . . . . . . . . . . . . 1,608,000 644,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . 41,402,258 34,370,809
------------ ------------
Total stockholder's equity. . . . . . . . . . . . . . . 52,044,601 44,049,152
------------ ------------
Total liabilities and stockholder's equity. . . . . . . $826,753,684 $638,118,357
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements.
17
<PAGE>
FIRST INVESTORS LIFE INSURANCE COMPANY
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31,1996 DECEMBER 31,1995
----------------- ---------------- ----------------
<S> <C> <C> <C>
REVENUES
Policyholder fees. . . . . . . . . . . . . . . . . . . . . . $24,826,454 $22,955,165 $19,958,420
Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . 6,279,137 6,725,329 7,293,719
Investment income (note 2) . . . . . . . . . . . . . . . . . 10,259,601 9,771,389 9,363,212
Realized gain (loss) on investments. . . . . . . . . . . . . 158,874 (221,025) 373,582
Other income . . . . . . . . . . . . . . . . . . . . . . . . 702,644 704,678 835,703
------------ ------------ ------------
Total income. . . . . . . . . . . . . . . . . . . . . . . 42,226,710 39,935,536 37,824,636
------------ ------------ ------------
BENEFITS AND EXPENSES
Benefits and increases in contract liabilities . . . . . . . 14,370,510 12,912,810 13,027,516
Dividends to policyholders . . . . . . . . . . . . . . . . . 1,033,663 964,913 954,384
Amortization of deferred acquisition costs (note 6). . . . . 663,200 1,454,408 1,672,429
Commissions and general expenses . . . . . . . . . . . . . . 15,445,888 16,287,498 15,773,968
------------ ------------ ------------
Total benefits and expenses . . . . . . . . . . . . . . . 31,513,261 31,619,629 31,428,297
------------ ------------ ------------
Income before Federal income tax . . . . . . . . . . . . . . . 10,713,449 8,315,907 6,396,339
Federal income tax (note 7):
Current . . . . . . . . . . . . . . . . . . . . . . . . . . 4,285,000 3,099,000 2,553,000
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . (603,000) (286,000) (376,000)
------------ ------------ ------------
3,682,000 2,813,000 2,177,000
------------ ------------ ------------
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,031,449 $ 5,502,907 $ 4,219,339
------------ ------------ ------------
------------ ------------ ------------
Income per share, based on 534,350 shares outstanding. . . . . $ 13.16 $ 10.30 $ 7.90
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
FIRST INVESTORS LIFE INSURANCE COMPANY
STATEMENTS OF STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31,1996 DECEMBER 31,1995
----------------- ---------------- ----------------
<S> <C> <C> <C>
Balance at beginning of year . . . . . . . . . . . . . . . . . $ 44,049,152 $ 39,780,245 $ 31,196,906
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . 7,031,449 5,502,907 4,219,339
Increase (decrease) in unrealized holding gains on
available-for-sale securities. . . . . . . . . . . . . . . . 964,000 (1,234,000) 4,364,000
------------ ------------ ------------
Balance at end of year . . . . . . . . . . . . . . . . . . . . $ 52,044,601 $ 44,049,152 $ 39,780,245
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31,1996 DECEMBER 31,1995
----------------- ---------------- ----------------
<S> <C> <C> <C>
Increase (decrease) in cash:
Cash flows from operating activities:
Policyholder fees received. . . . . . . . . . . . . . . . $ 24,587,113 $ 22,925,131 $ 19,374,522
Premiums received . . . . . . . . . . . . . . . . . . . . 6,088,582 6,413,009 6,895,096
Amounts received on policyholder accounts . . . . . . . . 125,818,334 105,489,481 87,156,662
Investment income received. . . . . . . . . . . . . . . . 10,263,095 9,964,169 9,360,894
Other receipts. . . . . . . . . . . . . . . . . . . . . . 57,287 55,779 69,621
Benefits and contract liabilities paid. . . . . . . . . . (138,420,373) (117,321,389) (101,642,156)
Commissions and general expenses paid . . . . . . . . . . (20,899,476) (20,857,687) (18,176,870)
------------ ------------ ------------
Net cash provided by (used for) operating activities. . . 7,494,562 6,668,493 3,037,769
------------ ------------ ------------
Cash flows from investing activities:
Proceeds from sale of investment securities . . . . . . . 38,900,851 39,062,702 58,755,827
Purchase of investment securities . . . . . . . . . . . . (44,021,791) (44,134,604) (58,622,646)
Purchase of furniture, equipment and other assets . . . . (62,170) (34,485) (128,442)
Net increase in policy loans. . . . . . . . . . . . . . . (2,662,162) (1,848,956) (2,330,591)
Investment in Separate Account . . . . . . . . . . . . . 593,945 (200) (500,000)
------------ ------------ ------------
Net cash provided by (used for) investing activities. . . (7,251,327) (6,955,543) (2,825,852)
Net increase (decrease) in cash . . . . . . . . . . . . . 243,235 (287,050) 211,917
Cash
Beginning of year . . . . . . . . . . . . . . . . . . . . . 901,980 1,189,030 977,113
------------ ------------ ------------
End of year . . . . . . . . . . . . . . . . . . . . . . . . $ 1,145,215 $ 901,980 $ 1,189,030
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
The Company received a refund of Federal income tax of $79,000 in 1997 and
$102,000 in 1996 and paid Federal income tax of $4,283,000 in 1997, $3,243,000
in 1996 and $2,125,000 in 1995.
See accompanying notes to financial statements.
19
<PAGE>
FIRST INVESTORS LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- ----------------- -----------------
<S> <C> <C> <C>
Reconciliation of net income to net cash
provided by (used for) operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 7,031,449 $ 5,502,907 $ 4,219,339
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Depreciation and amortization. . . . . . . . . . . 117,804 130,924 141,121
Amortization of deferred policy acquisition costs. 663,200 1,454,408 1,672,429
Realized investment (gains) losses . . . . . . . . . . . . (158,874) 221,025 (373,582)
Amortization of premiums and discounts on
investments. . . . . . . . . . . . . . . . . . . . 280,852 262,785 237,472
Deferred Federal income taxes. . . . . . . . . . . (603,000) (286,000) (376,000)
Other items not requiring cash - net . . . . . . . 9,771 6,794 (112,268)
(Increase) decrease in:
Premiums and other receivables, net. . . . . . . . (750,889) 336,385 (433,106)
Accrued investment income. . . . . . . . . . . . . (277,358) (70,005) (239,790)
Deferred policy acquisition costs, exclusive
of amortization. . . . . . . . . . . . . . . . . . (1,866,787) (1,275,323) (1,117,752)
Other assets . . . . . . . . . . . . . . . . . . . 9,323 (18,574) 64,490
Increase (decrease) in:
Policyholder account balances. . . . . . . . . . . 1,985,844 (78,699) (1,882,591)
Claims and other contract liabilities. . . . . . . 357,815 901,173 551,392
Accounts payable and accrued liabilities . . . . . 695,412 (419,307) 686,615
------------ ----------- ------------
$ 7,494,562 $ 6,668,493 $ 3,037,769
------------ ----------- ------------
------------ ----------- ------------
</TABLE>
See accompanying notes to financial statements.
20
<PAGE>
FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- BASIS OF FINANCIAL STATEMENTS
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles (GAAP). Such basis of presentation
differs from statutory accounting practices permitted or prescribed by insurance
regulatory authorities primarily in that:
(a) policy reserves are computed according to the Company's estimates
of mortality, investment yields, withdrawals and other benefits and expenses,
rather than on the statutory valuation basis;
(b) certain expenditures, principally for furniture and equipment and
agents' debit balances, are recognized as assets rather than being non-admitted
and therefore charged to retained earnings;
(c) commissions and other costs of acquiring new business are
recognized as deferred acquisition costs and are amortized over the premium
paying period of policies and contracts, rather than charged to current
operations when incurred;
(d) income tax effects of temporary differences, relating primarily
to policy reserves and acquisition costs, are provided;
(e) the statutory asset valuation and interest maintenance reserves
are reported as retained earnings rather than as liabilities;
NOTE 2 -- OTHER SIGNIFICANT ACCOUNTING PRACTICES
(a) ACCOUNTING ESTIMATES. The preparation of financial statements
in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosures of contingent assets and liabilities, at the date
of the financial statements and revenues and expenses during the reported
period. Actual results could differ from those estimates.
(b) DEPRECIATION. Depreciation is computed on the useful service life
of the depreciable asset using the straight line method of depreciation over
three to seven years.
(c) INVESTMENTS. Investments in equity securities that have readily
determinable fair values and all investments in debt securities are classified
in separate categories and accounted for as follows:
HELD-TO-MATURITY SECURITIES
Debt securities the Company has the positive intent and ability to hold to
maturity are recorded at amortized cost.
AVAILABLE-FOR-SALE SECURITIES
Debt and equity securities not classified in the other two categories are
recorded at fair value with unrealized gains and losses excluded from earnings
and reported as "unrealized holding gains or losses on available-for-sale
securities" in stockholder's equity.
21
<PAGE>
FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Short term investments are reported at market value which approximates
cost.
Gains and losses on sales of investments are determined using the
specific identification method. Investment income for the years indicated
consists of the following:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31,1997 DECEMBER 31, 1996 DECEMBER 31,1995
---------------- ----------------- ----------------
<S> <C> <C> <C>
Interest on fixed maturities . . . . . . . . . . . . . . . . $ 9,029,979 $ 8,559,429 $ 8,243,748
Interest on short term investments . . . . . . . . . . . . . 307,656 410,930 451,475
Interest on policy loans . . . . . . . . . . . . . . . . . . 1,268,834 1,151,681 973,242
Dividends on equity securities . . . . . . . . . . . . . . . -- 43,756 58,305
------------ ----------- ------------
Total investment income . . . . . . . . . . . . . . . . 10,606,469 10,165,796 9,726,770
Investment expense. . . . . . . . . . . . . . . . . . . 346,868 394,407 363,558
------------ ----------- ------------
Net investment income. . . . . . . . . . . . . . . . . . . . $10,259,601 $ 9,771,389 $ 9,363,212
------------ ----------- ------------
------------ ----------- ------------
</TABLE>
The amortized cost and estimated market values of investments at December 31,
1997 and 1996 are as follows:
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
AVAILABLE-FOR-SALE SECURITIES
DECEMBER 31, 1997
U.S. Treasury Securities and obligations
of U.S. Government Corporations
and Agencies. . . . . . . . . . . . . . . . . $ 39,532,729 $ 975,819 $ -- $ 40,508,548
Debt Securities issued by
States of the U.S.. . . . . . . . . . . . . . 7,309,135 92,015 -- 7,401,150
Corporate Debt Securities. . . . . . . . . . . . 67,900,325 1,739,318 75,913 69,563,730
Other Debt Securities . . . . . . . . . . . . . 7,606,438 300,761 -- 7,907,199
------------ ----------- ------- ------------
$122,348,627 $ 3,107,913 $75,913 $125,380,627
------------ ----------- ------- ------------
------------ ----------- ------- ------------
DECEMBER 31,1996
U.S. Treasury Securities and obligations
of U.S. Government Corporations
and Agencies. . . . . . . . . . . . . . . . . $ 41,254,552 $ 569,803 $ 157,020 $ 41,667,335
Debt Securities issued by
States of the U.S.. . . . . . . . . . . . . . 5,525,022 -- 172,264 5,352,758
Corporate Debt Securities. . . . . . . . . . . . 56,013,590 1,217,747 297,752 56,933,585
Other Debt Securities. . . . . . . . . . . . . . 9,952,727 133,266 27,780 10,058,213
------------- ------------ --------- -------------
$ 112,745,891 $ 1,920,816 $ 654,816 $ 114,011,891
------------ ------------ --------- -------------
------------ ------------ --------- -------------
</TABLE>
22
<PAGE>
FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At December 31, 1997 and 1996, the Company recognized "Unrealized Holding
Gains on Available-For-Sale Securities" of $1,608,000 and $644,000, net of
applicable deferred income taxes and amortization of deferred acquisition costs.
The change in the Unrealized Holding Gains (Losses) of $964,000, ($1,234,000)
and $4,364,000 for 1997, 1996 and 1995, respectively is reported as a separate
component of stockholders' equity.
<TABLE>
<CAPTION>
HELD-TO-MATURITY SECURITIES
DECEMBER 31,1997
<S> <C> <C> <C> <C>
U.S. Treasury Securities and obligations
of U.S. Government Corporations
and Agencies*. . . . . . . . . . . . . . . . . . $ 3,419,687 $ 90,126 $ 700 $ 3,509,113
Corporate Debt Securities. . . . . . . . . . . . . 2,000,000 109,000 -- 2,109,400
Other Debt Securities. . . . . . . . . . . . . . . 110,000 -- -- 110,000
------------ ---------- ------------- -----------
$ 5,529,687 $ 199,126 $ 700 $ 5,728,513
------------ ---------- ------------- -----------
------------ ---------- ------------- -----------
DECEMBER 31,1996
U.S. Treasury Securities and obligations
of U.S. Government Corporations
and Agencies*. . . . . . . . . . . . . . . . . . $ 3,439,214 $ 36,945 $ 10,944 $ 3,465,215
Corporate Debt Securities. . . . . . . . . . . . . 2,000,000 -- 66,200 1,933,800
Other Debt Securities. . . . . . . . . . . . . . . 110,000 -- -- 110,000
------------ ---------- ------------- -----------
$ 5,549,214 $ 36,945 $ 77,144 $ 5,509,015
------------ ---------- ------------- -----------
------------ ---------- ------------- -----------
</TABLE>
*These securities are on deposit for various state insurance departments and are
therefore restricted as to sale.
The amortized cost and estimated market value of debt securities at December
31, 1997, by contractual maturity, are shown below. Expected maturities will
differ from contractual maturities because borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
HELD TO MATURITY AVAILABLE FOR SALE
---------------------------- ---------------------------------
AMORTIZED ESTIMATED AMORTIZED ESTIMATED
COST MARKET VALUE COST MARKET VALUE
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Due in one year or less. . . . . . . . . . $ 363,473 $ 362,773 $ 6,608,708 $ 6,633,659
Due after one year through five years. . . 2,634,603 2,715,715 37,905,751 38,828,513
Due after five years through ten years . . 531,611 540,625 50,889,338 52,290,280
Due after ten years. . . . . . . . . . . . 2,000,000 2,109,400 26,944,831 27,628,175
---------- ----------- ------------- ------------
$5,529,687 $5,728,513 $122,348,628 $125,380,627
---------- ---------- ------------- ------------
---------- ---------- ------------- ------------
</TABLE>
Proceeds from sales of investments in fixed maturities were $34,316,604,
$39,046,422 and $56,949,635 in 1997, 1996 and 1995, respectively. Gross gains
of $374,583 and gross losses of $215,709 were realized on those sales in 1997.
Gross gains of $185,708 and gross losses of $406,733 were realized on those
sales in 1996. Gross gains of $578,810 and gross losses of $205,228 were
realized on those sales in 1995.
23
<PAGE>
FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(d) RECOGNITION OF REVENUE, POLICYHOLDER ACCOUNT BALANCES AND POLICY BENEFITS
TRADITIONAL ORDINARY LIFE AND HEALTH
Revenues from the traditional life insurance policies represent
premiums which are recognized as earned when due. Health insurance premiums
are recognized as revenue over the time period to which the premiums
relate. Benefits and expenses are associated with earned premiums so as to
result in recognition of profits over the lives of the contracts. This
association is accomplished by means of the provision for liabilities for
future policy benefits and the deferral and amortization of policy
acquisition costs.
UNIVERSAL LIFE AND VARIABLE LIFE
Revenues from universal life and variable life policies represent
amounts assessed against policyholders. Included in such assessments are
mortality charges, surrender charges and policy service fees.
Policyholder account balances on universal life consist of the
premiums received plus credited interest, less accumulated policyholder
assessments. Amounts included in expense represent benefits in excess of
policyholder account balances. The value of policyholder accounts on
variable life are included in separate account liabilities as discussed
below.
ANNUITIES
Revenues from annuity contracts represent amounts assessed against
contractholders. Such assessments are principally sales charges,
administrative fees, and in the case of variable annuities, mortality and
expense risk charges. The carrying value and fair value of fixed annuities
are equal to the policyholder account balances, which represent the net
premiums received plus accumulated interest.
(e) SEPARATE ACCOUNTS. Separate account assets and the related liabilities,
both of which are valued at market, represent segregated variable annuity and
variable life contracts maintained in accounts with individual investment
objectives. All investment income (gains and losses of these accounts) accrues
directly to the contractholders and therefore does not affect net income of the
Company.
NOTE 3 -- FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts for cash, short-term investments and policy loans as
reported in the accompanying balance sheet approximate their fair values. The
fair values for fixed maturities and equity-securities are based upon quoted
market prices, where available or are estimated using values from independent
pricing services.
24
<PAGE>
FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The carrying amounts for the Company's liabilities under investment - type
contracts approximate their fair values because interest rates credited to
account balances approximate current rates paid on similar investments and are
generally not guaranteed beyond one year. Fair values for the Company's
insurance contracts other than investment - type contracts are not required to
be disclosed. However, the fair values of liabilities for all insurance
contracts are taken into consideration in the overall management of interest
rate risk, which minimizes exposure to changing interest rates.
NOTE 4 -- RETIREMENT PLANS
The Company participates in a non-contributory profit sharing plan for the
benefit of its employees and those of other wholly-owned subsidiaries of its
parent. The Plan provides for retirement benefits based upon earnings. Vesting
of benefits is based upon years of service. For the years ended December 31,
1997, 1996 and 1995, the Company charged operations approximately $70,000,
$100,000 and $40,000 respectively for its portion of the contribution.
The Company also has a non-contributory retirement plan for the benefit of
its sales agents. The plan provides for retirement benefits based upon
commission on first-year premiums and length of service. The plan is unfunded.
Vesting of benefits is based upon graduated percentages dependent upon the
number of allocations made in accordance with the plan by the Company for each
participant. The Company charged to operations pension expenses of
approximately $419,000 in 1997, $414,000 in 1996 and $375,000 in 1995. The
accrued liability of approximately $2,913,000 in 1997 and $2,858,000 in 1996 was
sufficient to cover the value of benefits provided by the plan.
In addition, the Company participates in a 401(k) savings plan covering all
of its eligible employees and those of other wholly-owned subsidiaries of its
parent whereby employees may voluntarily contribute a percentage of their
compensation with the Company matching a portion of the contributions of certain
employees. The amount contributed by the Company in 1997 and 1996 was not
material.
NOTE 5 -- COMMITMENTS AND CONTINGENT LIABILITIES
The Company has agreements with affiliates and non-affiliates as follows:
(a) The Company's maximum retention on any one life is $100,000. The
Company reinsures a portion of its risk with other insurance companies and
reserves are reduced by the amount of reserves for such reinsured risks. The
Company is liable for any obligations which any reinsurance company may be
unable to meet. The Company had reinsured approximately 10% of its net life
insurance in force at December 31, 1997, 1996 and 1995. The Company also had
assumed reinsurance amounting to approximately 20%, 21% and 20% of its net life
insurance in force at the respective year ends. None of these transactions had
any material effect on the Company's operating results.
25
<PAGE>
FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(b) The Company and certain affiliates share office space, data processing
facilities and management personnel. Charges for these services are based upon
space occupied, usage of data processing facilities and time allocated to
management. During the years ended December 31, 1997, 1996 and 1995, the
Company paid approximately $1,114,000, $1,222,000 and $1,282,000, respectively,
for these services. In addition, the Company reimbursed an affiliate
approximately $9,814,000 in 1997, $9,709,000 in 1996,and $8,739,000 in 1995 for
commissions relating to the sale of its products.
The Company maintains a checking account with a financial institution,
which is also a wholly-owned subsidiary of its parent. The balance in this
account was approximately $332,000 at December 31, 1997 and $326,000 at December
31, 1996.
(c) The Company is subject to certain claims and lawsuits arising in the
ordinary course of business. In the opinion of management, all such claims
currently pending will not have a material adverse effect on the financial
position of the Company or its results of operations.
NOTE 6 -- ADJUSTMENTS MADE TO STATUTORY ACCOUNTING PRACTICES
Note 1 describes some of the common differences between statutory practices
and generally accepted accounting principles. The effects of these differences
for the years ended December 31, 1997, 1996 and 1995 are shown in the following
table in which net income and capital shares and surplus reported therein on a
statutory basis are adjusted to a GAAP basis.
<TABLE>
<CAPTION>
NET INCOME CAPITAL SHARES AND SURPLUS
YEAR ENDED DECEMBER 31 AT DECEMBER 31
---------------------- --------------------------
1997 1996 1995 1997 1996 1995
----------- ---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Reported on a statutory basis. . . . . . $5,809,629 $5,002,533 $3,705,334 $32,159,721 $26,580,877 $21,600,537
----------- ---------- ---------- ----------- ----------- -----------
Adjustments:
Deferred policy acquisition costs (b). . 351,239 (179,085) (554,677) 18,446,716 17,547,129 17,318,214
Future policy benefits (a) . . . . . . 133,848 514,086 422,387 (3,000,589) (2,398,397) (2,912,483)
Deferred income taxes. . . . . . . . . 603,000 286,000 376,000 1,039,000 934,000 12,000
Premiums due and deferred (e). . . . . 84,291 85,461 80,133 (1,274,816) (1,359,107) (1,444,568)
Cost of colletion and other statutory
liabilities . . . . . . . . . . . . (924) (12,283) (16,318) 36,060 36,984 49,267
Non-admitted assets. . . . . . . . . . -- -- -- 224,411 298,731 395,758
Asset valuation reserve. . . . . . . . -- -- -- 1,325,986 1,136,664 1,016,830
Interest maintenance reserve . . . . . (55,019) (48,542) (40,804) 56,112 6,271 200,690
Gross unrealized holding gains on
available-for-sale securities . . -- -- -- 3,032,000 1,266,000 3,544,000
Net realized capital gains (losses). . 158,874 (221,025) 373,582 -- -- --
Other . . . . . . . . . . . . . . . (53,489) 75,762 (126,298) -- -- --
----------- ---------- ---------- ----------- ----------- -----------
1,221,820 500,374 514,005 19,884,880 17,468,275 18,179,708
----------- ---------- ---------- ----------- ----------- -----------
In accordance with generally accepted
accounting principles. . . . . . . . . $7,031,449 $5,502,907 $4,219,339 $52,044,601 $44,049,152 $39,780,245
----------- ---------- ---------- ----------- ----------- -----------
----------- ---------- ---------- ----------- ----------- -----------
Per share, based on 534,350 shares
outstanding. . . . . . . . . . . . . . $13.16 $10.30 $7.90 $97.40 $82.44 $74.45
----------- ---------- ---------- ----------- ----------- -----------
----------- ---------- ---------- ----------- ----------- -----------
</TABLE>
26
<PAGE>
FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The following is a description of the significant policies used to adjust the
net income and capital shares and surplus from a statutory to a GAAP basis.
(a) Liabilities for future policy benefits have been computed primarily by the
net level premium method with assumptions as to anticipated mortality,
withdrawals and investment yields. The composition of the policy liabilities
and the more significant assumptions pertinent thereto are presented below:
<TABLE>
<CAPTION>
DISTRIBUTION OF LIABILITIES* BASIS OF ASSUMPTIONS
- ------------------------------------------------------------------------------------------
1996 1995 YEARS OF ISSUE INTEREST MORTALITY TABLE WITHDRAWAL
- ---- ---- -------------- -------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Non-par:
$1,505,551 $ 1,655,040 1962-1967 4 1/2% 1955-60 Basic Select plus Ultimate Linton B
5,310,394 5,814,885 1968-1988 5 1/2% 1955-60 Basic Select plus Ultimate Linton B
2,433,724 2,546,702 1984-1988 7 1/2% 85% of 1965-70 Basic Select Modified
plus Ultimate Linton B
101,775 86,508 1989-Present 7 1/2% 1975-80 Basic Select plus Ultimate Linton B
108,985 113,117 1989-Present 7 1/2% 1975-80 Basic Select plus Ultimate Actual
28,971 34,185 1989-Present 8% 1975-80 Basic Select plus Ultimate Actual
32,412,007 31,902,122 1985-Present 6% Accumulation of Funds --
Par:
224,913 223,500 1966-1967 4 1/2% 1955-60 Basic Select plus Ultimate Linton A
13,273,949 13,357,249 1968-1988 5 1/2% 1955-60 Basic Select plus Ultimate Linton A
899,407 975,132 1981-1984 7 1/4% 90% of 1965-70 Basic Select
plus Ultimate Linton B
4,699,324 4,772,595 1983-1988 9 1/2% 80% of 1965-70 Basic Select
plus Ultimate Linton B
15,977,808 14,031,404 1990-Present 8% 66% of 1975-80 Basic Select
plus Ultimate Linton B
Annuities:
19,581,382 21,779,771 1976-Present 5 1/2% Accumulation of Funds --
Miscellaneous:
19,604,218 16,939,829 1962-Present 2 1/2%-3 1/2% 1958-CSO None
</TABLE>
* The above amounts are before deduction of deferred premiums of $881,090 in
1997 and $936,565 in 1996.
(b) The costs of acquiring new business, principally commissions and
related agency expenses, and certain costs of issuing policies, such as medical
examinations and inspection reports, all of which vary with and are primarily
related to the production of new business, have been deferred. Costs deferred
on universal life and variable life are amortized as a level percentage of the
present value of anticipated gross profits resulting from investment yields,
mortality and surrender charges. Costs deferred on traditional ordinary life
and health are amortized over the premium-paying period of the related policies
in proportion to the ratio of the annual premium revenue to the total
anticipated premium revenue. Anticipated premium revenue was estimated using
the same assumptions which were used for computing liabilities for future policy
benefits. Amortization of $663,200 in 1997 and $1,454,408 in 1996, $1,672,429
in 1995 was charged to operations.
(c) Participating business represented 9.5% and 9.8% of individual life
insurance in force at December 31, 1997 and 1996, respectively.
The Board of Directors annually approves a dividend formula for calculation
of dividends to be distributed to participating policyholders.
27
<PAGE>
FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The portion of earnings of participating policies that can inure to the
benefit of shareholders is limited to the larger of 10% of such earnings or $.50
per thousand dollars of participating insurance in force. Earnings in excess of
that limit must be excluded from shareholders' equity by a charge against
operations. No such charge has been made, since participating business has
operated at a loss to date on a statutory basis. It is anticipated, however,
that the participating lines will be profitable over the lives of the policies.
(d) New York State insurance law prohibits the payment of dividends to
stockholders from any source other than the statutory unassigned surplus. The
amount of said surplus was $22,374,879, $16,796,135 and $11,815,645 at December
31, 1997, 1996 and 1995, respectively.
(e) Statutory due and deferred premiums are adjusted to conform to the
expected premium revenue used in computing future benefits and deferred policy
acquisition costs. In this regard, the GAAP due premium is recorded as an asset
and the GAAP deferred premium is applied against future policy benefits.
NOTE 7 -- FEDERAL INCOME TAXES
The Company joins with its parent company and other affiliated companies in
filing a consolidated Federal income tax return. The provision for Federal
income taxes is determined on a separate company basis.
Retained earnings at December 31, 1997 included approximately $146,000
which is defined as "policyholders' surplus" and may be subject to Federal
income tax at ordinary corporate rates under certain future conditions,
including distributions to stockholders.
Deferred tax liabilities (assets) are comprised of the following:
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Policyholder dividend provision. . . . . . . . . . . . . . . $ (357,219) $ (332,719)
Non-qualified agents' pension plan reserve . . . . . . . . . (1,161,304) 1,127,384)
Deferred policy acquisition costs. . . . . . . . . . . . . . 2,215,873 2,507,526
Future policy benefits . . . . . . . . . . . . . . . . . . . (2,575,365) 2,346,908)
Bond discount. . . . . . . . . . . . . . . . . . . . . . . . 39,184 28,677
Unrealized holding gains on Available-For-Sale Securities . 829,000 331,000
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,169) 5,808
------------ -----------
$(1,039,000) $ (934,000)
------------ -----------
------------ -----------
</TABLE>
The currently payable Federal Income tax provision of $3,099,000 for 1996
is net of a $75,000 Federal tax benefit resulting from a capital loss carryback
of $221,025.
28
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
First Investors Life Insurance Company
New York, New York
We have audited the statement of assets and liabilities of First
Investors Life Variable Annuity Fund D (a separate account of First Investors
Life Insurance Company, registered as a unit investment trust under the
Investment Company Act of 1940), as of December 31, 1997, and the related
statements of operations and changes in net assets for the period from July
28, 1997 (the date of commencement of operations) to December 31, 1997.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of First Investors
Life Variable Annuity Fund D as of December 31, 1997, and the results of its
operations and the changes in its net assets for the period from July 28,
1997 (the date of commencement of operations) to December 31, 1997, in
conformity with generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
February 19, 1998
29
<PAGE>
FIRST INVESTORS LIFE
VARIABLE ANNUITY FUND D
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments at net asset value (Note 3):
First Investors Life Series Fund . . . . . . . . . . . . . . . $14,689,116
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0-
-----------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . $14,689,116
-----------
LIABILITIES
Payable to First Investors Life Insurance Company. . . . . . . . 14,837
Other Liabilities. . . . . . . . . . . . . . . . . . . . . . . . 852,348
-----------
Total Liabilities. . . . . . . . . . . . . . . . . . . . . . 867,185
-----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,821,931
-----------
Net assets represented by Contracts in accumulation period . . . . $13,821,931
-----------
</TABLE>
See notes to financial statements.
30
<PAGE>
FIRST INVESTORS LIFE
VARIABLE ANNUITY FUND D
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JULY 28, 1997 (THE DATE OF COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME
Income:
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . $2,945
--------
Total income . . . . . . . . . . . . . . . . . . . . . . . . $2,945
--------
Expenses:
Mortality and expense risks (Note 4) . . . . . . . . . . . . . $41,042
--------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . $41,042
--------
NET INVESTMENT LOSS. . . . . . . . . . . . . . . . . . . . . . . . $(38,097)
--------
UNREALIZED APPRECIATION ON INVESTMENTS
Beginning of period. . . . . . . . . . . . . . . . . . . . . . . -0-
End of period. . . . . . . . . . . . . . . . . . . . . . . . . . $104,694
--------
Change in unrealized appreciation on investments . . . . . . . . . $104,694
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . $66,597
--------
</TABLE>
See notes to financial statements.
31
<PAGE>
FIRST INVESTORS LIFE
VARIABLE ANNUITY FUND D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM JULY 28, 1997 (THE DATE OF COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C>
Increase in Net Assets
From Operations
Net investment loss . . . . . . . . . . . . . . . . . . . . . $(38,097)
Change in unrealized appreciation on investments . . . . . . . 104,694
-----------
Net increase in net assets resulting from operations . . . . . 66,597
-----------
From Unit Transactions
Net insurance premiums . . . . . . . . . . . . . . . . . . . . 13,775,489
Contract payments. . . . . . . . . . . . . . . . . . . . . . . (20,155)
-----------
Increase in net assets derived from unit transactions. . . . . 13,755,334
-----------
Net increase in net assets. . . . . . . . . . . . . . . . . 13,821,931
Net Assets
Beginning of year. . . . . . . . . . . . . . . . . . . . . . . -0-
-----------
End of year. . . . . . . . . . . . . . . . . . . . . . . . . . $13,821,931
-----------
-----------
</TABLE>
See notes to financial statements.
32
<PAGE>
FIRST INVESTORS LIFE
VARIABLE ANNUITY FUND D
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1 -- ORGANIZATION
First Investors Life Variable Annuity Fund D (Separate Account D), a unit
investment trust registered under the Investment Company Act of 1940 (the
1940 Act), is a segregated investment account established by First Investors
Life Insurance Company (FIL). Assets of Separate Account D have been used to
purchase shares of First Investors Life Series Fund (the Fund), an open-end
diversified management investment company registered under the 1940 Act.
NOTE 2 -- SIGNIFICANT ACCOUNTING PRACTICES
INVESTMENTS
Shares of the Fund held by Separate Account D are valued at net
asset value per share. All distributions received from the Fund are
reinvested to purchase additional shares of the Fund at net asset value.
FEDERAL INCOME TAXES
Separate Account D is not taxed separately because its operations are
part of the total operations of FIL, which is taxed as a life insurance
company under the Internal Revenue Code. Separate Account D will not be
taxed as a regulated investment company under Subchapter M of the Code.
Under existing Federal income tax law, no taxes are payable on the
investment income or on the capital gains of Separate Account D.
NOTE 3 -- INVESTMENTS
Investments consist of the following:
<TABLE>
<CAPTION>
NET ASSET MARKET
SHARES VALUE VALUE COST
------- --------- ----------- -----------
<S> <C> <C> <C> <C>
First Investors Life Series Fund
Cash Management. . . . . . . . . . 288,036 $ 1.00 $ 288,036 $ 288,036
High Yield . . . . . . . . . . . . 51,085 12.30 628,552 612,544
Growth . . . . . . . . . . . . . . 122,727 29.24 3,588,551 3,529,939
Discovery. . . . . . . . . . . . . 75,913 27.77 2,107,723 2,170,516
Blue Chip. . . . . . . . . . . . . 183,294 23.71 4,345,840 4,277,887
International Securities . . . . . 108,258 16.91 1,831,074 1,897,746
Government . . . . . . . . . . . . 13,283 10.33 137,212 135,453
Investment Grade . . . . . . . . . 19,913 11.67 232,362 226,006
Utilities Income . . . . . . . . . 26,041 14.95 389,430 358,955
Target Maturity 2007 . . . . . . . 52,902 12.63 668,283 641,872
Target Maturity 2010 . . . . . . 37,177 12.70 472,053 445,468
----------- -----------
$14,689,116 $14,584,422
----------- -----------
----------- -----------
</TABLE>
The High Yield Series' investments in high yield securities, whether
rated or unrated, may be considered speculative and subject to greater market
fluctuations and risks of loss of income and principal than lower yielding,
higher rated, fixed income securities.
NOTE 4 -- MORTALITY AND EXPENSE RISKS AND DEDUCTIONS
In consideration for its assumption of the mortality and expense risks
connected with the Variable Annuity Contracts, FIL deducts an amount equal on
an annual basis to 1.25% of the daily net asset value of Separate Account D.
An additional administrative charge equal on an annual basis to 0.15% of
the daily net asset value is deducted. The total of these deductions in 1997
was $41,042.
An annual contract maintenance charge of $30 is deducted from the
accumulated value of the contract on the last business day of the contract
year or on the date of surrender of the contract, if earlier. There was no
deduction under this provision in 1997.
33
<PAGE>
FIRST INVESTORS LIFE
VARIABLE ANNUITY FUND D
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
The Variable Annuity Contracts are sold without an initial sales charge,
but at the time of a full or partial surrender of the Contract, they may be
subject to a contingent deferred sales charge ("CDSC") of 0% to 7% of the
value of the Accumulation Units surrendered.
34
<PAGE>
FIRST INVESTORS LIFE VARIABLE ANNUITY FUND D
PART C: OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements:
The financial statements for the period ending December 31,
1997 for First Investors Life Insurance Company and First
Investors Life Variable Annuity Fund D are included in Part
B, except Condensed Financial Information on Accumulation
Unit Values, which is included in Part A.
(b) Exhibits:
1. Resolution of the Board of Directors of First Investors
Life Insurance Company establishing Separate Account D. /1/
2. Not applicable.
3. Distribution Contracts:
a. Underwriting Agreement between First Investors Life
Insurance Company and First Investors Corporation. /1/
b. Specimen Variable Annuity Dealer Agreement between First
Investors Corporation and dealers. /1/
4. Variable Annuity Contracts:
a. Specimen Individual Variable Annuity Contract issued by
First Investors Life Insurance Company for participation in
Separate Account D. /2/
b. Specimen Individual Variable Annuity Contract issued by
First Investors Life Insurance Company providing for full
refund of premium payment and extension of ten-day
revocation period if Contract replaces another annuity
contract. /2/
c. Specimen Individual Variable Annuity Contract issued by
First Investors Life Insurance Company providing for full
refund of premium payment and containing an endorsement
pertaining to minimum rate of return following death of
Annuitant. /2/
d. Specimen Individual Variable Annuity Contract issued by
First Investors Life Insurance Company providing for a full
refund of
C-1
<PAGE>
premium payment upon request for cancellation of
Contract prior to delivery of Contract. /2/
5. Form of application used with Individual Variable Annuity
Contracts provided in response to (4) above. /1/
6 a.(1) Declaration of Intention and Charter of First
Investors Life Insurance Company. /1/
(2) Certificate of Amendment. /1/
(3) Certificate of Amendment. /1/
(4) Certificate of Amendment. /1/
(5) Certificate of Amendment. /1/
b. By-Laws of First Investors Life Insurance Company. /1/
7. Not applicable.
8. Not applicable.
9. Opinion and Consent of Tammie Lee, Esq., special counsel to
First Investors Life Insurance Company. /2/
10. Consent of Independent Public Accountants.
11. Not applicable.
12. Not applicable.
13. Performance calculations.
14. Financial Data Schedule. (See Exhibit 27 below.)
15. Powers of Attorney. /1/
27. Financial Data Schedule. (Inapplicable, because,
notwithstanding Item 24 (b)(14) of Form N-4, the
Commission staff has advised that no such
schedule is required.)
- -------------------------------
/1/Previously filed on May 1, 1997 in the initial filing of this
Registration Statement.
/2/Previously filed on July 8, 1997 in Pre-Effective Amendment
No. 1 to this Registration Statement.
C-2
<PAGE>
ITEM 25. Directors and Officers of the Depositor
The following are the Directors and Officers of First investors Life Insurance
Company:
<TABLE>
<CAPTION>
Position and Office
Name and with First Investors
Principal Business Address Life Insurance Company
- -------------------------- ----------------------
<S> <C>
(Unless otherwise noted, an
individual's business address is
95 Wall Street, New York, New York
10005.)
Jay G. Baris Director
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, N.Y. 10022
Carol Lerner Brown Secretary
Glenn T. Dallas Director
21 Eagle Nest Road
Morristown, N.J. 07960
William H. Drinkwater First Vice President & Chief Actuary
Lawrence M. Falcon Senior Vice President & Comptroller
Richard H. Gaebler President & Director
George V. Ganter Director
Robert J. Grosso Director
581 Main Street
Woodbridge, N.J. 07095
Glenn O. Head Chairman & Director
Kathryn S. Head Director
581 Main Street
Woodbridge, N.J. 07095
Scott Hodes Director
Ross & Hardies
150 North Michigan Avenue
Chicago, IL 60601
C-3
<PAGE>
<CAPTION>
Position and Office
Name and with First Investors
Principal Business Address Life Insurance Company
- -------------------------- ----------------------
<S> <C>
(Unless otherwise noted, an individual's
business address is 95 Wall Street, New
York, New York 10005.)
William M. Lipkus
581 Main Street
Woodbridge, NJ 07095 Vice President & Chief Accounting Officer
Jackson Ream Director
Nations Bank of Texas
P.O. Box 225961
Dallas, TX 75265
Nelson Schaenen, Jr. Director
Weiss, Peck & Greer
One New York Plaza
New York, New York 10004
Martin A. Smith Vice President
Ada M. Suchow Vice President & Assistant Secretary
John T. Sullivan Director
</TABLE>
ITEM 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant
There are no persons directly or indirectly controlled by or under
common control with the Registrant. Registrant is a separate account of
First Investors Life Insurance Company, the Depositor. Set forth below are
all persons controlled by or under common control with First Investors Life
Insurance Company:
ROUTE 33 REALTY CORPORATION (New Jersey). Ownership: 100% by First
Investors Life Insurance Company; Principal Business: Real Estate;
Subsidiary of First Investors Life Insurance Company.
FIRST INVESTORS CONSOLIDATED CORPORATION ("FICC") (Delaware). Ownership:
Glenn O. Head is the controlling shareholder; Principal Business: Holding
Company; Parent of First Investors Life Insurance Company.
C-4
<PAGE>
ADMINISTRATIVE DATA MANAGEMENT CORP. (New York). Ownership: 100% owned by
FICC; Principal Business: Transfer Agent; Affiliate of First Investors Life
Insurance Company.
EXECUTIVE INVESTORS MANAGEMENT COMPANY, INC. (Delaware). Ownership: 100%
owned by FICC; Principal Business: Investment Advisor; Affiliate of First
Investors Life Insurance Company.
FIRST INVESTORS ASSET MANAGEMENT COMPANY, INC. (Delaware). Ownership: 100%
owned by FICC; Principal Business: Investment Advisor; Affiliate of First
Investors Life Insurance Company.
FIRST INVESTORS CORPORATION (New York). Ownership: 100% owned by FICC;
Principal Business: Broker-Dealer; Affiliate of First Investors Life
Insurance Company.
FIRST INVESTORS LEVERAGE CORPORATION (New York). Ownership: 100% owned by
FICC; Principal Business: Inactive; Affiliate of First Investors Life
Insurance Company.
FIRST INVESTORS MANAGEMENT COMPANY, INC. (New York). Ownership: 100% of
common stock owned by FICC; Principal Business: Investment Advisor;
Affiliate of First Investors Life Insurance Company.
FIRST INVESTORS REALTY COMPANY, INC. (New Jersey). Ownership: 100% owned by
FICC; Principal Business: Real Estate; Affiliate of First Investors Life
Insurance Company.
FIRST INVESTORS RESOURCES, INC. (Delaware). Ownership: 100% owned by FICC;
Principal Business: Commodity Pool Operator; Affiliate of First Investors
Life Insurance Company.
EXECUTIVE INVESTORS CORPORATION (Delaware). Ownership: 100% owned by FICC;
Principal Business: Broker-Dealer; Affiliate of First Investors Life
Insurance Company.
FIRST FINANCIAL SAVINGS BANK, S.L.A. ("FFSB") (New Jersey). Ownership: 100%
owned by FICC, except Directors Qualifying Shares; Principal Business:
Savings and Loan; Affiliate of First Investors Life Insurance Company.
FIRST INVESTORS CREDIT CORPORATION (New Jersey). Ownership: 100% owned by
FICC; Principal Business: Real Estate; Affiliate of First Investors Life
Insurance Company.
N.A.K. REALTY CORPORATION (New Jersey). Ownership: 100% owned by FICC;
Principal Business: Real Estate; Affiliate of First Investors Life Insurance
Company.
REAL PROPERTY DEVELOPMENT CORPORATION (New Jersey). Ownership: 100% owned
by FICC; Principal Business: Real Estate; Affiliate of First Investors Life
Insurance Company.
C-5
<PAGE>
FIRST INVESTORS CREDIT FUNDING CORPORATION (New York). Ownership: 100% owned
by FICC; Principal Business: Sells commercial paper; Affiliate of First
Investors Life Insurance Company.
SCHOOL FINANCIAL MANAGEMENT SERVICES, INC. (Ohio). Ownership: 100% owned by
FICC; Principal Business: Tuition assistance program; Affiliate of First
Investors Life Insurance Company.
ITEM 27. Number of Contractowners
As of March 6, 1998, the number of owners of variable annuity contracts
offered by First Investors Life Variable Annuity Fund D was 367.
ITEM 28. Indemnification
Article XIV of the By-Laws of First Investors Life Insurance Company
provides as follows:
"To the full extent authorized by law and by the Charter, the
Corporation shall and hereby does indemnify any person who shall at
any time be made, or threatened to be made, a party in any civil or
criminal action or proceeding by reason of the fact that he, his
testator or his intestate is or was a director or officer of the
Corporation or served another corporation in any capacity at the
request of the Corporation, provided, that the notice required by
Section 62-a of the Insurance Law of the State of New York, as now in
effect or as amended from time to time, be filed with the
Superintendent of Insurance."
Reference is hereby made to the New York Business Corporation Law, Sections
721 through 725.
The general effect of this Indemnification will be to indemnify any
person made, or threatened to be made, a party to an action by or in the
right of the corporation to procure a judgment in its favor by reason of the
fact that the person, or that person's testator or intestate, is or was a
director or officer of the corporation, or is or was serving at the request
of the corporation as a director or officer of any other corporation of any
type or kind, domestic or foreign, of any partnership, joint venture, trust,
employee benefit plan or other enterprise, against amounts paid in settlement
and reasonable expenses, including attorney's fees, actually and necessarily
incurred in connection with the defense or settlement of such action, or in
connection with an appeal therein if such director or officer acted in good
faith, for a purpose reasonably believed by that person to be in, and not
opposed to, the best interests of the corporation and not otherwise knowingly
unlawful.
C-6
<PAGE>
A directors and officers liability policy in the amount of $3,000,000
covering First Investors Life's directors and officers has been issued by the
Great American Insurance Companies.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the First Investors Life Variable Annuity Fund D pursuant to the foregoing
provisions, or otherwise, the First Investors Life Variable Annuity Fund D
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 First
Investors Life Variable Annuity Fund D of expenses incurred or paid by a
director, officer or controlling person of the First Investors Life Variable
Annuity Fund D in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the First Investors Life Variable
Annuity Fund D 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
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
ITEM 29. Principal Underwriters
(a) First Investors Corporation, Underwriter of the Registrant, is also
Underwriter for:
First Investors Cash Management Fund, Inc.
First Investors Fund For Income, Inc.
First Investors Series Fund
First Investors Government Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Global Fund, Inc.
First Investors Multi-State Insured Tax Free Fund
First Investors New York Insured Tax Free Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors Tax-Exempt Money Market Fund, Inc.
First Investors U.S. Government Plus Fund
First Investors Series Fund II, Inc.
First Investors Life Variable Annuity Fund A
First Investors Life Level Premium Variable Life Insurance
(Separate Account B)
First Investors Life Variable Annuity Fund C
First Investors Corporation is Sponsor of:
First Investors Single Payment and Periodic Payment Plans I for
Investment in First Investors Global Fund, Inc.
C-7
<PAGE>
First Investors Single Payment and Periodic Payment Plans II for
Investment in First Investors Global Fund, Inc.
First Investors Single Payment and Periodic Payment Plans for
Investment in First Investors Fund For Income, Inc.
First Investors Single Payment and Periodic Payment Plans for
Investment in First Investors Government Fund, Inc.
First Investors Periodic Payment Plans for Investment in First
Investors High Yield Fund, Inc.
First Investors Single Payment and Periodic Payment Plans for the
Accumulation of Shares of First Investors Global Fund, Inc.
First Investors Single Payment and Periodic Payment Plans for
Investment in First Investors Insured Tax Exempt Fund, Inc.
(b) The following persons are the officers and directors of First
Investors Corporation:
<TABLE>
<CAPTION>
Name and Principal Position and Office with
Business Address (continued) First Investors Corporation
- ---------------------------- ---------------------------
<S> <C>
(Unless otherwise noted, an individual's
business address is 95 Wall Street, New
York, New York 10005)
Joseph I. Benedek Treasurer
581 Main Street
Woodbridge, New Jersey 07095
Lawrence A. Fauci Senior Vice President and Director
Glenn O. Head Chairman and Director
Kathryn S. Head Vice President and Director
581 Main Street
Woodbridge, New Jersey 07095
Marvin Hecker President
Jane W. Kruzan Director
Larry R. Lavoie Secretary and General Counsel
Jeremiah J. Lyons Director
Frederick Miller Senior Vice President
581 Main Street
Woodbridge, New Jersey 07095
C-8
<PAGE>
Elizabeth Reilly Vice President
581 Main Street
Woodbridge, New Jersey 07095
Louis Rinaldi Senior Vice President
581 Main Street
Woodbridge, New Jersey 07095
Matthew Smith Vice President
581 Main Street
Woodbridge, New Jersey 07095
John T. Sullivan Director
Robert Flanagan Vice President-Sales Administration
William M. Lipkus Chief Financial Officer
581 Main Street
Woodbridge, NJ 07095
</TABLE>
(c) Not Applicable.
ITEM 30. Location of Accounts and Records
All accounts, books and other documents required to be maintained pursuant
to Section 31(a) of the Investment Company Act of 1940, as amended, are located
at the offices of First Investors, 95 Wall Street, New York, New York.
ITEM 31. Management Services
Not applicable.
ITEM 32. Undertakings
Registrant hereby makes the following undertakings:
(a) An undertaking to file a post-effective amendment to this registration
statement as frequently as is necessary to ensure that the audited
financial statements in the registration statement are never more than
16 months old for so long as payments under the variable annuity
contracts may be accepted;
(b) An undertaking to include either (1) as part of any application to
purchase a contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional Information
or (2) a post card or similar written communication affixed to or
included in the prospectus that the applicant can remove to send for a
Statement of Additional Information;
C-9
<PAGE>
(a) An undertaking to deliver any Statement of Additional Information and
any financial statements required to be made available under this Form
promptly upon written or oral request.
(d) REPRESENTATION REGARDING REASONABLENESS AGGREGATE CHARGES DEDUCTED
UNDER THE CONTRACTS PURSUANT TO SECTION 26(e)(2)(A) THE INVESTMENT
COMPANY ACT OF 1940
First Investors Life Insurance Company ("First Investors Life")
represents that the fees and charges deducted under the Contracts that
are identified as Contract Form VAC (CDSC) and described in this
Registration Statement, in the aggregate, are reasonable in relation
to the services rendered, the expenses expected to be incurred, and
the risks assumed by First Investors Life under the Contracts. First
Investors Life bases it representation on its assessment of all of the
facts and circumstances, including such relevant factors, as the
nature and extent of such services, expenses and risks; the need for
First Investors Life to earn a profit; and the regulatory standards
for exemptive relief under the Investment Company Act of 1940 used
prior to October 1996, including the range of industry practice. This
representation applies to all Contracts sold pursuant to this
Registration Statement, including those sold on terms specifically
described in the prospectus contained herein, or any variations
therein, based on supplements, endorsements, or riders to any
Contracts or prospectus, or otherwise.
C-10
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant represents that this Post-Effective Amendment to
Registrant's Registration Statement ("Amendment") meets the requirements for
effectiveness pursuant to Rule 485(b) under the Securities Act of 1933, and
has caused this Amendment to be signed on its behalf, in the City of New
York, and State of New York, on the 20th day of April, 1998.
FIRST INVESTORS LIFE VARIABLE
ANNUITY FUND D
(Registrant)
BY: FIRST INVESTORS LIFE INSURANCE
COMPANY
(Depositor)
(On behalf of the Registrant and
itself)
By /s/Richard H. Gaebler
---------------------
Richard H. Gaebler
President
As required by the Securities Act of 1933, this Amendment to
Registrant's Registration Statement has been signed by the following officers
and directors of the Depositor in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/Richard H. Gaebler President and Director April 20, 1998
- ---------------------
Richard H. Gaebler
/s/William M. Lipkus Vice President and April 20, 1998
- --------------------- Chief Accounting
William M. Lipkus Officer
<PAGE>
Glenn O. Head* Chairman and Director April 20, 1998
Jay G. Baris* Director April 20, 1998
George V. Ganter* Director April 20, 1998
Robert J. Grosso* Director April 20, 1998
Scott Hodes* Director April 20, 1998
Jackson Ream* Director April 20, 1998
Nelson Schaenen Jr.* Director April 20, 1998
John T. Sullivan* Director April 20, 1998
Kathryn S. Head* Director April 20, 1998
Glenn T. Dallas* Director April 20, 1998
</TABLE>
* By: /s/Richard H. Gaebler
---------------------
Richard H. Gaebler
Attorney-In-Fact
Pursuant to Powers of
Attorney previously filed
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
99.N4.10 Consent of Independent Public
Accountants
99.N4.13 Performance Calculations
</TABLE>
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
First Investors Life Insurance Company
95 Wall Street
New York, NY 10005
We hereby consent to the use in Post-Effective Amendment No. 1 to the
Registration Statement on Form N-4 (File No. 333-26341) of our report dated
February 19, 1998 relating to the December 31, 1997 financial statements of
First Investors Life Variable Annuity Fund D and our report dated February
19, 1998 relating to the December 31, 1997 financial statements of First
Investors Life Insurance Company, which are included in said Registration
Statement.
/s/ Tait, Weller & Baker
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
April 21, 1998
<PAGE>
NAV ONLY Total Returns - Separate Account D
Average Annual Total Return and Total Return for First Investors Funds are
calculated using the following standardized formula:
Average Annual
Total Return = ((ERV DIVIDED BY P) 1/n ) -1
Total Return = ((ERV - P) DIVIDED BY P)
WHERE: ERV = Ending redeemable value of a hypothetical $1,000 investment made
at the beginning of 1, 5, or 10 year periods (or fractional period
thereof.)
P = a hypothetical initial investment of $1,000
N = number of years
The following table lists the information used to calculate the NAV only average
annual total return and total return for First Investors Life Series Fund -
Subaccount D as of December 31, 1997.
<TABLE>
<CAPTION>
AVE. ANNUAL TOTAL
ERV P N TOTAL RETURN RETURN
--- - - ------------ ------
<S> <C> <C> <C> <C> <C>
Blue Chip Fund
--------------
Life of Subaccount: $1,017.32 $1,000.00 .43 1.73% 1.73%
Discovery Fund
--------------
Life of Subaccount: $1,021.94 $1,000.00 .43 2.19% 2.19%
Government Fund
---------------
Life of Subaccount: $1,027.70 $1,000.00 .43 2.77% 2.77%
Growth Fund
-----------
Life of Subaccount: $1,032.43 $1,000.00 .43 3.24% 3.24%
High Yield Fund
---------------
Life of Subaccount: $1,041.14 $1,000.00 .43 4.11% 4.11%
<PAGE>
International Securities Fund
- -----------------------------
Life of Subaccount: $ 929.53 $1,000.00 .43 (7.05%) (7.05%)
Investment Grade Fund
---------------------
Life of Subaccount: $1,032.70 $1,000.00 .43 3.27% 3.27%
Target Maturity 2007 Fund
-------------------------
Life of Subaccount: $1,060.96 $1,000.00 .43 6.10% 6.10%
Target Maturity 2010 Fund
-------------------------
Life of Subaccount: $1,078.72 $1,000.00 .43 7.87% 7.87%
Utilities Fund
--------------
Life of Subaccount: $1,166.19 $1,000.00 .43 16.62% 16.62%
</TABLE>
<PAGE>
SEC Standardized Total Returns - Separate Account D
Average Annual Total Return and Total Return for First Investors Funds are
calculated using the following standardized formula:
Average Annual
Total Return = ((ERV DIVIDED BY P) 1/n ) -1
Total Return = ((ERV - P) DIVIDED BY P)
WHERE: ERV = Ending redeemable value of a hypothetical $1,000 investment made
at the beginning of 1, 5, or 10 year periods (or fractional period
thereof.)
P = a hypothetical initial investment of $1,000
N = number of years
The following table lists the information used to calculate the standardized
average annual total return and total return for First Investors Life Series
Fund - Subaccount D as of December 31, 1997.
<TABLE>
<CAPTION>
AVE. ANNUAL TOTAL
ERV P N TOTAL RETURN RETURN
<S> <C> <C> <C> <C> <C>
Blue Chip Fund
--------------
Life of Subaccount: $947.32 $1,000.00 .43 (5.27%) (5.27%)
Discovery Fund
--------------
Life of Subaccount: $951.94 $1,000.00 .43 (4.81%) (4.81%)
Government Fund
---------------
Life of Subaccount: $957.70 $1,000.00 .43 (4.23%) (4.23%)
Growth Fund
-----------
Life of Subaccount: $962.43 $1,000.00 .43 (3.76%) (3.76%)
High Yield Fund
---------------
Life of Subaccount: $971.14 $1,000.00 .43 (2.89%) (2.89%)
<PAGE>
International Securities Fund
- -----------------------------
Life of Subaccount: $864.47 $1,000.00 .43 (13.55%) (13.55%)
Investment Grade Fund
---------------------
Life of Subaccount: $962.70 $1,000.00 .43 (3.73%) (3.73%)
Target Maturity 2007 Fund
-------------------------
Life of Subaccount: $990.96 $1,000.00 .43 (0.90%) (0.90%)
Target Maturity 2010 Fund
-------------------------
Life of Subaccount: $1,008.72 $1,000.00 .43 0.87% 0.87%
Utilities Fund
--------------
Life of Subaccount: $1,096.19 $1,000.00 .43 9.62% 9.62%
</TABLE>
