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SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM N-8B-2
REGISTRATION STATEMENT OF UNIT INVESTMENT TRUST
WHICH ARE CURRENTLY ISSUING SECURITIES
Dated June 30, 1998
Pursuant to Section 8(b) of the Investment Company Act of 1940
Allmerica Select Separate Account III of Allmerica Financial Life Insurance
and Annuity Company
(Name of Unit Investment Trust)
440 Lincoln Street
Worcester MA 01653
(Address of Principal Office of Registrant)
Issuer of periodic payment plan certificates only for purposes of information
provided herein.
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I I. ORGANIZATION AND GENERAL INFORMATION
1. (a) FURNISH NAME OF THE TRUST AND THE INTERNAL REVENUE
SERVICE EMPLOYER IDENTIFICATION NUMBER.
The trust is the Allmerica Select Separate Account III
("Separate Account") of Allmerica Financial Life Insurance
and Annuity Company. The Separate Account is a separate
investment account of Allmerica Financial Life Insurance and
Annuity Company (the "Company") and has no employer
identification number.
(b) FURNISH TITLE OF EACH CLASS OR SERIES OF SECURITIES ISSUED
BY THE TRUST.
The securities are single payment individual variable life
insurance Contracts (the "Contracts").
2. FURNISH NAME AND PRINCIPAL BUSINESS ADDRESS AND ZIP CODE AND THE
INTERNAL REVENUE SERVICE EMPLOYER IDENTIFICATION NUMBER OF EACH
DEPOSITOR OF THE TRUST.
Allmerica Financial Life Insurance and Annuity Company
440 Lincoln Street
Worcester, Massachusetts 01653
FEIN: 04-6145677.
3. FURNISH NAME AND PRINCIPAL BUSINESS ADDRESS AND ZIP CODE AND THE
INTERNAL REVENUE SERVICE EMPLOYER IDENTIFICATION NUMBER OF EACH
CUSTODIAN OR TRUSTEE OF THE TRUST INDICATING FOR WHICH CLASS OR
SERIES OF SECURITIES EACH CUSTODIAN OR TRUSTEE IS ACTING.
The Company will hold in its own custody all of the securities.
4. FURNISH NAME AND PRINCIPAL BUSINESS ADDRESS AND ZIP CODE AND THE
INTERNAL REVENUE SERVICE EMPLOYER IDENTIFICATION NUMBER OF EACH
PRINCIPAL UNDERWRITER CURRENTLY DISTRIBUTING SECURITIES OF THE
TRUST.
Distribution of the Contracts has not yet commenced. When
distribution commences, the principal underwriter will be:
Allmerica Investments, Inc.
440 Lincoln Street
Worcester MA 01653
FEIN: 04-2448927.
5. FURNISH NAME OF STATE OR OTHER SOVEREIGN POWER, THE LAWS OF WHICH
GOVERN WITH RESPECT TO THE ORGANIZATION OF THE TRUST.
Delaware.
6. (a) FURNISH THE DATES OF EXECUTION AND TERMINATION OF AGREEMENT
CURRENTLY IN EFFECT UNDER THE TERMS OF WHICH THE TRUST WAS
ORGANIZED AND ISSUED OR PROPOSES TO ISSUE SECURITIES.
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The Separate Account was established under Delaware law
pursuant to a resolution of the Board of Directors of the
Company on June 13, 1996. The resolution establishing the
Separate Account will continue until amended by the Board of
Directors of the Company. The Contracts will be issued
pursuant to this resolution.
(b) FURNISH THE DATES OF EXECUTION AND TERMINATION OF ANY
INDENTURE OR AGREEMENT CURRENTLY IN EFFECT PURSUANT TO WHICH
THE PROCEEDS OF PAYMENTS ON SECURITIES ISSUED OR TO BE ISSUED
BY THE TRUST ARE HELD BY THE CUSTODIAN OR TRUSTEE.
None.
7. FURNISH IN CHRONOLOGICAL ORDER THE FOLLOWING INFORMATION WITH
RESPECT TO EACH CHANGE OF NAME OF THE TRUST SINCE JANUARY 1, 1930.
IF THE NAME HAS NEVER BEEN CHANGED, SO STATE.
The name of the Separate Account has never been changed.
8. STATE THE DATE ON WHICH THE FISCAL YEAR OF THE TRUST ENDS.
December 31.
MATERIAL LITIGATION
9. FURNISH A DESCRIPTION OF ANY PENDING LEGAL PROCEEDINGS, MATERIAL
WITH RESPECT TO THE SECURITY HOLDERS OF THE TRUST BY REASON OF THE
NATURE OF THE CLAIM OR THE AMOUNT THEREOF, TO WHICH THE TRUST, THE
DEPOSITOR, OR THE PRINCIPAL UNDERWRITER IS A PARTY OR OF WHICH THE
ASSETS OF THE TRUST ARE THE SUBJECT, INCLUDING THE SUBSTANCE OF THE
CLAIMS INVOLVED IN SUCH PROCEEDING AND THE TITLE OF THE PROCEEDING.
FURNISH A SIMILAR STATEMENT WITH RESPECT TO ANY PENDING
ADMINISTRATIVE PROCEEDING COMMENCED BY A GOVERNMENTAL AUTHORITY OR
ANY SUCH PROCEEDING OR LEGAL PROCEEDING KNOWN TO BE CONTEMPLATED
BY A GOVERNMENTAL AUTHORITY. INCLUDE ANY PROCEEDINGS WHICH,
ALTHOUGH IMMATERIAL ITSELF, IS REPRESENTATIVE OF, OR ONE OF, A
GROUP WHICH IN THE AGGREGATE IS MATERIAL.
There are no current or pending legal or administrative proceedings
to which the Separate Account, the Company, or Allmerica
Investments Inc. is a party and which are material with respect to
the security holders of the Separate Account.
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
GENERAL INFORMATION CONCERNING THE SECURITIES OF THE TRUST AND THE RIGHTS
OF HOLDERS.
10. FURNISH A BRIEF STATEMENT WITH RESPECT TO THE FOLLOWING MATTERS
FOR EACH CLASS OR SERIES OF SECURITIES ISSUED BY THE TRUST.
(a) WHETHER THE SECURITIES ARE OF THE REGISTERED OR BEARER TYPE.
The Contracts are variable life insurance policies, and as
such are "registered" in the name of the Contract Owner.
Records concerning the Contract Owner are maintained by or
on behalf of the Company.
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(b) WHETHER THE SECURITIES ARE OF THE CUMULATIVE OR DISTRIBUTIVE
TYPE.
The Contracts are of the cumulative type, providing for no
distribution of income, dividends or capital gains except in
connection with a voluntary surrender or partial withdrawal
of Contract value by a Contract Owner, or in connection with
the payment of death benefits.
(c) THE RIGHTS OF SECURITY HOLDERS WITH RESPECT TO WITHDRAWAL OR
REDEMPTION.
A Contract may be surrendered at any time, subject to the
possible imposition of a contingent deferred sales charge.
See Item 13(a) "Surrender Charge" and Item 17(a) "Surrender."
After the first Contract year, partial withdrawals in a
minimum amount of $1000 may be made from the Contract value
at any time upon written request filed at the Company's
Principal Office. A partial withdrawal will not be permitted
if it would reduce the Contract Value below $25,000. A
transaction charge, which is the smaller of 2% of the amount
withdrawn or $25, will be assessed in all cases. A partial
withdrawal charge may also be deducted. The partial
withdrawal charge will not exceed the surrender charge, and
the outstanding surrender charge will be reduced by the
amount of the partial withdrawal charges. See Item 13(a)
"Charges on Partial Withdrawal" and Item 17(a) "Partial
Withdrawal."
(d) THE RIGHTS OF SECURITY HOLDERS WITH RESPECT TO CONVERSION,
TRANSFER, PARTIAL-REDEMPTION, AND SIMILAR MATTERS.
TRANSFER - The Contracts permit net premiums to be allocated
either to the Company's General Account or to the Sub-Accounts
of the Separate Account. Each Sub-Account invests exclusively
in a corresponding investment portfolio ("Underlying Fund") of
the Allmerica Investment Trust ("AIT"), managed by AFIMS; of
the Variable Insurance Products Fund ("VIP"), managed by
Fidelity Management and Research Company ("Fidelity
Management"); or of the T. Rowe Price International Series,
Inc. ("T. Rowe Price"), managed by Rowe Price-Fleming
International, Inc.
Subject to the consent of the Company, the Contract Owner may
transfer amounts among all of the Sub-Accounts and between the
Sub-Accounts and the General Account, subject to certain
restrictions.
The Contract Owner may apply for automatic transfers from the
the Money Market Sub-Account to one or more of the other
Sub-Accounts. Automatic transfers may be made at intervals
of one, three, six or twelve months. Each automatic transfer
must be at least $100. If the Sub-Account from which the
automatic transfer is to be made is reduced to $0 (zero), the
automatic transfer will cease. The Contract Owner must then
reapply for any future automatic transfers. The Contract
Owner may also apply for automatic account rebalancing, in
order to reallocate Contract Value among the Sub-Accounts at
intervals of one, three, six or twelve months.
The first 12 transfers in a Contract year are free.
Thereafter, the Company may deduct a transfer charge (not to
exceed $25) from amounts transferred in that
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Contract year. The first automatic transfer counts as one
transfer toward the 12 free transfers allowed in each
Contract year. Each subsequent automatic transfer is free
and does not reduce the remaining number of transfers that
are free in a Contract year. Any transfers made for a
conversion privilege, Contract loan or material change in
investment policy will not count toward the 12 free
transfers.
The transfer privilege is subject to the Company's consent.
The Company reserves the right to impose limits on transfers
including, but not limited to, the:
- Minimum amount that may be transferred;
- Minimum amount that may remain in a Sub-Account following
a transfer from that Sub-Account;
- Minimum period between transfers involving the Fixed
Account; and
- Maximum amounts that may be transferred from the Fixed
Account.
Transfers involving the Fixed Account are currently permitted
only if:
- There has been at least a ninety (90) day period since
the last transfer from the Fixed Account; and
- The amount transferred from the Fixed Account in each
transfer does not exceed the lesser of $100,000 or 25%
of the Contract Value.
These rules are subject to change by the Company.
CONVERSION PRIVILEGE - During the first 24 Contract months
after the date of issue, subject to certain restrictions, the
Contract Owner may convert the Contract to a flexible premium
fixed Contract by transferring all Contract Value in the
Sub-Accounts to the General Account and by simultaneously
changing the allocation of future premiums to the General
Account. A similar conversion privilege is in effect for
24 Contract months after the date of an increase in face
amount, under which the Contract Owner may convert by
transferring all or part of Contract value in the
Sub-Accounts to the General Account and by simultaneously
changing the allocation of all or part of future premiums
to the General Account.
FREE LOOK PRIVILEGE - The Contract provides for a free look
period under the Right to Cancel provision. The Contract
Owner has the right to examine and cancel the Contract by
returning it to the Company or one of its representatives
on or before the tenth day (or such later date as may be
required by state law) after the Contract owner receives
the Contract.
If the Contract provides for a full refund under its "Right
to Cancel" provision (as may be required by state law),
the refund will be the entire Payment. If the Contract does
not provide for a full refund (as provided by state law), the
Contract Owner will receive:
- Amounts allocated to the Fixed Account; PLUS
- The Contract Value in the Variable Account: PLUS
- All fees, charges and taxes which have been
imposed.
The Contract Owner may make surrenders and partial
withdrawals as described in Items 10(c), 13(a) and 17(a).
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(e) IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE
OR AGREEMENTS WITH RESPECT TO LAPSES OR DEFAULTS BY SECURITY
HOLDERS IN MAKING PRINCIPAL PAYMENTS, AND WITH RESPECT TO
REINSTATEMENT.
CONTRACT TERMINATION AND REINSTATEMENT - The Contract will
terminate if on a Monthly Processing Date the Surrender Value
is less than $0 (zero.) If this situation occurs, the
Contract will be in default. The Contract Owner will then
have a grace period of 62 days, measured from the date of
default, to make a Payment sufficient to prevent termination.
On the date of default, the Company will send a notice to
the Contract owner and to any assignee of record. The notice
will state the Payment due and the date by which it must be
paid. Failure to make a sufficient Payment within the grace
period will result in the Contract terminating without value.
A terminated Contract may be reinstated within three years of
the date of default and before the Final Payment Date. The
reinstatement takes effect on the Monthly Processing Date
following the date the Contract Owner submits to the Company:
- Written application for reinstatement;
- Evidence of Insurability showing that the Insured is
insurable according to the Company's current
underwriting rules;
- A Payment that is large enough to cover the cost of all
Contract charges that were due and unpaid during the
grace period and that is large enough to keep the
Contract in force for three months; and
- A Payment or reinstatement of any loan against the
Contract that existed at the end of the grace period.
CONTRACT VALUE ON REINSTATEMENT - The Contract Value on the
date of reinstatement is:
. The Payment made to reinstate the Contract and interest
earned from the date the Payment was received at our
Principal Office; PLUS
. The Contract Value less any Outstanding Loan on the
date of default (not to exceed the surrender charge on
the date of reinstatement); MINUS
. The Monthly Deductions due on the date of reinstatement.
(f) THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENTS
WITH RESPECT TO VOTING RIGHTS, TOGETHER WITH THE NAMES OF ANY
PERSONS OTHER THAN SECURITY HOLDERS GIVEN THE RIGHT TO
EXERCISE VOTING RIGHTS PERTAINING TO THE TRUST'S SECURITIES
OR THE UNDERLYING SECURITIES AND THE RELATIONSHIP OF SUCH
PERSONS TO THE TRUST.
To the extent required by law, the Company will vote shares
held by each Sub-Account in accordance with instructions
received from the Contract Owners with Contract value in
such Sub-Account. Each person having a voting interest will
be provided with proxy materials together with an
appropriate form with which to give voting instructions to
the Company. Shares held in each Sub-Account for which no
timely instructions are received will be voted in proportion
to the instructions received from all persons with an
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interest in the Sub-Account furnishing instructions to the
Company with respect to the Underlying Funds. The Company
will also vote shares held in the Separate Account that it
owns and which are not attributable to the Contracts in the
same proportion.
The number of votes which a Contract Owner may cast will be
determined by the Company as of the record date established
for the Underlying Fund. The number of shares held in each
Sub-Account deemed attributable to each Contract Owner is
determined by dividing Contract value in the Sub-Account,
if any, by the net asset value of one share in the
corresponding Underlying Fund in which the assets of the
Sub-Account are invested. Fractional votes will be counted.
If the 1940 Act or any rules thereunder should be amended
or if the present interpretation of the 1940 Act or such
rules should change, and as a result the Company determines
that it is permitted to vote shares of the Fund in its own
right, whether or not such shares are attributable to the
Contracts, the Company reserves the right to do so.
The Company may, when required by state insurance regulatory
authorities, disregard voting instructions if the
instructions require that the shares be voted so as (1)
to cause a change in the subclassification or investment
objective of one or more of the Underlying Funds or (2)
to approve or disapprove an investment advisory contract
for the Underlying Funds. In addition the Company may
disregard voting instructions calling for a change in the
investment Contracts, any investment adviser or principal
underwriter of any Underlying Fund which may be initiated
by Contract Owners or its respective Trustees, provided
the Company's disapproval of the change is reasonable and,
in the case of a change in investment Contracts or
investment adviser, based on a good faith determination
that such change would be contrary to state law or
otherwise inappropriate in light of the Underlying Fund's
objectives and purposes. In the event the Company does
disregard voting instructions, a summary of that action
and the reasons for that action will be included in the
next periodic report to Contract Owners.
(g) WHETHER SECURITY HOLDERS MUST BE GIVEN NOTICE OF ANY CHANGES
IN:
(1) THE COMPOSITION OF THE ASSETS OF THE TRUST.
The Company reserves the right, subject to applicable
law, to make additions to, deletions from, or
substitutions for the shares that are held in the
Sub-Accounts of the Separate Account or that the
Sub-Accounts of the Separate Account may purchase.
If the shares of an Underlying Fund are no longer
available for investment or if in the Company's
judgment further investment in any Underlying Fund
should become inappropriate in view of the purposes
of the Separate Account or the affected Sub-Account,
the Company may redeem the shares of that Underlying
Fund and substitute shares of another registered
open-end management company. The Company will not
substitute any shares attributable to a Contract
interest in a Sub-Account without notice and prior
approval of the SEC and state insurance authorities,
to the extent required by the 1940 Act or other
applicable law.
The Company also reserves the right to establish
additional Sub-Accounts of the Separate Account,
each of which would invest in shares corresponding
to a new Portfolio or Fund or in shares of another
investment company having a specified investment
objective. Subject to applicable law and any
required Commission approval, the Company may, in
its sole discretion, establish new Sub-Accounts or
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eliminate one or more Sub-Accounts if marketing needs, tax
considerations or investment conditions warrant. Any new
Sub-Accounts may be made available to existing Contract
Owners on a basis to be determined by the Company.
If any of these substitutions or changes are made, the Company
may by appropriate endorsement change the Contract to reflect
the substitution or change and will notify Contract Owners of
all such changes. If the Company deems it to be in the best
interest of Contract Owners, and subject to any approvals
that may be required under applicable law, the Separate
Account or any Sub-Account(s) may be operated as a management
company under the 1940 Act, may be deregistered under that
Act if registration is no longer required, or may be combined
with other Sub-Accounts or other separate accounts of the
Company.
(2) THE TERMS AND CONDITIONS OF THE SECURITIES ISSUED
BY THE TRUST.
No change in the terms and conditions of the Contracts
that affect the Contract Owner's rights will be made
without notice to Contract Owner to the extent required
by law.
(3) THE PROVISIONS OF ANY INDENTURE OR AGREEMENT OF THE
TRUST.
No notice to or consent from Contract Owners is required
for any change in the Company's resolution establishing
the Separate Account.
(4) THE IDENTITY OF THE DEPOSITOR, TRUSTEE OR CUSTODIAN.
The depositor of the Separate Account cannot be changed.
The Separate Account has no Trustees.
Notice to Contract Owners need not be given for the
custodian to be changed.
(h) WHETHER THE CONSENT OF SECURITY HOLDERS IS REQUIRED IN
ORDER FOR ACTION TO BE TAKEN CONCERNING ANY CHANGE IN:
(1) THE COMPOSITION OF THE ASSETS OF THE TRUST.
The Contracts do not require consent of the Contract
Owners when changing the underlying securities of the
Separate Account, except as may be required by currently
applicable law or regulation.
(2) THE TERMS AND CONDITIONS OF THE SECURITIES ISSUED
BY THE TRUST.
Except as appropriate to comply with federal or state
law or regulation the terms and conditions of a Contract
cannot be changed without the consent of the Contract
Owner.
(3) THE PROVISIONS OF ANY INDENTURE OR AGREEMENT OF THE
TRUST.
No consent is required.
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(4) THE IDENTITY OF THE DEPOSITOR, TRUSTEE OR CUSTODIAN.
The depositor of the Separate Account cannot be changed.
The Separate Account has no Trustees.
The consent of Contract Owners holders is not required
to change the custodian.
(I) ANY OTHER PRINCIPAL FEATURE OF THE SECURITIES ISSUED BY THE
TRUST OR ANY OTHER PRINCIPAL RIGHT, PRIVILEGE OR OBLIGATION
NOT COVERED BY SUBDIVISIONS (a) TO (g) OR BY ANY OTHER ITEM
IN THIS FORM.
(1) PREMIUM PAYMENTS - SEE Items 14 and 15.
(2) NET DEATH BENEFIT - As long as the Contract remains
in force, the Company will, upon due proof of the
Insured's death, pay the Net Death Benefit of the
Contract to the named beneficiary. The Company will
normally pay the Net Death Benefit within seven days
of receiving due proof of the Insured's death, but
the Company may delay payments under certain
circumstances. The Net Death Benefit may be received
by the beneficiary in cash or under one or more of
the payment options set forth in the Contract. Before
the Final Payment Date, the Net Death Benefit is:
- The Death Benefit: minus
- Any outstanding loan, rider charges and Monthly
Deductions due and unpaid through the Contract
month in which the Insured dies, as well as any
partial withdrawals and surrender charges.
After the Final Payment Date, the Net Death benefit
is:
- The Contract Value; minus
- Any outstanding loan.
In most states, the Company will compute the Net Death
Benefit on the date the Company receive due proof of
the Insured's death.
The Death Benefit is the greater of the:
- Face Amount; or
- Guideline Minimum Sum Insured, which is computed
based on federal tax regulations to ensure that
the Contact qualifies as a life insurance contract
and that the insurance proceeds will be excluded
from the gross income of the beneficiary.
GUARANTEED DEATH BENEFIT RIDER - If at the time of
issue the Contract Owner has made purchase payments
equal to 100% of the Guideline Single Premium, a
Guaranteed Death Benefit Rider will be added
to the Contract at no additional charge. If the
Guaranteed Death Benefit Rider is in effect
on the Final Payment Date, a guaranteed
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Net Death Benefit will be provided thereafter unless
the Guaranteed Death Benefit Endorsement is terminated,
as described below. The guaranteed Net Death Benefit
will be:
- the greater of (a) the Face Amount as of the Final
Payment Date or (b) the Contract Value as of the date
due proof of death is received by the Company,
- reduced by the Outstanding Loan, if any, through the
contract month in which the Insured dies.
The Guaranteed Death Benefit Rider will terminate and
may not be reinstated on the first to occur of the
following:
- Foreclosure of the Outstanding Loan, if any; or
- A request for a partial withdrawal or preferred loan
after the Final Payment Date; or
- Upon the Contract Owner's written request.
(3) CALCULATION OF CASH VALUE - SEE Items 44(a), 44(c), and
46(a).
(4) LOAN PROVISIONS. SEE Item 21.
(5) PAYMENT OPTIONS - Upon written request, the surrender
value or part of the Net Death Benefit may be placed
under one or more of the payment options offered by the
Company. If the Contract Owner does not make an
election, the Company will pay the benefits in a single
sum. A certificate will be provided to the payee
describing the payment option selected.
(6) OPTIONAL INSURANCE BENEFIT - Subject to certain
requirements, one or more of the following additional
insurance benefits may be added by rider: Living
Benefits Rider and Exchange Rider. The cost of these
optional insurance benefits will be deducted from
Contract value as part of the monthly deduction.
INFORMATION CONCERNING THE SECURITIES UNDERLYING THE TRUST'S SECURITIES
11. DESCRIBE BRIEFLY THE KIND OR TYPE OF SECURITIES COMPRISING THE
UNIT OF SPECIFIED SECURITIES IN WHICH SECURITY HOLDERS HAVE AN
INTEREST.
The Contract permits payments to be allocated either to the Company's
General Account or to the Separate Account. The Separate Account is
currently comprised of eighteen investment divisions
("Sub-Accounts"). Each Sub-Account invests exclusively in a
corresponding portfolio of AIT, Fidelity VIP, or T. Rowe Price.
AIT. AIT is an open-end, diversified management investment company
registered with the SEC under the 1940 Act. Ten different investment
portfolios of the Trust are available under the Policies, each issuing
a series of shares: the Select Aggressive Growth Fund, Select Capital
Appreciation Fund, Select Value Opportunity Fund, Select Emerging
Markets
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Fund, Select Strategic Growth Fund, Select International Equity
Fund, Select Growth Fund, Select Growth and Income Fund, Select
Income Fund, and Money Market Fund. AFIMS serves as investment
manager of the Trust. AFIMS has entered into agreements with
other investment managers ("Sub-Advisers"), who manage the
investments of the funds.
FIDELITY VIP. Fidelity VIP, managed by FMR & Research Company
("FMR"), is an open-end, diversified, management investment company
organized as Massachusetts business trust and registered with the
Commission under the 1940 Act. Three of the investment portfolios of
VIP are available under the Policies: Fidelity VIP Growth Portfolio,
Fidelity VIP Equity-Income Portfolio, and Fidelity VIP High Income
Portfolio.
T. ROWE PRICE. T. Rowe Price, managed by Rowe Price-Fleming
International, Inc. ("Price-Fleming"), is an open-end, diversified,
management investment company organized as a Maryland corporation in
1994 and registered with the Commission under the 1940 Act. One of
its investment portfolios is available under the Policies: the T.
Rowe Price International Stock Portfolio.
A summary of investment objectives of the funds is set forth below.
SELECT AGGRESSIVE GROWTH FUND -- The Select Aggressive Growth Fund
of the Trust seeks above-average capital appreciation by investing
primarily in common stocks of companies which are believed to have
significant potential for capital appreciation.
SELECT CAPITAL APPRECIATION FUND -- The Select Capital Appreciation
Fund of the Trust seeks long-term growth of capital in a manner
consistent with the preservation of capital. Realization of income is
not a significant investment consideration and any income realized on
the Fund's investments will be incidental to its primary objective.
The Fund invests primarily in common stock of industries and companies
which are believed to be experiencing favorable demand for their
products and services, and which operate in a favorable competitive
environment and regulatory climate.
SELECT VALUE OPPORTUNITY FUND -- The Select Value Opportunity Fund
of the Trust seeks long-term growth by investing primarily in a
diversified portfolio of common stocks of small and mid-size companies
whose securities at the time of purchase are considered by the
Sub-Adviser to be undervalued.
SELECT EMERGING MARKETS FUND - The Select Emerging Markets fund of the
Trust seeks long-term growth of capital by investing in the world's
emerging markets. The Fund may invest in high yielding, lower-rated
fixed-income securities (commonly referred to as "Junk bonds") which
are subject to greater risk than investments in higher-rated
securities.
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO -- The T. Rowe Price
International Stock Portfolio seeks long-term growth of capital
through investments primarily in common stocks of established,
non-U.S. companies.
SELECT INTERNATIONAL EQUITY FUND --The Select International Equity
Fund of the Trust seeks maximum long-term total return (capital
appreciation and income) primarily by investing in common stocks of
established non-U.S. companies.
FIDELITY VIP GROWTH PORTFOLIO -- The Growth Portfolio of Fidelity VIP
seeks to achieve capital appreciation. The Portfolio normally
purchases common stocks, although its investments are not
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restricted to any one type of security. Capital appreciation also
may be found in other types of securities, including bonds and
preferred stocks.
SELECT GROWTH FUND -- The Select Growth Fund of the Trust seeks to
achieve long-term growth of capital by investing in a diversified
portfolio consisting primarily of common stocks selected on the
basis of their long-term growth potential.
SELECT STRATEGIC GROWTH FUND -- seeks long-term growth of capital
by investing primarily in common stocks of established companies.
FIDELITY VIP EQUITY-INCOME PORTFOLIO -- The Equity-Income Portfolio
of Fidelity VIP seeks reasonable income by investing primarily in
income-producing equity securities. In choosing these securities, the
Portfolio also will consider the potential for capital appreciation.
The Portfolio's goal is to achieve a yield which exceeds the composite
yield on the securities comprising the S & P 500. The Portfolio may
invest in high yielding, lower-rated fixed-income securities (commonly
referred to as "junk bonds") which are subject to greater risk than
investments in higher-rated securities. See "Risks of Lower-Rated
Debt Securities" in the Fidelity VIP prospectus.
SELECT GROWTH AND INCOME FUND -- The Select Growth and Income Fund
seeks a combination of long-term growth of capital and current income.
The Fund will invest primarily in dividend-paying common stocks and
securities convertible into common stocks.
FIDELITY VIP HIGH INCOME PORTFOLIO -- The High Income Portfolio of
Fidelity VIP seeks to obtain a high level of current income by
investing primarily in high-yielding, lower-rated fixed-income
securities (commonly referred to as "junk bonds"), while also
considering growth of capital. These securities often are considered
to be speculative, and involve greater risk of default or price
changes than securities assigned a high quality rating.
SELECT INCOME FUND - The Select Income Fund of the Trust seeks a high
level of current income. The Fund will invest primarily in investment
grade, fixed-income securities.
MONEY MARKET FUND -- The Money Market Fund of the Trust is invested in
a diversified portfolio of high-quality, short-term money market
instruments with the objective of obtaining maximum current income
consistent with the preservation of capital and liquidity.
12. IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN CERTIFICATES
AND IF ANY UNDERLYING SECURITIES WERE ISSUED BY ANOTHER INVESTMENT
COMPANY, FURNISH INFORMATION FOR EACH SUCH COMPANY:
(a) NAME OF COMPANY.
The Sub-Accounts of the Separate Account invest in corresponding
Underlying Funds of AIT (managed by Allmerica Financial
Investment Management Services, Inc.); VIP (managed by Fidelity
Management; and T. Rowe Price (managed by Price-Fleming).
(b) NAME AND PRINCIPAL ADDRESS OF DEPOSITOR.
First Allmerica Financial Life Insurance Company (formerly State
Mutual Life
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Assurance Company of America, until October 16, 1995), 440
Lincoln Street, Worcester, MA 01653 is the depositor of AIT.
Fidelity Investments, 82 Devonshire Street, Boston, MA is the
depositor of VIP.
T. Rowe Price Associates, Inc. 100 East Pratt Street, Baltimore,
Maryland, 21202, is the depositor of T. Rowe Price.
(c) NAME AND PRINCIPAL BUSINESS ADDRESS OF TRUSTEE OR CUSTODIAN:
Chase Manhattan Bank, N.A., Avenue of the Americas, 39th Floor,
New York, New York is the Custodian of the assets of AIT.
Shawmut Bank of Boston, N.A., One Federal Street, Boston, MA is
the Custodian of the assets of VIP.
The Chase Manhattan Bank, 4 Chase Metrotech Center, Brooklyn, NY
11245 is the custodian of the assets of DGPF.
(d) NAME AND PRINCIPAL BUSINESS ADDRESS OF PRINCIPAL-UNDERWRITER
The principal underwriter of AIT is Allmerica Investments, Inc.,
440 Lincoln Street, Worcester, Massachusetts, 01653.
The principal underwriter of VIP is Fidelity Distributors
Corporation, 82 Devonshire Street, Boston, MA.
The principal underwriter of T. Rowe Price is T. Rowe Price
Investment Services, Inc. 100 East Pratt Street, Baltimore,
Maryland, 21202.
(e) THE PERIOD DURING WHICH THE SECURITIES OF SUCH COMPANY HAVE
BEEN THE UNDERLYING SECURITIES.
Shares of the Underlying Funds will be purchased by the Separate
Account only after the effective date of the Separate Account's
registration statement under the Securities Act of 1933.
INFORMATION CONCERNING LOADS, FEES, CHARGES AND EXPENSES
13. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO EACH LOAD,
FEE, EXPENSE OR CHARGE TO WHICH (1) PRINCIPAL PAYMENTS; (2)
UNDERLYING SECURITIES; (3) DISTRIBUTIONS; (4) CUMULATED OR
REINVESTED DISTRIBUTIONS OR INCOME; AND (5) REDEEMED OR
LIQUIDATED ASSETS OF THE TRUST'S SECURITIES ARE SUBJECT:
(A) THE NATURE OF SUCH LOAD, FEE, EXPENSE OR CHARGE;
(B) THE AMOUNT THEREOF:
(C) THE NAME OF THE PERSON TO WHOM SUCH AMOUNTS ARE PAID
AND HIS RELATIONSHIP TO THE TRUST:
(D) THE NATURE OF THE SERVICES PERFORMED BY SUCH PERSON IN
CONSIDERATION FOR SUCH LOAD, FEE, EXPENSE OR CHARGE.
- 13 -
<PAGE>
(1) UNDER THE CONTRACTS
The following charges will apply to the Contracts under the
circumstances described. Some of these charges apply
throughout the Contract's duration.
MONTHLY DEDUCTIONS - On the Monthly Processing Date, the Company
will deduct an amount to cover charges and expenses incurred in
connection with the Contract. This Monthly Deduction will be
deducted by subtracting values from the Fixed Account
accumulation and/or canceling Units from each applicable
Sub-Account, in the ratio that the Contract Value in the
Account or Sub-Account bears to the Contract Value. The amount
of the Monthly Deduction will vary from month to month. The
Monthly Deduction is comprised of the following charges:
- Maintenance Fee: The Company will make a deduction of $2.50
from any Contract with less than $100 in Contract Value.
This charge is to reimburse the Company for expenses related
to issuance and maintenance of the Contract. The Company
does not intend to profit from this charge.
- Administration Charge: The Company imposes a monthly charge
at an annual rate of 0.20% of the Contract Value. This
charge is to reimburse the Company for administrative
expenses incurred in the administration of the Contract.
It is not expected to be a source of profit.
- Monthly Insurance Protection Charge: Immediately after the
Contract is issued, the Death Benefit will be greater than
the initial Payment. While the Contract is in force, the
Death Benefit will generally be greater than the Contract
Value. To enable the Company to pay this excess of the
Death Benefit over the Contract Value, a monthly cost of
insurance charge is deducted. This charge varies
depending on the type of Contract and the Underwriting
Class. In no event will the current deduction for the
cost of insurance exceed the guaranteed maximum insurance
protection rates set forth in the Contract. These
guaranteed rates are based on the Commissioners 1980
Standard Ordinary Mortality Tables, Tobacco user or
Non-Tobacco user (Mortality Table B for unisex Contracts
and Mortality Table D for second-to-die Contracts) and the
Insured's sex and age. The Tables the Company uses for this
purpose set forth different mortality estimates for males
and females and for tobacco users and non-tobacco users.
Any change in the insurance protection rates will apply to
all Insured of the same age, sex and Underwriting Class
whose Contracts have been in force for the same period.
The Underwriting Class of an Insured will affect the
insurance protection rate. The Company currently place
Insureds into standard Underwriting Classes and non-standard
Underwriting
- 14 -
<PAGE>
Classes. The Underwriting Classes are also divided into
two categories: tobacco user and non-tobacco user. The
Company will place Insureds under the age of 18 at the
Date of Issue in a standard or non-standard Underwriting
Class. The Company will then classify the Insured as a
non-tobacco user.
- Distribution Expense: During the first ten Contract years,
the Company make a monthly deduction to compensate for a
portion of the sales expense which are incurred by the
Company with respect to the Contracts. This charge is
equal to 0.90% of the Contract Value.
- Federal & State Payment Tax Charge: During the first
Contract year, the Company make a monthly deduction equal
to an annual rate of 1.50% of Contract Value to partially
compensate the Company for the increase in federal tax
liability from the application of Section 848 of the
Internal Revenue Code and to offset a portion of the
average premium tax the Company is expected to pay to
various state and local jurisdictions. The Company does
not intend to profit from the premium tax portion of
this charge.
DAILY DEDUCTIONS - The Company assess each Sub-Account with a
charge for mortality and expense risks the Company assumes.
Fund expenses are also reflected in the Variable Account.
- Mortality and Expense Risk Charge: The Company imposes a
daily charge at a current annual rate of 0.90% of the
average daily net asset value of each Sub-Account. This
charge compensates the Company for assuming mortality and
expense risks for variable interests in the Contracts.
The mortality risk the Company assumes is that Insureds may
live for a shorter time than anticipated. If this happens,
the Company will pay more Net Death Benefits than
anticipated. The expense risk the Company assumes is that
the expenses incurred in issuing and administering the
Contracts will exceed the revenue generated by the
administration charges in the Contracts. If the charge for
mortality and expense risks is not sufficient to cover
mortality experience and expenses, the Company will absorb
the losses. If the charge turns out to be higher than
mortality and expense risk experience, the difference will
be a profit to the Company.
- Fund Expenses - The value of the Units of the Sub-Accounts
will reflect the investment advisory fee and other expenses
of the Funds whose shares the Sub-Accounts purchase.
No charges are currently made against the Sub-Accounts for
federal or state income taxes. Should income taxes be imposed,
the Company may make deductions from the Sub-Accounts to pay the
taxes.
- 15 -
<PAGE>
SURRENDER CHARGE - The Contract's contingent surrender charge is
a deferred sales charge and an unrecovered payment tax charge.
The deferred sales charge compensates the Company for
distribution expenses, including commissions to the Company's
representatives, advertising and the printing of prospectuses
and sales literature. The unrecovered payment tax charge is
designed to reimburse the Company for the unrecovered federal
and state taxes the Company has paid.
<TABLE>
<CAPTION>
Contract
Year* 1 2 3 4 5 6 7 8 9 10+
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Surrender 10.00% 9.25% 8.50% 7.75% 7.00% 6.25% 4.75% 3.25% 1.50% 0%
Charge
- --------------------------------------------------------------------------------
</TABLE>
The surrender charge applies for ten Contract years. The
Company impose the surrender charge only if, during its duration,
the Contract Owner requests a full surrender or a partial
withdrawal in excess of the free withdrawal amount.
CHARGES ON PARTIAL WITHDRAWAL - Partial withdrawals in a minimum
amount of $500 may be made from the Contract value. A
transaction charge which is the smaller of 2% of the amount
withdrawn or $25 will be assessed in all cases.
A partial withdrawal charge may also be imposed upon a partial
withdrawal. For each partial withdrawal the Contract Owner may
withdraw an amount equal to 10% of the Contract value on the
date the written withdrawal request is received by the Company
less the total of any prior withdrawals in that Contract year
which were not subject to the partial withdrawal charge,
without incurring a partial withdrawal charge. Any partial
withdrawal in excess of this amount ("excess withdrawal") will
be subject to the partial withdrawal charge. The partial
withdrawal charge is equal to 5% of the excess withdrawal
up to the amount of the surrender charge(s) on the date of
withdrawal. There will be no partial withdrawal charge if
there is no applicable surrender charge on the date of
withdrawal.
The Contract's outstanding surrender charge will be reduced by
the amount of the partial withdrawal charge deducted. The
partial withdrawal charge deducted will decrease existing
surrender charges in the following order:
- first, the surrender charge for the most recent increase
in face amount;
- second, the surrender charges for the next most recent
increases successively; and
- last, the surrender charge for the initial face amount.
(2) UNDERLYING SECURITIES.
- 16 -
<PAGE>
INVESTMENT ADVISORY SERVICES TO AIT:
The overall responsibility for the supervision of the affairs
of the Trust vests in the Trustees. The Trustees have entered
into a Management Agreement with Allmerica Financial Investment
Management Services, Inc. ("AFIMS"), an indirect wholly-owned
subsidiary of First Allmerica, to handle the day-to-day affairs
of the Trust. AFIMS, subject to review by the Trustees, is
responsible for the general management of the Funds. AFIMS also
performs certain administrative and management services for the
Trust, furnishes to the Trust all necessary office space,
facilities, and equipment, and pays the compensation, if any,
of officers and Trustees who are affiliated with AFIMS.
Other than the expenses specifically assumed by AFIMS under the
Management Agreement, all expenses incurred in the operation of
the Trust are borne by it, including fees and expenses
associated with the registration and qualification of the
Trust's shares under the Securities Act of 1933, other fees
payable to the Commission, independent public accountant, legal
and custodian fees, association membership dues, taxes,
interest, insurance premiums, brokerage commission, fees and
expenses of the Trustees who are not affiliated with AFIMS,
expenses for proxies, prospectuses, and reports to shareholders,
and other expenses.
Pursuant to the Management Agreement with the Trust, AFIMS has
entered into agreements ("Sub-Adviser Agreements") with other
investment advisers ("Sub-Advisers") under which each
Sub-Adviser manages the investments of one or more of the Funds.
Under the Sub-Adviser Agreement, the Sub-Adviser is authorized
to engage in portfolio transactions on behalf of the applicable
Fund, subject to such general or specific instructions as may
be given by the Trustees. The terms of a Sub-Adviser Agreement
cannot be materially changed without the approval of a majority
in interest of the shareholders of the affected Fund.
Allmerica Asset Management, Inc., an indirect wholly owned
subsidiary of First Allmerica, is the Sub-Adviser for the
Money Market Fund. The Sub-Advisers for the other funds are
independent. AFIMS selects the Sub-Advisers in consultation
with RogersCasey Consulting, Inc., a leading pension consulting
firm. AFIMS selected each independent Sub-Adviser using strict
objective and qualitative criteria, with special emphasis on
the Sub-Adviser's record in managing similar portfolios. A
committee that includes members affiliated with Allmerica
Financial monitors and evaluates on-going performance of the
independent Sub-Advisers.
AFIMS's fee, computed for each Fund, will be paid from the
assets of such Fund. Pursuant to the Management Agreement
with the Trust, AFIMS has entered into agreements
"Sub-Adviser Agreements") with other investment advisers
("Sub-Advisers") under which each Sub-Adviser manages the
investments of one or more of the Funds. Under the
Sub-Adviser Agreement, the Sub-Adviser is authorized to
engage in portfolio transactions on behalf of the applicable
Fund, subject to such general or
- 17 -
<PAGE>
specific instructions as may be given by the Trustees.
The terms of a Sub-Adviser Agreement cannot be materially
changed without the approval of a majority in interest of
the shareholders of the affected Fund. AFIMS is solely
responsible for the payment of all fees for investment
management services to the Sub-Advisers.
For providing its services under the Management Agreement,
AFIMS will receive a fee, computed daily at an annual rate
based on the average daily net asset value of each Fund as
follows:
<TABLE>
<S> <C> <C>
Select Aggressive Growth Fund First $100 million 1.00%
Next $150 million 0.90%
Next $250 million 0.85%
Over $500 million 0.85%
Select Capital Appreciation Fund First $100 million 1.00%
Next $150 million 0.90%
Next $250 million 0.85%
Over $500 million 0.85%
Select Value Opportunity Fund First $100 million 1.00%
Next $150 million 0.85%
Next $250 million 0.80%
Next $250 million 0.75%
Over $750 million 0.70%
Select Emerging Markets Fund * 1.35%
Select International Equity Fund First $100 million 1.00%
Next $150 million 0.90%
Next $250 million 0.85%
Over $500 million 0.85%
Select Growth Fund First $250 million 0.85%
Next $250 million 0.80%
Next $250 million 0.70%
Over $750 million 0.70%
Select Strategic Growth Fund * 0.85%
Select Growth and Income Fund First $100 million 0.75%
Next $150 million 0.70%
Next $250 million 0.65%
Over $500 million 0.65%
Select Income Fund First $50 million 0.60%
Next $50 million 0.55%
Over $100 million 0.45%
Money Market Fund First $50 million 0.35%
Next $200 million 0.25%
Over $250 million 0.20%
</TABLE>
* Fee does not vary with level of Funds
* The Manager voluntarily has agreed until further notice to waive its
management fee in the event that expenses of the Select Emerging Markets
Fund exceed 2.00% of the Fund's average daily net assets. The amount of
such waiver will be limited to the net amount of management fees earned by
the Manager from the Fund after subtracting the fees paid by the
Manager to Schroder Capital Management International Inc. for sub-advisory
services.
INVESTMENT ADVISORY SERVICES TO FIDELITY VIP.
- 18 -
<PAGE>
For managing investments and business affairs, each
Portfolio pays a monthly fee to Fidelity Management. The
prospectus of Fidelity VIP contain additional information
concerning the Portfolios, including information about
additional expenses paid by the Portfolios, and should be
read in conjunction with this Prospectus.
The Fidelity High Income Portfolio pays a monthly fee to
Fidelity Management at an annual fee rate made up of the
sum of two components:
1. A group fee rate based on the monthly average net
assets of all the mutual funds advised by Fidelity
Management. On an annual basis this rate cannot rise
above 0.37%, and drops as total assets in all these
funds rise.
2. An individual fund fee rate of 0.45% of the Fidelity
High Income Portfolio's average net assets
throughout the month. One-twelfth of the annual
management fee rate is applied to net assets
averaged over the most recent month, resulting in a
dollar amount which is the management fee for that
month.
The fee rates of the Fidelity Equity-Income and Fidelity
Growth Portfolios each are made of two components:
1. A group fee rate based on the monthly average net
assets of all of the mutual funds advised by Fidelity
Management. On an annual basis, this rate cannot rise
above 0.52%, and drops as total assets in all these
mutual funds rise.
2. An individual Portfolio fee rate of 0.20% for the
Fidelity Equity-Income Portfolio and 0.30% for the
Fidelity Growth Portfolio.
One-twelfth of the sum of these two rates is applied to the
respective Portfolio's net assets averaged over the most
recent month, giving a dollar amount which is the fee for
that month. Thus, the Fidelity High Income Portfolio may
have a fee as high as 0.82% of its average net assets. The
Fidelity Equity-Income Portfolio may have a fee as high as
0.72% of its average net assets. The Fidelity Growth
Portfolio may have a fee as high as 0.82% of its average
net assets. The actual fee rate may be less depending on
the total assets in the funds advised by Fidelity
Management.
INVESTMENT ADVISORY SERVICES TO T. ROWE PRICE
The Investment Adviser for the International Stock Portfolio
is Rowe Price-Fleming International, Inc. ("Price-Fleming").
To cover investment management and operating expenses, the
T. Rowe Price International Stock Portfolio pays
Price-Fleming a single, all-inclusive fee of 1.05% of its
average daily net assets.
(3) DISTRIBUTIONS
No distributions are made to Certificate Owners except
voluntary surrenders or partial withdrawals, and upon
payment of death proceeds. Surrenders and partial
withdrawals may be subject to the surrender and
- 19 -
<PAGE>
partial withdrawal charges described in 13(a)(1), above.
Also SEE Item 21.
(4) CUMULATED OR REINVESTED DISTRIBUTIONS OR INCOME
Distributions from the Underlying Funds are reinvested by
Sub-Accounts of the Separate Account in additional shares of
the respective Underlying Fund, without charge, at net asset
value.
(5) REDEEMED OR LIQUIDATED ASSETS OF THE TRUST'S SECURITIES
See "Surrender Charge" and "Charges on Partial Withdrawals"
under Item 13(a)(1) above.
(b) FOR EACH INSTALLMENT PAYMENT TYPE OF PERIODIC PAYMENT PLAN
CERTIFICATE OF THE TRUST, FURNISH INFORMATION WITH RESPECT TO
SALES LOAD AND OTHER DEDUCTIONS FROM PRINCIPAL PAYMENTS.
None. No deductions are made from payments prior to allocation
to the Company's General Account or the Separate Account. All
charges and deductions are made from Contract value, net assets
of the Separate Account, or upon certain surrenders, partial
withdrawals, and decreases in face amount.
(c) STATE (1) THE AMOUNT OF SALES LOAD AS A PERCENTAGE OF THE NET
AMOUNT INVESTED, AND (2) THE AMOUNT OF TOTAL DEDUCTIONS AS A
PERCENTAGE OF THE NET AMOUNT INVESTED FOR EACH TYPE OF SECURITY
ISSUED BY THE TRUST.
A contingent deferred sales load is calculated at issuance of
the Contract and for increases in face amounts, but is deducted
if at all, only upon surrender or decreases in face amount
within 10 Contract years or less, depending upon issue age.
Also, a transaction charge and partial withdrawal charge may
be deducted on partial withdrawals.
(d) EXPLAIN FULLY THE REASONS FOR ANY DIFFERENCE IN THE PRICE AT
WHICH SECURITIES ARE OFFERED FOR ANY CLASS OF TRANSACTIONS TO ANY
CLASS OR GROUP OF OFFICERS, INCLUDING OFFICERS, DIRECTORS OR
EMPLOYEES OF THE DEPOSITION TRUSTEE, CUSTODIAN OR PRINCIPAL
UNDERWRITER.
Not Applicable.
(e) FURNISH A BRIEF DESCRIPTION OF ANY LOADS, FEES, EXPENSES OR
CHARGES NOT COVERED IN ITEM 13(a) WHICH MAY BE PAID BY SECURITY
HOLDERS IN CONNECTION WITH THE TRUST OR ITS SECURITIES.
The Company reserves the right to impose a charge for changing
the allocation of any monthly deductions, or for a projection of
values. No such charges are currently imposed and any such
charge is guaranteed not to exceed $25.00.
(f) STATE WHETHER THE DEPOSITOR, PRINCIPAL UNDERWRITER,
CUSTODIAN OR TRUSTEE, OR ANY AFFILIATED PERSON OF THE FOREGOING,
MAY RECEIVE PROFITS OR OTHER BENEFITS NOT INCLUDED IN ANSWER TO
ITEM 13(a) OR 13(d) THROUGH THE SALE OR PURCHASE OF THE TRUST
SECURITIES OR INTERESTS IN SUCH SECURITIES, OR UNDERLYING
SECURITIES OR INTERESTS IN UNDERLYING SECURITIES, AND DESCRIBE
FULLY THE NATURE AND EXTENT OF SUCH PROFITS OR BENEFITS.
- 20 -
<PAGE>
The Company receives fees from the investment advisers or other
service providers of certain Underlying Funds in return for
providing certain services to Policyowners. Currently, the
Company receives service fees with respect to the Fidelity VIP
Equity-Income Portfolio, Fidelity VIP Growth Portfolio, and
Fidelity VIP High Income Portfolio, at an annual rate of 0.10% of
the aggregate net asset value, respectively, of the shares of
such Underlying Funds held by the Separate Account. With respect
to the T. Rowe Price International Stock Portfolio, the Company
receives service fees at an annual rate of 0.15% per annum of the
aggregate net asset value of shares held by the Separate Account.
The Company may in the future render services for which it will
receive compensation from the investment advisers or other
service providers of other Underlying Funds.
Neither the Company, AFIMS, nor any affiliated person of the
foregoing may receive any profit or any other benefit from
payments under the Contract or the investments held in the
Separate Account not included in the answer to Item 13(a) or (d)
through the sale of purchase of the Contract or shares of the
Underlying Funds, except that (1) the Company may receive a
profit to the extent that the cost of insurance built into the
Contract exceeds the actual cost of insurance needed to pay
benefits; (2) favorable mortality or expense experience may cause
the insurance provided to be profitable to the Company; (3) the
Company will compensate certain others, including the Company's
agents, for services rendered in connection with the distribution
of the Contract, as described in Item 38, but such payments will
be made from the Company's General Account; and (4) the
investment advisers of the respective Underlying Funds will
receive an advisory fee, as described in Item 13(a)(2).
(g) STATE THE PERCENTAGE THAT THE AGGREGATE ANNUAL CHARGES AND
DEDUCTIONS FOR MAINTENANCE AND OTHER EXPENSES OF THE TRUST BEAR
TO THE DIVIDEND AND INTEREST INCOME FROM THE TRUST PROPERTY
DURING THE PERIOD COVERED BY THE FINANCIAL STATEMENTS FILED
HEREWITH.
Not Applicable. The Separate Account has no assets as of the
date of this filing.
(h) OTHER
The Company will recoup commission and other sales expense
through a combination of surrender and partial withdrawal
charges, and the investment earnings in excess of the interest
credited on amounts allocated to the General Account.
The deduction of the charge for mortality and expense risks
assumed by the Company under the Contracts is within the range of
industry practice for comparable single premium variable life
insurance contracts. If the charge for mortality and expense
risks is not sufficient to cover actual mortality experience and
expenses, the Company will absorb the losses. If expenses are
less than the amounts provided, the difference will be a profit
to the Company. To the extent this charge results in a profit to
the Company, such profit will be available for the payment of the
Company;s general expenses, including distribution and sales
expense.
- 21 -
<PAGE>
INFORMATION CONCERNING THE OPERATIONS OF THE TRUST
14. DESCRIBE THE PROCEDURE WITH RESPECT TO THE APPLICATIONS (IF ANY)
AND THE ISSUANCE AND AUTHENTICATION OF THE TRUST'S SECURITIES, AND
STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT
PERTAINING THERETO.
Individuals wishing to purchase a Contract must submit a completed
application to an authorized registered agent or to the Company's
Principal Office. The Company generally will issue a Contract only on
the lives of Insureds age 89 and under, who supply evidence of
insurability satisfactory to the Company. Acceptance is subject to
the Company's underwriting rules, and the Company reserves the right
to reject an application for any reason.
Within limits, applicants may choose the amount of the initial premium
desired. Currently, the minimum initial premium for which a Contract
may be issued is $25,000.
The Contract will be effective on the date of issue only after all
outstanding delivery requirements are satisfied and the Company has
received the initial premium. The date of issue is the date used to
determine all future periodic transactions under the Contract, e.g.,
Contract months and Contract years. Within limits, the Company may
establish an earlier date of issue.
If the Contract Owner makes the initial payment with the application,
and there has been no material misrepresentation on the application,
fixed, conditional insurance of up to the amount applied for but not
to exceed $500,000, will start as of the date of the application and
will generally continue for a maximum of 90 days. If a medical
examination of a person to be Insured is required by the Company's
underwriting rules, coverage on that person will not start until
completion of the examination. In no event will a death benefit be
provided under the conditional insurance agreement if death is by
suicide.
If the application is approved, the date of issue will be the date the
terms of the conditional insurance agreement are met. If the
Applicant does not wish to make any payment until the Contract is
issued, the Company will require payment upon delivery of the
Contract in order to place the Contract in force upon delivery of the
Contract. If the Contract is not issued, the Company will issue an
Annuity Contract to the Contract Owner. If the Contract Owner elects
not to receive an Annuity Contract, the premium will be returned to
the Applicant, WITHOUT INTEREST.
15. DESCRIBE THE PROCEDURE WITH RESPECT TO THE RECEIPT OF PAYMENTS
FROM PURCHASERS OF THE TRUST'S SECURITIES AND THE HANDLING OF THE
PROCEEDS THEREOF, AND STATE THE SUBSTANCE OF THE PROVISIONS OF ANY
INDENTURE OR AGREEMENT PERTAINING THERETO.
PREMIUM PAYMENTS - Payments are payable only to the Company, and may
be mailed to the Principal Office or paid through an authorized agent
of the Company. All payments are credited to the Separate Account or
General Account as of date of receipt at the Principal Office.
The Contract requires a single payment of at least $25,000 on or
before the Date of Issue. The initial payment is used to determine
the face amount of the Policy, by treating the initial payment as
equal to 100% of the Guideline Single premium. The Contract owner may
indicate the desired Face Amount on the application. If the Face
Amount specified exceeds 100% of the Guideline Single Premium for the
Payment Amount, the Application
- 22 -
<PAGE>
will be amended and a Contract with a higher Face Amount will be
issued. If the Face Amount specified is less than 80% of the
Guideline Single Premium for the Payment amount, the application
will be amended and a Contract with a lower Face Amount will be
issued.
Additional Payments of at least $10,000 may be made as long as the
total Payments do not exceed the maximum payment specified in the
Contract. The total of all premiums paid can never exceed the
then-current maximum premium limitation determined by Internal
Revenue Service rules. Where total payments would exceed the
current maximum payment limits, the Company will only accept that
part of a Payment which will make total payments equal the maximum.
The Company will return any part of a payment that is greater than
that amount. However, the Company will accept a payment needed to
prevent Contract lapse during a contract year.
16. DESCRIBE THE PROCEDURE WITH RESPECT TO THE ACQUISITION OF
UNDERLYING SECURITIES AND THE DISPOSITION THEREOF, AND STATE THE
SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT PERTAINING
THERETO.
Each Sub-Account of the Separate Account invests its assets in shares
of a corresponding Underlying Fund. Purchases and redemptions of such
shares are made at net asset value, with no deduction for sales load.
Amounts of net purchase payments allocated to a Sub-Account, transfers
to that Sub-Account, and reserve adjustment transfers, if any, will be
netted as of each valuation date against amounts withdrawn from the
Sub-Account in connection with Contract surrenders, partial
withdrawals, transfers, and death benefits, as well as the asset
charge and amounts paid to the Company in lieu of taxes, if any. A
net purchase or sale of Underlying Fund shares will be made for a
Sub-Account at net asset value. All income, dividends and realized
gain distributions of a Underlying Fund will be reinvested in shares
of the respective Underlying Fund at net asset value. Valuation dates
currently occur on each day on which the New York Stock Exchange is
open for trading, and on such other days where there is a sufficient
degree of trading in a Underlying Fund's securities such that the
current net asset value of the Sub-Accounts may be materially
affected.
17. (a) DESCRIBE THE PROCEDURE WITH RESPECT TO WITHDRAWAL OR
REDEMPTION BY SECURITY HOLDERS.
SURRENDER - A Contract Owner may at any time surrender the
Contract and receive its surrender value (i.e., Contract value,
less Debt and applicable surrender charges) upon written request
signed by the Contract Owner and return of the Contract to the
Principal Office. The surrender value will be based on the
Contract value as of the valuation date on which the request and
Contract are received at the Principal Office. A surrender
charge may be deducted when a Contract is surrendered. See Item
13(a), "Surrender."
The surrender value is normally payable within seven days
following the Company's receipt of the surrender request. The
Company reserves the right to defer surrenders and partial
withdrawals of amounts funded by each Sub-Account during any
period when (1) trading on the New York Stock Exchange is
restricted as determined by the SEC or such Exchange is closed
for other than weekends and holidays, (2) the SEC has by order
permitted such suspension, or (3) an emergency, as determined by
the SEC, exists such that disposal of portfolio
- 23 -
<PAGE>
securities or valuation of assets of each Sub-Account is not
reasonably practicable.
The right is reserved by the Company to defer surrenders and
partial withdrawal of amounts allocated to the Company's General
Account for a period not to exceed six months.
PARTIAL WITHDRAWAL - At any time after the first Contract year, a
Contract Owner may redeem a portion of the Contract value of his
or her Contract, subject to the limits stated below, upon written
request signed by the Contract Owner and filed at the Principal
Office. Where allocations have been made to more than one
account, a percentage of the partial withdrawal may be allocated
to each such account. The written request must indicate the
dollar amount the Contract Owner wishes to receive and the
account from which such amount is to be redeemed.
The Contract Owner may allocate the amount withdrawn among the
Sub-Accounts and the General Account. If no allocation
instructions are provided, the Company will make a pro rata
allocation.
A partial withdrawal from a Sub-Account will result in
cancellation of a number of Units equivalent in value to the
amount withdrawn, computed as of the valuation date that the
request is received at the Company's Principal Office. The
amount withdrawn equals the amount requested by the Contract
Owner plus any applicable charges. The Company will normally pay
the amount of the partial withdrawal within seven days, but may
delay payment under certain circumstances described above under
"Surrender." Each partial withdrawal must be in a minimum amount
of $1000, or the entire amount in a Sub-Account, if less. The
Company will not allow a partial withdrawal if it would reduce
the Contract Value below $25,000. The Face amount is reduced
proportionately based on the ratios of the amount of the partial
withdrawal and charges to the Contract Value on the date of
withdrawal. See Item 13(a), "Partial Withdrawals."
(b) FURNISH THE NAMES OF ANY PERSONS WHO MAY REDEEM OR REPURCHASE,
OR ARE REQUIRED TO REDEEM OR REPURCHASE, THE TRUST'S SECURITIES
OR UNDERLYING SECURITIES FROM SECURITY HOLDERS, AND THE
SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT
PERTAINING THERETO.
The Company is required to process all surrender and partial
withdrawal requests as described in Item 17(a). The Underlying
Funds will redeem their shares upon the Company's request in
accordance with the Investment Company Act of 1940. Redeemed
shares may later be reissued.
(c) INDICATE WHETHER REPURCHASED OR REDEEMED SECURITIES WILL BE
CANCELED OR MAY BE RESOLD.
If a Contract is surrendered, the Contract will be canceled and
may not be reissued. If a Contract terminates due to lapse or
foreclosure, the Contract may be reinstated as provided below.
TERMINATION - The Contract will terminate if on a monthly
processing date the surrender value is zero or less. If this
situation occurs, the Contract will be in default. The Contract
Owner will then have a grace period of 62 days, measured from the
date of default, to make a payment sufficient to prevent
termination. On
- 24 -
<PAGE>
the date of default, the Company will send a notice to the
Contract Owner and to any assignee on record. The notice will
state the amount of premium due and the date on which it is
due. Failure to make a sufficient payment within the grace
period will result in termination of the Contract without any
Contract value. If the Insured dies during the grace period,
the Net Death Benefit will still be payable, but any overdue
charges will be deducted from the Net Death Benefit.
REINSTATEMENT - If the Contract has not been surrendered and
the Insured is alive, the terminated Contract may be reinstated
anytime within three years after the date of default by
submitting the following to the Company: (1) a written
application for reinstatement; (2) evidence of insurability
showing the Insured is insurable according to the Company's
underwriting rules; (3) a payment that is large enough to
cover the cost of all contract charges that were due and unpaid
during the grace period and to keep the Contact in force for
three months; and (4) a payment or reinstatement of any loan
against the Contract that existed at the end of the grace
period.
SURRENDER CHARGE - For the purpose of measuring the surrender
charge period, the contract will be reinstated as of the date of
default. The surrender charge on the date of reinstatement is
the surrender charge which would have been in effect on the date
of default.
CONTRACT VALUE ON REINSTATEMENT - The Contract value on the date
of reinstatement is:
- the payment made to reinstate the Contract increased by
interest from the date the payment was received at the
Company's Principal Office; plus
- the Contract value less any outstanding loan on the date of
default (to the extent it does not exceed the surrender
charge on the date of reinstatement); minus
- the Monthly Deductions due on the date of reinstatement.
The Contract Owner may reinstate any outstanding loan.
18. (a) DESCRIBE THE PROCEDURE WITH RESPECT TO THE RECEIPT,
CUSTODY AND DISPOSITION OF THE INCOME AND OTHER DISTRIBUTABLE
FUNDS OF THE TRUST AND STATE THE SUBSTANCE OF THE PROVISIONS OF
ANY INDENTURE OR AGREEMENT PERTAINING THERETO.
Distributions with respect to the shares of a Underlying Fund
held by a Sub-Account are reinvested in shares of that
Underlying Fund at net asset value. Such shares are added to
the assets of the respective Sub-Account.
(b) DESCRIBE THE PROCEDURE, IF ANY, WITH RESPECT TO THE
REINVESTMENT OF DISTRIBUTIONS TO SECURITY HOLDERS AND STATE THE
SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT
PERTAINING THERETO.
No distributions are made to Contract Owners other than in
connection with a death benefit or with a Contract
Owner-initiated loan, partial withdrawal or surrender of the
Contract. See Items 13(a) and 21.
- 25 -
<PAGE>
(c) IF ANY RESERVES OR SPECIAL FUNDS ARE CREATED OUT OF INCOME
OR PRINCIPAL, STATE WITH RESPECT TO EACH SUCH RESERVE OR FUND THE
PURPOSE AND ULTIMATE DISPOSITION THEREOF, AND DESCRIBE THE MANNER
OF HANDLING SAME.
Payments placed in the Separate Account constitute certain
reserves for benefits under the Contract.
(d) SUBMIT A SCHEDULE SHOWING THE PERIODIC AND SPECIAL
DISTRIBUTIONS WHICH HAVE BEEN MADE TO SECURITY HOLDERS DURING
THE THREE YEARS COVERED BY THE FINANCIAL STATEMENTS FILED
HEREWITH. STATE FOR EACH SUCH DISTRIBUTION THE AGGREGATE AMOUNT
AND AMOUNT PER SHARE. IF DISTRIBUTIONS FROM SOURCES OTHER THAN
CURRENT INCOME HAVE BEEN MADE, IDENTIFY EACH SUCH OTHER SOURCE
AND INDICATE WHETHER SUCH DISTRIBUTION REPRESENTS THE RETURN OF
PRINCIPAL PAYMENTS TO SECURITY HOLDERS. IF PAYMENTS OTHER THAN
CASH WERE MADE, DESCRIBE THE NATURE THEREOF, THE ACCOUNT CHARGED
AND THE BASIS OF DETERMINING THE AMOUNT OF SUCH CHARGE.
Not Applicable. The Separate Account has not begun business
operations.
19. DESCRIBE THE PROCEDURE WITH RESPECT TO THE KEEPING OF RECORDS
AND ACCOUNTS OF THE TRUST, THE MAKING OF REPORTS AND THE
FURNISHING OF INFORMATION TO SECURITY HOLDERS, AND THE SUBSTANCE
OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT PERTAINING
THERETO.
The Company will maintain the records and books of the Separate
Account. The Company will also maintain records for each Contract,
including the number and value of units of each Sub-Account
credited to each Contract and the value of accumulations in the
General Account.
Issuance and transfer of Underlying Fund shares will be by book
entry only. Stock certificates will not be issued to the Company
or Separate Account. Shares ordered from the Underlying Funds
will be recorded in an appropriate title for the Separate Account
or appropriate Sub-Account.
Contract Owners will be sent promptly statements of significant
transactions such as premium payments, changes in specified face
amount, transfers among Sub-Accounts and the General Account,
partial withdrawals, increases in loan amount by the Contract
Owner, loan repayments, lapse, termination for any reason, and
reinstatement. An annual statement will also be sent to the
Contract Owner within 30 days after a Contract year. The annual
statement will summarize all of the above transactions and
deductions of charges during the Contract year. It will also
set forth the status of the death benefit, Contract value,
surrender value, amounts in the Sub-Accounts and General
Account, and any Contract loan(s).
In addition, the Contract Owner will be sent semi-annual
reports containing financial statements and other information
for the Separate Account and the Underlying Funds, as required
by the 1940 Act.
20. STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR
AGREEMENT CONCERNING THE TRUST WITH RESPECT TO THE FOLLOWING:
(a) AMENDMENTS TO SUCH INDENTURE OR AGREEMENT.
Not Applicable.
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<PAGE>
(b) THE EXTENSION OR TERMINATION OF SUCH INDENTURE OR AGREEMENT.
Not Applicable.
(c) THE REMOVAL OR RESIGNATION OF THE TRUSTEE OR CUSTODIAN, OR
THE FAILURE OF THE TRUSTEE OR CUSTODIAN TO PERFORM ITS DUTIES,
OBLIGATIONS AND FUNCTIONS.
The Company will act as the custodian of assets of the Separate
Account. The Company may appoint another custodian. In such
event, the custodial agreement will provide that the assets
owned by the Separate Account shall be delivered directly by
the Company to a successor custodian.
(d) THE APPOINTMENT OF A SUCCESSOR TRUSTEE AND THE PROCEDURE IF
A SUCCESSOR TRUSTEE IS NOT APPOINTED.
Not Applicable.
(e) THE REMOVAL OR RESIGNATION OF THE DEPOSITOR, OR THE FAILURE
OF THE DEPOSITOR TO PERFORM ITS DUTIES, OBLIGATIONS AND
FUNCTIONS.
There is no such provision in an indenture or agreement. Under
Delaware law, the Company may not abrogate its obligation under
the Contracts.
(f) THE APPOINTMENT OF A SUCCESSOR DEPOSITOR AND THE PROCEDURE
IF A SUCCESSOR DEPOSITOR IS NOT APPOINTED.
There is no such provision in any indenture or agreement.
21. (a) STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE
OR AGREEMENT WITH RESPECT TO LOANS TO SECURITY HOLDERS.
Loans may be obtained by request to the Company on the sole
security of the Contract. The total amount which may be
borrowed is the loan value. The Loan Value is 90% of an amount
is equal to the Contract value less surrender charges. The
minimum loan amount is $1,000. The maximum loan amount is the
Loan Value minus any outstanding loans.
A Contract loan may be allocated among the General Account and
one or more Sub-Accounts. If the Contract Owner does not make an
allocation, the Company will allocate the loan among the accounts
in the same proportion that the Contract value in the General
Account (other than value reflecting an outstanding loan), and
the Contract value in each Sub-Account bear to the total Contract
value (other than value reflecting an outstanding loan) on the
date the Company receives the loan request. Contract value in
each Sub-Account equal to the Contract loan allocated to such
Sub-Account will be transferred to the General Account, and the
number of Units equal to Contract value so transferred will be
canceled. Amounts transferred to or held in the General Account
to secure Debt will earn interest at a rate equal to an effective
annual yield of at least 4.0%.
PREFERRED LOAN OPTION - Any portion of the Outstanding Loan that
represents earnings in the Contract, a loan from an exchanged
life insurance policy that was as carried over to the Contract,
or the gain in the exchanged life insurance policy
- 27 -
<PAGE>
that was carried over to the Contract may be treated as a
preferred loan. The guaranteed annual interest rate credited to
the Contract Value securing a preferred loan will be at least
5.5%. The available percentage of the gain carried over from an
exchanged policy less any policy loan carried over which will
be eligible for preferred loan treatment is as follows:
<TABLE>
<CAPTION>
Beginning of Contract Year Unloaned Gain Available
<S> <C>
1 0%
2 10%
3 20%
4 30%
5 40%
6 50%
7 60%
8 70%
9 80%
10 90%
11 100%
</TABLE>
LOAN INTEREST CHARGED - Interest accrues daily and is payable
in arrears at the annual rate of 6.0%. Interest is payable at
the end of each Contract year or on a pro rata basis for such
shorter period as the loan may exist. Interest not paid when
due will be added to the loan principal and bear interest at
the same rate.
REPAYMENT OF LOANS - Loans may be repaid at any time prior
to the lapse of the Contract. Upon repayment of Debt, the
portion of the Contract value that is in the General Account
securing the loan will be transferred to the various
Sub-Accounts in accordance with the Contract Owner's
instructions. If the Contract Owner does not make a repayment
allocation, the Company will allocate Contract value in
accordance with the Contract Owner's most recent payment
allocation instructions; provided, however, that loan
repayments allocated to the Separate Account cannot exceed
Contract value previously transferred from the Separate
Account to secure the outstanding loan.
FORECLOSURE - If Debt exceeds the surrender value of the
Contract, the Contract will terminate. A notice of such
pending termination will be mailed to the last known address
of the Contract Owner and any assignee. If the excess Debt
is not paid within 62 days after this notice is mailed, the
Contract will terminate with no value. A Contract may be
reinstated following loan foreclosure.
(b) FURNISH A BRIEF DESCRIPTION OF ANY PROCEDURE OR ARRANGEMENT
BY WHICH LOANS ARE MADE AVAILABLE TO SECURITY HOLDERS BY THE
DEPOSITOR, PRINCIPAL UNDERWRITER, TRUSTEE OR CUSTODIAN, OR ANY
AFFILIATED PERSON OF THE FOREGOING.
See item 21(a), above. No other loans are made, except under the
terms of life insurance Contracts which may be issued by the
depositor or affiliated insurance companies.
(c) IF SUCH LOANS ARE MADE, FURNISH THE AGGREGATE AMOUNT OF
LOANS OUTSTANDING AT THE END OF THE LAST FISCAL
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<PAGE>
YEAR, THE AMOUNT OF INTEREST COLLECTED DURING THE LAST FISCAL
YEAR ALLOCATED TO THE DEPOSITOR, PRINCIPAL UNDERWRITER, TRUSTEE
OR CUSTODIAN OR AFFILIATED PERSON OF THE FOREGOING, AGGREGATE
AMOUNT OF LOANS IN DEFAULT AT THE END OF THE LAST FISCAL YEAR
COVERED BY FINANCIAL STATEMENTS FILED HEREWITH.
Not Applicable.
22. STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR
AGREEMENT WITH RESPECT TO LIMITATIONS ON THE LIABILITIES OF THE
DEPOSITOR, TRUSTEE OR CUSTODIAN, OR ANY OTHER PARTY TO SUCH INDENTURE
OR AGREEMENT.
The Contracts provide that the Company shall not be charged with
notice of any assignment of the Contract unless it is in writing and
filed at the Company's Principal Office. The Company assumes no
liability for the validity of any assignment.
23. DESCRIBE ANY BONDING ARRANGEMENT FOR OFFICERS, DIRECTORS, PARTNERS
OR EMPLOYEES OF THE DEPOSITOR OR PRINCIPAL UNDERWRITER OF THE
TRUST, INCLUDING THE AMOUNT OF COVERAGE AND THE TYPE OF BOND.
The Company and Allmerica Investments, Inc. are named Insureds under
a blanket bond in the amount of $20 million, issued by Underwriters
at Lloyds and other London companies. The bond covers officers,
directors, and employees of the Company and Allmerica Investments,
Inc., all of whom are employees of First Allmerica.
AIT maintains a fidelity bond pursuant to Rule 17(g) under the 1940
Act, in the amount of $2.7 million, issued by Underwriters
at Lloyd's and other London Companies. The bond covers directors
and officers of AIT, who may also be director or officers of the
depositor and principle underwriter, and employees of First
Allmerica who are "access persons" of AIT.
24. STATE THE SUBSTANCE OF ANY OTHER MATERIAL PROVISIONS OF ANY
INDENTURE OR AGREEMENT CONCERNING THE TRUST OR ITS SECURITIES AND
A DESCRIPTION OF ANY OTHER MATERIAL FUNCTIONS OR DUTIES OF THE
DEPOSITOR, TRUSTEE OR CUSTODIAN NOT STATED IN ITEM 10 OR ITEMS
14 TO 23 INCLUSIVE.
PARTICIPATION AGREEMENT. The Company and Separate Account has
entered into Participation Agreements with the Underlying Funds,
which define the terms under which the Sub-Accounts of Separate
Account invest in the Underlying Funds.
CONTRACT OWNER - The Contract Owner is the Insured unless another
Contract Owner has been named in the application for the Contract.
The Contract Owner is generally entitled to exercise all rights
under a Contract while the Insured is alive, subject to the consent
of any irrevocable beneficiary (the consent of a revocable
beneficiary is not required). The consent of the Insured is
required whenever the face amount of insurance is increased.
BENEFICIARY - The beneficiary is the person or persons to whom the
insurance proceeds are payable upon the Insured's death. Unless
otherwise stated in the Contract, the beneficiary has no rights in
the the Contract Owner may change any beneficiary unless the
Contract Owner has declared a beneficiary to be irrevocable. If
no beneficiary is alive when the Insured dies, the Contract Owner
(or the Contract Owner's estate) will be the beneficiary. If more
than one beneficiary is alive when the Insured dies, they will be
paid in equal shares, unless the Contract Owner has chosen
otherwise. Where there is more than one beneficiary, the interest
of a beneficiary who dies before Insured will pass to surviving
beneficiaries
- 29 -
<PAGE>
proportionately.
INCONTESTABILITY - The Company will not contest the validity of a
Contract after it has been in force during the Insured's lifetime
for two years from the date of issue.
SUICIDE - The Net Death Benefit will not be paid if the Insured
commits suicide within two years from the date of issue.
Instead, the Company will pay the beneficiary an amount equal to
all payments paid for the Contract, without interest, less any
outstanding Debt and less any partial withdrawals.
AGE AND SEX - If the Insured's age or sex as stated in the
application for a Contract is not correct, the Death Benefit and
Face Amount under a Contract will be adjusted to reflect the
correct age and sex. The adjustment will be based upon the ratio
of the Maximum Payment for the Contract to the Maximum payment for
the Contract issued for the correct age or sex. The benefit will be
that which the most recent cost of insurance charge would have
purchased for the correct age and sex. In no event will the death
benefit be reduced to less than the Guideline Minimum Sum Insured.
In the case of a Contract issued on a unisex basis, this provision
(as it relates to misstatement of sex) does not apply.
ASSIGNMENT - The Contract Owner may assign a Contract as collateral or
make an absolute assignment of the Contract. All rights under the
Contract will be transferred to the extent of the assignee's
interest. When recorded, the assignment will take effect as of the
date the written request was signed. The Company is not bound by
an assignment or release thereof, unless it is in writing and is
recorded at the Company's Principal Office. Any rights created
by the assignment will be subject to any payments made or actions
taken by the Company before the assignment is recorded. The
Company is not responsible for the validity of any assignment or
release.
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
ORGANIZATION AND OPERATIONS OF DEPOSITOR
25. STATE THE FORM OF ORGANIZATION OF THE DEPOSITOR OF THE
TRUST, THE NAME OF THE STATE OR OTHER SOVEREIGN POWER UNDER
THE LAWS OF WHICH THE DEPOSITOR WAS ORGANIZED AND THE DATE OF
ORGANIZATION.
The Company is a life insurance company organized as a
corporation under the laws of the State of Delaware on July 26,
1974. Prior to January 1, 1982, the Company was known as the
"American Variable Annuity Life Assurance Company." The Company
is the successor in interest by virtue of merger to a life
insurance company of that name which was organized under the
laws of the State of Arkansas in January 1967. Effective
October 1, 1995, the Company changed its name to AAllmerica
Financial Life Insurance and Annuity Company."
The Company is an indirect subsidiary of First Allmerica
Financial Life Insurance Company ("First Allmerica"), which
in turn is a wholly-owned subsidiary of Allmerica Financial
Corporation, 440 Lincoln Street, Worcester, Massachusetts,
01653.
26. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ALL
FEES RECEIVED BY THE DEPOSITOR OF THE TRUST IN CONNECTION
WITH THE EXERCISE OF ANY FUNCTIONS OR DUTIES CONCERNING
SECURITIES. OF THE TRUST DURING THE PERIOD COVERED BY THE
FINANCIAL STATEMENTS FILED HEREWITH:
- 30 -
<PAGE>
Not Applicable.
(b) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ANY FEE OR
ANY PARTICIPATION IN FEES RECEIVED BY THE DEPOSITOR FROM ANY
UNDERLYING INVESTMENT COMPANY OR ANY AFFILIATED PERSON OR
INVESTMENT ADVISER OF SUCH COMPANY:
The Company receives fees from the investment advisers or other
service providers of certain Underlying Funds in return for
providing services with respect to the Underlying Funds to
Contract owners. Currently, the Company receives service fees
with respect to the Fidelity VIP Equity-Income Portfolio,
Fidelity VIP Growth Portfolio, and Fidelity VIP High Income
Portfolio, at an annual rate of 0.10% of the aggregate net asset
value, respectively, of the shares held by the Variable Account.
With respect to the T. Rowe Price International Stock Portfolio,
the Company receives service fees at an annual rate of 0.15% per
annum of the aggregate net asset value of shares held by the
Variable Account. The Company may in the future render services
for which it will receive compensation from the investment
advisers or other service providers of other Underlying Funds.
The Company has not received any such fee or participation.
(1) THE NATURE OF SUCH FEE OR PARTICIPATION.
See 26(b), above.
(2) THE NAME OF THE PERSON MAKING PAYMENTS.
See 26(b), above.
(3) THE NATURE OF THE SERVICES RENDERED IN CONSIDERATION
FOR SUCH FEE OR PARTICIPATION.
See 26(b), above.
(4) THE AGGREGATE AMOUNT RECEIVED DURING THE LAST FISCAL
YEAR COVERED BY THE FINANCIAL STATEMENTS FILED HEREWITH.
Not Applicable.
27. DESCRIBE THE GENERAL CHARACTER OF THE BUSINESS ENGAGED IN BY THE
DEPOSITOR INCLUDING A STATEMENT AS TO ANY BUSINESS OTHER THAN THAT OF
DEPOSITOR OF THE TRUST. IF THE DEPOSITOR ACTS OR HAS ACTED IN ANY
CAPACITY WITH RESPECT TO ANY INVESTMENT COMPANY OR COMPANIES OTHER
THAN THE TRUST, STATE THE NAME OR NAMES OF SUCH COMPANY OR COMPANIES,
THEIR RELATIONSHIP, IF ANY, TO THE TRUST, AND THE NATURE OF THE
DEPOSITOR'S ACTIVITIES THEREWITH. IF THE DEPOSITOR HAS CEASED TO ACT
IN SUCH NAMED CAPACITY, STATE THE DATE OF AND CIRCUMSTANCES
SURROUNDING SUCH CESSATION.
The Company is licensed to write life insurance, health insurance,
and variable contracts in the District of Columbia, Puerto Rico, the
Virgin Islands, and all states except New York
- 31 -
<PAGE>
and Hawaii.
The Company offers variable life and annuity Contracts through other
of its Separate Accounts, all of which are registered as unit
investment trusts under the Investment Company Act of 1940.
The Company served as investment adviser for its Separate Account
VA-A (formerly the "American Variable Annuity Fund") from 1967 until
1969. The Company also served as principal underwriter for Separate
Account VA-A from 1967 until 1972.
OFFICIALS AND AFFILIATED PERSONS OF DEPOSITOR
28. (a) FURNISH AS AT LATEST PRACTICABLE DATE THE FOLLOWING
INFORMATION WITH RESPECT TO THE DEPOSITOR OF THE TRUST, WITH
RESPECT TO EACH OFFICER, DIRECTOR, OR PARTNER OF THE DEPOSITOR,
AND WITH RESPECT TO EACH NATURAL PERSON DIRECTLY OR INDIRECTLY
OWING OR HOLDING WITH POWER TO VOTE 5% OR MORE OF THE
OUTSTANDING VOTING SECURITIES OF THE DEPOSITOR.
(i) NAME AND PRINCIPAL BUSINESS ADDRESS.
(ii) NATURE OF RELATIONSHIP OR AFFILIATION WITH DEPOSITOR OF
THE TRUST;
(iii) OWNERSHIP OF ALL SECURITIES OF THE DEPOSITOR;
(iv) OWNERSHIP OF ALL SECURITIES OF THE TRUST;
(v) OTHER COMPANIES OF WHICH EACH PERSON NAMED ABOVE IS
PRESENTLY OFFICER, DIRECTOR OR PARTNER.
See 28(b) and 29, below.
(b) FURNISH A BRIEF STATEMENT OF THE BUSINESS EXPERIENCE
DURING THE LAST FIVE YEARS OF EACH OFFICER, DIRECTOR OR
PARTNER OF THE DEPOSITOR.
The principal occupations and business experience for
the last five years of Directors and Executive Officers
of the Company are as follows:
PRINCIPAL OCCUPATION(S) DURING PAST
NAME AND POSITION FIVE YEARS
Bruce C. Anderson Director of First Allmerica since 1996;
Director Vice President, First Allmerica since
1984
Abigail M. Armstrong Secretary of First Allmerica since
Secretary and Counsel 1996; Counsel, First Allmerica since
1991
Robert E. Bruce Director and Chief Information Officer
Director and Chief Information of First Allmerica since 1997; Vice
Officer President of First Allmerica since
1995; Corporate Manager, Digital
Equipment Corporation 1979 to 1995
- 32 -
<PAGE>
John P. Kavanaugh Director and Chief Investment Officer
Director, Vice President and of First Allmerica since 1996; Vice
Chief Investment Officer President, First Allmerica since 1991
John F. Kelly Director of First Allmerica since 1996;
Director, Vice President and General Counsel since 1981; Senior Vice
General Counsel President since1 986, and Assistant
Secretary, First Allmerica since 1991
J. Barry May Director of First Allmerica since 1996;
Director Director and President, The Hanover
Insurance Company since 1996; Vice
President, The Hanover Insurance
Company, 1993 to 1996; General
Manager, The Hanover Insurance Company
1989 to 1993
James R. McAuliffe Director of First Allmerica since 1996;
Director Director of Citizens Insurance Company
of America since 1992; President since
1994 and CEO since 1996; Vice
President, First Allmerica 1982 to 1994
and Chief Investment Officer, First
Allmerica 1986 to 1994.
John F. O'Brien Director, Chairman of the Board,
Director and Chairman of the Board President and Chief Executive Officer,
First Allmerica since 1989
Edward J. Parry, III Director and Chief Financial Officer of
Director, Vice President, Chief First Allmerica since 1996; Vice
Financial Officer, and Treasurer President and Treasurer, First
Allmerica since 1993
Richard M. Reilly Director of First Allmerica since 1996;
Director, President and Vice President, First Allmerica since
Chief Executive Officer 1990; Director, Allmerica Investments,
Inc. since 1990; Director and
President, Allmerica Financial
Investment Management Services , Inc.
since 1990
Robert P. Restrepo, Jr. Director and Vice President of First
Director and Vice President Allmerica since May, 1998; Chief
Executive Officer, Travelers Property
& Casualty Group, 1996 to 1998; Senior
Vice President, Aetna Life & Casualty
Company, 1993 to 1996.
Eric A. Simonsen Director of First Allmerica since 1996;
Director and Vice President Vice President, First Allmerica since
1990; Chief Financial Officer, First
Allmerica 1990 to 1996
Phillip E. Soule Director of First Allmerica since 1996;
- 33 -
<PAGE>
Director Vice President, First Allmerica since
1987
COMPANIES OWNING SECURITIES OF DEPOSITOR
29. FURNISH AS AT LATEST PRACTICABLE DATE THE FOLLOWING INFORMATION WITH
RESPECT TO EACH COMPANY WHICH DIRECTLY OR INDIRECTLY OWNS, CONTROLS
OR HOLDS WITH POWER TO VOTE 5% OR MORE OF THE OUTSTANDING VOTING
SECURITIES OF DEPOSITOR.
The Company is a wholly-owned subsidiary of SMA Financial Corp., 440
Lincoln Street, Worcester, Massachusetts, which in turn is a
wholly-owned subsidiary of First Allmerica, which in turn is a
wholly-owned subsidiary of Allmerica Financial Corporation. All are
located at 440 Lincoln Street, Worcester, Massachusetts. The Company
and Allmerica Financial Corporation are Delaware corporations. First
Allmerica and SMA Financial Corp. are organized under the laws of the
Commonwealth of Massachusetts.
CONTROLLING PERSONS
30. FURNISH AS AT LATEST PRACTICABLE DATE THE FOLLOWING INFORMATION
WITH RESPECT TO ANY PERSON OTHER THAN THOSE COVERED BY ITEMS 28, 29,
AND 42 WHO DIRECTLY OR INDIRECTLY CONTROLS THE DEPOSITOR.
None.
COMPENSATION OF OFFICERS AND DIRECTORS
31. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE
REMUNERATION FOR SERVICES PAID BY THE DEPOSITOR DURING THE LAST FISCAL
YEAR COVERED FINANCIAL STATEMENTS FILED HEREWITH;
(a) DIRECTLY TO EACH OF THE OFFICERS OR PARTNERS OR THE
DEPOSITOR DIRECTLY RECEIVING THE THREE HIGHEST AMOUNTS OF
REMUNERATION;
None. All officers of the Company are employees of the Company's
parent, First Allmerica, and receive no remuneration from the
Company.
(b) DIRECTLY TO ALL OFFICERS OR PARTNERS OF THE DEPOSITOR AS A
GROUP EXCLUSIVE OF PERSONS WHOSE REMUNERATION IS INCLUDED UNDER
ITEM 31(a), STATING SEPARATELY THE AGGREGATE AMOUNT PAID BY THE
DEPOSITOR ITSELF AND THE AGGREGATE AMOUNT PAID BY ALL THE
SUBSIDIARIES;
None. All officers of the Company are employees of the Company's
parent, First Allmerica, and receive no remuneration from the
Company. The Company has no subsidiaries.
(c) INDIRECTLY OR THROUGH SUBSIDIARIES TO EACH OF THE OFFICERS
OR PARTNERS OF THE DEPOSITOR;
Not Applicable. The Company has no subsidiaries.
COMPENSATION OF DIRECTORS
32. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE
REMUNERATION FOR SERVICES, EXCLUSIVE OF REMUNERATION REPORTED
UNDER ITEM 31, PAID BY THE DEPOSITOR DURING THE LAST FISCAL YEAR
- 34 -
<PAGE>
COVERED BY FINANCIAL STATEMENTS FILED HEREWITH:
(a) THE AGGREGATE DIRECT REMUNERATION TO DIRECTORS;
None. All directors of the Company are employees of the
Company's parent, First Allmerica, and receive no remuneration
from the Company.
(b) INDIRECTLY OR THROUGH SUBSIDIARIES TO DIRECTORS.
Not Applicable. The Company has no subsidiaries.
COMPENSATION TO EMPLOYEES
33. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE
AGGREGATE AMOUNT OF REMUNERATION FOR SERVICES OF ALL EMPLOYEES
OF THE DEPOSITOR (EXCLUSIVE OF PERSONS WHOSE REMUNERATION IS
REPORTED IN ITEMS 31 AND 32) WHO RECEIVED REMUNERATION IN EXCESS
OF $10,000 DURING THE LAST FISCAL YEAR COVERED BY FINANCIAL
STATEMENTS FILED HEREWITH FROM THE DEPOSITOR AND ANY OF ITS
SUBSIDIARIES.
None. The Company has no employees. All corporate services are
provided by employees of First Allmerica, pursuant to the terms
of a Service Agreement between the Company and First Allmerica.
(b) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE
AGGREGATE AMOUNT OF REMUNERATION FOR SERVICES INFORMATION DURING
THE LAST FISCAL YEAR COVERED BY FINANCIAL STATEMENTS FILED
HEREWITH TO THE FOLLOWING CLASSES OF PERSONS (EXCLUSIVE OF THOSE
PERSONS COVERED BY ITEM 33(a)): (1) SALES MANAGERS, BRANCH
MANAGERS, DISTRICT MANAGERS AND OTHER PERSONS SUPERVISING THE
SALE OF REGISTRANT'S SECURITIES; (2) SALESMEN, SALES AGENTS,
CANVASSERS AND OTHER PERSONS MAKING SOLICITATIONS BUT NOT IN
SUPERVISORY CAPACITY; (3) ADMINISTRATIVE AND CLERICAL EMPLOYEES;
AND (4) OTHERS (SPECIFY). IF A PERSON IS EMPLOYED IN MORE THAN
ONE CAPACITY, CLASSIFY ACCORDING TO PREDOMINANT TYPE OF WORK.
Not Applicable.
COMPENSATION TO OTHER PERSONS
34. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE AGGREGATE
AMOUNT OF COMPENSATION FOR SERVICES PAID ANY PERSON (EXCLUSIVE OF
PERSONS WHOSE REMUNERATION IS REPORTED IN ITEMS 31, 32 AND 33), WHOSE
AGGREGATE COMPENSATION IN CONNECTION WITH SERVICES RENDERED WITH
RESPECT TO THE TRUST IN ALL CAPACITIES EXCEED $10,000 DURING THE LAST
FISCAL YEAR COVERED BY FINANCIAL STATEMENTS FILED HEREWITH FROM THE
DEPOSITOR AND ANY OF ITS SUBSIDIARIES.
None
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
DISTRIBUTION OF-SECURITIES
35. FURNISH THE NAMES OF THE STATES IN WHICH SALES OF THE TRUST'S
SECURITIES (A) ARE CURRENTLY BEING MADE, (B) ARE PRESENTLY PROPOSED TO
MADE, AND (C) HAVE BEEN DISCONTINUED, INDICATING BY
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APPROPRIATE LETTER THE STATUS WITH RESPECT TO EACH STATE.
(a) Sale of the Contracts has not commenced in any state.
(b) Following the effectiveness of the Separate Account's
registration statement under the Securities Act of 1933, and
obtaining required approvals under state law, the Company
proposes issuing the Contracts in the District of Columbia,
Virgin Islands, and Puerto Rico and in all states except New York
and Hawaii.
(c) Not Applicable.
36. IF SALES OF THE TRUST'S SECURITIES HAVE AT ANY TIME SINCE JANUARY
1, 1936 BEEN SUSPENDED FOR MORE THAN A MONTH, DESCRIBE BRIEFLY THE
REASONS FOR SUCH SUSPENSION.
Not Applicable.
37. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO EACH
INSTANCE WHERE SUBSEQUENT TO JANUARY 1, 1937, ANY FEDERAL OR
STATE GOVERNMENTAL OFFICER, AGENCY, OR REGULATORY BODY DENIED
AUTHORITY TO DISTRIBUTE SECURITIES OF THE TRUST, EXCLUDING A
DENIAL WHICH WAS MERELY A PROCEDURAL STEP PRIOR TO ANY
DETERMINATION BY SUCH OFFICER, ETC., AND WHICH DENIAL WAS
SUBSEQUENTLY RESCINDED.
(1) NAME OF OFFICER, AGENCY OR BODY
None.
(2) DATE OF DENIAL
Not Applicable.
(3) BRIEF STATEMENT OF REASONS GIVEN FOR DENIAL
Not Applicable.
(b) FURNISH THE FOLLOWING INFORMATION WITH REGARD TO EACH
INSTANCE WHERE, SUBSEQUENT TO JANUARY 1, 1937, THE AUTHORITY TO
DISTRIBUTE SECURITIES OF THE TRUST HAS BEEN REVOKED BY ANY
FEDERAL OR STATE GOVERNMENTAL OFFICER, AGENCY OR REGULATORY BODY.
(1) NAME OF OFFICER, AGENCY OR BODY
None.
(2) DATE OF REVOCATION
Not Applicable.
(3) BRIEF STATEMENT OF REASONS GIVEN FOR REVOCATION
Not Applicable.
38. (a) FURNISH A GENERAL DESCRIPTION OF THE METHOD OF DISTRIBUTION
OF SECURITIES OF THE TRUST.
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<PAGE>
Allmerica Investments, Inc., an indirect subsidiary of First
Allmerica, will act as principal underwriter of the Contracts
pursuant to a Sales and Administrative Agreement with the
Company and the Separate Account. Allmerica Investments, Inc.
is a broker-dealer and a member of the National Association of
Securities Dealers, Inc. The Contracts will be sold by
registered representatives of Allmerica Investments, Inc. or of
other broker-dealers which have selling agreements with Allmerica
Investments, Inc., and who have been appointed as agents of the
Company .
(b) STATE THE SUBSTANCE OF ANY CURRENT SELLING AGREEMENT BETWEEN
EACH PRINCIPAL UNDERWRITER AND THE TRUST OR THE DEPOSITOR,
INCLUDING A STATEMENT AS TO THE INCEPTION AND TERMINATION DATES
OF THE AGREEMENT, ANY RENEWAL AND TERMINATION PROVISIONS, AND MY
ASSIGNMENT PROVISIONS.
The Company and Separate Account will execute an Underwriting
and Administrative Services Agreement ("Agreement") with
Allmerica Investments, Inc., its principal underwriter.
Unless otherwise terminated, the Agreement shall continue in
effect from year to year. The Agreement may be terminated by
any party at any time upon giving 60 days' written notice to
the other parties, and terminates automatically in the event
of its assignment.
(c) STATE THE SUBSTANCE OF ANY CURRENT AGREEMENTS OR
ARRANGEMENTS OF EACH PRINCIPAL UNDERWRITER WITH DEALERS, AGENTS,
SALESMEN, ETC., WITH RESPECT TO COMMISSIONS AND OVERRIDING
COMMISSIONS, TERRITORIES, FRANCHISES, QUALIFICATIONS, AND
REVOCATIONS. IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES, FURNISH SCHEDULES OF COMMISSIONS AND THE BASES
THEREOF. IN LIEU OF A STATEMENT CONCERNING SCHEDULES OF
COMMISSIONS, SUCH SCHEDULES OF COMMISSIONS MAY BE FILED AS
EXHIBIT A(3)(c).
Registered representatives of Allmerica Investments, Inc., or of
broker-dealers which have selling agreements with Allmerica
Investments, Inc., will be appointed as agents of the Company in
order to sell the Contract. Such agents will be required to pass
applicable NASD examinations, and qualify under applicable state
insurance licensing requirements. Agents who sell the Contract
will receive commissions based on a commission schedule, and
Managers who supervise the agents will receive overriding
commissions.
(A). Maximum Initial Compensation payable by the Company with
respect to the sale and distribution of the Contracts shall be
7.50% of initial and subsequent payments. Alternative
commission schedules are available with lower initial commission
amounts, plus ongoing annual compensation of up to 1.00% of
contract Value. To the extent permitted by NASD rules,
promotional incentives or payments may also be provided to
broker-dealers based on sales volumes, the assumption of
wholesaling functions or other sales-related criteria. Other
payments may be made for other services that do not directly
involve the sale of the Contracts. These services may include
the recruitment and training of personnel, production of
promotional literature, and similar services.
INFORMATION CONCERNING PRINCIPAL UNDERWRITER
39. (a) STATE THE FORM OF ORGANIZATION OF EACH PRINCIPAL
UNDERWRITER OF SECURITIES OF THE TRUST, THE NAME OF THE
STATE OR OTHER SOVEREIGN POWER UNDER THE LAWS OF WHICH EACH
UNDERWRITER WAS ORGANIZED AND THE DATE OF ORGANIZATION.
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<PAGE>
The principal underwriter of the Contracts, Allmerica
Investments, Inc., was incorporated under the laws of the
Commonwealth of Massachusetts on March 27, 1969.
(b) STATE WHETHER ANY PRINCIPAL UNDERWRITER CURRENTLY
DISTRIBUTING SECURITIES OF THE TRUST IS A MEMBER OF THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD).
Allmerica Investments, Inc., will be the underwriter of the
Contracts. The Company is also registered as a broker-dealer,
and is a member of the NASD.
40. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO
ALL FEES RECEIVED BY EACH PRINCIPAL UNDERWRITER OF THE
TRUST FROM THE SALE OF SECURITIES OF THE TRUST AND ANY
OTHER FUNCTIONS IN CONNECTION THEREWITH EXERCISED BY SUCH
UNDERWRITER IN SUCH CAPACITY OR OTHERWISE DURING THE PERIOD
COVERED BY THE FINANCIAL STATEMENT FILED HEREWITH.
None.
(b) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ANY FEE
OR ANY PARTICIPATION IN FEES RECEIVED BY EACH PRINCIPAL
UNDERWRITER FROM ANY UNDERLYING INVESTMENT COMPANY OR ANY
AFFILIATED PERSON OR INVESTMENT ADVISER OF SUCH COMPANY:
None.
(1) THE NATURE OF SUCH FEE OR PARTICIPATION.
None.
(2) THE NAME OF THE PERSON MAKING PAYMENT.
None.
(3) THE NATURE OF THE SERVICES RENDERED IN CONSIDERATION
FOR SUCH FEE OR PARTICIPATION.
None.
(4) THE AGGREGATE AMOUNT RECEIVED DURING THE LAST FISCAL
YEAR COVERED BY THE FINANCIAL STATEMENTS FILED HEREWITH.
None.
41. (a) DESCRIBE THE GENERAL CHARACTER OF THE BUSINESS
PRINCIPAL UNDERWRITER, INCLUDING A STATEMENT AS TO ANY
BUSINESS OTHER THAN THE DISTRIBUTION OF SECURITIES OF THE
TRUST. IF A PRINCIPAL UNDERWRITER ACTS OR HAS ACTED IN ANY
CAPACITY WITH RESPECT TO ANY INVESTMENT COMPANY OR
COMPANIES OTHER THAN THE TRUST, STATE THE NAME OR NAMES OF
SUCH COMPANY OR COMPANIES, THEIR RELATIONSHIP, IF ANY, TO
THE TRUST AND THE NATURE OF SUCH ACTIVITIES. IF A
PRINCIPAL UNDERWRITER HAS CEASED TO ACT IN SUCH NAMED
CAPACITY, STATE THE DATE OF AND CIRCUMSTANCES SURROUNDING
SUCH CESSATION.
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<PAGE>
Allmerica Investments, Inc. is a registered broker-dealer and a
member of the NASD. Allmerica Investments, Inc. is a retail
broker-dealer of variable contracts (including life and
annuities) issued by the Company and of affiliated and
unaffiliated mutual funds. Allmerica Investments, Inc. acts as
principal underwriter of variable annuity and variable life
contracts issued by Separate Accounts of the Company and of
First Allmerica, which are registered as unit investment trusts
under the 1940 Act in connection with the issuance of variable
annuity and variable life contracts. Allmerica Investments
also acts as principal underwriter of AIT which is a management
investment company under the 1940 Act. The variable contracts
issued by the Company are sold through registered
representatives of Allmerica Investments, Inc. (or of broker-
dealers which have selling agreements with Allmerica
Investments, Inc.), who are also licensed as insurance
agents of the Company.
(b) FURNISH AS AT LATEST PRACTICABLE DATE THE ADDRESS OF EACH
BRANCH OFFICE OF EACH PRINCIPAL UNDERWRITER CURRENTLY SELLING
SECURITIES OF THE TRUST AND FURNISH THE NAME AND RESIDENCE
ADDRESS OF THE PERSON IN CHARGE OF SUCH OFFICE.
Not Applicable. The Separate Account is not yet issuing
securities.
(c) FURNISH THE NUMBER OF INDIVIDUAL SALESMEN OF EACH PRINCIPAL
UNDERWRITER THROUGH WHOM ANY OF THE SECURITIES OF THE TRUST WERE
DISTRIBUTED FOR THE LAST FISCAL YEAR OF THE TRUST COVERED BY THE
FINANCIAL STATEMENTS FILED HEREWITH AND FURNISH THE AGGREGATE
AMOUNT OF COMPENSATION RECEIVED BY SUCH SALESMEN IN SUCH YEAR.
Not Applicable. The Contracts have not yet been issued.
42. FURNISH AS AT LATEST PRACTICABLE DATE THE FOLLOWING INFORMATION
WITH RESPECT TO EACH PRINCIPAL UNDERWRITER CURRENTLY DISTRIBUTING
SECURITIES OF THE TRUST AND WITH RESPECT TO EACH OF THE OFFICERS,
DIRECTORS OR PARTNERS OF SUCH UNDERWRITER (OWNERSHIP OF SECURITIES OF
THE TRUST).
Not Applicable. The Contracts have not yet been issued.
43. FURNISH, FOR THE LAST FISCAL YEAR COVERED BY THE FINANCIAL
STATEMENTS FILED HEREWITH, THE AMOUNT OF BROKERAGE COMMISSIONS
RECEIVED BY ANY PRINCIPAL UNDERWRITER WHO IS A MEMBER OF A NATIONAL
SECURITIES EXCHANGE AND WHO IS CURRENTLY DISTRIBUTING THE SECURITIES
OF THE TRUST OR EFFECTING TRANSACTIONS FOR THE TRUST IN THE PORTFOLIO
SECURITIES OF THE TRUST.
Not Applicable.
OFFERING PRICE OR ACQUISITION VALUATION OF SECURITIES OF THE TRUST
44. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE
METHOD OF VALUATION USED BY THE TRUST FOR THE PURPOSES OF
DETERMINING THE OFFERING PRICE TO THE PUBLIC OF SECURITIES
ISSUED THE TRUST OR THE VALUATION OF SHARES OR INTERESTS IN THE
UNDERLYING SECURITIES ACQUIRED BY THE HOLDER OF A PERIODIC
PAYMENT PLAN CERTIFICATE.
Each payment is allocated to the General Account of the Company
or to the Sub-Account(s) selected by the Contract Owner.
Allocations to the Sub-Accounts are credited to the Contract
in the form of Units. Units are credited separately for each
Sub-Account. The number of Units of each Sub-Account credited
to the
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<PAGE>
Contract is equal to the portion of the payment allocated to
the Sub-Account, divided by the dollar value of the applicable
Unit as of the valuation date the payment is received at the
Company's Principal Office. The number of Units resulting from
each payment will remain fixed unless changed by a subsequent
split of Unit value, transfer, partial withdrawal or surrender.
In addition, if the Company deducts charges from a Sub-Account
(as a result of Contract Owner instructions or the pro rata
allocation of charges if the Contract Owner has given no
instruction), each such deduction will result in cancellation
of a number of Units equal in value to the charge allocated to
the Sub-Account. The dollar value of a Unit of each Sub-Account
varies from valuation date to valuation date based on the
investment experience of that Sub-Account. That experience, in
turn, will reflect the investment performance, expenses and
charges of the respective Underlying Funds. The value of a Unit
is set at $1.00 on the first Valuation Date of each Sub-Account.
The dollar value of a Unit of a Sub-Account varies from
Valuation Date to Valuation Date based on the investment
experience of that Sub-Account. This investment experience
reflects the investment performance, expenses and charges of the
Underlying Fund in which the Sub-Account invests. The value of
each Unit was set at $1.00 on the first Valuation Date of each
Sub-Account.
The value of a Unit on any Valuation Date is the product of:
- The dollar value of the Unit on the preceding
Valuation Date; times
- The net investment factor.
Net Investment Factor - The net investment factor measures the
investment performance of a Sub-Account during the Valuation
Period just ended. The net investment factor for each
Sub-Account is the result of:
- The net asset value per share of a Fund held in the
Sub-Account determined at the end of the current Valuation
Period; plus
- The per share amount of any dividend or capital gain
distributions made by the Fund on shares in the Sub-Account
if the Aex-dividend@ date occurs during the current
Valuation Period; divided by
- The net asset value per share of a Fund share held in
the Sub-Account determined as of the end of the immediately
preceding Valuation Period; minus
- The mortality and expense risk charge for each day in
the Valuation Period, currently at an annual rate of 0.90%
of the daily net asset value of that Sub-Account.
The net investment factor may be greater or less than one.
Therefore, the value of a Unit may increase or decrease. The
Contract Owner bears the investment risk.
Allocations to the General Account are not converted into Units,
but are credited interest at a rate periodically set by the
Company.
(b) FURNISH A SPECIMEN SCHEDULE SHOWING THE COMPONENTS OF THE
OFFERING PRICE OF THE TRUST'S SECURITIES AS OF THE LATEST
PRACTICABLE DATE.
No Contracts have been issued or offered for sale to the public.
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<PAGE>
(c) IF THERE IS ANY VARIATION IN OFFERING PRICE OF THE TRUST'S
SECURITIES TO ANY PERSON OR CLASSES OF PERSONS OTHER THAN
UNDERWRITERS, STATE THE NATURE AND AMOUNT OF SUCH VARIATION AND
INDICATE THE PERSON OR CLASSES OF PERSONS TO WHOM SUCH OFFERING
IS MADE.
At any time, the "price" of a Unit of a Sub-Account will be the
same for all Contract Owners. However, the cost of insurance
charges for the Contracts will not be the same for all Contract
Owners. The insurance principles of pooling and distribution of
mortality risks is based upon the assumption that each Contract
Owner pays a cost of insurance charge commensurate with the
Insured's mortality risk, which is actuarially determined based
upon factors such as age, sex, health and occupation. In the
context of life insurance, a uniform mortality charge (the "cost
of insurance charge") for all Insureds would discriminate
unfairly in favor of those Insureds representing greater
mortality risks to the disadvantage of those representing lesser
risks. Accordingly, there will be a different "price" for each
actuarial category of Contract Owners because different cost of
insurance rates will apply. The "price" will also vary based on
net amount at risk. The Contracts will be offered and sold
pursuant to this cost of insurance schedule, the Company's
underwriting standards, and in accordance with state insurance
laws. Such laws prohibit unfair discrimination among Insureds,
but recognize that premiums must be based upon factors such as
age, health and occupation. Tables showing the maximum cost of
insurance charges will be delivered as part of the Contract.
45. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ANY SUSPENSION
OF THE REDEMPTION RIGHTS OF THE SECURITIES ISSUED BY THE TRUST DURING
THE THREE FISCAL YEARS COVERED BY THE FINANCIAL STATEMENTS FILED
HEREWITH:
Not Applicable.
(a) BY WHOSE ACTION REDEMPTION RIGHTS WERE SUSPENDED.
Not Applicable.
(b) THE NUMBER OF DAYS' WRITTEN NOTICE GIVEN TO SECURITY HOLDERS
PRIOR TO SUSPENSION OF REDEMPTION RIGHTS.
Not Applicable.
(c) REASON FOR SUSPENSION.
Not Applicable.
(d) PERIOD DURING WHICH SUSPENSION WAS IN EFFECT.
Not Applicable.
46.(a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE METHOD OF
DETERMINING THE REDEMPTION OR WITHDRAWAL VALUATION OF SECURITIES
ISSUED BY THE TRUST:
(1) THE SOURCE OF QUOTATIONS USED TO DETERMINE THE VALUE OF
PORTFOLIO SECURITIES.
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<PAGE>
The Sub-Accounts invest only in shares of the Underlying Funds.
Shares of each are sold and redeemed at their net asset value as
next computed after receipt of the purchase or redemption order.
Each purchase or redemption is confirmed in a written statement
of the number of shares purchased or redeemed and the aggregate
number of shares currently held by the respective Sub-Accounts.
See Item 44(a).
(2) WHETHER OPENING, CLOSING, BID, ASKED OR ANY OTHER PRICE
ISSUED.
See 44(a) and 46(a)(1), above.
(3) WHETHER PRICE IS AS OF THE DAY OF SALE OR AS OF ANY OTHER
TIME.
See 44(a) and 46(a)(1), above.
(4) A BRIEF DESCRIPTION OF THE METHODS USED BY REGISTRANT FOR
DETERMINING OTHER ASSETS AND LIABILITIES INCLUDING ACCRUAL FOR
EXPENSES AND TAXES (INCLUDING TAXES ON UNREALIZED APPRECIATION).
CONTRACT VALUE AND SURRENDER VALUE - The Contract value is
the total amount available for investment and is equal to
the sum of the accumulation in the General Account and the
value of the Units in the Sub-Accounts. The Contract value
is used in determining the surrender value (the Contract
value less any loans and applicable surrender charges).
There is no guaranteed minimum Contract value. Because
Contract value on any date depends upon a number of
variables, it cannot be predetermined. Contract value and
surrender value will reflect frequency and amount of net
premiums paid, interest credited to accumulations in the
General Account, the investment performance of the chosen
Sub-Accounts of the Separate Account, any partial
withdrawals, any loans, any loan repayments, any loan
interest paid or credited, and any charges assessed in
connection with the Contract.
CALCULATION OF CONTRACT VALUE - The Contract value is
determined first on the date of issue and thereafter on each
valuation date. On the date of issue, the Contract value
will be the payments received, plus any interest earned
during the period when premiums are held in the General
Account (before being transferred to the Separate Account)
less any Monthly Deductions due. On each valuation date
after the date of issue the Contract value will be:
(a) the aggregate of the values in each of the Sub-Accounts
on the valuation date, determined for each Sub-Account by
multiplying the value of a Unit in that Sub-Account on that
date by the number of such Units allocated to the Contract;
PLUS
(b) the value in the General Account (including any amounts
transferred to the General Account with respect to a loan).
Thus, the Contract value is determined by multiplying the number
of Units in each Sub-Account by the value of the applicable
Units on the particular valuation date, adding the products,
and adding the amount of the accumulations in the General
Account, if any. Also see Item 44(a), above.
Because of its current tax status, the Company does not expect to
incur any
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<PAGE>
federal income tax liabilities that would be charged to
the Separate Account, and the Company does not intend to make a
charge for federal income taxes. The Company may, however, incur
state and local taxes (in addition to premium taxes) in several
states. At present, these taxes are not significant. If there
is a material change in state or local tax laws, charges for such
taxes, if any, attributable to the Separate Account may be made.
(5) OTHER ITEMS WHICH REGISTRANT DEDUCTS FROM THE NET ASSET
VALUE IN COMPUTING REDEMPTION VALUE OF ITS SECURITIES.
Units of the Sub-Accounts will be redeemed at net asset
value. However, under the Contracts, a surrender or partial
redemption may be subject to Surrender charges. See 13(a),
"SURRENDER CHARGES" and "PARTIAL WITHDRAWAL"
(6) WHETHER ADJUSTMENTS ARE MADE FOR FRACTIONS.
No adjustments are made for fractions.
(b) FURNISH A SPECIMEN SCHEDULE SHOWING THE COMPONENTS OF THE
REDEMPTION PRICE TO THE HOLDERS OF THE TRUST'S SECURITIES AS OF
THE LATEST PRACTICABLE DATE.
No Contracts have been issued or offered for sale to the public.
PURCHASE AND SALE OF INTERESTS IN UNDERLYING SECURITIES FROM AND TO
SECURITY HOLDERS
47. FURNISH A STATEMENT AS TO THE PROCEDURE WITH RESPECT TO THE
MAINTENANCE OF A POSITION IN THE UNDERLYING SECURITIES OR INTERESTS
IN THE UNDERLYING SECURITIES, THE EXTENT AND NATURE THEREOF AND THE
PERSON WHO MAINTAINS SUCH A POSITION. INCLUDE A DESCRIPTION OF THE
PROCEDURE WITH RESPECT TO THE PURCHASE OF UNDERLYING SECURITIES OR
INTERESTS IN THE UNDERLYING SECURITIES FROM SECURITY HOLDERS WHO
EXERCISE REDEMPTION OR WITHDRAWAL RIGHTS AND THE SALE OF SUCH
UNDERLYING SECURITIES AND INTERESTS IN THE UNDERLYING SECURITIES TO
OTHER SECURITY HOLDERS. STATE WHETHER THE METHOD OF VALUATION OF
SUCH UNDERLYING SECURITIES OR INTERESTS IN UNDERLYING SECURITIES
DIFFERS FROM THAT SET FORTH IN ITEMS 44 AND 46. IF ANY ITEM OF
EXPENDITURE INCLUDED IN THE DETERMINATION OF THE VALUATION IS NOT
OR MAY NOT ACTUALLY BE INCURRED OR EXPENDED, EXPLAIN THE NATURE OF
SUCH ITEM AND WHO MAY BENEFIT FROM THE TRANSACTION.
All purchases and redemptions of shares of the Underlying Funds are
at net asset value. Other separate accounts of the Company currently
invest in shares of AIT, and AIT issues shares to separate accounts
of First Allmerica and may issue shares to separate accounts of other
affiliated insurance companies. Other than AIT, the other Underlying
Funds may issue shares to unaffiliated insurance companies. All
transactions are at net asset value. The Company will redeem
sufficient shares of the Underlying Funds to pay certain life
insurance proceeds, benefits at maturity, or surrender proceeds, or
for other purposes contemplated by the Contract.
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. FURNISH THE FOLLOWING INFORMATION AS TO EACH TRUSTEE OR CUSTODIAN
OF THE TRUST.
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<PAGE>
(a) NAME AND PRINCIPAL ADDRESS:
Allmerica Financial Life Insurance and Annuity Company
440 Lincoln Street
Worcester, MA 01653
(b) FORM OF ORGANIZATION:
Stock life insurance company.
(c) STATE OR OTHER SOVEREIGN POWER UNDER THE LAWS OF WHICH THE
TRUSTEE OR CUSTODIAN WAS ORGANIZED.
Incorporated under the laws of Delaware.
(d) NAME OF GOVERNMENTAL SUPERVISING OR EXAMINING AUTHORITY.
Delaware Insurance Department. The Company is also subject to
examination by the insurance departments of each state in which
it does business.
49. STATE THE BASIS FOR PAYMENT OF FEES OR EXPENSES OF THE TRUSTEE OR
CUSTODIAN FOR SERVICES RENDERED WITH RESPECT TO THE TRUST AND ITS
SECURITIES, AND THE AMOUNT THEREOF FOR THE LAST FISCAL YEAR. INDICATE
THE PERSON PAYING SUCH FEES OR EXPENSES. IF ANY FEES OR EXPENSES ARE
PREPAID, STATE THE UNEARNED AMOUNTS.
The Company deducts the following monthly charges from the Contract
Value:
- Maintenance Fee -- a $2.50 Maintenance Fee from
Contracts with a Contract Value of less than
$50,000
- Administration Charge -- 0.20% on an annual basis
for the administrative expenses
- Monthly Insurance Protection Charge -- a charge
for the cost of insurance, which varies depending
on the type of Contract and Underwriting Class,
- For the first Contract Year only, Federal and
State Payment Tax Charge 1.50% on an annual basis
for federal, state and local taxes.
- For the first ten Contract years, the Company also
deducts a monthly charges Distribution Fee of
0.90% on an annual basis for distribution expenses
The following daily charge is deducted from the Sub-Accounts of the
Variable Account:
- Mortality and Expense Risk Charge -- 0.90% on an annual
basis for the mortality and expense risks. This
charge is imposed to compensate the Company for its
assumption of certain mortality and expense risks.
Such expense risks include the risks of increased costs
associated with the custodian function.
The charges below apply only if the Contract Owner surrenders the
Contract or make
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<PAGE>
partial withdrawals:
- Surrender Charge - This charge applies on full
surrenders within ten Contract years. The surrender
charge begins at 10.00% of the Payment(s) and decreases
to 0% by the tenth Contract year.
- Partial Withdrawal Costs - The Company deducts from the
Contract Value the following charges for partial
withdrawals:
- A transaction fee of 2.0% of the amount
withdrawn, not to exceed $25, for each partial
withdrawal for processing costs; and
- A surrender charge on a withdrawal exceeding
the "Free 10% Withdrawal," described below.
As the Separate Account has not begun business operations,
no fees have been paid.
50. STATE WHETHER THE TRUSTEE OR CUSTODIAN OR ANY OTHER
PERSON HAS OR MAY CREATE A LIEN ON THE ASSETS OF THE TRUST,
AND, IF SO, GIVE FULL PARTICULARS, OUTLINING THE SUBSTANCE
OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT WITH RESPECT
THERETO.
None. Under Delaware law, the assets supporting Contract
reserves in the Separate Account may not be charged with any
liabilities arising out of any other business of the
Company.
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO
INSURANCE OF HOLDERS OF SECURITIES:
Interests in the Separate Account are sold only to fund the
Contracts. Other than the Contracts themselves, no
insurance is sold to Contract Owners with interests in the
Sub-Accounts, in connection with such interests.
(a) THE NAME AND ADDRESS OF THE INSURANCE COMPANY.
Allmerica Financial Life Insurance and Annuity Company
440 Lincoln Street
Worcester, MA 01653
(b) THE TYPES OF CONTRACTS AND WHETHER INDIVIDUAL OR
GROUP CONTRACTS.
The Contracts are modified single payment individual
life insurance Contracts.
(c) THE TYPES OF RISKS INSURED AND EXCLUDED.
The Contracts are offered to individuals age 89 and
under, subject to the Company's underwriting standards.
The Company assumes the risk that the deduction made
for mortality and expense risks will prove inadequate
to cover actual insurance costs and expenses.
(d) THE COVERAGE OF THE CONTRACTS.
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The Contracts provide insurance coverage on the life of
the Insured. The Face Amount is stated in each
Contract. Death Benefits will be reduced by any
outstanding loans and any due and unpaid contract
charges.
(e) THE BENEFICIARIES OF SUCH CONTRACTS AND THE USES
TO WHICH THE PROCEEDS OF CONTRACTS MUST BE PUT.
The beneficiary is named by the Contract Owner to
receive the death benefit. The interest of any
beneficiary will be subject to any assignment made by
the Contract Owner. The Contract Owner may declare a
beneficiary to be revocable (changed any time by
written request) or irrevocable (may be changed only
with the written consent of the beneficiary). The
interest of a beneficiary who dies before the Insured
will pass to surviving beneficiaries. If all
beneficiaries die before the Insured, the death
proceeds will pass to the Contract Owner.
(f) THE TERMS AND MANNER OF CANCELLATION AND OF
REINSTATEMENT.
See Item 17(a) for the manner of cancellation and
reinstatement.
(g) THE METHOD OF DETERMINING THE AMOUNT OF PREMIUMS
TO BE PAID BY HOLDERS OF SECURITIES.
See answer to Item 13(a) for amount of charges imposed
and 44(a) and 44(c) for the manner in which the premium
is determined.
(h) THE AMOUNT OF AGGREGATE PREMIUMS PAID TO THE
INSURANCE COMPANY DURING THE LAST FISCAL YEAR.
The Company has not yet begun issuing the Contracts.
In calendar year 1996, the aggregate payments paid to
the Company under all other life, accident and health,
annuity and deposit fund contracts was approximately
$1.53 billion.
(i) WHETHER ANY PERSON OTHER THAN THE INSURANCE COMPANY
RECEIVES ANY PART OF SUCH PREMIUMS, THE NAME OF EACH
SUCH PERSON AND THE AMOUNTS INVOLVED, AND THE NATURE
OF THE SERVICES RENDERED THEREFOR.
No person other than the Company receives any part of
the payments. However, the Company may from time to
time enter into reinsurance agreements with First
Allmerica or other insurance companies under which
certain insurance risks, premium income and related
expenses are assumed by First Allmerica or such other
insurance companies.
(j) THE SUBSTANCE OF ANY OTHER MATERIAL PROVISIONS OF
ANY INDENTURE OR AGREEMENT OF THE TRUST RELATING TO
INSURANCE.
None.
VII. CONTRACT OF REGISTRANT
52. (a) FURNISH THE SUBSTANCE OF THE PROVISIONS OF
ANY INDENTURE OR AGREEMENT WITH RESPECT TO THE
CONDITIONS UPON WHICH AND THE METHOD OF SELECTION BY
WHICH PARTICULAR PORTFOLIO SECURITIES MUST OR MAY BE
ELIMINATED FROM THE ASSETS OF THE
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TRUST OR MUST OR MAY BE REPLACED BY OTHER PORTFOLIO
SECURITIES. IF AN INVESTMENT ADVISER OR OTHER PERSON IS TO
BE EMPLOYED IN CONNECTION WITH SUCH SELECTION, ELIMINATION
OR SUBSTITUTION, STATE THE NAME OF SUCH PERSON, THE NATURE
OF ANY AFFILIATION TO THE DEPOSITOR, TRUSTEE OR
CUSTODIAN, AND ANY PRINCIPAL UNDERWRITER, AND THE
AMOUNT OF REMUNERATION TO BE RECEIVED FOR SUCH
SERVICES. IF ANY PARTICULAR PERSON IS NOT DESIGNATED
IN THE INDENTURE OR AGREEMENT, DESCRIBE BRIEFLY THE
METHOD OF SELECTION OF SUCH PERSON.
The investment policy of each Sub-Account of the
Separate Account is to invest in a particular
Underlying Fund.
The Company reserves the right, subject to applicable
law, to make additions to, deletions from, or
substitutions for the shares that are held in the
Sub-Accounts of the Separate Account or that the
Sub-Accounts of the Separate Account may purchase. If
the shares of an Underlying Fund are no longer
available for investment or if in the Company's
judgment further investment in any Underlying Fund
should become inappropriate in view of the purposes of
the Separate Account or the affected Sub-Account, the
Company may redeem the shares of that Underlying Fund
and substitute shares of another registered open-end
management company. The Company will not substitute
any shares attributable to a Contract interest in a
Sub-Account without notice and prior approval of the
SEC and state insurance authorities, to the extent
required by the 1940 Act or other applicable law.
The Company also reserves the right to establish
additional Sub-Accounts of the Separate Account, each
of which would invest in shares corresponding to a new
Underlying Fund or in shares of another investment
company having a specified investment objective.
Subject to applicable law and any required SEC
approval, the Company may, in its sole discretion,
establish new Sub-Accounts or eliminate one or more
Sub-Accounts if marketing needs, tax considerations or
investment conditions warrant. Any new Sub-Accounts
may be deemed available to existing Contract Owners on
a basis to be determined by the Company. If the
Company deems it to be in the best interest of Contract
Owners, and subject to any approvals that may be
required under applicable law, the Variable Account or
Sub-Account may be operated as a management company
under the 1940 Act, may be deregistered if registration
is no longer required, or may be combined with other
separate accounts of the Company.
If any of these substitutions or changes are made, the
Company way by appropriate endorsement change the
Contract to reflect the substitution or change.
(b) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO
EACH TRANSACTION INVOLVING THE ELIMINATION OF ANY
UNDERLYING SECURITY DURING THE PERIOD COVERED BY THE
FINANCIAL STATEMENTS FILED HEREWITH.
Not Applicable.
(c) DESCRIBE THE CONTRACT OF THE TRUST WITH RESPECT TO
THE SUBSTITUTION AND ELIMINATION OF THE UNDERLYING
SECURITIES OF THE TRUST WITH RESPECT TO:
(1) THE GROUNDS FOR ELIMINATION AND SUBSTITUTION;
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See 52(a), above.
(2) THE TYPE OF SECURITIES WHICH MAY BE
SUBSTITUTED FOR ANY UNDERLYING SECURITY;
See 52(a), above.
(3) WHETHER THE ACQUISITION OF SUCH SUBSTITUTED
SECURITY OR SECURITIES WOULD CONSTITUTE THE
CONCENTRATION OF INVESTMENT IN A PARTICULAR
INDUSTRY OR GROUP OF INDUSTRIES OR WOULD CONFORM
TO A CONTRACT OF CONCENTRATION OF INVESTMENT IN A
PARTICULAR; INDUSTRY OR GROUP OF INDUSTRIES;
Not Applicable.
(4) WHETHER SUCH SUBSTITUTED SECURITIES MAY BE
THE SECURITIES OF ANY OTHER INVESTMENT COMPANY;
AND
See 52(a), above.
(5) THE SUBSTANCE OF THE PROVISIONS OF ANY
INDENTURE OR AGREEMENT WHICH AUTHORIZE OR RESTRICT
THE CONTRACT OF THE REGISTRANT IN THIS REGARD.
See 52(a) above.
(d) FURNISH A DESCRIPTION OF ANY (EXCLUSIVE OF
CONTRACTS COVERED BY PARAGRAPH (A) AND (B) HEREIN) OF
THE TRUST WHICH IS DEEMED A MATTER OF FUNDAMENTAL
CONTRACT AND WHICH IS ELECTED TO BE TREATED AS SUCH.
None.
REGULATED INVESTMENT COMPANY
53. (a) STATE THE TAXABLE STATUS OF THE TRUST.
Because of its current tax status, the Company does not
expect to incur any federal income tax liabilities that
would be charged to the Separate Account, and the
Company does not intend to make a charge against the
assets of the Separate Account for federal income
taxes. The Company may, however, incur state and local
taxes (in addition to premium taxes) in several states.
At present, these taxes are not significant. If there
is a material change in state or local tax laws,
charges for such taxes, if any, attributable to the
Separate Account may be made.
See also 46(a), above.
(b) STATE WHETHER THE TRUST QUALIFIED FOR THE LAST
TAXABLE AS A REGULATED INVESTMENT COMPANY AS DEFINED IN
SECTION 851 OF THE INTERNAL REVENUE CODE OF 1954, AND
STATE ITS PRESENT INTENTION WITH RESPECT TO SUCH
QUALIFICATION DURING THE CURRENT TAXABLE YEAR.
Not Applicable.
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VIII. FINANCIAL AND STATISTICAL INFORMATION
54. IF THE TRUST IS NOT THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES, FURNISH THE FOLLOWING INFORMATION WITH RESPECT
TO EACH CLASS OR SERIES OF ITS SECURITIES.
Not Applicable.
55. IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES, A TRANSCRIPT OF A HYPOTHETICAL ACCOUNT SHALL
BE FILED IN APPROXIMATELY THE FOLLOWING FORM ON THE BASIS OF
THE CERTIFICATE CALLING FOR THE SMALLEST AMOUNT OF PAYMENTS.
THE SCHEDULE SHALL COVER A CERTIFICATE OF THE TYPE CURRENTLY
BEING SOLD ASSUMING THAT SUCH CERTIFICATE HAD BEEN SOLD AT A
DATE APPROXIMATELY TEN YEARS PRIOR TO THE DATE OF
REGISTRATION OR TO THE APPROXIMATE DATE OF ORGANIZATION OF
THE TRUST.
Not Applicable.
56. IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES, FURNISH BY YEARS FOR THE PERIOD COVERED BY THE
FINANCIAL STATEMENTS FILED HEREWITH IN RESPECT OF
CERTIFICATES SOLD DURING SUCH PERIOD, THE FOLLOWING
INFORMATION FOR EACH FULLY PAID TYPE AND EACH INSTALLMENT
PAYMENT TYPE OF PERIODIC PAYMENT PLAN CERTIFICATE CURRENTLY
BEING ISSUED BY THE TRUST.
Not Applicable.
57. IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES, FURNISH BY YEARS FOR THE PERIOD COVERED BY
FINANCIAL STATEMENTS FILED HEREWITH THE FOLLOWING
INFORMATION FOR EACH INSTALLMENT PAYMENT TYPE OF PERIODIC
PAYMENT PLAN CERTIFICATE CURRENTLY BEING ISSUED BY THE
TRUST.
Not Applicable.
58. IF THE TRUST IS THE ISSUER OF PERIODIC PLAN
CERTIFICATES FURNISH THE FOLLOWING INFORMATION FOR EACH
INSTALLMENT PERIODIC PAYMENT PLAN CERTIFICATE OUTSTANDING AS
AT THE LATEST PRACTICABLE DATE.
Not Applicable.
59. FINANCIAL STATEMENTS:
FINANCIAL STATEMENTS OF THE SEPARATE ACCOUNT
Financial statements, if any, will be contained
in a pre-effective amendment to the registration
statement for the Contract on Form S-6 filed under
the Securities Act of 1933. They are incorporated herein
by reference.
FINANCIAL STATEMENTS OF THE DEPOSITOR
The Financial Statements of the Company are contained in
the initial registration statement on Form S-6 filed
by the Registrant pursuant the Securities Act of 1933. They
are incorporated herein by reference.
IX. EXHIBITS
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A. Furnish the most recent form of the following:
(1) Indenture -- Certified copy of Resolutions of the
Board of Directors of the Company of June 13, 1996
authorizing the establishment of the Allmerica Select
Separate Account III was previously filed in the
initial Registration Statement on Form S-6 of the
Fulcrum Variable Life Separate Account II (File No
333-15569) and is incorporated by reference herein.
(2) Not Applicable.
(3) (a) Underwriting and Administrative Services Agreement
between the Company and Allmerica Investments, Inc. was
previously filed on April 15, 1998 in Post-Effective
Amendment No. 5 of the registration statement on Form S-6 of
Allmerica Select Separate Account II (File No 33-83604) and
is incorporated by reference herein.
(b) Registered Representatives/Agents
Agreement was previously filed on April 15, 1998 in
Post-Effective Amendment No. 5 of the registration
statement on Form S-6 of Allmerica Select Separate
Account II (File No 33-83604) and is incorporated by
reference herein.
(c) Compensation Schedule is filed in the Registrant's
initial registration statement on Form S-6, and is
incorporated herein by reference.
(4) Not Applicable.
(5) (a) Allmerica Select SPL Policy is filed in the
Registrant's initial registration statement on Form S-6,
and is incorporated herein by reference.
(b) Option To Accelerate Death Benefits Rider (Living
Benefits Rider) is filed in the Registrant's initial
registration statement on Form S-6, and is incorporated
herein by reference.
(c) Section 1035 Rider is filed in the Registrant's initial
registration statement on Form S-6, and is incorporated
herein by
reference.
(d) Guaranteed Death Benefit Rider is filed in the
Registrant's initial registration statement on Form S-6,
and is incorporated herein by reference.
(6) Articles of Incorporation and Bylaws, as amended, of
the Company were previously filed on October 1, 1995 in
Post-Effective Amendment No. 1 of the registration
statement on Form S-6 of Allmerica Select Separate
Account II (File No 33-83604) and are incorporated by
reference herein.
(7) Not applicable.
(8) (a) Participation Agreement with Allmerica Investment
Trust was previously filed on April 15, 1998 in
Post-Effective Amendment No. 5 of the registration
statement on Form S-6 of Allmerica Select Separate
Account II (File No 33-83604) and is incorporated by
reference herein.
(b) Participation Agreement with T. Rowe Price
International Series, Inc. was previously filed on April 15,
1998 in Post-Effective Amendment No. 5 of the
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registration statement on Form S-6 of Allmerica Select
Separate Account II (File No 33-83604) and is incorporated
by reference herein.
(c) Participation Agreement with Variable Insurance
Products Fund, as amended, was previously filed on April 15,
1998 in Post-Effective Amendment No. 5 of the registration
statement on Form S-6 of Allmerica Select Separate Account
II (File No 33-83604) and is incorporated by reference
herein.
(d) Fidelity Service Agreement, effective as of
November 1, 1995, was previously filed on April 30, 1996 in
Post-Effective Amendment No. 2 of the registration statement
on Form S-6 of Allmerica Select Separate Account II (File No
33-83604) and is incorporated by reference herein.
(e) An Amendment to the Fidelity Service Agreement,
effective as of January 1, 1997, was previously filed on May
1, 1997 in Post-Effective Amendment No. 3 of the
registration statement on Form S-6 of Allmerica Select
Separate Account II (File No 33-83604) and is incorporated
by reference herein.
(f) Fidelity Service Contract, effective as of January
1, 1997, was previously filed on May 1, 1997 in
Post-Effective Amendment No. 3 of the registration
statement on Form S-6 of Allmerica Select Separate
Account II (File No 33-83604) and is incorporated by
reference herein.
(g) Service Agreement with Rowe-Price Fleming
International, Inc. was previously filed on April 15, 1998
in Post-Effective Amendment No. 5 of the registration
statement on Form S-6 of Allmerica Select Separate Account
II (File No 33-83604) and is incorporated by reference
herein.
(h) BFDS Agreements for lockbox and mailroom services
was previously filed on April 15, 1998 in Post-Effective
Amendment No. 5 of the registration statement on Form S-6 of
Allmerica Select Separate Account II (File No 33-83604) and
is incorporated by reference herein.
(9) Not applicable.
(10) Form of Application for Contract is filed in the
Registrant's initial registration statement on Form S-6,
and is incorporated herein by reference.
(11) None.
B. (1) None.
(2) None.
C. None.
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SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940,
Allmerica Financial Life Insurance and Annuity Company, depositor of the
Registrant, has caused this registration statement to be duly signed on
behalf of the Registrant in the City of Worcester and Commonwealth of
Massachusetts on the 25th day of June, 1998.
ALLMERICA SELECT SEPARATE ACCOUNT III OF ALLMERICA FINANCIAL
LIFE INSURANCE AND ANNUITY COMPANY
(Name of Registrant)
BY: ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
(Name of Depositor)
By: /s/ Sheila B. St. Hilaire
-------------------------
Assistant Vice President and Counsel
Attest: /s/ Abigail M. Armstrong
--------------------------
(Name)
SECRETARY AND COUNSEL
(Title)
