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ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
SUPPLEMENT TO PROSPECTUSES DATED MAY 1, 1999
INHEIRITAGE ACCOUNT FULCRUM ACCOUNT
VEL ACCOUNT VEL II ACCOUNT VEL III ACCOUNT
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First Allmerica Financial Life Insurance Company ("FAFLIC") has obtained
approval from the Massachusetts Division of Insurance to take certain actions
(the "Plan") to simplify the organizational and capital structure of its holding
company system. The Plan will be implemented on or about July 1, 1999.
In accordance with the Plan, all property-and casualty companies in the holding
company system, as well as several other non-insurance subsidiaries, will be
moved out from under FAFLIC to a position more directly under the ultimate
controlling person in the group, Allmerica Financial Corporation ("AFC"). In
1998, the net income of the subsidiaries to be transferred from FAFLIC to AFC
was $95.7 million. As of December 31, 1998, the total assets and total equity of
these subsidiaries were $4,033.0 million and $1,264.1 million, respectively.
Under the Plan, FAFLIC will retain its ownership of Allmerica Financial Life
Insurance and Annuity Company ("AFLIAC"). Certain indirect wholly-owned
subsidiaries of FAFLIC, including Allmerica Investments, Inc. and Allmerica
Financial Investment Management, Inc., will become wholly-owned subsidiaries of
AFLIAC (and therefore continue to be indirect wholly-owned subsidiaries of
FAFLIC).
As part of the transactions, AFC will contribute to FAFLIC capital of $125
million and agree to maintain FAFLIC's statutory surplus at specified levels
during the following six years. In addition, any dividend from FAFLIC to AFC
during 2000 and 2001 would require the prior approval of the Massachusetts
Insurance Commissioner.
* * *
Abigail M. Armstrong has resigned as Secretary, in order to assume new duties
with AFLIAC and FAFLIC. Mary M. Eldridge has been elected Secretary, effective
June 1, 1999. Ms. Eldridge has been an employee of FAFLIC since 1992, and has
been an Attorney with the Company since 1998.
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SUPPLEMENT DATED JUNE 25, 1999
