<PAGE> 1
As filed with the Securities and Exchange Commission on February 24, 1999.
Registration No. 333-33351
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO REGISTRATION STATEMENT ON FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES OF UNIT
INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT B
(Formerly FNAL Variable Life Account I)
(Exact name of trust)
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
(formerly First North American Life Assurance Company)
(Name of depositor)
Corporate Center at Rye
555 Theodore Fremd Avenue
Rye, New York 10580
(Address of depositor's principal executive offices)
A. Scott Logan, President Copy to:
The Manufacturers Life Insurance Company of
New York J. Sumner Jones
Corporate Center at Rye Jones & Blouch L.L.P.
555 Theodore Fremd Avenue 1025 Thomas Jefferson St., NW
Rye, New York 10580 Suite 405 West
(Name and Address of Agent for Service) Washington, DC 20007-0805
Approximate date of commencement of proposed public offering: As soon after the
effective date of this Registration Statement as is practicable.
-----------------------
It is proposed that this filing will become effective:
___ immediately upon filing pursuant to paragraph (b) of Rule 485
___ on (date) pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
X on May 1, 1999 pursuant to paragraph (a)(1) of Rule 485
___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
<PAGE> 2
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT B
Registration Statement on Form S-6
Cross-Reference Sheet
<TABLE>
<CAPTION>
FORM
N-8B-2
ITEM NO. CAPTION IN PROSPECTUS
<S> <C>
1 Cover Page; General Information About Manulife New York, the
Separate Account and Manufacturers Investment Trust
2 Cover Page; General Information About Manulife New York, the
Separate Account and Manufacturers Investment Trust
3 *
4 Miscellaneous Matters (Distribution of the Policy)
5 General Information About Manulife New York, the Separate Account
and Manufacturers Investment Trust
6 General Information About Manulife New York, the Separate Account
and Manufacturers Investment Trust
7 *
8 *
9 Miscellaneous Matters (Pending Litigation)
10 Detailed Information About The Policies
11 General Information About Manulife New York, the Separate Account
and Manufacturers Investment Trust
12 General Information About Manulife New York, the Separate Account
and Manufacturers Investment Trust
13 Detailed Information About The Policies (Charges and Deductions)
14 Detailed Information About the Policies (Premium Provisions --
Policy Issue and Initial Premium); Miscellaneous Matters
(Responsibilities Assumed By Manulife New York)
15 Detailed Information About The Policies (Premium Provisions --
Policy Issue and Initial Premium)
16 **
17 Detailed Information About The Policies (Policy Values -- Partial
Withdrawals and Surrenders); Other Provisions -- Payment of
Proceeds)
18 General Information About Manulife New York, the Separate Account
and Manufacturers Investment Trust
19 Detailed Information About The Policies (Other Provisions - Reports
To Policyowners); Miscellaneous Matters (Responsibilities Assumed By
Manulife New York)
20 *
21 Detailed Information About The Policies
22 *
23 **
24 Detailed Information About the Policies (Other General Policy
Provisions)
25 General Information About Manulife New York, the Separate Account
and Manufacturers Investment Trust
26 *
27 **
28 Miscellaneous Matters (The Directors And Officers Of Manulife New
York)
29 General Information About Manulife New York, the Separate Account
and Manufacturers Investment Trust
30 *
31 *
32 *
33 *
34 *
35 **
36 *
37 *
38 Miscellaneous Matters (Distribution of the Policy; Responsibilities
Assumed By Manulife New
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
York)
39 Miscellaneous Matters (Distribution of the Policy)
40 *
41 **
42 *
43 *
44 Detailed Information About The Policies (Policy Values - Policy
Value)
45 *
46 Detailed Information About The Policies (Policy Values - Partial
Withdrawals and Surrenders; Other Provisions -- Payment of Proceeds)
47 General Information About Manulife New York, the Separate Account
and Manufacturers Investment Trust
48 *
49 *
50 General Information About Manulife New York, the Separate Account
and Manufacturers Investment Trust
51 Detailed Information About The Policies
52 Detailed Information About The Policies (Miscellaneous Matters --
Portfolio Share Substitution)
53 **
54 *
55 *
56 *
57 *
58 *
59 Financial Statements
</TABLE>
- --------------
* Omitted since answer is negative or item is not applicable.
** Omitted.
<PAGE> 4
PART I
PROSPECTUS
<PAGE> 5
PROSPECTUS
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK
SEPARATE ACCOUNT B
VENTURE VUL
A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
This prospectus describes the flexible premium variable life insurance policy
(the "Policy") issued by The Manufacturers Life Insurance Company of New York
("we" or "us"). The Policies are designed to provide lifetime insurance
protection together with flexibility as to:
- the timing and amount of premium payments;
- the investments underlying the Policy Value; and
- the amount of insurance coverage.
This flexibility allows you, the policyowner, to pay premiums and adjust
insurance coverage in light of your current financial circumstances and
insurance needs.
Policy Value may be accumulated on a fixed basis or vary with the investment
performance of the sub-accounts of our Separate Account B (the "Separate
Account").
We use the assets of each sub-account to purchase shares of a particular
investment portfolio ("Portfolio") of Manufacturers Investment Trust (the
"Trust"). The accompanying Trust prospectus and the corresponding statement of
additional information describe the investment objectives of the Portfolios in
which you may invest net premiums. The Portfolios available to you are set forth
commencing on the inside front cover. We may add other sub-accounts and
Portfolios in the future.
You should ask one of our sales representative if changing, or adding to,
existing insurance coverage would be advantageous. You should note that it may
not be advisable to purchase a Policy as a replacement for existing insurance.
PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. IT
CONTAINS INFORMATION ABOUT THE SEPARATE ACCOUNT AND THE POLICY THAT YOU SHOULD
KNOW BEFORE INVESTING.
The Securities and Exchange Commission (the "SEC") maintains a Web site
(http://www.sec.gov) that contains material incorporated by reference and other
information regarding registrants that file with the SEC.
THE POLICIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC. NEITHER THE SEC
NOR ANY STATE HAS DETERMINED WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
HOME OFFICE:
The Manufacturers Life Insurance
Company of New York
Corporate Center at Rye
555 Theodore Fremd Avenue
Rye, New York 10580-9966
SERVICE OFFICE MAILING ADDRESS:
The Manufacturers Life Insurance
Company of New York
P.O. Box 633, Niagara Square Station
Buffalo, New York 14201-0633
TELEPHONE: 1-888-267-7784
The date of this prospectus is , 1999.
<PAGE> 6
ELIGIBLE PORTFOLIOS
The Portfolios of the Trust available under the Policies are as follows:
AGGRESSIVE GROWTH PORTFOLIOS
PACIFIC RIM EMERGING MARKETS TRUST. The investment objective of the Pacific Rim
Emerging Markets Trust is to achieve long-term growth of capital. Manufacturers
Adviser Corporation ("MAC") manages the Pacific Rim Emerging Markets Trust and
seeks to achieve this investment objective by investing in a diversified
portfolio that is comprised primarily of common stocks and equity-related
securities of corporations domiciled in countries of the Pacific Rim region.
SCIENCE & TECHNOLOGY TRUST. The investment objective of the Science & Technology
Trust is long-term growth of capital. Current income is incidental to the
portfolio's objective. T. Rowe Price Associates, Inc. ("T. Rowe Price") manages
the Science & Technology Trust.
INTERNATIONAL SMALL CAP TRUST. The investment objective of the International
Small Cap Trust is to seek long-term capital appreciation. Founders Asset
Management, LLC ("Founders") manages the International Small Cap Trust and will
pursue this objective by investing primarily in securities issued by foreign
companies which have total market capitalizations or annual revenues of $1
billion or less. These securities may represent companies in both established
and emerging economies throughout the world.
EMERGING SMALL COMPANY TRUST (formerly the Emerging Growth Trust). The
investment objective of the Emerging Small Company Trust is maximum capital
appreciation. Warburg Pincus Asset Management, Inc. manages the Emerging Small
Company Trust and will pursue this objective by investing primarily in a
portfolio of equity securities of domestic companies. The Emerging Small Company
Trust ordinarily will invest at least 65% of its total assets in common stocks
or warrants of emerging growth companies that represent attractive opportunities
for maximum capital appreciation.
PILGRIM BAXTER GROWTH TRUST. The investment objective of the Pilgrim Baxter
Growth Trust is capital appreciation. Pilgrim Baxter & Associates, Ltd. ("PBA")
manages the Pilgrim Baxter Growth Trust and seeks to achieve its objective by
investing in companies believed by PBA to have an outlook for strong earnings
growth and the potential for significant capital appreciation.
SMALL/MID CAP TRUST. The investment objective of the Small/Mid Cap Trust is to
seek long term capital appreciation. Fred Alger Management, Inc. manages the
Small/Mid Cap Trust and will pursue this objective by investing at least 65% of
the portfolio's total assets (except during temporary defensive periods) in
small/mid cap equity securities.
INTERNATIONAL STOCK TRUST. The investment objective of the International Stock
Trust is to achieve long-term growth of capital. Rowe Price-Fleming
International, Inc. manages the International Stock Trust and seeks to obtain
this objective by investing primarily in common stocks of established, non-U.S.
companies.
GROWTH PORTFOLIOS
WORLDWIDE GROWTH TRUST. The investment objective of the Worldwide Growth Trust
is long-term growth of capital. Founders manages the Worldwide Growth Trust and
seeks to attain this objective by normally investing at least 65% of its total
assets in equity securities of growth companies in a variety of markets
throughout the world.
GLOBAL EQUITY TRUST. The investment objective of the Global Equity Trust is
long-term capital appreciation. Morgan Stanley Dean Witter Investment Management
Inc. manages the Global Equity Trust and intends to pursue this objective by
investing primarily in equity securities of issuers throughout the world,
including U.S. issuers.
SMALL COMPANY VALUE TRUST. The investment objective of the Small Company Value
Trust is long-term growth of capital. AXA Rosenberg investment Management LLC
manages the Small Company Value Trust and
ii
<PAGE> 7
intends to pursue this objective by investing in equity securities of smaller
companies which are traded principally in the markets of the United States.
EQUITY TRUST. The principal investment objective of the Equity Trust is growth
of capital. Current income is a secondary consideration although growth of
income may accompany growth of capital. Fidelity Management Trust Company
("FMTC") manages the Equity Trust and seeks to attain the foregoing objective by
investing primarily in common stocks of United States issuers or securities
convertible into or which carry the right to buy common stocks.
GROWTH TRUST. The investment objective of the Growth Trust is to seek long-term
growth of capital. Founders manages the Growth Trust and will pursue this
objective by investing, under normal market conditions, at least 65% of its
total assets in common stocks of well-established, high-quality growth companies
that Founders believes have the potential to increase earnings faster than the
rest of the market.
QUANTITATIVE EQUITY TRUST. The investment objective of the Quantitative Equity
Trust is to achieve intermediate and long-term growth through capital
appreciation and current income by investing in common stocks and other equity
securities of well established companies with promising prospects for providing
an above-average rate of return. MAC manages the Quantitative Equity Trust.
EQUITY INDEX TRUST. The investment objective of the Equity Index Trust is to
achieve investment results which approximate the total return of publicly traded
common stocks in the aggregate, as represented by the Standard & Poor's 500
Composite Stock Price Index. MAC manages the Equity Index Trust.
BLUE CHIP GROWTH TRUST. The primary investment objective of the Blue Chip Growth
Trust is to provide long-term growth of capital. Current income is a secondary
objective, and many of the stocks in the portfolio are expected to pay
dividends. T. Rowe Price manages the Blue Chip Growth Trust.
REAL ESTATE SECURITIES TRUST. The investment objective of the Real Estate
Securities Trust is to achieve a combination of long-term capital appreciation
and satisfactory current income by investing in real estate related equity and
debt securities. MAC manages the Real Estate Securities Trust.
GROWTH & INCOME PORTFOLIOS
VALUE TRUST. The investment objective of the Value Trust is to realize an
above-average total return over a market cycle of three to five years,
consistent with reasonable risk. Miller Anderson & Sherrerd, LLP ("MAS") manages
the Value Trust and seeks to attain this objective by investing primarily in
common and preferred stocks, convertible securities, rights and warrants to
purchase common stocks, ADRs and other equity securities of companies with
equity capitalizations usually greater than $300 million.
INTERNATIONAL GROWTH AND INCOME TRUST. The investment objective of the
International Growth and Income Trust is to seek long-term growth of capital and
income. The Portfolio is designed for investors with a long-term investment
horizon who want to take advantage of investment opportunities outside the
United States. J.P. Morgan Investment Management Inc. manages the International
Growth and Income Trust.
GROWTH AND INCOME TRUST. The investment objective of the Growth and Income Trust
is to provide long-term growth of capital and income consistent with prudent
investment risk. Wellington Management Company, LLP ("Wellington Management")
manages the Growth and Income Trust and seeks to achieve the Trust's objective
by investing primarily in a diversified portfolio of common stocks of U.S.
issuers which Wellington Management believes are of high quality.
EQUITY-INCOME TRUST. The investment objective of the Equity-Income Trust is to
provide substantial dividend income and also long term capital appreciation. T.
Rowe Price manages the Equity-Income Trust and seeks to attain this objective by
investing primarily in dividend-paying common stocks, particularly of
established companies with favorable prospects for both increasing dividends and
capital appreciation.
iii
<PAGE> 8
BALANCED PORTFOLIOS
BALANCED TRUST. The investment objective of the Balanced Trust is current income
and capital appreciation. Founders is the manager of the Balanced Trust and
seeks to attain this objective by investing in a balanced portfolio of common
stocks, U.S. and foreign government obligations and a variety of corporate
fixed-income securities.
AUTOMATIC ASSET ALLOCATION TRUSTS (AGGRESSIVE, MODERATE AND CONSERVATIVE). The
investment objective of each of the Automatic Asset Allocation Trusts is to
realize the highest potential total return consistent with a specified level of
risk tolerance -- conservative, moderate or aggressive. The amount of each
Portfolio's assets invested in each category of securities -- debt, equity, and
money market -- is dependent upon the judgment of FMTC as to what percentages of
each Portfolio's assets in each category will contribute to the limitation of
risk and the achievement of its investment objective.
BOND PORTFOLIOS
HIGH YIELD TRUST. The investment objective of High Yield Trust is to realize an
above-average total return over a market cycle of three to five years,
consistent with reasonable risk. MAS manages the High Yield Trust and seeks to
attain this objective by investing primarily in high yield debt securities,
including corporate bonds and other fixed-income securities.
STRATEGIC BOND TRUST. The investment objective of the Strategic Bond Trust is to
seek a high level of total return consistent with preservation of capital. The
Strategic Bond Trust seeks to achieve its objective by giving its Subadviser,
Salomon Brothers Asset Management Inc. ("SBAM") broad discretion to deploy the
Strategic Bond Trust's assets among certain segments of the fixed-income market
as SBAM believes will best contribute to the achievement of the Portfolio's
objective.
GLOBAL GOVERNMENT BOND TRUST. The investment objective of the Global Government
Bond Trust is to seek a high level of total return by placing primary emphasis
on high current income and the preservation of capital. Oechsle International
Advisors, LLC manages the Global Government Bond Trust and intends to pursue
this objective by investing primarily in a selected global portfolio of
high-quality, fixed-income securities of foreign and U.S. governmental entities
and supranational issuers.
CAPITAL GROWTH BOND TRUST. The investment objective of the Capital Growth Bond
Trust is to achieve growth of capital by investing in medium-grade or better
debt securities, with income as a secondary consideration. MAC manages the
Capital Growth Bond Trust. The Capital Growth Bond Trust differs from most
"bond" funds in that its primary objective is capital appreciation, not income.
INVESTMENT QUALITY BOND TRUST. The investment objective of the Investment
Quality Bond Trust is to provide a high level of current income consistent with
the maintenance of principal and liquidity. Wellington Management manages the
Investment Quality Bond Trust and seeks to achieve the Portfolio's objective by
investing primarily in a diversified portfolio of investment grade corporate
bonds and U.S. Government bonds with intermediate to longer term maturities.
U.S. GOVERNMENT SECURITIES TRUST. The investment objective of the U.S.
Government Securities Trust is to obtain a high level of current income
consistent with preservation of capital and maintenance of liquidity. SBAM
manages the U.S. Government Securities Trust and seeks to attain its objective
by investing a substantial portion of its assets in debt obligations and
mortgage-backed securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and derivative securities such as collateralized
mortgage obligations backed by such securities.
MONEY MARKET PORTFOLIO
MONEY MARKET TRUST. The investment objective of the Money Market Trust is to
obtain maximum current income consistent with preservation of principal and
liquidity. MAC manages the Money Market Trust and seeks to achieve this
objective by investing in high quality, U.S. dollar denominated money market
instruments.
iv
<PAGE> 9
LIFESTYLE PORTFOLIOS
LIFESTYLE AGGRESSIVE 1000 TRUST. The investment objective of the Lifestyle
Aggressive 1000 Trust is to provide long term growth of capital. Current income
is not a consideration. MAC manages the Portfolio and seeks to achieve this
objective by investing approximately 100% of the Lifestyle Trust's assets in
Underlying Portfolios which invest primarily in equity securities.
LIFESTYLE GROWTH 820 TRUST. The investment objective of the Lifestyle Growth 820
Trust is to provide long term growth of capital with consideration also given to
current income. MAC manages the Portfolio and seeks to achieve this objective by
investing approximately 20% of the Lifestyle Trust's assets in Underlying
Portfolios which invest primarily in fixed income securities and approximately
80% of its assets in Underlying Portfolios which invest primarily in equity
securities.
LIFESTYLE BALANCED 640 TRUST. The investment objective of the Lifestyle Balanced
640 Trust is to provide a balance between high level of current income and
growth of capital with a greater emphasis given to capital growth. MAC manages
the Portfolio and seeks to achieve this objective by investing approximately 40%
of the Lifestyle Trust's assets in Underlying Portfolios which invest primarily
in fixed income securities and approximately 60% of its assets in Underlying
Portfolios which invest primarily in equity securities.
LIFESTYLE MODERATE 460 TRUST. The investment objective of the Lifestyle Moderate
460 Trust is to provide a balance between a high level of current income and
growth of capital with a greater emphasis given to high income. MAC manages the
Portfolio and seeks to achieve this objective by investing approximately 60% of
the Lifestyle Trust's assets in Underlying Portfolios which invest primarily in
fixed income securities and approximately 40% of its assets in Underlying
Portfolios which invest primarily in equity securities.
LIFESTYLE CONSERVATIVE 280 TRUST. The investment objective of the Lifestyle
Conservative 280 Trust is to provide a high level of current income with some
consideration also given to growth of capital. MAC manages the Portfolio and
seeks to achieve this objective by investing approximately 80% of the Lifestyle
Trust's assets in Underlying Portfolios which invest primarily in fixed income
securities and approximately 60% of its assets in Underlying Portfolios which
invest primarily in equity securities.
v
<PAGE> 10
PROSPECTUS CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION TO POLICIES..................................................
GENERAL INFORMATION ABOUT US, ............................................
THE SEPARATE ACCOUNT AND THE TRUST ...................................
Manulife New York ...................................................
Separate Account B ..................................................
Manufacturers Investment Trust ......................................
DETAILED INFORMATION ABOUT THE POLICIES...................................
PREMIUM PROVISIONS ....................................................
Policy Issue And Initial Premium ....................................
Premium Allocation ..................................................
Premium Limitations .................................................
Short-Term Cancellation Right And "Free Look"........................
Provisions ..........................................................
INSURANCE BENEFIT .....................................................
The Insurance Benefit ...............................................
No Lapse Guarantee...................................................
No Lapse Guarantee Cumulative Premium Test...........................
Death Benefit Options ...............................................
Death Benefit Option Changes ........................................
Face Amount Changes .................................................
POLICY VALUES .........................................................
Policy Value ........................................................
Transfers Of Policy Value ...........................................
Policy Loans ........................................................
Partial Withdrawals And Surrenders ..................................
Charges and Deductions ..............................................
Deductions From Premiums ............................................
Surrender Charges....................................................
Monthly Deductions ..................................................
Administration Charge ...............................................
Cost Of Insurance Charge ............................................
Mortality And Expense Risks Charge ..................................
Other Charges .......................................................
The General Account .................................................
OTHER GENERAL POLICY PROVISIONS .......................................
Policy Default.......................................................
Policy Reinstatement ................................................
Miscellaneous Policy Provisions .....................................
OTHER PROVISIONS ......................................................
Supplementary Benefits ..............................................
Payment Of Proceeds .................................................
Reports To Policyowners .............................................
</TABLE>
vi
<PAGE> 11
<TABLE>
<S> <C>
MISCELLANEOUS MATTERS ....................................................
Portfolio Share Substitution ........................................
Federal Income Tax Considerations ...................................
Tax Status Of The Policy ............................................
Tax Treatment Of Policy Benefits ....................................
Our Taxes ...........................................................
Distribution Of The Policy ..........................................
Responsibilities Assumed By Us and MSS ..............................
Voting Rights .......................................................
Directors And Officers Of Manulife New York .........................
State Regulations ...................................................
Pending Litigation ..................................................
Additional Information ..............................................
Legal Matters .......................................................
Experts .............................................................
Year 2000 Issues ....................................................
FINANCIAL STATEMENTS .....................................................
APPENDICES ...............................................................
A. Sample Illustrations Of Policy Values, Cash Surrender................
Values And Death Benefits ...........................................
B. Definitions .........................................................
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION WHERE IT
WOULD NOT BE LAWFUL. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS OR IN THE PROSPECTUS OR STATEMENT OF ADDITIONAL INFORMATION OF THE
TRUST. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS
DIFFERENT.
You should examine this prospectus carefully. The INTRODUCTION TO POLICIES will
briefly describe the Policy. More detailed information will be found within.
vii
<PAGE> 12
INTRODUCTION TO POLICIES
The following summary is intended to provide a general
description of the most important features of the Policy. It
is not a complete description. You should read all of this
prospectus in order to fully understand the provisions of the
Policy.
GENERAL
The Policy provides a death benefit in the event of the death
of the life insured to the person you name as the beneficiary.
You may pay premiums at any time and in any amount, subject to
certain limitations.
- --------------------------------------------------------------------------------
You may tell us how to invest your premiums.
- --------------------------------------------------------------------------------
You may instruct us as to how your premiums, net of certain
deductions, will be allocated. You may choose among the Fixed
Account and the sub-accounts of the Separate Account. The
premiums you allocate to the sub-accounts of the Separate
Account are invested in shares of a particular Portfolio of
the Trust. You may change your instructions as to how premiums
should be allocated at any time. You may also transfer amounts
among the sub-accounts subject to certain restrictions (see
"Transfers of Policy Value").
The Portfolios currently available to you are set forth
beginning on the inside front cover of this prospectus. In the
future we may make available other sub-accounts and
Portfolios.
The Policy has a Policy Value reflecting premiums you have
paid, the investment performance of the accounts to which you
have allocated premiums, and certain charges for expenses and
cost of insurance. You may obtain a portion of the Policy
Value by making a policy loan or a partial withdrawal, or by
full surrender of the Policy.
DEATH BENEFIT
- --------------------------------------------------------------------------------
You have two death benefit options.
- --------------------------------------------------------------------------------
DEATH BENEFIT OPTIONS. You choose one of two death benefit
options:
- a death benefit equal to the face amount of
the Policy, or
- a death benefit equal to the face amount of
the Policy plus the Policy Value.
Under either option, the death benefit may have to be
increased to satisfy the so-called "corridor percentage test"
under the definition of life insurance in the Internal Revenue
Code of 1986, as amended (the "Code"). See DETAILED
INFORMATION ABOUT THE POLICIES; INSURANCE BENEFIT -- "The
Insurance Benefit" and "Death Benefit Options."
YOU MAY CHANGE THE DEATH BENEFIT OPTION. You may change the
death benefit option after the Policy has been in force for
one year. See DETAILED INFORMATION ABOUT THE POLICIES;
INSURANCE BENEFIT -- "Death Benefit Option Changes."
1
<PAGE> 13
- --------------------------------------------------------------------------------
You may increase or decrease the Policy's face amount.
- --------------------------------------------------------------------------------
YOU MAY INCREASE THE FACE AMOUNT. After the Policy has been in
force for one year, you may increase the face amount of the
Policy once per policy year. You may have to furnish
satisfactory evidence of your insurability. Usually a Policy
will have new surrender charges after an increase. See
DETAILED INFORMATION ABOUT THE POLICIES; INSURANCE BENEFIT --
"Face Amount Changes."
YOU MAY DECREASE THE FACE AMOUNT. After the Policy has been in
force for one year, you may decrease the face amount once per
policy year. A decrease in face amount may result in the
deduction of surrender charges. See DETAILED INFORMATION ABOUT
THE POLICIES; INSURANCE BENEFIT -- "Face Amount Changes."
PREMIUM PAYMENTS ARE FLEXIBLE
- --------------------------------------------------------------------------------
You may pay premiums at any time.
- --------------------------------------------------------------------------------
You may pay premiums at any time and in any amount, subject to
certain limitations. See DETAILED INFORMATION ABOUT THE
POLICIES; PREMIUM PROVISIONS -- "Policy Issue" and "Premium
Limitations."
You must pay at least the Initial Premium to put the Policy in
force. See DETAILED INFORMATION ABOUT THE POLICIES; PREMIUM
PROVISIONS - "Premium Limitations."
After the Initial Premium is paid there is no minimum premium
required. However, for Policies with a face amount of at least
$250,000, by complying with the No Lapse Guarantee Cumulative
Premium Test, you can ensure that the Policy will not go into
default for the first five policy years. See DETAILED
INFORMATION ABOUT THE POLICIES; INSURANCE BENEFIT - "No Lapse
Guarantee."
The Policy is subject to maximum premium limitations to ensure
that it qualifies as life insurance under rules defined in the
Code. See DETAILED INFORMATION ABOUT THE POLICIES; PREMIUM
PROVISIONS -- "Premium Limitations."
THE POLICY VALUE
- --------------------------------------------------------------------------------
What is the Policy Value?
- --------------------------------------------------------------------------------
The Policy has a Policy Value which reflects the following:
- the premium payments you have made;
- the investment performance of the sub-accounts to
which you have allocated net premiums.
- the interest we have credited to amounts allocated to
our Fixed Account;
- any partial withdrawals you have made;
- and charges we have deducted under the Policy.
The Policy Value is the sum of the values in the Investment
Accounts, the Fixed Account and the Loan Account.
INVESTMENT ACCOUNT. We establish an Investment Account under
the Policy for each sub-account of the Separate Account to
which you have allocated net premiums or have transferred
amounts. An Investment Account measures the interest of the
Policy in the corresponding sub-account.
2
<PAGE> 14
The value of each Investment Account under the Policy varies
each Business Day and reflects the investment performance of
the Portfolio shares held in the corresponding sub-account.
See DETAILED INFORMATION ABOUT THE POLICIES; POLICY VALUES --
"Policy Value."
FIXED ACCOUNT. The Fixed Account consists of that portion of
the Policy Value based on net premiums allocated to, and
amounts transferred to, the general account of the Company.
We credit interest on amounts in the Fixed Account at an
effective annual rate guaranteed to be at least 4%. See
DETAILED INFORMATION ABOUT THE POLICIES; POLICY VALUES -- "The
General Account."
LOAN ACCOUNT. When you make a policy loan, we will establish a
Loan Account under the Policy. We will transfer an amount from
the Investment Accounts and the Fixed Account to the Loan
Account.
We will credit interest to amounts in the Loan Account at an
effective annual rate of at least 4%. The actual rate credited
on loan amounts will be the rate charged on loan amounts less
an interest rate differential, currently 1.75%. For Select
Loan Amounts the interest rate differential is currently 0%.
This is subject to change in certain circumstances. See
DETAILED INFORMATION ABOUT THE POLICIES; POLICY VALUES --
"Policy Loans."
- --------------------------------------------------------------------------------
You may transfer amounts among the various investment options.
- --------------------------------------------------------------------------------
TRANSFERS ARE PERMITTED. You may transfer amounts among the
sub-accounts of the Separate Account and our Fixed Account,
subject to certain restrictions.
We permit twelve transfers per policy year at no cost to you.
Transfers in excess of that will cost $25 per transfer. If you
request more than one transfer at the same time, we will treat
your requests as a single request.
Certain restrictions may apply to transfer requests. See
DETAILED INFORMATION ABOUT THE POLICIES; POLICY VALUES --
"Policy Value."
USING THE POLICY VALUE
- --------------------------------------------------------------------------------
How you may use your Policy Value.
- --------------------------------------------------------------------------------
BORROWING AGAINST THE POLICY VALUE. You may borrow against the
Policy Value. The minimum loan amount is $500.
Loan interest will be charged on a fixed basis at an effective
annual rate of 5.75%. See DETAILED INFORMATION ABOUT THE
POLICIES; POLICY VALUES -- "Policy Loans."
YOU MAY MAKE A PARTIAL WITHDRAWAL OF THE POLICY VALUE. After a
Policy has been in force for one year, you may make a partial
withdrawal of the Policy Value. The minimum amount you may
withdraw is $500. You may specify that the withdrawal is to be
made from a specific Investment Account or the Fixed Account.
A partial withdrawal may result in a reduction in the face
amount of the Policy. It may also result in the assessment of
a portion of the surrender charges to which the Policy is
subject. See DETAILED INFORMATION ABOUT THE POLICIES; POLICY
VALUES -- "Partial Withdrawals and Surrenders" and "Surrender
Charges."
THE POLICY MAY BE SURRENDERED FOR ITS NET CASH SURRENDER
VALUE. The Net Cash Surrender Value is equal to the Policy
Value less surrender charges, outstanding monthly deductions
due and the value of the Policy Debt Account. Surrender of a
Policy during the Surrender Charge Period will usually result
in assessment of surrender charges. See DETAILED INFORMATION
ABOUT THE POLICIES; POLICY VALUES -- "Partial Withdrawals and
Surrenders," "Charges and Deductions" and "Surrender Charges."
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<PAGE> 15
CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------
What are the various charges under the Policy?
- --------------------------------------------------------------------------------
1) DEDUCTIONS FROM PREMIUMS. We reserve the right to make a
charge for state, local and Federal taxes in an amount not to
exceed 3.60%. We currently make no deduction of charges from
premium payments for such taxes.
2) SURRENDER CHARGES. We usually deduct a deferred
underwriting charge and a deferred sales charge if, during the
Surrender Charge Period:
- you surrender the Policy for its Net Cash
Surrender Value,
- you make a partial withdrawal in excess of
the Withdrawal Tier Amount,
- you decrease the face amount of the Policy,
or
- the Policy lapses.
The deferred underwriting charge is $4.50 for each $1,000 of
face amount of life insurance coverage initially or added by
increase.
In effect, the charge applies only to the first $500,000 of
face amount initially purchased or the first $500,000 of each
subsequent increase in face amount. Thus, the charge made in
connection with any one underwriting will not exceed $2,250.
The maximum deferred sales charge is 50% of premiums paid up
to a maximum number of Target Premiums that varies (from -2.00
to 2.59) according to the issue age of the life insured, the
face amount at issue and the amount of any increase.
The full amount of the deferred underwriting charge and the
deferred sales charge will be in effect for five years
following Policy issue. Beginning in the sixth year, these
charges grade downward over a maximum ten-year period. See
DETAILED INFORMATION ABOUT THE POLICIES; POLICY VALUES --
"Charges And Deductions" and "Surrender Charges."
If you increase the face amount, the surrender charges
applicable to the increase will be those rates that would
apply if a Policy were issued to the life insured at his or
her then attained age and based on the amount of the increase.
3) MONTHLY DEDUCTIONS. At the beginning of each policy month
we deduct from the Policy Value:
- an administration charge of $35 per month
until the first policy anniversary;
thereafter $10 per month (the right is
reserved to increase the administration
charge by up to $.01 per $1,000 of face
amount per month),
- a charge for the cost of insurance,
- a charge for mortality and expense risks of
0.075% per month through the later of the
tenth policy anniversary and your attained
age 60 and, thereafter, 0.0375% per month
(this charge is assessed against the value
of your investment accounts), and
- charge(s) for any supplementary benefit(s)
added to the Policy.
The cost of insurance charge varies based on the net amount at
risk under the Policy and the applicable cost of insurance
rate. Cost of insurance rates vary according to issue age, the
duration of the coverage, sex, any additional ratings
indicated in the policy, and risk class of the life insured.
The maximum cost of insurance rate we charge will not exceed
the 1980 Commissioners Standard Ordinary Smoker/Nonsmoker
Mortality Tables. However, any additional ratings as
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<PAGE> 16
indicated in the Policy will be added to the cost of insurance
rate. See DETAILED INFORMATION ABOUT THE POLICIES; POLICY
VALUES - "Charges and Deductions" and "Monthly Deductions."
If the Policy is still in force when the life insured attains
age 100, we will pay the policyowner the Net Cash Surrender
Value as of the Maturity Date of the Policy.
4) OTHER CHARGES. Charges will be imposed on certain transfers
of Policy Values, including a $25 charge for each transfer in
excess of twelve per policy year and a $5 charge for each
Dollar Cost Averaging transfer if Policy Value does not exceed
$15,000. See DETAILED INFORMATION ABOUT THE POLICIES; POLICY
VALUES -- "Transfers Of Policy Value."
INVESTMENT MANAGEMENT FEES AND EXPENSES
The Trust (excluding the Lifestyle Trusts) pays investment
management fees that range from .25% to 1.10% of the assets of
the Portfolios. Total Trust annual expenses range from .54% to
1.95% of the assets of the Portfolios (excluding the Lifestyle
Trusts). In the case of the Lifestyle Trusts, Manufacturers
Securities Services, LLC ("MSS"), the adviser to the Trust,
has voluntarily agreed to pay the expenses of the Lifestyle
Trusts (other than the expenses of the Underlying Portfolios).
Absent the expense reimbursement agreement between the adviser
and the Trust, total trust annual expenses for the Lifestyle
Trusts would range from .748% to 1.156%. This expense
reimbursement may be terminated at any time. Because each
Lifestyle Trust invests in shares of other Portfolios, each
will bear its pro rata share of the fees and expenses incurred
by the other Portfolios. See DETAILED INFORMATION ABOUT THE
POLICIES; POLICY VALUES -- "Other Charges."
We reserve the right to charge or establish a provision for
any Federal, state or local taxes that may be attributable to
the Separate Account or our operations with respect to the
Policies. This charge or provision for taxes would be in
addition to the deductions for state, local and Federal taxes
currently being made.
SUPPLEMENTARY BENEFITS
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Supplementary benefits are available.
- --------------------------------------------------------------------------------
You may choose to add certain supplementary benefits to the
Policy. These supplementary benefits are offered subject to
state approval and include
- an accidental death benefit,
- change of life insured (for corporate owned
Policies), and
- a disability benefit to waive the cost of
monthly deductions.
The cost of any supplementary benefits will be deducted from
the Policy Value monthly. See DETAILED INFORMATION ABOUT THE
POLICIES; OTHER PROVISIONS -- "Supplementary Benefits."
DEFAULT
Unless the No Lapse Guarantee is in effect, the Policy will go
into default if the Net Cash Surrender Value at the beginning
of any policy month would go below zero after deducting the
monthly charges then due. The Policy will not go into default
if the policy qualifies for the No Lapse Guarantee. We will
send a notice to you if the Policy goes into default. It will
allow a grace period in which you may make a premium payment
sufficient to bring the Policy out of default. If you do not
pay the required premium during the grace period, the Policy
will terminate. See DETAILED INFORMATION ABOUT THE POLICIES;
OTHER GENERAL POLICY PROVISIONS -- "Policy Default."
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<PAGE> 17
NO LAPSE GUARANTEE
- --------------------------------------------------------------------------------
You may be able to guarantee that your Policy will not go into default.
- --------------------------------------------------------------------------------
On Policies issued with a face amount of at least $250,000, as
long as the No Lapse Guarantee Cumulative Premium Test is
satisfied, we will guarantee that the Policy will not go into
default, even if a combination of Policy loans, adverse
investment experience and other factors should cause the
Policy's Net Cash Surrender Value to be insufficient to meet
the monthly deductions due at the beginning of a policy month.
The No Lapse Guarantee Period is the first five Policy Years
for life insureds with an issue age up to and including 85. It
is not offered to life insureds whose Issue Age exceeds 85.
See DETAILED INFORMATION ABOUT THE POLICIES; INSURANCE BENEFIT
- "No Lapse Guarantee."
REINSTATEMENT
If your Policy is terminated, you may have it reinstated
within either the 21-day or five-year period following the
date of termination, providing certain conditions are met. See
DETAILED INFORMATION ABOUT THE POLICIES; OTHER GENERAL POLICY
PROVISIONS -- "Policy Reinstatement."
FREE LOOK
You may return a Policy for a refund of premium within 10 days
after it is received.
If the Policy is purchased in connection with a replacement of
an existing life insurance policy (as defined in "DETAILED
INFORMATION ABOUT THE POLICIES - Short-Term Cancellation Right
and 'Free Look' Provisions"), you may cancel the Policy by
returning it within 60 days after it is received.
If you request an increase in face amount which results in new
surrender charges, the "free look" provision will also apply
to the increase. See DETAILED INFORMATION ABOUT THE POLICIES;
PREMIUM PROVISIONS -- "Short-Term Cancellation Right and 'Free
Look' Provisions."
FEDERAL TAX MATTERS
We believe that a Policy issued on a standard risk class basis
should meet the definition of a life insurance contract as set
forth in Section 7702 of the Code. With respect to a Policy
issued on a substandard basis, there is less guidance
available to determine if such a Policy would satisfy the
Section 7702 definition of a life insurance contract,
particularly if the policyowner pays the full amount of
premiums permitted under such a Policy. If your Policy
qualifies as a life insurance contract for Federal income tax
purposes, you should not be deemed to be in constructive
receipt of Policy Value under a Policy until there is a
distribution from the Policy. Moreover, death benefits payable
under a Policy should be completely excludable from the gross
income of the beneficiary. As a result, the beneficiary
generally should not be taxed on these proceeds. See DETAILED
INFORMATION ABOUT THE POLICIES; MISCELLANEOUS MATTERS -
"Federal Income Tax Considerations" and "Tax Status of the
Policy."
Under certain circumstances, a Policy may be treated as a
"Modified Endowment Contract" ("MEC"). If the Policy is a MEC,
then all pre-death distributions, including Policy loans, will
be treated first as a distribution of taxable income and then
as a return of investment in the Policy. In addition, prior to
age 59 1/2 any such distributions generally will be subject to
a 10% penalty tax. See DETAILED INFORMATION ABOUT THE
POLICIES; MISCELLANEOUS MATTERS -- "Federal Income Tax
Considerations" and "Tax Treatment of Policy Benefits."
If the Policy is not a MEC, distributions generally will be
treated first as a return of investment in the Policy and then
a disbursement of taxable income. Moreover, loans will not be
treated as distributions. Select Loans may, however, be
treated as taxable distributions. If you are considering the
use of systematic policy loans as one element of a
comprehensive retirement
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<PAGE> 18
income plan, you should consult your personal tax adviser
regarding the potential tax consequences if such loans were to
so reduce Policy Value that the Policy would lapse, absent
additional payments. The premium payment necessary to avert
lapse would increase with the age of the insured. Finally,
neither distributions nor loans under a Policy that is not a
MEC are subject to the 10% penalty tax. See DETAILED
INFORMATION ABOUT THE POLICIES; MISCELLANEOUS MATTERS -
"Federal Income Tax Considerations."
The United States Congress has in the past considered, and in
the future may consider legislation that, if enacted, could
change the tax treatment of life insurance policies. In
addition, the Treasury Department may amend existing
regulations, or adopt new interpretations of existing laws,
state tax laws or, if the policyowner is not a United States
resident, foreign tax laws, which may affect the tax
consequences to him or her, the lives insured or the
beneficiary. These laws may change from time to time without
notice and, as a result, the tax consequences may be altered.
There is no way of predicting whether, when or in what form
any such change would be adopted. Any such change could have a
retroactive effect regardless of the date of enactment. We
suggest that you consult a tax adviser.
ESTATE AND GENERATION-SKIPPING TAXES
The proceeds of this life insurance policy may be taxable
under Estate and Generation-Skipping Tax provisions of the
Code. You should consult your tax adviser regarding these
taxes.
GENERAL INFORMATION ABOUT US, THE SEPARATE ACCOUNT AND THE
TRUST
MANUFACTURERS LIFE OF NEW YORK
- --------------------------------------------------------------------------------
We are an indirect subsidiary of Manulife.
- --------------------------------------------------------------------------------
We are a stock life insurance company organized under the laws
of New York in 1992. Our principal office is located at
Corporate Center at Rye, 555 Theodore Fremd Avenue, Rye, New
York 10580. We are a wholly-owned subsidiary of Manulife North
America. Manulife North America is a stock life insurance
company organized under the laws of Delaware in 1979 with its
principal office located at 116 Huntington Avenue, Boston,
Massachusetts 02116.
Our ultimate parent entity is The Manufacturers Life Insurance
Company ("Manulife"), a Canadian mutual life insurance company
based in Toronto, Canada. Prior to January 1, 1996, Manulife
North America was a wholly owned subsidiary of North American
Life Assurance Company ("NAL"), a Canadian mutual life
insurance company. On January 1, 1996 NAL and Manulife merged
with the combined company retaining the Manulife name.
Effective January 1, 1996, immediately following the merger of
NAL and Manulife, Manulife North America experienced a
corporate restructuring which resulted in the formation of a
newly organized holding corporation, Manulife-Wood Logan
Holding Co., Inc., formerly NAWL Holding Co., Inc. ("MWL").
MWL holds all of the outstanding shares of Manulife North
America and Wood Logan Associates, Inc. ("WLA"). MWL is owned
62.5% by The Manufacturers Life Insurance Company (U.S.A.),
22.5% by MRL Holding, LLC and 15% by the principals of WLA.
On January 20, 1998, the Board of Directors of Manulife
announced that it had asked the Management of Manulife to
prepare a plan for conversion of Manulife from a mutual life
insurance company to an investor-owned, publicly traded stock
company. Any demutualization plan for Manulife is subject to
the approval of the Manulife Board of Directors and
participating policy holders as well as regulatory approval.
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<PAGE> 19
Manufacturers Life of New York's financial ratings are as
follows:
A++ A.M. Best
Superior in financial strength; 1st category of 15
AAA Duff & Phelps
Highest in claims paying ability; 1st category of 18
AA+ Standard & Poor's
Excellent in claims paying ability; 2nd category of
21
These ratings, which are current as of _________________, 19__
and are subject to change, are assigned as a measure of
Manufacturers Life of New York's ability to honor the death
benefit and life annuitization guarantees but not specifically
to its products, the performance (return) of these products,
the value of any investment in these products upon withdrawal
or to individual securities held in any portfolio.
SEPARATE ACCOUNT B
- --------------------------------------------------------------------------------
The Policy Values you allocate to our Separate Account are invested in the Trust
portfolio(s) you select.
- --------------------------------------------------------------------------------
We established the Separate Account on May 6, 1997, subject to
approval by the Superintendent of Insurance of New York. The
Separate Account holds assets that are segregated from all of
our other assets. The Separate Account is currently used only
to support variable life insurance policies.
We are the legal owner of the assets in the Separate Account.
The income, gains and losses of the Separate Account, whether
or not realized, are, in accordance with applicable contracts,
credited to or charged against the Account without regard to
our other income, gains or losses.
We will at all times maintain assets in the Separate Account
with a total market value at least equal to the reserves and
other liabilities relating to variable benefits under all
policies participating in the Separate Account. These assets
may not be charged with liabilities which arise from any other
business we conduct. However, our obligations under the
policies are part of our general corporate obligations.
The Separate Account is registered with the SEC under the
Investment Company Act of 1940, as amended (the "1940 Act") as
a unit investment trust. A unit investment trust is a type of
investment company which invests its assets in specified
securities, such as the shares of one or more investment
companies, rather than in a portfolio of unspecified
securities. Registration under the 1940 Act does not involve
any supervision by the SEC of the management or investment
policies or practices of the Separate Account. For state law
purposes the Separate Account is treated as a part or division
of Manufacturers Life of New York.
MANUFACTURERS INVESTMENT TRUST
- --------------------------------------------------------------------------------
The Trust is a mutual fund in which the Separate Account invests that has 36
investment portfolios managed by 15 sub-advisers.
- --------------------------------------------------------------------------------
We invest the assets of each sub-account of the Separate
Account in shares of a particular Portfolio of the Trust. The
Trust, formerly NASL Series Trust, is registered under the
1940 Act as an open-end management investment company. It
receives investment advisory services from Manufacturers
Securities Services, LLC ("MSS"). MSS, the successor to NASL
Financial Services, Inc., is a registered investment adviser
under the Investment Advisers Act of 1940.
The Trust also employs sub-advisers. The sub-adviser for each
Portfolio is identified in the description of the eligible
Portfolios set forth commencing on the inside front cover of
this prospectus.
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<PAGE> 20
The Separate Account purchases and redeems shares of the Trust
at net asset value. Any dividend or capital gain distribution
received from a Portfolio will be reinvested immediately at
net asset value in shares of that Portfolio and retained as
assets of the corresponding sub-account.
The list of Portfolios in which you may invest under the
Policy and the investment objectives and certain policies of
those Portfolios is set forth commencing on the inside front
cover of this prospectus. A full description of the Trust, its
investment objectives, policies and restrictions, the risks
associated therewith, its expenses, and other aspects of its
operation is contained in the accompanying Trust prospectus,
which should be read together with this prospectus.
We use shares of the Trust to support benefits under both
variable annuity contracts and variable life insurance
policies that we or life insurance companies affiliated with
us issue. We also purchase shares through our general account
for certain limited purposes including providing initial
portfolio seed money. For a description of the procedures for
handling potential conflicts of interest arising from the
funding of benefits under both types of policies, you should
review the accompanying Trust prospectus.
DETAILED INFORMATION ABOUT THE POLICIES
Unless otherwise indicated or required by the context, the
discussion throughout this prospectus assumes that the Policy
has not gone into default, there is no outstanding Policy
Debt, and the death benefit is not determined by the corridor
percentage test (see "Death Benefit Options").
PREMIUM PROVISIONS
POLICY ISSUE AND INITIAL PREMIUM
- --------------------------------------------------------------------------------
The minimum face amount is $50,000.
- --------------------------------------------------------------------------------
To purchase a Policy, you must submit a completed application.
We will issue a Policy only if it has a face amount of at
least $50,000 ($100,000 for preferred risk policies).
Generally, we issue a Policy only to persons between ages 0
and 90. In certain circumstances we may in our sole discretion
issue a Policy to persons above age 90. Before issuing a
Policy, we will require evidence of insurability satisfactory
to us. A life insured will have a risk class of
preferred/non-smoker, preferred/smoker, standard/non-smoker or
standard/smoker as determined by our underwriting rules. We
may issue Policies to persons who fail to meet standard
underwriting requirements by assigning an additional rating.
We will accept an application if it meets our insurance
underwriting rules. Each Policy has a policy date from which
policy years, policy months and policy anniversaries are all
determined. Each Policy also has an effective date which is
the date we become obligated under the Policy and when the
first monthly deductions are taken.
If an application is accompanied by a check for at least the
Initial Premium and we accept the application, the policy date
will be the date we receive the application and check at our
Service Office. The effective date will be the date our
underwriters approve issuance of the Policy. If an application
is accompanied by a check for at least the Initial Premium,
the life insured may be covered under the terms of a
conditional insurance agreement until the effective date.
If an application that we accept is not accompanied by a check
for at least the Initial Premium, we will issue the Policy
with a policy date which is seven days after issuance of the
Policy (the "issue date") and with an effective date which is
the date our Service Office receives at least the Initial
Premium. In certain situations a different policy date may be
used. We must receive the Initial Premium within 60 days after
the policy date; however, we may require the Initial Premium
within 30 days on Policies issued with Additional Ratings. If
the Initial Premium is not paid or if the application is
rejected, we will cancel the Policy and return any premiums
paid to the applicant.
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<PAGE> 21
Under certain circumstances we may issue a Policy with a
backdated policy date. A Policy will not be backdated more
than six months before the date of the application for the
Policy. Monthly deductions will be made for the period the
policy date is backdated.
We will credit interest on all premiums received prior to the
effective date of a Policy from the date of receipt at the
rate of return then being earned on amounts allocated to the
Money Market Trust. On the effective date, we will allocate
the premiums paid plus interest credited, net of deductions
for Federal, state and local taxes, among the Investment
Accounts or the Fixed Account in accordance with the your
instructions.
- --------------------------------------------------------------------------------
Premiums paid after the first premium are allocated as of the date received.
- --------------------------------------------------------------------------------
We will allocate all premiums received on or after the
effective date of the Policy among the Investment Accounts or
the Fixed Account as of the date the premiums were received at
our Service Office. Monthly deductions are due on the policy
date and at the beginning of each policy month thereafter.
However, if due prior to the effective date, they will be
taken on the effective date instead of the dates they were
due.
PREMIUM ALLOCATION
You may allocate your premium payments, net of deductions, to
either the Fixed Account or to one or more of the Investment
Accounts. Amounts allocated to the Fixed Account will
accumulate at an annual rate of interest equal to at least 4%.
Amounts allocated to the Investment Accounts will be invested
in shares of the Portfolios held by the corresponding
sub-accounts of the Separate Account. Your allocation must be
made as a percentage of the Net Premium. The percentage may be
any whole number between zero and 100, provided the total
percentage equals 100. You may change the way in which your
Net Premiums are allocated at any time without charge. The
change will take effect on the date a written or authorized
telephonic request for change, in a format satisfactory to us,
is received at our Service Office.
PREMIUM LIMITATIONS
- --------------------------------------------------------------------------------
We issue Policies with a Planned Premium you select.
- --------------------------------------------------------------------------------
After you pay the Initial Premium, you may pay additional
premiums at any time and in any amount during the lifetime of
the life insured subject to certain limitations. After the
Initial Premium, all premiums must be paid to our Service
Office. Unlike traditional insurance, premiums are not payable
at specified intervals or in specified amounts. Your Policy
will be issued with a Planned Premium which is based on the
amount of premium you wish to pay. It is recommended that the
Planned Premium be such that the No Lapse Guarantee Cumulative
Premium Test will (see INSURANCE BENEFITS - "No Lapse
Guarantee") will be satisfied.
We will send notices to you setting forth the Planned Premium
at the payment interval you select, unless you are making
payments pursuant to a pre-authorized payment plan. However,
you are under no obligation to make the indicated payment.
We will not accept any premium payment which is less than $50,
unless the premium is payable pursuant to a pre-authorized
payment plan. In that case we will accept a payment of as
little as $10. We may change these minimums on 90 days'
written notice. The Policies also limit the sum of the
premiums that may be paid at any time in order to preserve the
qualification of the Policies as life insurance for Federal
tax purposes. These limitations are set forth in each Policy.
We reserve the right to refuse or refund any premium payments
that may cause a Policy to fail to qualify as life insurance
under applicable tax law.
SHORT-TERM CANCELLATION RIGHT AND "FREE LOOK" PROVISIONS
A Policy may be returned for a refund of the premium within 10
days after it is received. The Policy can be mailed or
delivered to the Manulife New York agent who sold it or to the
Manulife New York Service Office. Immediately on such delivery
or mailing, the Policy shall be deemed void from the
beginning. Within seven days after receipt of the returned
Policy at its Service
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<PAGE> 22
Office, Manulife New York will refund any premium paid.
Manulife New York reserves the right to delay the refund of
any premium paid by check until the check has cleared.
If the Policy is purchased in connection with a replacement of
an existing policy (as defined below), the policyowner may
also cancel the Policy by returning it to the Service Office
or the Manulife New York agent who sold it at any time within
60 days after receipt of the Policy. Within 10 days of receipt
of the Policy by the Company, the Company will pay the
policyowner the Policy Value, computed at the end of the
valuation period during which the Policy is received by the
Company. In the case of a replacement of a policy issued by a
New York insurance company, the policyowner may have the right
to reinstate the prior policy. The policyowner should consult
with his or her attorney or the Manulife New York agent
regarding this matter prior to purchasing the new Policy.
Replacement of an existing life insurance policy generally is
defined as the purchase of a new life insurance policy in
connection with (a) the lapse, surrender or change of, or
borrowing from, an existing life insurance policy or (b) the
assignment to a new issuer or an existing life insurance
policy. This description, however, does not necessarily cover
all situations which could be considered a replacement of an
existing life insurance policy. Therefore, a policyowner
should consult with his or her Manulife New York agent or
attorney regarding whether the purchase of a new life
insurance policy is a replacement of an existing life
insurance policy.
If you request an increase in face amount which results in new
surrender charges, you will have the same rights as described
above to cancel the increase. If canceled, the Policy Value
and the surrender charges will be recalculated to the amounts
they would have been had the increase not taken place. You may
request a refund of all or any portion of premiums paid during
the free look period, and the Policy Value and the surrender
charges will be recalculated to the amounts they would have
been had the premiums not been paid.
PROVISIONS FOR AVOIDING LAPSE
NO LAPSE GUARANTEE
- --------------------------------------------------------------------------------
Policies with a face amount of at least $250,000 may be issued with a no lapse
guarantee.
- --------------------------------------------------------------------------------
You may elect the No Lapse Guarantee on Policies issued with a
face amount of at least $250,000 (calculated as described
below). If elected, as long as the No Lapse Guarantee
Cumulative Premium Test (see below) is satisfied during the
first five policy years, we guarantee that the Policy will not
go into default (see OTHER GENERAL POLICY PROVISIONS --
"Policy Default"). Our guarantee applies even if a combination
of Policy loans, adverse investment experience and other
factors causes the Policy's Net Cash Surrender Value to be
insufficient to meet the monthly deductions due at the
beginning of a policy month.
The No Lapse Guarantee terminates at the end of the fifth
policy year.
The No Lapse Guarantee is not offered to life insureds with an
issue age exceeding 85.
While the No Lapse Guarantee is in effect, we will determine
at the beginning of each policy month whether the No Lapse
Guarantee Cumulative Premium Test, described below, has been
satisfied. If it has not been satisfied, we will notify you of
that fact and allow a 61-day grace period in which you may
make a premium payment sufficient to keep the No Lapse
Guarantee in effect. This required payment, as described in
the notification to you, will be equal to the outstanding
premium required to meet the No Lapse Guarantee Cumulative
Premium Test as of the date the No Lapse Guarantee was not
satisfied plus the Monthly No Lapse Guarantee Premium due for
the next two policy months.
If the required payment is not received by the end of the
grace period, the No Lapse Guarantee will terminate.
Thereafter, the Policy may go into default if the Policy's Net
Cash Surrender Value is insufficient to meet the monthly
deductions due at the beginning of a policy month. A death
benefit option change will also terminate the No Lapse
Guarantee if it is in effect at the time of the
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<PAGE> 23
change as will a decrease in face amount below $250,000. The
No Lapse Guarantee cannot be reinstated after it has been
terminated. See OTHER GENERAL POLICY PROVISIONS -- "Policy
Default" and INSURANCE BENEFIT -- "Death Benefit Option
Changes."
NO LAPSE GUARANTEE CUMULATIVE PREMIUM TEST. The No Lapse
Guarantee Cumulative Premium Test is satisfied if, as of the
beginning of the policy month, the sum of all premiums paid to
date less any partial withdrawals and less any Policy Debt is
at least equal to the sum of the Monthly No Lapse Guarantee
Premiums due since the policy date.
The Monthly No Lapse Guarantee Premium is one-twelfth of the
No Lapse Guarantee Premium. The No Lapse Guarantee Premium is
set forth in the Policy. It is subject to change if you change
the face amount of the Policy (see INSURANCE BENEFIT -- "Face
Amount Changes"), or if there is any change in the
supplementary benefits added to the Policy or in the risk
class of any life insured.
INSURANCE BENEFIT
THE INSURANCE BENEFIT
If the Policy is in force at the time of the life insured's
death, we will pay an insurance benefit based on the death
benefit option that you select upon receipt of due proof of
death. The amount payable will be the death benefit under the
selected option, plus any amounts payable under any
supplementary benefits added to the Policy, less the value of
the Policy Debt at the date of death. The insurance benefit
will be paid in one sum unless we and the beneficiary agree
upon another form of settlement. If the insurance benefit is
paid in one sum, we will pay interest from the date of death
to the date of payment. If the life insured should die after
our receipt of a request for surrender, no insurance benefit
will be payable, and we will pay only the Net Cash Surrender
Value.
DEATH BENEFIT OPTIONS
You may select one of two death benefit options -- Option 1
and Option 2.
- --------------------------------------------------------------------------------
What is Option 1?
- --------------------------------------------------------------------------------
Under Option 1 the death benefit is
- the face amount of the Policy at the date of
death or, if greater,
- the Policy Value at the date of death
multiplied by the applicable percentage in
the table set forth below.
- --------------------------------------------------------------------------------
What is Option 2?
- --------------------------------------------------------------------------------
Under Option 2 the death benefit is
- the face amount of the Policy plus the
Policy Value at the date of death or, if
greater,
- the Policy Value at the date of death
multiplied by the applicable percentage in
the following table:
- --------------------------------------------------------------------------------
Use of the corridor percentage may increase your death benefit.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CORRIDOR
AGE PERCENTAGE
--- ----------
<S> <C>
40 & below 250%
41 243
42 236
43 229
44 222
45 215
46 209
47 203
48 197
49 191
50 185
51 178
52 171
53 164
54 157
55 150
56 146
57 142
</TABLE>
12
<PAGE> 24
<TABLE>
<S> <C>
58 138
59 134
60 130
61 128
62 126
63 124
64 122
65 120
66 119
67 118
68 117
69 116
70 115
71 113
72 111
73 109
74 107
75-90 105
91 104
92 103
93 102
94 101
95 & above 100
</TABLE>
Regardless of which death benefit option is in effect, the
relationship of Policy Value to death benefit will change
whenever we use the "corridor percentages" to determine the
amount of the death benefit. This will occur whenever
multiplying the Policy Value by the applicable percentage set
forth in the above table results in a greater death benefit
than would otherwise apply under the selected option.
For example, assume the life insured under a Policy with a
face amount of $100,000 has an attained age of 40. If Option 1
is in effect, the corridor percentage will produce a greater
death benefit whenever the Policy Value exceeds $40,000 (250%
x $40,000 = $100,000). If the Policy Value is less than
$40,000, an incremental change in Policy Value, up or down,
will have no effect on the death benefit. If the Policy Value
is greater than $40,000, an incremental change in Policy Value
will result in a change in the death benefit by a factor of
2.5. Thus, if the Policy Value were to increase to $40,010,
the death benefit would be increased to $100,025 (250% x
$40,010 = $100,025).
If Option 2 were in effect in the above example, the corridor
percentage would produce a greater death benefit whenever the
Policy Value exceeded $66,667 (250% x 66,667 = 166,667). At
that point the death benefit produced by multiplying the
Policy Value by 250% would result in a greater amount than
adding the Policy Value to the face amount of the Policy. If
the Policy Value is less than $66,667, an incremental change
in Policy Value will have a dollar-for-dollar effect on the
death benefit. If the Policy Value is greater than $66,667, an
incremental change in Policy Value will result in a change in
the death benefit by a factor of 2.5 in the same manner as
would be the case under Option 1 when the corridor percentage
determined the death benefit.
DEATH BENEFIT OPTION CHANGES
Your initial selection of the death benefit option is made in
the application. After the Policy has been in force for one
year, you may change the death benefit option. The change will
be effective as of any subsequent policy month following a
request. Your written request for a change must be received by
us at least 30 days prior to the beginning of a policy month
in order to become effective on that date. We reserve the
right to limit a request for change if the change would cause
the Policy to fail to qualify as life insurance for tax
purposes.
A change in death benefit option will result in a change in
the Policy's face amount. The change in face amount is
required in order to avoid any change in the amount of the
death benefit.
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
CHANGE TO OPTION 2 If the change in death benefit is from Option 1 to
Option 2, the new face amount will be equal to the
NEW FACE AMOUNT = face amount prior to the change minus the Policy
OLD FACE AMOUNT Value on the effective date of the change. A change
MINUS to Option 2 will not be allowed if it would cause the
POLICY VALUE face amount of the Policy to go below the minimum
face amount of $50,000 ($100,000 for preferred risk
policies).
- --------------------------------------------------------------------------------
CHANGE TO OPTION 1 If the change in death benefit is from Option 2 to
Option 1, the new face amount will be equal to the
face amount prior to the change plus the Policy Value
NEW FACE AMOUNT = on the effective date of the change. The increase in
face
- --------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 25
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
OLD FACE AMOUNT amount resulting from a change to Option 1 will not
PLUS affect the amount of surrender charges to which a
POLICY VALUE Policy may be subject. The Company has the right to
require satisfactory evidence of insurability before
permitting a change from Option 2 to Option 1. The
Company does not currently require evidence of
insurability when making this change.
- --------------------------------------------------------------------------------
</TABLE>
If you wish to have level insurance coverage, you should
generally select Option 1. Under Option 1, increases in Policy
Value usually will reduce the net amount of risk under a
Policy which will reduce cost of insurance charges. This means
that favorable investment performance should result in a
faster increase in Policy Value than would occur under an
identical Policy with Option 2 in effect. However, the larger
Policy Value which may result under Option 1 will not affect
the amount of the death benefit unless the corridor
percentages are used to determine the death benefit.
If you want to have the Policy Value reflected in the death
benefit so that any increases in Policy Value will increase
the death benefit, you should generally select Option 2. Under
Option 2, the net amount at risk will remain level unless the
corridor percentages are used to determine death benefit, in
which case increases in Policy Value will increase the net
amount at risk.
FACE AMOUNT CHANGES
- --------------------------------------------------------------------------------
You may increase or decrease the Policy's face amount.
- --------------------------------------------------------------------------------
Subject to certain limitations, you may increase or decrease
the face amount of your Policy. A change in face amount may
affect the monthly deductions and surrender charges (see
POLICY VALUES -- "Charges And Deductions").
MINIMUM CHANGES. Currently, each increase or decrease in face
amount (other than a decrease resulting from a partial
withdrawal) must be at least $50,000 ($100,000 for increases
in preferred risk policies). We reserve the right to increase
or decrease the minimum face amount change on 90 days' written
notice to you. We also reserve the right to limit a change in
face amount to the extent necessary to prevent the Policy from
failing to qualify as life insurance for tax purposes.
INCREASES. After the Policy has been in force for one year,
you may increase the face amount of your Policy once per
policy year. Increases are subject to satisfactory evidence of
insurability. An increase will become effective at the
beginning of the next policy month following the date we
approve the requested increase. We reserve the right to refuse
your request for an increase if the life insured's age at the
effective date of the increase would be greater than the
maximum issue age for new Policies at that time.
- --------------------------------------------------------------------------------
Face amount increases usually subject the Policy to new surrender charges.
- --------------------------------------------------------------------------------
An increase in face amount will usually subject the Policy to
new surrender charges. The new surrender charges will be
computed as if a new Policy were being purchased for the
increase in face amount. For purposes of determining the new
deferred sales charge, a portion of the Policy Value at the
time of the increase, and a portion of the premiums paid on or
subsequent to the increase, will be deemed to be premiums
attributable to the increase. See POLICY VALUES - "Charges and
Deductions" and "Surrender Charges."
Any increase in face amount to a level less than the highest
face amount previously in effect will have no effect on the
surrender charges to which the Policy is subject, since
surrender charges, if applicable, will have been assessed in
connection with the prior decrease in face amount. The
insurance coverage eliminated by the decrease of the oldest
face amount will be deemed to be restored first. As with the
purchase of a Policy, you will have free look right with
respect to any increase resulting in new surrender charges.
No additional premium is required for a face amount increase.
However, you may need to pay an additional premium to keep the
Policy from going into default. This is because new surrender
charges resulting from an increase would automatically reduce
the Net Cash Surrender Value of the Policy.
14
<PAGE> 26
DECREASES. After the Policy has been in force for one year,
you may decrease the face amount of your Policy once per
policy year. A decrease in face amount will become effective
at the beginning of the next policy month following the
receipt of a properly executed request. A decrease will not be
allowed if it would cause the face amount to go below the
minimum face amount of $50,000 ($100,000 for preferred risk
policies).
- --------------------------------------------------------------------------------
Face amount decreases usually result in the assessment of a surrender charge.
- --------------------------------------------------------------------------------
Usually, we will deduct surrender charges from the Policy
Value whenever a decrease in face amount is made during the
Surrender Charge Period. See POLICY VALUES - "Charges and
Deductions" and "Surrender Charges." For purposes of
determining surrender and cost of insurance charges, a
decrease will reduce face amount in the following order: (a)
the face amount provided by the most recent increase, then (b)
the face amounts provided by the next most recent increases
successively, and finally (c) the initial face amount.
POLICY VALUES
POLICY VALUE
- --------------------------------------------------------------------------------
The Policy Value is the sum of your values in the Investment Accounts, the Fixed
Account and the Loan Account.
- --------------------------------------------------------------------------------
A Policy has a Policy Value. You may access a portion of the
Policy Value by making a policy loan or partial withdrawal or
by surrendering the Policy. See "Policy Loans" and "Partial
Withdrawals And Surrenders," below. The Policy Value may also
affect the amount of the death benefit. See INSURANCE BENEFIT
-- "Death Benefit Options." The Policy Value at any time is
equal to the sum of the values in the Investment Accounts, the
Fixed Account and the Loan Account. The following discussion
relates only to the Investment Accounts. Policy loans are
discussed under "Policy Loans" and the Fixed Account is
discussed under "The General Account." The portion of the
Policy Value based on the Investment Accounts is not
guaranteed and will vary each Business Day with the investment
performance of the underlying Portfolio.
We establish an Investment Account under the Policy for each
sub-account of the Separate Account to which you allocate net
premiums or transfer amounts. Each Investment Account measures
the interest of the Policy in the corresponding sub-account.
The value of the Investment Account for a particular
sub-account is equal to the number of units of that
sub-account credited to the Policy times the value of such
units.
- --------------------------------------------------------------------------------
Sub-account units are used to measure Investment Account values.
- --------------------------------------------------------------------------------
We credit sub-account units to a Policy whenever you allocate
net premiums or transfer amounts to that sub-account.
Sub-account units are canceled whenever amounts are deducted,
transferred or withdrawn from the sub-account. The number of
units credited or canceled for a specific transaction is based
on the dollar amount of the transaction divided by the value
of the unit at the end of the Business Day on which the
transaction occurs. The number of units credited with respect
to a premium payment is based on the applicable unit values at
the end of the Business Day on which the premium is received
at our Service Office or other office or entity so designated
by us.
Units are valued at the end of each Business Day. A Business
Day is deemed to end at the time of the determination of the
net asset value of the underlying Portfolio shares. When an
order involving the crediting or canceling of units is
received after the end of a Business Day or on a day which is
not a Business Day, the order will be processed on the basis
of unit values determined at the end of the next Business Day.
Similarly, any determination of Policy Value, Investment
Account value or death benefit to be made on a day which is
not a Business Day will be made at the end of the next
Business Day.
The value of a unit of each sub-account was initially fixed at
$10. For each subsequent Business Day the unit value is
determined by multiplying the unit value for the preceding
Business Day by the "net investment factor" for the particular
sub-account for that subsequent Business Day. The net
investment factor for a sub-account for any Business Day is
equal to (a) divided by (b), where:
(a) is the net asset value of the underlying
Portfolio shares held by that sub-account at
the end of such Business Day before any
policy
15
<PAGE> 27
transactions are made on that day; and
(b) is the net asset value of the underlying
Portfolio shares held by that sub-account at
the end of the immediately preceding
Business Day after all policy transactions
have been made for that day.
We reserve the right to adjust the above formula for any taxes
determined by us to be attributable to the operations of the
sub-account.
TRANSFERS OF POLICY VALUE
- --------------------------------------------------------------------------------
You may make 12 transfers per year free of charge.
- --------------------------------------------------------------------------------
You may change the extent to which your Policy Value is based
upon any specific sub-account of the Separate Account or the
Company's general account. You make those changes by
transferring amounts from one or more Investment Accounts or
the Company's general account to other Investment Accounts or
the Company's general account. You are permitted to make
twelve transfers each policy year free of charge. If you make
additional transfers in a policy year, we will charge you $25
per transfer. We will assess this charge against the
Investment Account or Fixed Account from which the amount is
being transferred. For this purpose all transfer requests we
receive from you on the same Business Day will be treated as a
single transfer request. There will be no change in issue age,
risk class of the life insured or face amount as a result of
any transfer.
The most that you may transfer from the Fixed Account in any
one policy year is the greater of $500 or 15% of the Fixed
Account value at the previous policy anniversary. Any transfer
which involves a transfer out of the Fixed Account may not
involve a transfer to the Investment Account for the Money
Market Trust.
- --------------------------------------------------------------------------------
You may effectively convert your Policy to a fixed benefit Policy.
- --------------------------------------------------------------------------------
While the Policy is in force, you may transfer the Policy
Value from all of the Investment Accounts to the Fixed
Account, without incurring transfer charges:
(a) within 18 months after the Issue Date; or
(b) within 60 days of the effective date of a
material change in the investment objectives
of the sub-accounts, or within 60 days of
the date of notification of such change.
DOLLAR COST AVERAGING. We offer a Dollar Cost Averaging
program. Under this program amounts will be automatically
transferred at predetermined intervals from one Investment
Account to any other Investment Account(s) or the Fixed
Account.
- --------------------------------------------------------------------------------
You may arrange for periodic transfers from one Investment Account to other
accounts.
- --------------------------------------------------------------------------------
Under the Dollar Cost Averaging program you designate an
amount to be transferred at predetermined intervals from one
Investment Account into any other Investment Account(s) or the
Fixed Account. Each transfer under the Dollar Cost Averaging
program must be of a minimum amount set by us. We may change
this minimum at any time in our discretion. Currently, no
charge will be made for this program if the Policy Value
exceeds $15,000 on the date of transfer. Otherwise, there will
be a charge of $5 for each transfer. We will deduct the charge
from the value of the Investment Account out of which the
transfer is made. If there are insufficient funds to effect a
Dollar Cost Averaging transfer, including the charge, if
applicable, we will not effect the
16
<PAGE> 28
transfer and will notify you of that fact. We reserve the
right to cease to offer this program on 90 days' written
notice.
ASSET ALLOCATION BALANCER TRANSFERS. We also offer
policyowners the ability to have amounts automatically
transferred among stipulated Investment Accounts to maintain
an allocated percentage in each stipulated Investment Account.
- --------------------------------------------------------------------------------
You may arrange for automatic transfers every six months to preserve your
investment allocations.
- --------------------------------------------------------------------------------
Under the Asset Allocation Balancer program you designate an
allocation of Policy Value among Investment Accounts. At six
month intervals, beginning six months after the policy date,
we will move amounts among the Investment Accounts as
necessary to maintain your chosen allocation. A change to your
premium allocation instructions will automatically result in a
change in Asset Allocation Balancer instructions so that the
two are identical unless either you instruct us differently or
a Dollar Cost Averaging request is in effect. Currently, we
make no charge for this program; however, we reserves the
right to institute a charge on 90 days' written notice.
We reserve the right to cease to offer this program on 90
days' written notice.
POLICY LOANS
- --------------------------------------------------------------------------------
You may borrow against your Policy Value.
- --------------------------------------------------------------------------------
While the Policy is in force, you may borrow against your
Policy Value. The Policy serves as the only security for the
loan. The minimum amount of any loan is $500. The maximum loan
amount is the amount which would cause the Modified Policy
Debt to equal the loan value of the Policy on the date of the
loan. The loan value is the Policy's Cash Surrender Value less
the monthly deductions due to the next policy anniversary. The
Modified Policy Debt as of any date is the Policy Debt (the
aggregate amount of policy loans, including borrowed interest,
less any loan repayments) plus the amount of interest to be
charged to the next policy anniversary, all discounted from
the next policy anniversary to such date at an annual rate of
4%. We transfer an amount equal to the Modified Policy Debt to
the Loan Account to ensure that a sufficient amount will be
available to pay interest on the Policy Debt at the next
policy anniversary.
For example, assume a Policy with a loan value of $5,000, no
outstanding policy loans and a loan interest rate of 5.75%.
The maximum amount that can be borrowed is an amount that will
cause the Modified Policy Debt to equal $5,000. If the loan is
made on a policy anniversary, the maximum loan will be $4,917.
This amount at 5.75% interest will equal $5,200 one year
later; $5,200 discounted to the date of the loan at 4% (the
Modified Policy Debt) equals $5,000. Because the minimum rate
of interest credited to the Loan Account is 4%, $5,000 must be
transferred to the Loan Account to ensure that $5,200 will be
available at the next policy anniversary to cover the interest
accrued on the Policy Debt.
- --------------------------------------------------------------------------------
You may designate how the loan is to be taken from your various accounts.
- --------------------------------------------------------------------------------
When a loan is made, we will deduct from the Investment
Accounts or the Fixed Account, and transfer to the Loan
Account, an amount which will result in the Loan Account value
being equal to the Modified Policy Debt. You may designate how
the amount to be transferred to the Loan Account is allocated
among the accounts from which the transfer is to be made. In
the absence of instructions, we will allocate the amount to be
transferred to each account in the same proportion as the
value in each Investment Account and the Fixed Account bears
to the Net Policy Value. A transfer from an Investment Account
will result in the cancellation of units of the underlying
sub-account equal in value to the amount transferred from the
Investment Account. However, since the Loan Account is part of
the Policy Value, transfers made in connection with a loan
will not change the Policy Value.
17
<PAGE> 29
A policy loan may result in a Policy's failing to satisfy the
No Lapse Guarantee. As a result, the No Lapse Guarantee may
terminate. See INSURANCE BENEFIT -- "No Lapse Guarantee" and
OTHER GENERAL POLICY PROVISIONS -- "Policy Default."
Moreover, if the No Lapse Guarantee is not in force, a policy
loan may cause a Policy to be more susceptible to going into
default, since a policy loan will be reflected in the Net Cash
Surrender Value. See OTHER GENERAL POLICY PROVISIONS --
"Policy Default."
A policy loan will also affect future Policy Values, since
that portion of the Policy Value in the Loan Account will
increase in value at the crediting interest rate rather than
varying with the performance of the underlying Portfolios
selected by the policyowner or increasing in value at the rate
of interest credited for amounts allocated to the Fixed
Account.
- --------------------------------------------------------------------------------
Systematic loans may have adverse tax consequences, and a premium necessary to
avoid lapse will increase as the insured grows older.
- --------------------------------------------------------------------------------
Policy loans may have tax consequences. If you are considering
the use of systematic policy loans as one element of a
comprehensive retirement income plan, you should consult your
personal tax adviser regarding the potential tax consequences
if such loans were to so reduce Policy Value that the Policy
would lapse, absent additional payments. The premium payment
necessary to avert lapse would increase with the age of the
insured. See MISCELLANEOUS MATTERS - "Federal Income Tax
Considerations" and "Tax Treatment of Policy Benefits."
Finally, a policy loan will affect the amount payable on the
death of the life insured, since the death benefit is reduced
by the value of the Policy Debt at the date of death in
arriving at the insurance benefit.
- --------------------------------------------------------------------------------
The interest we credit to your Loan Account may equal the interest we charge on
your loan for amounts up to the Policy's Select Loan Amount.
- --------------------------------------------------------------------------------
INTEREST CHARGED ON POLICY LOANS. Interest on the Policy Debt
will accrue daily and be payable annually on the policy
anniversary. We will fix the rate of interest charged at an
effective annual rate of 5.75%. If the interest due on a
policy anniversary is not paid by the policyowner, the
interest will be borrowed against the Policy.
INTEREST CREDITED TO THE LOAN ACCOUNT. We will credit interest
to any amount in the Loan Account at an effective annual rate
of at least 4%. The actual rate credited is:
- On amounts in excess of the Policy's Select Loan
Amount, the rate of interest charged on the policy
loan less an interest rate differential, currently
1.75%.
- On amounts up to the Policy's Select Loan Amount, the
rate of interest charged on policy loan less an
interest rate differential, currently 0%.
The tax consequences associated with a loan interest credited
differential of 0% are unclear. A tax adviser should be
consulted before effecting a loan to evaluate the tax
consequences that may arise in such a situation. If we
determine, in our sole discretion, that there is a substantial
risk that a loan will be treated as a taxable distribution
under Federal tax law as a result of the differential between
the credited interest rate and the loan interest rate, the
Company retains the right to increase the the loan interest
rate to an amount that would result in the transaction being
treated as a loan under Federal tax law. If this amount is not
prescribed by any IRS ruling or regulation or any court
decision, the amount of increase will be that which the
Company considers to be most likely to result in the
transaction being treated as a loan under Federal tax law.
Prior to the later of the tenth policy anniversary and the
anniversary following attained age 55, the amount available as
a Select Loan is zero; after the later of the tenth policy
anniversary and the policy anniversary following attained age
55, the amount available annually as a Select Loan is equal to
12% of the Policy's Net Cash Surrender Value at the previous
policy anniversary. The amount available as a Select Loan
applies to existing and new loans. If, at the time your are
considering a Select Loan, interest due currently on your
outstanding loans equals or exceeds the Select Loan Amount,
the Select Loan feature can not be used to withdraw additional
cash from Policy Value. The total of all loans, including the
Select Loan Amount, cannot exceed the maximum loan amount as
described above.
18
<PAGE> 30
To illustrate the amount available as a Select Loan, assume
that a Policy has an issue age of 47 and a Net Cash Surrender
Value on the eleventh policy anniversary of $10,000. The
Select Loan Amount available during the twelfth policy year is
$1,200 (12% x $10,000). Assume that at the beginning of the
twelfth policy year, a loan of $1,500 is taken. $1,200 of that
amount is considered the Select Loan Amount, $300 an ordinary
policy loan.
At the end of the twelfth policy year, assume that the Net
Cash Surrender Value is $9,000. The Select Loan Amount
available during the thirteenth policy year is $1,080 (12% x
$9,000). If not already repaid, the $300 from the prior year's
loan that was not considered a Select Loan is immediately
converted to a Select Loan, leaving $780 of the Select Loan
Amount available for the thirteenth policy year (provided that
the sum of all outstanding loans does not exceed the Policy's
maximum loan amount). The amount of any unpaid interest on the
Select Loan and the ordinary policy loan from the twelfth
policy year also would be borrowed as a Select Loan up to the
maximum Select Loan Amount and thereby reduce by that amount
the $780 available for borrowing as a Select Loan during the
remainder of the thirteenth policy year.
LOAN ACCOUNT ADJUSTMENTS. Whenever a loan is first taken out,
and at specified events thereafter, we adjust the value of the
Loan Account. We take the difference between (i) the Loan
Account before any adjustment and (ii) the Modified Policy
Debt at the time of adjustment and transfer that amount
between the Loan Account and the Investment Accounts or the
Fixed Account. The amount transferred to or from the Loan
Account will be such that the value of the Loan Account after
the adjustment will be equal to the Modified Policy Debt.
The specified events which cause an adjustment to the Loan
Account are (i) a policy anniversary, (ii) a partial or full
loan repayment, (iii) a new loan or (iv) an amount is needed
to meet a monthly deduction. A loan repayment may be implicit
in that policy debt is effectively repaid upon termination
(i.e., upon death of the life insured, surrender or lapse of
the policy). In each of these instances, the Loan Account will
be adjusted so that any excess of the Loan Account over the
Modified Policy Debt after the repayment will be included in
the termination proceeds.
Except as noted below under "Loan Repayments," we will
allocate amounts transferred from the Loan Account to the
Investment Accounts and the Fixed Account in the same
proportion as the value in the corresponding "loan
sub-account" bears to the value of the Loan Account. A "loan
sub-account" exists for each Investment Account and for the
Fixed Account. Amounts transferred to the Loan Account are
allocated to the appropriate loan sub-account to reflect the
account from which the transfer was made.
LOAN ACCOUNT ILLUSTRATION. (Dollar amounts in this
illustration have been rounded to the nearest dollar.) The
operation of the Loan Account may be illustrated as follows:
assume a Policy with a loan value of $5,000, a loan interest
rate of 5.75%, and a maximum loan amount on a policy
anniversary of $4,917. For purposes of the illustration,
assume that the Select Loan Amount is zero. If a loan in the
maximum amount of $4,917 is made, an amount equal to the
Modified Policy Debt, $5,000, is transferred to the Loan
Account. At the next policy anniversary the value of the Loan
Account will have increased to $5,200 ($5,000 x 1.04)
reflecting interest credited at an effective annual rate of
4.0%. At that time the loan will have accrued interest charges
of $283 ($4,917 x .0575), bringing the Policy Debt to $5,200.
If the accrued interest charges are paid on the policy
anniversary, the Policy Debt will continue to be $4,917, and
the Modified Policy Debt, reflecting interest for the next
policy year and discounting the Policy Debt and such interest
at 4%, will be $5,000. An amount will be transferred from the
Loan Account to the Fixed Account or the Investment Accounts
so that the Loan Account value will equal the Modified Policy
Debt. Since the Loan Account value was $5,200, a transfer of
$200 will be required ($5,200 -- $5,000).
If, however, the accrued interest charges of $283 are
borrowed, an amount will be transferred from the Investment
Accounts and the Fixed Account so that the Loan Account value
will equal the Modified Policy Debt recomputed at the policy
anniversary. The new Modified Policy Debt is the
19
<PAGE> 31
Policy Debt, $5,200, plus loan interest to be charged to the
next policy anniversary, $299 ($5,200 x .0575), discounted at
4%, which results in a figure of $5,288. Since the value of
the Loan Account was $5,200, a transfer of $88 will be
required. This amount is equivalent to the 1.75% interest rate
differential on the $5,000 transferred to the Loan Account on
the previous policy anniversary.
- --------------------------------------------------------------------------------
You may repay your Policy Loan at any time prior to the death of the insured.
- --------------------------------------------------------------------------------
LOAN REPAYMENTS. You may repay Policy Debt in whole or in part
at any time prior to the death of the life insured provided
the Policy is in force. When a repayment is made, we will
credit the repayment amount to the Loan Account and transfer
an amount to the Fixed Account or the Investment Accounts so
that the Loan Account at that time will equal the Modified
Policy Debt. We will allocate loan repayments first to the
Fixed Account until the associated loan sub-account is reduced
to zero. We will then allocate loan repayments to each
Investment Account in the same proportion as the value in the
corresponding loan sub-account bears to the value of the Loan
Account. Amounts paid to us not specifically designated in
writing as loan repayments will be treated as premiums.
PARTIAL WITHDRAWALS AND SURRENDERS
- --------------------------------------------------------------------------------
You may partially withdraw your Policy's Net Cash Surrender Value after the
Policy has been in force for two policy years.
- --------------------------------------------------------------------------------
After a Policy has been in force for one policy year, you may
make a partial withdrawal of the Net Cash Surrender Value. The
minimum amount that may be withdrawn is $500. You should
specify the portion of the withdrawal to be taken from each
Investment Account and the Fixed Account. In the absence of
instructions we will allocate the withdrawal among such
accounts in the same proportion as the Policy Value in each
account bears to the Net Policy Value. No more than one
partial withdrawal may be made in any one policy month.
If you make a partial withdrawal during the Surrender Charge
Period, we will usually assess a portion of the surrender
charges to which the Policy is subject (see POLICY VALUES -
"Charges And Deductions" and "Surrender Charges") if the
amount withdrawn is in excess of the Withdrawal Tier Amount.
The Withdrawal Tier Amount is 10% of the Net Cash Surrender
Value determined as of the previous policy anniversary. The
portion of a partial withdrawal that is considered to be in
excess of the Withdrawal Tier Amount includes all previous
partial withdrawals that have occurred in the current policy
year. If the Option 1 death benefit is in effect under a
Policy from which a partial withdrawal is made, the face
amount of the Policy will be reduced. See POLICY VALUES --
"Charges And Deductions" and "Surrender Charges."
You may surrender your Policy for its Net Cash Surrender Value
at any time while the life insured is living. The Net Cash
Surrender Value is the Policy Value less any surrender charges
and outstanding monthly deductions due (the "Cash Surrender
Value") minus the value of the Policy Debt. The Net Cash
Surrender Value will be determined at the end of the Business
Day on which we receive the Policy and a written request for
surrender at our Service Office. After a Policy is
surrendered, the insurance coverage and all other benefits
under the Policy will terminate. Surrender of a Policy during
the Surrender Charge Period will usually result in our
assessment of surrender charges. See POLICY VALUES -- "Charges
And Deductions" and "Surrender Charges."
CHARGES AND DEDUCTIONS
The charges we make under the Policy are assessed as (i)
deductions from premiums, (ii) surrender charges upon
surrender, partial withdrawals, decreases in face amount or
lapse, (iii) monthly deductions, and (iv) other charges. These
charges are described below.
DEDUCTIONS FROM PREMIUMS
We currently make no deduction from premium payments for state
and local taxes. The maximum amount we may deduct for such
taxes in the future is 2.35%. We currently make no deduction
from premium payments for Federal taxes. The maximum amount we
may deduct for such taxes in the future is 1.25%.
20
<PAGE> 32
SURRENDER CHARGES
We will assess surrender charges upon surrender, a partial
withdrawal of Policy Value in excess of the Withdrawal Tier
Amount, a requested decrease in face amount, or lapse. We
usually assess these charges if any of the above transactions
occurs within the Surrender Charge Period unless the charges
have been previously deducted. There are two surrender charges
-- a deferred underwriting charge and a deferred sales charge.
- --------------------------------------------------------------------------------
The deferred underwriting charge is $4.50 per $1000 of face amount not to exceed
$2,250.
- --------------------------------------------------------------------------------
DEFERRED UNDERWRITING CHARGE. The deferred underwriting charge
is $4.50 for each $1,000 of face amount of life insurance
coverage initially purchased or added by increase. In effect,
the charge applies only to the first $500,000 of face amount
initially purchased or the first $500,000 of each subsequent
increase in face amount. Thus, the charge made in connection
with any one underwriting will not exceed $2,250. The amount
of the charge remains level for five years. Following the
fifth year after issuance of the Policy or a face amount
increase, the charge applicable to the initial face amount or
increase will decrease each month by varying rates depending
upon the life insured's issue age until the charge has
decreased to zero. The applicable percentage of the deferred
underwriting charges to which the Policy is subject is
illustrated by the following table:
TABLE 1: DEFERRED UNDERWRITING CHARGES
<TABLE>
<CAPTION>
Transaction Occurs
After Monthly
Deduction Taken Percent of Deferred Underwriting Charges by Issue Age*
For Last Month
Preceding End ---------------------------------------------------------------
of Month* Age
- ------------------ ---------------------------------------------------------------
Month 0-50 51 52 53 54 55+
- ------------------ ---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
12 100% 100% 100% 100% 100% 100%
24 100% 100% 100% 100% 100% 100%
36 100% 100% 100% 100% 100% 100%
48 100% 100% 100% 100% 100% 100%
60 100% 100% 100% 100% 100% 100%
72 90% 88.89% 87.50% 85.71% 83.33% 80.00%
84 80% 77.78% 75.00% 71.43% 66.67% 60.00%
96 70% 66.67% 62.50% 57.14% 50.00% 40.00%
108 60% 55.56% 50.00% 42.86% 33.33% 20.00%
120 50% 44.44% 37.50% 28.57% 16.67% 0%
132 40% 33.33% 25.00% 14.28% 0%
144 30% 22.22% 12.50% 0%
156 20% 11.11% 0%
168 10% 0%
180 0%
</TABLE>
* Months not shown may be calculated by interpolation.
We designed the deferred underwriting charge to cover the
administrative expenses associated with underwriting and
policy issue, including the costs of processing applications,
conducting medical examinations, conducting medical
examinations, determining the life insured's risk class and
establishing policy records.
21
<PAGE> 33
- --------------------------------------------------------------------------------
The maximum deferred sales charge is 50% of premiums not to exceed a specified
number of Target Premiums.
- --------------------------------------------------------------------------------
DEFERRED SALES CHARGE. The maximum deferred sales charge is
50% of premiums paid up to a maximum number of Target Premiums
that varies (from - 2.00 to 2.59) according to the issue age
of the life insured, the face amount at issue and the amount
of any increase. This charge compensates us for some of the
expenses of selling and distributing the Policies, including
agents' commissions, advertising, agent training and the
printing of prospectuses and sales literature.
The deferred sales charge deducted in any policy year is not
specifically related to sales expenses incurred in that year.
Instead, we expect that the major portion of the sales
expenses attributable to a Policy will be incurred during the
first policy year, although the deferred sales charge might be
deducted up to fifteen years later. We anticipate that the
aggregate amounts we receive under the Policies for sales
charges will be insufficient to cover our aggregate sales
expenses. To the extent that our sales expenses exceed our
sales charges, we will pay the excess from our other assets or
surplus, including amounts derived from the mortality and
expense risks charge described below.
We specify the Target Premium for the initial face amount in
the Policy. We will compute a Target Premium for each increase
in face amount above the highest face amount of coverage
previously in effect, and we will advise you of each new
Target Premium. Target Premiums depend upon the face amount of
insurance provided at issue or by an increase and the issue
age and sex of the life insured. The maximum number of Target
Premiums subject to the deferred sales charge varies, based on
the issue age of the life insured, the face amount at issue
and the amount of any increase, according to the following
tables:
TABLE 2: NUMBER OF TARGET PREMIUMS SUBJECT TO DEFERRED SALES CHARGE
(APPLICABLE TO THE INITIAL FACE AMOUNT AND INCREASES)
<TABLE>
<CAPTION>
Age $250,000 Under Age $250,000 Under Age $250,000 Under
or More 250,000 or More $250,000 or More $250,000
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 -2.00* 1.68 30 1.56 2.15 60 2.06 2.43
1 -0.52* 1.46 31 1.61 2.19 61 2.06 2.43
2 0.06 1.45 32 1.67 2.23 62 2.05 2.43
3 0.24 1.45 33 1.72 2.27 63 2.05 2.43
4 0.62 1.46 34 1.78 2.30 64 2.05 2.42
5 0.63 1.47 35 1.83 2.33 65 2.05 2.41
6 0.67 1.49 36 1.86 2.38 66 2.03 2.41
7 0.69 1.51 37 1.89 2.41 67 2.03 2.41
8 0.72 1.52 38 1.91 2.45 68 1.96 2.41
9 0.75 1.54 39 1.94 2.49 69 1.83 2.30
10 0.78 1.55 40 1.96 2.52 70 1.71 2.17
11 0.82 1.58 41 1.98 2.55 71 1.58 2.05
12 0.85 1.60 42 2.01 2.59 72 1.46 1.92
13 0.88 1.61 43 2.04 2.57 73 1.35 1.80
14 0.92 1.63 44 2.06 2.55 74 1.25 1.70
15 0.88 1.52 45 2.08 2.54 75 1.16 1.60
16 0.90 1.53 46 2.12 2.53 76 1.08 1.50
17 0.94 1.58 47 2.16 2.51 77 1.01 1.40
18 0.99 1.64 48 2.20 2.50 78 0.93 1.30
19 1.03 1.68 49 2.21 2.49 79 0.87 1.22
20 1.07 1.72 50 2.19 2.48 80 0.82 1.14
21 1.11 1.77 51 2.17 2.47 81 0.76 1.07
22 1.16 1.82 52 2.16 2.47 82 0.71 1.01
23 1.20 1.86 53 2.15 2.46 83 0.67 0.95
24 1.25 1.91 54 2.13 2.46 84 0.62 0.89
25 1.30 1.95 55 2.12 2.45 85 0.58 0.83
26 1.35 1.99 56 2.10 2.44 86 0.56 0.78
</TABLE>
22
<PAGE> 34
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
27 1.40 2.04 57 2.09 2.44 87 0.54 0.73
28 1.46 2.08 58 2.08 2.43 88 0.52 0.68
29 1.51 2.12 59 2.07 2.43 89 0.50 0.64
90 0.50 0.63
</TABLE>
* The negative Number of Target Premiums produces a negative
Deferred Sales Charge. When combined with the Deferred
Underwriting Charge, the negative Deferred Sales Charge
reduces the total surrender charge.
The maximum deferred sales charge will be in effect for at
least the first five years of the Surrender Charge Period.
After that, the portion of the deferred sales charge that
remains in effect will grade down at a rate that also varies
according to the issue age of the life insured until, at the
end of the Surrender Charge Period, there is no deferred sales
charge. The table to be used to reduce the applicable deferred
sales charge during the Surrender Charge Period is set forth
in Table 1 above. The applicable table will be set forth in
each Policy and the policyowner will be informed of the table
to be used in connection with sales charges on increases in
face amount.
In order to determine the deferred sales charge applicable to
a face amount increase, we will treat a portion of the Policy
Value on the date of increase as a premium attributable to the
increase. In addition, a portion of each premium paid on or
subsequent to the increase will be attributed to the increase.
In each case, the portion attributable to the increase will be
the ratio of the "guideline annual premium" for the increase
to the sum of the guideline annual premiums for the initial
face amount and all increases including the requested
increase.
The following example illustrates how deferred underwriting
and deferred sales charges are calculated using data from
Tables 1 and 2 above.
Assume a 36-year-old male (standard risk), whose Policy was
issued at age 30, and who has paid $9,000 in premiums under a
Policy with a Target Premium of $593 and a face amount of
$100,000, surrenders his Policy during the last month of the
sixth policy year.
A deferred underwriting charge of $405 will be assessed. The
maximum deferred underwriting charge of $450 ($4.50 per $1,000
of face amount x 100) will be multiplied by the 90% listed in
Table 1 as applicable to surrenders during the last month of
the sixth policy year [90% x ($4.50 x 100) = $405].
A deferred sales charge of $573.73 will also be assessed.
According to Table 2, the maximum number of Target Premiums
subject to the deferred sales charge for a person who was 30
years old when his or her Policy with a face amount less than
$250,000 was issued would be 2.15. Thus $1,274.95 (2.15 x
$593) will be the maximum amount of premiums subject to the
50% sales charge, producing a maximum sales charge of $637.46
(50% x $1,274.95 = $637.49). Because the surrender occurs
during the last month of the sixth policy year, only 90% (from
the Table 2 for issue age 30) of the maximum sales charge
remains applicable [90% x (.50 x 2.15 x $593) = $573.73].
CHARGES ON PARTIAL WITHDRAWALS. Whenever a portion of the
surrender charges is deducted as a result of a partial
withdrawal of Policy Value in excess of the Withdrawal Tier
Amount, we will reduce the Policy's remaining surrender
charges by the amount of the charges taken. The surrender
charges not assessed as a result of the 10% free withdrawal
provision remain in effect under the Policy and may be
assessed upon surrender or lapse, other partial withdrawals,
or a requested decrease in face amount. The portion of the
surrender charges assessed will be based on the ratio of (i)
to (ii), where
(i) is the amount of the withdrawal in excess of the
Withdrawal Tier Amount , and
23
<PAGE> 35
(ii) is to the Net Cash Surrender Value of the Policy
less the Withdrawal Tier Amount immediately prior to
the withdrawal.
We will deduct the surrender charges from each Investment
Account and the Fixed Account in the same proportion as the
amount of the withdrawal taken from such account bears to the
total amount of the withdrawal. If the amount in the account
is insufficient to pay the portion of the surrender charges
allocated to that account, then the portion of the withdrawal
allocated to that account will be reduced so that the
withdrawal plus the portion of the surrender charges allocated
to that account equal the value of that account.
Units equal to the amount of the partial withdrawal taken, and
surrender charges deducted, from each Investment Account will
be canceled based on the value of such units determined at the
end of the Business Day on which we receive a written request
for withdrawal at our Service Office.
- --------------------------------------------------------------------------------
A partial withdrawal will result in a reduction in the Policy's face amount if
the Option 1 death benefit is in effect.
- --------------------------------------------------------------------------------
If the Option 1 death benefit is in effect under a Policy from
which a partial withdrawal is made, we will reduce the face
amount of the Policy. If the death benefit is equal to the
face amount at the time of withdrawal, the face amount will be
reduced by the amount of the withdrawal plus the portion of
the surrender charges assessed. If the death benefit is based
upon the Policy Value times the applicable percentage set
forth under INSURANCE BENEFIT -- "Death Benefit Options"
above, the face amount will be reduced only to the extent that
the amount of the withdrawal plus the portion of the surrender
charges assessed exceeds the difference between the death
benefit and the face amount.
Reductions in face amount resulting from partial withdrawals
will not incur any surrender charges above the surrender
charges applicable to the withdrawal. When the face amount of
a Policy is based on one or more increases subsequent to
issuance of the Policy, a reduction resulting from a partial
withdrawal will be applied in the same manner as a requested
decrease in face amount, i.e., against the face amount
provided by the most recent increase, then against the next
most recent increases successively and finally against the
initial face amount.
- --------------------------------------------------------------------------------
We deduct a portion of the surrender charges if you decrease the face amount or
cancel an increase.
- --------------------------------------------------------------------------------
CHARGES ON DECREASES IN FACE AMOUNT. As with partial
withdrawals, we will deduct a portion of a Policy's surrender
charges upon a decrease, or a cancellation of an increase, in
face amount which you request. Since surrender charges are
determined separately for the initial face amount and each
face amount increase, and since a decrease in face amount will
have a different impact on each level of insurance coverage,
we will determine separately the portion of the surrender
charges to be deducted with respect to each level of insurance
coverage. That portion will be the same as the ratio of the
amount of the reduction in such coverage to the amount of such
coverage prior to the reduction.
As noted under INSURANCE BENEFIT -- "Face Amount Changes," we
apply decreases to the most recent increase first and
thereafter to the next most recent increases successively. We
will deduct the charges from the Policy Value, and we will
allocate the amount so deducted among the Investment Accounts
and the Fixed Account in the same proportion as the Policy
Value in each bears to the Net Policy Value. Whenever a
portion of the surrender charges is deducted as a result of a
decrease in face amount, the Policy's remaining surrender
charges will be reduced by the amount of the charges taken.
CHARGES REMAINING AFTER FACE AMOUNT DECREASES OR PARTIAL
WITHDRAWALS. Each time a pro-rata deferred underwriting charge
or a pro-rata deferred sales charge for a face amount decrease
or for a partial withdrawal is deducted, the remaining
deferred underwriting charge and deferred sales charge will be
reduced proportionately.
We will calculate the remaining deferred underwriting charge
using Table 1 above. The actual remaining charge will be the
result of (a) divided by (b), multiplied by (c), where
(a) is the grading percentage applicable to the life
insured's issue age and Policy duration;
24
<PAGE> 36
(b) is the grading percentage applicable to the life
insured's issued age at the time of the last face
amount decrease or partial withdrawal; and
(c) is the remaining deferred sales charge prior to
the last face amount decrease or partial withdrawal
less the deferred underwriting charge deducted for
that face amount decrease or partial withdrawal.
We will calculate the remaining deferred sales charge using
Table 1 above. The actual remaining charge will be the result
of (a) divided by (b), multiplied by (c), where:
(a) is the grading percentage applicable to the
Policy duration;
(b) is the grading percentage at the time of the last
face amount decrease or partial withdrawal; and
(c) is the remaining deferred sales charge prior to
the last face amount decrease or partial withdrawal
less the deferred sales charge deducted for that face
amount decrease or partial withdrawal.
Until the sum of premiums paid equals or exceeds the number of
Target Premiums subject to deferred sales charge multiplied by
the Target Premium, subsequent premium payments will increase
the remaining deferred sales charge.
MONTHLY DEDUCTIONS
- --------------------------------------------------------------------------------
We deduct monthly from the Policy Value: an administrative charge, a cost of
insurance charge, a mortality and expense risks charge and charges for
supplementary benefits.
- --------------------------------------------------------------------------------
Each month we make a deduction from Policy Value consisting of
an administration charge, a charge for the cost of insurance,
a charge for mortality and expense risks, and charge(s) for
any supplementary benefit(s) (see OTHER PROVISIONS --
"Supplementary Benefits"). We allocate the monthly deduction
among the Investment Accounts and (other than the mortality
and expense risks charge) the Fixed Account in the same
proportion as the Policy Value in each bears to the Net Policy
Value. Monthly deductions due prior to the effective date will
be taken on the effective date instead of the dates they were
due. If the Policy is still in force when the life insured
attains age 100, we will pay the policyowner the Net Cash
Surrender Value as of the Maturity Date of the Policy.
ADMINISTRATION CHARGE
The monthly administration charge is $35 until the first
anniversary and, thereafter, $10 (the right is reserved to
increase the administration charge by an additional amount up
to $.01 per $1,000 of face amount per month). The charge is
designed to cover certain administrative expenses associated
with the Policy, including maintaining policy records,
collecting premiums and processing death claims, surrender and
withdrawal requests and various charges permitted under a
Policy.
COST OF INSURANCE CHARGE
The monthly charge for the cost of insurance is determined by
multiplying the applicable cost of insurance rate times the
net amount at risk at the beginning of each policy month. The
cost of insurance rate is based on:
- the life insured's issue age,
- the duration of the coverage,
- sex, and
- risk class.
25
<PAGE> 37
We determine the rate separately for the initial face amount and for each
increase in face amount. Cost of insurance rates will generally increase with
the life insured's age. Any additional ratings as indicated in the Policy will
be added to the cost of insurance rate.
We use cost of insurance rates that reflect our expectations as to future
mortality experience as based on current experience. We may change the rates
from time to time on a basis which does not unfairly discriminate within the
class of life insureds. In no event will the cost of insurance rate exceed the
guaranteed rate set forth in the Policy except to the extent that an extra rate
is imposed because of an additional rating applicable to the life insured. The
guaranteed rates are based on the 1980 Commissioners Standard Ordinary
Smoker/Nonsmoker Mortality Tables.
The net amount at risk to which the cost of insurance rate is applied is the
difference between the death benefit, divided by 1.0032737 (a factor which
reduces the net amount at risk for cost of insurance charge purposes by taking
into account assumed monthly earnings at an annual rate of 4%), and the Policy
Value. Because different cost of insurance rates may apply to different levels
of insurance coverage, we will calculate the net amount at risk separately for
each level of insurance coverage. When the Option 1 death benefit is in effect,
for purposes of determining the net amount at risk applicable to each level of
insurance coverage, the Policy Value is attributed first to the initial face
amount and then, if the Policy Value is greater than the initial face amount, to
each increase in face amount in the order made.
Because the calculation of the net amount at risk is different under the death
benefit options when more than one level of insurance coverage is in effect, a
change in the death benefit option may result in a different net amount at risk
for each level of insurance coverage than would have occurred had the death
benefit option not been changed. Since the cost of insurance is calculated
separately for each level of insurance coverage, any change in the net amount at
risk for a level of insurance coverage resulting from a change in the death
benefit option may affect the amount of the charge for the cost of insurance.
Partial withdrawals and decreases in face amount will also affect the manner in
which the net amount at risk for each level of insurance coverage is calculated.
MORTALITY AND EXPENSE RISKS CHARGE
We make a monthly charge against your Policy Value for the mortality and expense
risks we assume under the Policies. We make this charge at the beginning of each
policy month at a rate of
- 0.075% through the later of the tenth anniversary of the Policy and
your attained age of 60
- and, thereafter, 0.0375%.
We assess the charge against the value of your Investment Accounts by canceling
units in the same proportion as the value of each Investment Account bears to
the total value of your Investment Accounts. The mortality risk assumed is that
lives insured may live for a shorter period of time than we estimated. The
expense risk assumed is that expenses incurred in issuing and administering the
Policies will be greater than we estimated. We estimate that virtually all of
the mortality and expense risks charge currently relates to expense risks. We
will realize a gain from this charge to the extent it is not needed to provide
benefits and pay expenses under the Policies.
OTHER CHARGES
Currently, we make no charge against the Separate Account for Federal, state or
local taxes that may be attributable to the Separate Account or to our
operations with respect to the Policies. However, if we incur any such taxes, we
may make a charge therefor.
26
<PAGE> 38
We impose charges on certain transfers of Policy Values, including a $25 charge
for each transfer in excess of twelve in a policy year and a $5 charge for each
Dollar Cost Averaging transfer when Policy Value does not exceed $15,000. See
POLICY VALUES -- "Transfers Of Policy Value."
The Separate Account purchases shares of Portfolios at net asset value. The net
asset value of those shares reflects the investment management fees and expenses
set forth below. More detailed information concerning these fees and expenses is
set forth under the caption "Management of The Trust" in the prospectus for the
Trust that accompanies this prospectus.
TRUST ANNUAL EXPENSES
(as a percentage of Trust average net assets)
<TABLE>
<CAPTION>
OTHER EXPENSES
MANAGEMENT (AFTER EXPENSE TOTAL TRUST
TRUST PORTFOLIO FEES REIMBURSEMENT) ANNUAL EXPENSES
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pacific Rim Emerging Markets........ 0.850% 0.570% 1.420%
Science & Technology................ 1.100% 0.160% 1.260%
International Small Cap............. 1.100% 0.210% 1.310%
Emerging Small Company.............. 1.050% 0.060% 1.110%
Pilgrim Baxter Growth............... 1.050% 0.130% 1.180%
Small/Mid Cap....................... 1.000% 0.050% 1.050%
International Stock................. 1.050% 0.330% 1.380%
Worldwide Growth.................... 1.000% 0.320% 1.320%
Global Equity....................... 0.900% 0.110% 1.010%
Small Company Value................. 1.050% 0.100% 1.150%
Equity.............................. 0.750% 0.050% 0.800%
Growth.............................. 0.850% 0.100% 0.950%
Quantitative Equity................. 0.700% 0.070% 0.770%
Blue Chip Growth.................... 0.925% 0.050% 0.975%
Real Estate Securities.............. 0.700% 0.070% 0.770%
Value............................... 0.800% 0.160% 0.960%
International Growth and Income..... 0.950% 0.170% 1.120%
Growth and Income................... 0.750% 0.040% 0.790%
Equity-Income....................... 0.800% 0.050% 0.850%
Balanced............................ 0.800% 0.080% 0.880%
Aggressive Asset Allocation......... 0.750% 0.150% 0.900%
High Yield.......................... 0.775% 0.110% 0.885%
Moderate Asset Allocation........... 0.750% 0.100% 0.850%
Conservative Asset Allocation....... 0.750% 0.140% 0.890%
Strategic Bond...................... 0.775% 0.100% 0.875%
Global Government Bond.............. 0.800% 0.130% 0.930%
Capital Growth Bond................. 0.650% 0.080% 0.730%
Investment Quality Bond............. 0.650% 0.090% 0.740%
U.S. Government Securities.......... 0.650% 0.070% 0.720%
Money Market........................ 0.500% 0.040% 0.540%
Lifestyle Aggressive 1000#.......... 0% 1.116%* 1.116%
Lifestyle Growth 820#............... 0% 1.048%* 1.048%
Lifestyle Balanced 640#............. 0% 0.944%* 0.944%
Lifestyle Moderate 460#............. 0% 0.850%* 0.850%
Lifestyle Conservative 280#......... 0% 0.708%* 0.708%
</TABLE>
* Reflects expenses of the Underlying Portfolios. Manufacturers Securities
Services, LLC ("MSS") has voluntarily agreed to pay the expenses of each
Lifestyle Trust (excluding the expenses of the Underlying Portfolios). This
voluntary expense reimbursement may be terminated at any time. If such expense
reimbursement was not in effect, Total Trust Annual Expenses would be .04%
higher (based on expenses of the Lifestyle Trusts for the fiscal year ended
December 31, 1998) as noted in the chart below:
27
<PAGE> 39
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL TRUST
TRUST PORTFOLIO FEES EXPENSES ANNUAL EXPENSES
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Lifestyle Aggressive 1000........... 0% 1.156% 1.156%
Lifestyle Growth 820................ 0% 1.088% 1.088%
Lifestyle Balanced 640.............. 0% 0.984% 0.984%
Lifestyle Moderate 460.............. 0% 0.890% 0.890%
Lifestyle Conservative 280.......... 0% 0.748% 0.748%
</TABLE>
# Each Lifestyle Trust will bear its own pro rata share of the fees and expenses
incurred by the Underlying Portfolios in which it invests, and the investment
return of each Lifestyle Trust will be net of the Underlying Portfolio expenses.
Each Lifestyle Portfolio must also bear its own expenses. However, MSS is
currently paying those expenses as described in footnote (*) above.
THE GENERAL ACCOUNT
By virtue of exclusionary provisions, interests in our general account have not
been registered under the Securities Act of 1933 and our general account has not
been registered as an investment company under the 1940 Act. Accordingly,
neither our general account nor any interests therein are subject to the
provisions of these acts, and as a result the staff of the SEC has not reviewed
the disclosures in this prospectus relating to the general account. Disclosures
regarding the general account may, however, be subject to certain generally
applicable provisions of the Federal securities laws relating to the accuracy
and completeness of statements made in a prospectus.
Our general account consists of all assets owned by us other than those in our
separate accounts. Subject to applicable law, we have sole discretion over the
investment of the assets of our general account.
- --------------------------------------------------------------------------------
We will credit interest to the portion of your Policy Value allocated to the
Fixed Account at an annual rate of at least 4%.
- --------------------------------------------------------------------------------
You may elect to allocate net premiums to the Fixed Account or to transfer all
or a portion of your Policy Value to the Fixed Account from the Investment
Accounts. Transfers from the Fixed Account to the Investment Accounts are
subject to restrictions. See POLICY VALUES -- "Transfers Of Policy Value" and
"Policy Value." We will hold the reserves required for any portion of the Policy
Value allocated to the Fixed Account in our general account. However, your
allocation of Policy Value to the Fixed Account does not entitle you to share in
the investment experience of our general account. Instead, we guarantee that
your Policy Value in the Fixed Account will accrue interest daily at an
effective annual rate of at least 4%, without regard to the actual investment
experience of our general account. We may, at our sole discretion, credit a
higher rate of interest, although we are not obligated to do so. You assume the
risk that interest credited may not exceed the guaranteed minimum rate of 4% per
year.
28
<PAGE> 40
OTHER GENERAL POLICY PROVISIONS
POLICY DEFAULT
- --------------------------------------------------------------------------------
Unless the No Lapse Guarantee is in effect, your Policy will go into default if
the Net Cash Surrender Value would go below zero after taking the monthly
deductions then due.
- --------------------------------------------------------------------------------
Unless the No Lapse Guarantee is in effect, your Policy will go into default if
the Policy's Net Cash Surrender Value at the beginning of any policy month would
go below zero after deducting the monthly deductions then due. We will notify
you of the default and will allow a 61-day grace period in which you may make a
premium payment sufficient to bring the Policy out of default. The payment you
must make will be equal to the amount necessary to bring the Net Cash Surrender
Value to zero, if it was less than zero at the date of default, plus the monthly
deductions due at the date of default and at the beginning of each of the two
policy months thereafter, based on the Policy Value at the date of default. If
we do not receive the required payment by the end of the grace period, we will
terminate the Policy and pay to you the Net Cash Surrender Value as of the date
of default less the monthly deductions then due. If the life insured should die
during the grace period following a Policy's going into default, the Policy
Value used in the calculation of the death benefit will be the Policy Value as
of the date of default, and the insurance benefit payable will be reduced by any
outstanding monthly deductions due at the time of death.
POLICY REINSTATEMENT
You can reinstate a Policy which has terminated after going into default at any
time within 21 days following the date of termination without furnishing
evidence of insurability, subject to the following conditions:
(a) The life insured's risk class is standard or preferred; and
(b) The life insured's attained age is less than 46.
You can reinstate a Policy which has terminated after going into default at any
time within the five-year period following the date of termination subject to
the following conditions:
(a) You must not have been surrendered the Policy for its Net Cash
Surrender Value;
(b) You furnish to us satisfactory evidence of the life insured's
insurability;
(c) You pay us a premium equal to the payment required during the 61-day
grace period following default to keep the Policy in force; and
(d) You repay to us an amount equal to any amounts paid by us in
connection with the termination of the Policy.
If we approve the reinstatement, the date of reinstatement will be the later of
the date of your written request or the date we receive the required payment at
our Service Office.
MISCELLANEOUS POLICY PROVISIONS
BENEFICIARY. You may appoint one or more beneficiaries of the Policy by naming
them in the application. Beneficiaries may be appointed in three classes --
primary, secondary and final. Thereafter you may change the beneficiary during
the life insured's lifetime by giving written notice to us in a form
satisfactory to us unless an irrevocable designation has been elected. If the
life insured dies and there is no surviving beneficiary, you, or your estate if
you are the life insured, will be the beneficiary. If a beneficiary dies before
the seventh day after the death of the life insured, we will pay the insurance
benefit as if the beneficiary had died before the life insured.
INCONTESTABILITY. We will not contest the validity of a Policy after it has been
in force during the life insured's lifetime for two years from the issue date.
We will not contest the validity of an increase in face amount or the addition
of a supplementary benefit after such increase or addition
29
<PAGE> 41
has been in force during the life insured's lifetime for two years. If a Policy
has been reinstated and been in force for less than two years from the
reinstatement date, we can contest any misrepresentation of a fact material to
the reinstatement.
MISSTATEMENT OF AGE OR SEX. If the life insured's stated age or sex or both in
the Policy are incorrect, we will change the face amount of insurance so that
the death benefit will be that which the most recent monthly charge for the cost
of insurance would have bought for the correct age and sex.
SUICIDE EXCLUSION. If the life insured dies by suicide within two years from the
issue date, we will pay only the premiums paid less any partial withdrawals of
the Net Cash Surrender Value and any amount in the Policy Debt. If the life
insured should die by suicide within two years after a face amount increase, the
death benefit for the increase will be limited to the monthly deduction for the
increase.
ASSIGNMENT. We will not be bound by an assignment until we receive a copy of it
at our Service Office. We assume no responsibility for the validity or effects
of any assignment.
CONVERSION PRIVILEGE. You may effectively convert your policy, at any Policy
Anniversary, to a fixed paid-up benefit, without evidence of insurability. The
Policy Value, other values based thereon and the Investment Account values will
be determined as of the Business Day on which we receive the written request for
conversion. The basis for determining the Policy Value will be the Commissioners
1980 Standard Ordinary Smoker or Non-Smoker Mortality Table and an interest rate
of 4% per year. The Flexible Premium Variable Life coverage cannot be reinstated
after the date of conversion.
OTHER PROVISIONS
SUPPLEMENTARY BENEFITS
Subject to certain requirements, you may add one or more supplementary benefits
to a Policy, including those providing accidental death coverage, waiving
monthly deductions upon disability, and, in the case of corporate-owned
Policies, permitting a change of the life insured. You may obtain more detailed
information concerning supplementary benefits from one of our authorized agents.
We will deduct the cost of any supplementary benefits as part of the monthly
deduction. See POLICY VALUES -- "Monthly Deductions."
PAYMENT OF PROCEEDS
As long as the Policy is in force, we will ordinarily pay any policy loans,
partial withdrawals, Net Cash Surrender Value or any insurance benefit within
seven days after receipt at our Service Office of all the documents required for
such a payment.
We may delay the payment of any policy loans, partial withdrawals, Net Cash
Surrender Value or the portion of any insurance benefit that depends on the
Fixed Account value for up to six months; otherwise we may delay payment for any
period during which (i) the New York Stock Exchange is closed for trading
(except for normal holiday closings) or trading on the New York Stock Exchange
is otherwise restricted; or (ii) an emergency exists as defined by the SEC or
the SEC requires that trading be restricted; or (iii) the SEC permits a delay
for the protection of policyowners. Also, we may deny transfers in the
circumstances stated in clauses (i), (ii) and (iii) above and in the
circumstances previously set forth. See POLICY VALUES --"Transfers Of Policy
Value."
30
<PAGE> 42
REPORTS TO POLICYOWNERS
Within 30 days after each policy anniversary, we will send you a statement
showing, among other things, the amount of the death benefit, the Policy Value
and its allocation among the Investment Accounts, the Fixed Account and the Loan
Account, the value of the units in each Investment Account to which the Policy
Value is allocated, any Loan Account balance and any interest charged since the
last statement, the premiums paid and policy transactions made during the period
since the last statement and any other information required by law.
Within 10 days after any transaction involving purchase, sale, or transfer of
units of Investment Accounts, we will send a confirmation statement.
You will also be sent an annual and a semi-annual report for the Trust which
will include a list of the securities held in each Portfolio as required by the
1940 Act.
MISCELLANEOUS MATTERS
PORTFOLIO SHARE SUBSTITUTION
- --------------------------------------------------------------------------------
Under certain circumstances we may seek to substitute shares of a different
Portfolio or fund.
- --------------------------------------------------------------------------------
Although we believe it to be highly unlikely, it is possible that in the
judgment of our management, one or more of the Portfolios may become unsuitable
for investment by the Separate Account because of a change in investment policy
or a change in the applicable laws or regulations, because the shares are no
longer available for investment, or for some other reason. In that event, we may
seek to substitute the shares of another Portfolio or of an entirely different
mutual fund. Before this can be done, the approval of the SEC and one or more
state insurance departments may be required.
We also reserve the right to combine other separate accounts with the Separate
Account, to establish additional sub-accounts within the Separate Account, to
operate the Separate Account as a management investment company or other form
permitted by law, to transfer assets from this Separate Account to another
separate account and from another separate account to this Separate Account, and
to de-register the Separate Account under the 1940 Act. We would make the change
only if permissible under applicable Federal and New York state law.
We will not materially change the investment objectives of the Separate Account
without first filing the change with the Insurance Commissioner of the State of
New York. You will be advised of any change at the time it is made.
FEDERAL INCOME TAX CONSIDERATIONS
The following summary provides a general description of the Federal income tax
considerations associated with the Policy and does not purport to be complete or
to cover all situations. This discussion is not intended as tax advice. You
should consult counsel or other competent tax advisers for more complete
information. This discussion is based upon our understanding of the present
Federal income tax laws as they are currently interpreted by the IRS. We make no
representation as to the likelihood of continuation of the present federal
income tax laws or of the current interpretations by the Service. WE DO NOT MAKE
ANY GUARANTEE REGARDING THE TAX STATUS OF ANY POLICY OR ANY TRANSACTION
REGARDING THE POLICIES.
The Policies may be used in various arrangements, including non-qualified
deferred compensation or salary continuance plans, split dollar insurance plans,
executive bonus plans, retiree medical benefit plans and others. The tax
consequences of such plans may vary depending on the particular facts and
circumstances of each individual arrangement. Therefore, if the use of such
Policies in any such arrangement, the value of which depends in part on its tax
consequences, is contemplated, you should consult a qualified tax adviser for
advice on the tax attributes of the particular arrangement.
31
<PAGE> 43
TAX STATUS OF THE POLICY
Section 7702 of the Code sets forth a definition of a life insurance contract
for Federal tax purposes. The Secretary of Treasury (the "Treasury") is
authorized to prescribe regulations implementing Section 7702. However, while
proposed regulations and other interim guidance have been issued, final
regulations have not been adopted and guidance as to how Section 7702 is to be
applied is limited. If a Policy were determined not to be a life insurance
contract for purposes of Section 7702, such Policy would not provide the tax
advantages normally provided by a life insurance policy.
- --------------------------------------------------------------------------------
Policies issued on a standard rate basis should qualify as life insurance under
the Code.
- --------------------------------------------------------------------------------
With respect to a Policy issued on the basis of a standard rate class, we
believe (largely in reliance on IRS Notice 88-128 and the proposed mortality
charge regulations under Section 7702, issued on July 5, 1991) that such a
Policy should meet the Section 7702 definition of a life insurance contract.
With respect to a Policy that is issued on a substandard basis (i.e., a premium
class involving higher-than-standard mortality risk), there is less guidance, in
particular as to how mortality and other expense requirements of Section 7702
are to be applied in determining whether such a Policy meets the Section 7702
definition of a life insurance contract. Thus, it is not clear whether or not
such a Policy would satisfy Section 7702, particularly if the policyowner pays
the full amount of premiums permitted under the Policy.
If it is subsequently determined that a Policy does not satisfy Section 7702, we
may take whatever steps are appropriate and reasonable to attempt to cause such
a Policy to comply with Section 7702. For these reasons, we reserve the right to
restrict Policy transactions as necessary to attempt to qualify it as a life
insurance contract under Section 7702.
Section 817(h) of the Code requires that the investments of the Separate Account
be "adequately diversified" in accordance with Treasury regulations in order for
the Policy to qualify as a life insurance contract under Section 7702 of the
Code (discussed above). The Separate Account, through the Trust, intends to
comply with the diversification requirements prescribed in Treas. Reg. Sec.
1.817-5, which affect how the Trust's assets are to be invested. We believe that
the Separate Account will thus meet the diversification requirement, and we will
monitor continued compliance with the requirement.
In certain circumstances, owners of variable life insurance Policies may be
considered the owners, for Federal income tax purposes, of the assets of the
separate account used to support their Policies. In those circumstances, income
and gains from the separate account assets would be includible in the variable
policyowner's gross income. The IRS has stated in published rulings that a
variable policyowner will be considered the owner of separate account assets if
the policyowner possesses incidents of ownership in those assets, such as the
ability to exercise investment control over the assets. The Treasury Department
has also announced, in connection with the issuance of regulations concerning
diversification, that those regulations "do not provide guidance concerning the
circumstances in which investor control of the investments of a segregated asset
account may cause the investor (i.e., the policyowner), rather than the
insurance company, to be treated as the owner of the assets in the account."
This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyowners may direct their
investments to particular sub-accounts without being treated as owners of the
underlying assets."
The ownership rights under the Policy are similar to, but different in certain
respects from, those described by the IRS in rulings in which it was determined
that policyowners were not owners of separate account assets.
For example, the Policy has many more Portfolios to which policyowners may
allocate premium payments and Policy Values than were available in the policies
described in the rulings. These differences could result in an owner being
treated as the owner of a pro rata portion of the assets of
32
<PAGE> 44
the Separate Account. In addition, we do not know what standards will be set
forth, if any, in the regulations or rulings which the Treasury Department has
stated it expects to issue. We therefore reserve the right to modify the Policy
as necessary to attempt to prevent an owner from being considered the owner of a
pro rata share of the assets of the Separate Account.
The following discussion assumes that the Policy will qualify as a life
insurance contract for Federal income tax purposes.
TAX TREATMENT OF POLICY BENEFITS
IN GENERAL. We believe that the proceeds and cash value increases of a Policy
should be treated in a manner consistent with a fixed-benefit life insurance
policy for Federal income tax purposes. Thus, the death benefit under the Policy
should be excludable from the gross income of the beneficiary under Section
101(a)(1) of the Code.
- --------------------------------------------------------------------------------
Generally, you will not be deemed to be in constructive receipt of your Policy
Value until there is a distribution.
- --------------------------------------------------------------------------------
Depending on the circumstances, the exchange of a Policy, a change in the
Policy's death benefit option, a Policy loan, a partial withdrawal, a surrender,
a change in ownership, a change of insured, the addition of an accelerated death
benefit rider, or an assignment of the Policy may have Federal income tax
consequences. In addition, Federal, state and local transfer, and other tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each policyowner or beneficiary. Generally, the policyowner
will not be deemed to be in constructive receipt of the Policy Value, including
increments thereof, until there is a distribution. The tax consequences of
distributions from, and loans taken from or secured by, a Policy depend on
whether the Policy is classified as a MEC. Upon a complete surrender or lapse of
a Policy or when benefits are paid at a Policy's maturity date, if the amount
received plus the amount of indebtedness exceeds the total investment in the
Policy, the excess will generally be treated as ordinary income subject to tax,
regardless of whether the Policy is or is not a MEC.
MODIFIED ENDOWMENT CONTRACTS. Section 7702A establishes a class of life
insurance contracts designated as "Modified Endowment Contracts," which applies
to Policies entered into or materially changed after June 20, 1988.
Because of the Policy's flexibility, classification as a MEC will depend on the
individual circumstances of each Policy. In general, a Policy will be a MEC if
the accumulated premiums paid at any time during the first seven policy years
exceed the sum of the net level premiums which would have been paid on or before
such time if the Policy provided for paid-up future benefits after the payment
of seven level annual premiums. The determination of whether a Policy will be a
MEC after a material change generally depends upon the relationship of the death
benefit and Policy Value at the time of such change and the additional premiums
paid in the seven years following the material change. If a premium is received
which would cause the Policy to become a MEC within 23 days of the next policy
anniversary, we will not apply the portion of the premium which would cause MEC
status (excess premium) to the Policy when received. The excess premium will be
placed in a suspense account until the next anniversary date, at which point the
excess premium, along with interest earned on the excess premium at a rate of
3.5% from the date the premium was received, will be applied to the Policy. The
policyowner will be advised of this action and will be offered the opportunity
to have the premium credited as of the original date received or to have the
premium returned. If the policyowner does not respond, the premium and interest
will be applied to the Policy as of the first day of the next anniversary.
If a premium is received which would cause your Policy to become a MEC more than
23 days prior to the next policy anniversary, we will refund any excess premium
to you. The portion of the premium which is not excess will be applied as of the
date received. We will advise you of this action and will offer to return the
premium and have it credited to the account as of the original date received.
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<PAGE> 45
If, in connection with the application or issue of the Policy, you acknowledge
that your Policy is or will become a MEC, we will credit excess premiums that
would cause MEC status as of the date received.
Further, if a transaction occurs which reduces the face amount of your Policy
during the first seven years, we will retest the Policy, retroactive to the date
of purchase, to determine compliance with the seven-pay test based on the lower
face amount. As well, if a reduction of the face amount occurs within seven
years of a material change, we will retest the Policy for compliance retroactive
to the date of the material change. Failure to comply would result in
classification as a MEC regardless of any efforts by us to provide a payment
schedule that will not violate the seven-pay test.
The rules relating to whether a Policy will be treated as a MEC are extremely
complex and cannot be adequately described in the limited confines of this
summary. Therefore, you should consult with a competent adviser to determine
whether a transaction will cause the Policy to be treated as a MEC.
- --------------------------------------------------------------------------------
Generally, a distribution from a Policy that is not a MEC is taxable to you only
to the extent the distribution exceeds your investment in the Policy.
- --------------------------------------------------------------------------------
DISTRIBUTIONS FROM POLICIES CLASSIFIED AS MODIFIED ENDOWMENT CONTRACTS. Policies
classified as MECs will be subject to the following tax rules: First, all
partial withdrawals from such a Policy are treated as ordinary income subject to
tax up to the amount equal to the excess (if any) of the Policy Value
immediately before the distribution over the investment in the Policy (described
below) at such time. Second, loans taken from or secured by such a Policy are
treated as partial withdrawals from the Policy and taxed accordingly. Past-due
loan interest that is added to the loan amount is treated as a loan. Third, a
10% additional income tax is imposed on the portion of any distribution
(including distributions upon surrender) from, or loans taken from or secured
by, such a Policy that is included in income except where the distribution or
loan is made on or after the policyowner attains age 59 1/2, is attributable to
the policyowner's becoming disabled, or is part of a series of substantially
equal periodic payments for the life (or life expectancy) of the policyowner or
the joint lives (or joint life expectancies) of the policyowner and the
policyowner's beneficiary.
DISTRIBUTIONS FROM POLICIES NOT CLASSIFIED AS MODIFIED ENDOWMENT CONTRACTS. A
distribution from a Policy that is not a MEC is generally treated as a tax-free
recovery by the policyowner of the investment in the Policy (described below) to
the extent of such investment in the Policy, and as a distribution of taxable
income only to the extent the distribution exceeds the investment in the Policy.
An exception to this general rule occurs in the case of a decrease in the
Policy's death benefit or any other change that reduces benefits under the
Policy in the first 15 years after the Policy is issued and that results in a
cash distribution to the policyowner in order for the Policy to continue
complying with the Section 7702 definitional limits. Such a cash distribution
will be taxed in whole or in part as ordinary income (to the extent of any gain
in the Policy) under rules prescribed in Section 7702.
Loans from, or secured by, a Policy that is not a MEC are not treated as
distributions. Instead, such loans are treated as indebtedness of the
policyowner. Select Loans may, however, be treated as a distribution.
Finally, neither distributions (including distributions upon surrender) nor
loans from, or secured by, a Policy that is not a MEC are subject to the 10%
additional tax.
POLICY LOAN INTEREST. Generally, personal interest paid on any loan under a
Policy which is owned by an individual is not deductible. In addition, except
for the transition rules described in the paragraph below, interest on any loan
under a Policy owned by a taxpayer and covering the life of any individual who
is an officer or employee of or is financially interested in the business
carried on by the taxpayer will not be tax deductible unless the employee is a
key person within the meaning of Section 264 of the Code. A deduction will not
be permitted for interest on a loan under a policy held on the life of a key
person to the extent the aggregate of such loans with respect to contracts
covering the key person exceeds $50,000. The number of employees who can
34
<PAGE> 46
qualify as key persons depends in part on the size of the employer but cannot
exceed 20 individuals.
Furthermore, if a non-natural person owns a Policy, or is the direct or indirect
beneficiary under a Policy, Section 264(f) of the Code disallows a pro-rata
portion of the taxpayer's interest expense allocable to unborrowed policy cash
values attributable to insurance held on the lives of individuals who are not
20% (or more) owners of the taxpayer-entity, officers, employees, or former
employees of the taxpayer.
The portion of the interest expense that is allocable to unborrowed policy cash
values is an amount that bears the same ratio to that interest expense as the
taxpayer's average unborrowed policy cash values under such life insurance
policies bears to the average adjusted bases for all assets of the taxpayer.
If the taxpayer is not the owner, but is the direct or indirect beneficiary
under the contract, then the amount of unborrowed cash value of the policy taken
into account in computing the portion of the taxpayer's interest expense
allocable to unborrowed policy cash values cannot exceed the benefit to which
the taxpayer is directly or indirectly entitled under the Policy.
INVESTMENT IN THE POLICY. Investment in the Policy means (i) the aggregate
amount of any premiums or other consideration paid for a Policy, minus (ii) the
aggregate amount received under the Policy which has been excluded from gross
income of the policyowner (except that the amount of any loan from, or secured
by, a Policy that is a MEC, to the extent such amount has been excluded from
gross income, will be disregarded), plus (iii) the amount of any loan from, or
secured by, a Policy that is a MEC to the extent that such amount has been
included in the gross income of the policyowner.
MULTIPLE POLICIES. All MECs that are issued by us (or our affiliates) to the
same policyowner during any calendar year are treated as one MEC for purposes of
determining the amount includible in the gross income under Section 72(e) of the
Code.
OUR TAXES
As a result of the Omnibus Budget Reconciliation Act of 1990, insurance
companies are generally required to capitalize and amortize certain policy
acquisition expenses over a 10-year period rather than currently deducting such
expenses. This treatment applies to the deferred acquisition expenses of a
Policy and results in a significantly higher corporate income tax liability for
us. We reserve the right to make a charge to premiums to compensate us for the
anticipated higher corporate income taxes.
At the present time, we make no charge to the Separate Account for any Federal,
state or local taxes that we incur that may be attributable to the Separate
Account or to the Policies. We, however, reserve the right in the future to make
a charge for any such tax or other economic burden resulting from the
application of the tax laws that we determine to be properly attributable to the
Separate Account or to the Policies.
DISTRIBUTION OF THE POLICY
MSS is a Delaware limited liability company organized on October 1, 1997, with
its principal offices located at 73 Tremont Street, Boston, Massachusetts 02108.
MSS acts as the principal underwriter of, and continuously offers, the Policies
pursuant to a Distribution Agreement with us. MSS is a subsidiary of Manulife
North America, the ultimate parent entity of which is Manulife. MSS is
registered as a broker-dealer under the Securities Exchange Act of 1934, is a
member of the National Association of Securities Dealers and is duly appointed
and licensed as our insurance agent. The Policies will be sold by registered
representatives of broker-dealers having distribution agreements with MSS who
are also licensed by the New York State Insurance Department and appointed with
us. The gross first-year compensation paid by us, consisting of
35
<PAGE> 47
commission, expense allowance and General Agent Override, if applicable will not
exceed 99% of premiums paid up to the Target Premium and a total of 3% on the
excess thereof. Additionally, we may pay renewal compensation consisting of
commissions and expense allowance, totaling 3% of premiums paid in years two to
15, and 2% thereafter, plus 0.15% of the Policy Value per annum after the third
anniversary
RESPONSIBILITIES ASSUMED BY US AND MSS
We have entered into an agreement with MSS pursuant to which MSS will pay
selling broker dealers maximum commission and expense allowance payments
pursuant to limitations imposed by New York Insurance Law. We will prepare and
maintain all books and records required to be prepared and maintained by MSS
with respect to the Policies, and send all confirmations required to be sent by
MSS with respect to the Policies. We will pay MSS for expenses incurred and
services performed under the terms of the agreement in such amounts and at such
times as agreed to by the parties.
Manulife has also entered into a Service Agreement with us pursuant to which
Manulife or its designee will provide to us all issue, administrative, general
services and recordkeeping functions on our behalf with respect to all of our
insurance policies including the Policies.
Finally, we may, from time to time at our sole discretion, enter into one or
more reinsurance agreements with other life insurance companies, under which
policies issued by us may be automatically reinsured, such that our total amount
at risk under a policy would be limited for the life of the insured.
VOTING RIGHTS
- --------------------------------------------------------------------------------
We will vote shares of the Trust attributable to your Policy in accordance with
your instructions.
- --------------------------------------------------------------------------------
As stated above, we will invest all of the assets held in the sub-accounts of
the Separate Account in shares of a particular Portfolio of the Trust. We are
the legal owner of those shares and as such have the right to vote upon matters
that are required by the 1940 Act to be approved or ratified by the shareholders
of a mutual fund and to vote upon any other matters that may be voted upon at a
shareholders' meeting. However, we will vote shares held in the sub-accounts in
accordance with instructions received from policyowners having an interest in
such sub-accounts.
We will vote shares held in each sub-account for which no timely instructions
from policyowners are received, including shares not attributable to Policies,
in the same proportion as those shares in that sub-account for which
instructions are received. Should the applicable Federal securities laws or
regulations change so as to permit us to vote shares held in the Separate
Account in our own right, we may elect to do so.
The number of shares in each sub-account for which instructions may be given by
a policyowner is determined by dividing the portion of the Policy Value derived
from participation in that sub-account, if any, by the value of one share of the
corresponding Portfolio of the Trust. We will determine the number as of a date
chosen by us, but not more than 90 days before the shareholders' meeting.
Fractional votes are counted. Voting instructions will be solicited in writing
at least 14 days prior to the shareholders' meeting.
We may, if required by state insurance officials, disregard voting instructions
if such instructions would require shares to be voted so as to cause a change in
the sub-classification or investment policies of one or more of the Portfolios,
or to approve or disapprove an investment management contract. In addition, we
may disregard voting instructions that would require changes in the investment
policies or investment adviser, provided that we reasonably disapprove such
changes in accordance with applicable Federal regulations. If we disregard
voting instructions, we will advise you of that action and our reasons for such
action in the next communication to policyowners.
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<PAGE> 48
DIRECTORS AND OFFICERS OF MANULIFE NEW YORK
Our Directors and Officers, together with their principal occupations during the
past few years, are as follows:
<TABLE>
<CAPTION>
NAME, ADDRESS POSITION
AND AGE WITH COMPANY PRINCIPAL OCCUPATION
- ------- ------------ --------------------
<S> <C> <C>
Bruce Avedon Director* Consultant (self-employed).
6601 Hitching Post Lane
Cincinnati, OH 45230
Age: 68
John D. DesPrez III Director* Senior Vice President, Annuities, Manulife,
73 Tremont Street September 1996 to present; Director and
Boston, MA 02108 President, Manulife North America, September
Age: 40 1996 to present; Vice President, Mutual
Funds, Manulife, January, 1995 to September 1996;
President and Chief Executive Officer, North
American Funds, March 1993 to September 1996.
Ruth Ann Flemming Director* Homemaker.
145 Western Drive
Short Hills, NJ 07078
Age: 39
Tracy A. Kane Secretary and Assistant Vice President and Counsel,
73 Tremont Street Counsel Manulife North America, April 1993 to
Boston, MA 02108 Present.
Age: 36
Theodore Kilkuskie Director* Senior Vice President, Annuities - 1999 - present,
73 Tremont Street Manulife; Manulife; President, Manulife North America -
Boston, MA 02108 1999 - present; Senior Vice President, U.S.
Age: 42 Individual Insurance, Manulife, June 1995 to
present; Executive Vice President, Mutual
Fund Sales & Marketing, State Street
Research & Management, March 1994 to
May 1995.
</TABLE>
37
<PAGE> 49
<TABLE>
<CAPTION>
NAME, ADDRESS POSITION
AND AGE WITH COMPANY PRINCIPAL OCCUPATION
- ------- ------------ --------------------
<S> <C> <C>
David W. Libbey Treasurer Vice President, Finance, Manulife North
73 Tremont Street America, June 1997 to present; Vice
Boston, MA 02108 President and Actuary, Second Vice
Age: 49 President and Actuary, Paul Revere
Insurance Group, June 1970 to March 1997.
Neil M. Merkl, Esq. Director* Attorney (self-employed), April 1994 to
35-35 161st Street present; Partner, Wilson Elser, Etc., 1979
Flushing, NY 11358 to 1994.
Age: 66
Robert C. Perez, Ph.D. Director* Associate Professor, Iona College, Hagen
715 North Avenue Business School.
New Rochelle, NY 01801
Age: 70
James P. O'Malley Director* Assistant Vice President, Systems New Business
133 Pringle Drive Pensions, Manulife, 1984 to present.
Whitby, Ontario, Canada
John Richardson Director and Chairman Executive Vice President and General
200 Bloor Street East Of the Board of Manager, U.S. Operations, Manulife,
Toronto, Ontario, Canada Directors* January 1995 to present; Senior Vice
M4W 1E5 President and General Manager, Canadian
Age: 59 Operations, Manulife, June 1992 to
January 1995.
James K. Robinson Director* Attorney, Assistant Secretary, Eastman
7 Summit Drive Kodak Company.
Rochester, NY 14620
Age: 70
A. Scott Logan Director* and Director and President, Wood Logan
1455 East Putnam Avenue President Associates, Inc. Senior Vice President
Old Greenwich, CT 06870 and National Marketing Director,
Age: 59 Massachusetts Financial Services.
John G. Vrysen Vice President and Vice President and Chief Financial
73 Tremont Street Chief Actuary Officer, U.S. Operations, Manulife, January
Boston, MA 02108 1996 to present; prior to January 1996,
Age: 42 Vice President and Chief Actuary,
Manulife North America.
</TABLE>
*Each Director is elected to serve until the next annual meeting of shareholders
or until his or her successor is elected and qualified.
38
<PAGE> 50
STATE REGULATIONS
We are subject to regulation and supervision by the New York Department of
Insurance, which periodically examines our financial condition and operations.
We are also subject to the insurance laws and regulations of all jurisdictions
in which we are authorized to do business. The Policies have been filed with
insurance officials, and meet all standards set by law, in each jurisdiction
where they are sold.
We are required to submit annual statements of our operations, including
financial statements, to the insurance departments of the various jurisdictions
in which we do business for the purposes of determining solvency and compliance
with local insurance laws and regulations.
PENDING LITIGATION
No litigation is pending that would have a material effect upon the Separate
Account or the Trust.
ADDITIONAL INFORMATION
We have filed a registration statement under the Securities Act of 1933 with the
SEC relating to the offering described in this prospectus. This prospectus does
not include all the information set forth in the registration statement. You may
obtain the omitted information from the SEC's principal office in Washington,
D.C. upon payment of the prescribed fee.
For further information you may also contact our Service Office.
LEGAL MATTERS
Tracey Anne Kane, Esq., our Secretary and General Counsel, has passed on the
legal validity of the Policies. Jones & Blouch L.L.P., Washington, D.C., has
passed on certain matters relating to the Federal securities laws.
INDEPENDENT AUDITORS
Our financial statements at December 31, 1998 and 1997 and for the years then
ended appearing in this prospectus have been audited by Ernst & Young LLP,
independent auditors, as set forth I their reports thereon appearing elsewhere
herein. Those financial statements are included herein in reliance upon such
reports given upon the authority of such firm as experts in auditing and
accounting.
YEAR 2000 ISSUES
Preparing computer systems to deal with the Year 2000 risk has become a major
issue for businesses throughout the world. Within the group of companies made up
of Manulife and its subsidiaries ("Manulife Financial"), a group-wide program
has been underway since 1996 to make all critical systems compliant by the end
of 1998 and other systems compliant by the end of 1999. Included in this program
are all systems applicable to and shared by us with Manulife Financial. Based on
a detailed assessment, Manulife Financial determined that a portion of its
software needs to be modified or replaced so that its computer systems will
function properly into the Year 2000 and beyond. Like most companies, the Year
2000 issue represents a significant challenge for Manulife Financial, and
extensive resources have been dedicated to modifying existing software and to
converting to new software. However, there can be no assurances that Manulife
Financial's systems, nor those of other companies on which Manulife Financial
relies, will be fully converted
39
<PAGE> 51
on a timely basis and therefore that all adverse effects on the Company due to
the Year 2000 risk will be avoided. Manulife Financial is presently consulting
with vendors, customers, subsidiaries, third-parties and other businesses with
which it deals to ensure that no material aspect of its, or our operations will
be hindered by the Year 2000 risk.
The costs of the project and the date on which Manulife Financial plans to
complete the modifications are based on management's best estimates and are
subject to some uncertainty. Manulife Financial is using both internal and
external resources to reprogram, or replace, and test the software for Year 2000
modifications. The total cost of this program to Manulife Financial is estimated
to be $64 million, comprised of $55 million for specifically budgeted programs
and $9 million for general contingencies. Manulife Financial has incurred $__
million as at December 31, 1998 of which we will receive an allocation due to
its shared systems. The costs allocated are not expected to have a material
effect on our net operating income.
FINANCIAL STATEMENTS
Our financial statements included herein should be distinguished from the
financial statements of the Separate Account and should be considered only as
bearing upon our ability to meet our obligations under the Policies.
[TO BE INCLUDED BY AMENDMENT.]
40
<PAGE> 52
APPENDIX A
SAMPLE ILLUSTRATIONS OF POLICY VALUES,
CASH SURRENDER VALUES AND DEATH BENEFITS
The following tables have been prepared to help show how values under the Policy
change with investment performance. The tables include both Policy Values and
Cash Surrender Values as well as Death Benefits. The Policy Value is the sum of
the values in the Investment Accounts, as the tables assume no values in the
Fixed Account or Loan Account. The Cash Surrender Value is the Policy Value less
any applicable surrender charges. The tables illustrate how Policy Values and
Cash Surrender Values, which reflect all applicable charges and deductions, and
Death Benefits of the Policy on an insured of a given age would vary over time
if the return on the assets of the Portfolio was a uniform, gross, after-tax,
annual rate of 0%, 6% or 12%. The Policy Values, Death Benefits and Cash
Surrender Values would be different from those shown if the returns averaged 0%,
6% or 12%, but fluctuated over and under those averages throughout the years.
The charges reflected in the tables include those for: deferred underwriting and
sales charges, and monthly deductions for administration, cost of insurance and
mortality and expense risks. The amounts shown for the Policy Value, Death
Benefit and Cash Surrender Value as of each policy year reflect the fact that
the net investment return on the assets held in the sub-accounts is lower than
the gross, after-tax return. This is because the expenses and fees borne by the
Portfolios are deducted from the gross return. The illustrations reflect an
average of the Trusts' expenses, which is approximately 0.954% on an annual
basis. The gross annual rates of return of 0%, 6% and 12% correspond to
approximate net annual rates of return of -0.949%, 4.994% and 10.937%.
The tables assume that no premiums have been allocated to the Fixed Account,
that planned premiums are paid on the policy anniversary and that no transfers,
partial withdrawals, policy loans, changes in death benefit options or changes
in face amount have been made. The tables reflect the fact that no charges for
Federal, state or local taxes are currently made against the Separate Account.
If such a charge is made in the future, it would take a higher gross rate of
return to produce after-tax returns of 0%, 6% and 12% than it does now.
There are two tables shown for each combination of age and death benefit option
for male non-smokers, one based on current cost of insurance and monthly
administration charges and the other based on the maximum administration
charges, deductions from premiums and cost of insurance charges based on the
1980 Commissioners Standard Ordinary Smoker/Nonsmoker Mortality Tables. The
current waiver of deductions from premiums and current monthly administration
charges and cost of insurance charges are not guaranteed and may be changed.
Upon request, we will furnish a comparable illustration based on the proposed
life insured's age, sex (unless unisex rates are required by law) and risk
class, any additional ratings and the death benefit option, face amount and
planned premium requested. Illustrations for smokers would show less favorable
results than the illustrations shown below.
From time to time, in advertisements or sales literature for the Policies that
quote performance data of one or more of the Portfolios, we may include cash
surrender values and death benefit figures computed using the same methodology
as that used in the following illustrations, but with the average annual total
return of the Portfolios for which performance data is shown in the
advertisement replacing the hypothetical rates of return shown in the following
tables. This information may be shown in the form of graphs, charts, tables and
examples.
<PAGE> 53
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
MALE NON-SMOKER ISSUE AGE 35 (STANDARD)
$500,000 FACE AMOUNT DEATH BENEFIT OPTION 1
$5,960 ANNUAL PLANNED PREMIUM
ASSUMING CURRENT CHARGES
<TABLE>
<CAPTION>
0% Hypothetical 6% Hypothetical 12% Hypothetical
Gross Investment Return Gross Investment Return Gross Investment Return
-------------------------------- --------------------------------- ----------------------------------
End of Cash Cash Cash
Policy Accumulated Policy Surrender Death Policy Surrender Death Policy Surrender Death
Year(1) Premiums(2) Value(3) Value(3)(4) Benefit Value(3) Value(3)(4) Benefit Value(3) Value(3)(4) Benefit
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 6,258 $ 4,614 $ 0 $500,000 $ 4,925 $ 0 $500,000 $ 5,237 $ 7 $ 500,000
2 12,829 9,407 2,929 500,000 10,324 3,846 500,000 11,278 4,801 500,000
3 19,728 14,069 7,591 500,000 15,897 9,420 500,000 17,877 11,400 500,000
4 26,973 18,596 12,119 500,000 21,649 15,172 500,000 25,085 18,608 500,000
5 34,579 22,981 16,504 500,000 27,577 21,100 500,000 32,955 26,478 500,000
6 42,566 27,251 21,421 500,000 33,713 27,883 500,000 41,580 35,750 500,000
7 50,953 31,368 26,186 500,000 40,026 34,844 500,000 50,998 45,816 500,000
8 59,758 35,336 30,802 500,000 46,528 41,994 500,000 61,293 56,759 500,000
9 69,004 39,149 35,263 500,000 53,219 49,332 500,000 72,550 68,663 500,000
10 78,712 42,811 39,572 500,000 60,108 56,869 500,000 84,870 81,631 500,000
15 135,039 58,611 58,611 500,000 97,596 97,596 500,000 166,561 166,561 500,000
20 206,927 69,484 69,484 500,000 140,362 140,362 500,000 297,108 297,108 500,000
25 298,676 74,497 74,497 500,000 189,390 189,390 500,000 507,829 507,829 680,491
30 415,774 70,948 70,948 500,000 249,721 249,721 500,000 859,860 859,860 1,049,029
</TABLE>
- ----------
(1) All values shown are as of the end of the policy year indicated, have been
rounded to the nearest dollar, and assume that (a) premiums paid after the
initial premium are received on the policy anniversary, (b) no policy loan
has been made, (c) no partial withdrawal of the Cash Surrender Value has
been made and (d) no premiums have been allocated to the Fixed Account.
(2) Assumes net interest of 5% compounded annually.
(3) Manufacturers Securities Services, LLC has voluntarily agreed to waive
fees payable to it and/or to reimburse expenses for a period of one year
from January 1, 1997 to the extent necessary to prevent the total of
advisory fees and expenses for the Quantitative Equity Trust, Real Estate
Securities Trust and Capital Growth Bond Trust for such period from
exceeding .50% of average net assets. The investment management fees and
expenses used to calculate the policy values do not reflect this waiver.
If this waiver were reflected in the calculations, Policy Values and Cash
Surrender Values would be slightly higher.
(4) Provided the No Lapse Guarantee Cumulative Premium Test has been and
continues to be met, the No Lapse Guarantee will keep the Policy in force
until the end of the first 5 Policy Years.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES. IT IS EMPHASIZED THAT THE
HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED
A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
<PAGE> 54
INVESTMENT RETURNS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A
NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICYOWNER,
AND THE INVESTMENT RETURNS FOR THE FUNDS OF THE TRUST. THE POLICY VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF ACTUAL RATES OF INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE> 55
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
MALE NON-SMOKER ISSUE AGE 35 (STANDARD)
$500,000 FACE AMOUNT DEATH BENEFIT OPTION 1
$5,960 ANNUAL PLANNED PREMIUM
ASSUMING GUARANTEED CHARGES
<TABLE>
<CAPTION>
0% Hypothetical 6% Hypothetical 12% Hypothetical
Gross Investment Return Gross Investment Return Gross Investment Return
------------------------------- ---------------------------------- ---------------------------------
End of Cash Cash Cash
Policy Accumulated Policy Surrender Death Policy Surrender Death Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit Value Value(3) Benefit Value Value(3) Benefit
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 6,258 $ 4,338 $ 0 $500,000 $ 4,635 $ 0 $500,000 $ 4,933 $ 0 $500,000
2 12,829 8,863 2,385 500,000 9,733 3,256 500,000 10,640 4,163 500,000
3 19,728 13,259 6,782 500,000 14,993 8,516 500,000 16,871 10,394 500,000
4 26,973 17,526 11,049 500,000 20,418 13,941 500,000 23,674 17,196 500,000
5 34,579 21,657 15,180 500,000 26,007 19,529 500,000 31,099 24,621 500,000
6 42,566 25,650 19,821 500,000 31,762 25,932 500,000 39,206 33,376 500,000
7 50,953 29,495 24,314 500,000 37,679 32,498 500,000 48,054 42,872 500,000
8 59,758 33,196 28,662 500,000 43,768 39,234 500,000 57,722 53,188 500,000
9 69,004 36,743 32,857 500,000 50,024 46,137 500,000 68,283 64,397 500,000
10 78,712 40,139 36,901 500,000 56,456 53,218 500,000 79,835 76,596 500,000
15 135,039 54,546 54,546 500,000 91,207 91,207 500,000 156,172 156,172 500,000
20 206,927 63,667 63,667 500,000 130,114 130,114 500,000 277,565 277,565 500,000
25 298,676 64,609 64,609 500,000 172,001 172,001 500,000 473,143 473,143 634,012
30 415,774 53,954 53,954 500,000 220,462 220,462 500,000 799,351 799,351 975,209
</TABLE>
- ----------
(1) All values shown are as of the end of the policy year indicated, have been
rounded to the nearest dollar, and assume that (a) premiums paid after the
initial premium are received on the policy anniversary, (b) no policy loan
has been made, (c) no partial withdrawal of the Cash Surrender Value has
been made and (d) no premiums have been allocated to the Fixed Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the No Lapse Guarantee Cumulative Premium Test has been and
continues to be met, the No Lapse Guarantee will keep the Policy in force
until the end of the first 5 Policy Years.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES. IT IS EMPHASIZED THAT THE
HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED
A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING
THE INVESTMENT ALLOCATION MADE BY THE POLICYOWNER, AND THE INVESTMENT RETURNS
FOR THE FUNDS OF THE TRUST. THE POLICY VALUE, CASH SURRENDER VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE> 56
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
MALE NON-SMOKER ISSUE AGE 35 (STANDARD)
$500,000 FACE AMOUNT DEATH BENEFIT OPTION 2
$7,450 ANNUAL PLANNED PREMIUM
ASSUMING CURRENT CHARGES
<TABLE>
<CAPTION>
0% Hypothetical 6% Hypothetical 12% Hypothetical
Gross Investment Return Gross Investment Return Gross Investment Return
-------------------------------- --------------------------------- ------------------------------------
End of Cash Cash Cash
Policy Accumulated Policy Surrender Death Policy Surrender Death Policy Surrender Death
Year(1) Premiums(2) Value(3) Value(3)(4) Benefit Value(3) Value(3)(4) Benefit Value(3) Value(3)(4) Benefit
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 7,823 $ 6,067 $ 92 $506,067 $ 6,466 $ 491 $506,466 $ 6,866 $ 891 $ 506,866
2 16,036 12,279 5,802 512,279 13,459 6,981 513,459 14,686 8,209 514,686
3 24,660 18,323 11,846 518,323 20,679 14,202 520,679 23,227 16,750 523,227
4 33,716 24,197 17,720 524,197 28,131 21,654 528,131 32,555 26,077 532,555
5 43,224 29,892 23,415 529,892 35,812 29,335 535,812 42,734 36,257 542,734
6 53,208 35,435 29,606 535,435 43,755 37,925 543,755 53,875 48,045 553,875
7 63,691 40,788 35,606 540,788 51,928 46,746 551,928 66,029 60,847 566,029
8 74,698 45,953 41,418 545,953 60,341 55,807 560,341 79,297 74,762 579,297
9 86,255 50,922 47,036 550,922 68,991 65,104 568,991 93,777 89,890 593,777
10 98,391 55,699 52,461 555,699 77,887 74,648 577,887 109,589 106,350 609,589
15 168,798 76,419 76,419 576,419 125,987 125,987 625,987 213,281 213,281 713,281
20 258,658 90,947 90,947 590,947 179,636 179,636 679,636 374,069 374,069 874,069
25 373,345 98,160 98,160 598,160 238,189 238,189 738,189 624,487 624,487 1,124,487
30 519,718 95,367 95,367 595,367 303,091 303,091 803,091 1,034,482 1,034,482 1,534,482
</TABLE>
- ----------
(1) All values shown are as of the end of the policy year indicated, have been
rounded to the nearest dollar, and assume that (a) premiums paid after the
initial premium are received on the policy anniversary, (b) no policy loan
has been made, (c) no partial withdrawal of the Cash Surrender Value has
been made and (d) no premiums have been allocated to the Fixed Account.
(2) Assumes net interest of 5% compounded annually.
(3) Manufacturers Securities Services, LLC has voluntarily agreed to waive
fees payable to it and/or to reimburse expenses for a period of one year
from January 1, 1997 to the extent necessary to prevent the total of
advisory fees and expenses for the Quantitative Equity Trust, Real Estate
Securities Trust and Capital Growth Bond Trust for such period from
exceeding .50% of average net assets. The investment management fees and
expenses used to calculate the policy values do not reflect this waiver.
If this waiver were reflected in the calculations, Policy Values and Cash
Surrender Values would be slightly higher.
(4) Provided the No Lapse Guarantee Cumulative Premium Test has been and
continues to be met, the No Lapse Guarantee will keep the Policy in force
until the end of the first 5 Policy Years.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES. IT IS EMPHASIZED THAT THE
HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED
A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
<PAGE> 57
INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICYOWNER, AND THE INVESTMENT
RETURNS FOR THE FUNDS OF THE TRUST. THE POLICY VALUE, CASH SURRENDER VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES
OF INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT
ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE> 58
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
MALE NON-SMOKER ISSUE AGE 35 (STANDARD)
$500,000 FACE AMOUNT DEATH BENEFIT OPTION 2
$7,450 ANNUAL PLANNED PREMIUM
ASSUMING GUARANTEED CHARGES
<TABLE>
<CAPTION>
0% Hypothetical 6% Hypothetical 12% Hypothetical
Gross Investment Return Gross Investment Return Gross Investment Return
------------------------------- -------------------------------- ----------------------------------
End of Cash Cash Cash
Policy Accumulated Policy Surrender Death Policy Surrender Death Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit Value Value(3) Benefit Value Value(3) Benefit
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 7,823 $ 5,740 $ 0 $505,740 $ 6,121 $ 146 $506,121 $ 6,503 $ 528 $ 506,503
2 16,036 11,632 5,155 511,632 12,756 6,278 512,756 13,926 7,448 513,926
3 24,660 17,362 10,885 517,362 19,604 13,127 519,604 22,029 15,552 522,029
4 33,716 22,927 16,450 522,927 26,668 20,191 526,668 30,876 24,399 530,876
5 43,224 28,321 21,844 528,321 33,947 27,470 533,947 40,528 34,051 540,528
6 53,208 33,542 27,712 533,542 41,445 35,616 541,445 51,061 45,232 551,061
7 63,691 38,578 33,396 538,578 49,155 43,973 549,155 62,547 57,365 562,547
8 74,698 43,432 38,898 543,432 57,086 52,552 557,086 75,081 70,547 575,081
9 86,255 48,094 44,208 548,094 65,231 61,344 565,231 88,750 84,864 588,750
10 98,391 52,566 49,327 552,566 73,599 70,360 573,599 103,668 100,429 603,668
15 168,798 71,714 71,714 571,714 118,572 118,572 618,572 201,198 201,198 701,198
20 258,658 84,327 84,327 584,327 167,887 167,887 667,887 351,523 351,523 851,523
25 373,345 87,135 87,135 587,135 218,065 218,065 718,065 581,560 581,560 1,081,560
30 519,718 77,092 77,092 577,092 268,832 268,832 768,832 953,480 953,480 1,453,480
</TABLE>
- ----------
(1) All values shown are as of the end of the policy year indicated, have been
rounded to the nearest dollar, and assume that (a) premiums paid after the
initial premium are received on the policy anniversary, (b) no policy loan
has been made, (c) no partial withdrawal of the Cash Surrender Value has
been made and (d) no premiums have been allocated to the Fixed Account.
(2) Assumes net interest of 5% compounded annually.
(5) Provided the No Lapse Guarantee Cumulative Premium Test has been and
continues to be met, the No Lapse Guarantee will keep the Policy in force
until the end of the first 5 Policy Years.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES. IT IS EMPHASIZED THAT THE
HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED
A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING
THE INVESTMENT ALLOCATION MADE BY THE POLICYOWNER, AND THE INVESTMENT RETURNS
FOR THE FUNDS OF THE TRUST. THE POLICY VALUE, CASH SURRENDER VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE> 59
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
MALE NON-SMOKER ISSUE AGE 55 (STANDARD)
$500,000 FACE AMOUNT DEATH BENEFIT OPTION 1
$15,095 ANNUAL PLANNED PREMIUM
ASSUMING CURRENT CHARGES
<TABLE>
<CAPTION>
0% Hypothetical 6% Hypothetical 12% Hypothetical
Gross Investment Return Gross Investment Return Gross Investment Return
------------------------------------ -------------------------------- -----------------------------------
End of Cash Cash Cash
Policy Accumulated Policy Surrender Death Policy Surrender Death Policy Surrender Death
Year(1) Premiums(2) Value(3) Value(3)(4) Benefit Value(3) Value(3)(4) Benefit Value(3) Value(3)(4) Benefit
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 15,850 $ 10,718 $ 920 $500,000 $ 11,478 $ 1,681 $500,000 $ 12,241 $ 2,443 $ 500,000
2 32,492 21,323 6,517 500,000 23,518 8,712 500,000 25,808 11,002 500,000
3 49,966 31,482 16,676 500,000 35,803 20,997 500,000 40,493 25,688 500,000
4 68,314 41,474 26,668 500,000 48,630 33,824 500,000 56,712 41,906 500,000
5 87,580 51,319 36,513 500,000 62,045 47,240 500,000 74,653 59,847 500,000
6 107,809 60,996 49,151 500,000 76,057 64,213 500,000 94,484 82,640 500,000
7 129,049 70,346 61,463 500,000 90,539 81,655 500,000 116,264 107,381 500,000
8 151,351 79,304 73,382 500,000 105,454 99,532 500,000 140,160 134,238 500,000
9 174,768 87,920 84,959 500,000 120,880 117,919 500,000 166,476 163,514 500,000
10 199,356 96,193 96,193 500,000 136,853 136,853 500,000 195,507 195,507 500,000
15 342,015 136,983 136,983 500,000 233,079 233,079 500,000 405,181 405,181 500,000
20 524,087 157,932 157,932 500,000 349,158 349,158 500,000 758,043 758,043 811,106
25 756,463 115,990 115,990 500,000 496,668 496,668 521,502 1,327,514 1,327,514 1,393,890
30 1,053,039 0(5) 0(5) 500,000(5) 689,148 689,148 723,606 2,229,147 2,229,147 2,340,604
</TABLE>
- ----------
(1) All values shown are as of the end of the policy year indicated, have been
rounded to the nearest dollar, and assume that (a) premiums paid after the
initial premium are received on the policy anniversary, (b) no policy loan
has been made, (c) no partial withdrawal of the Cash Surrender Value has
been made and (d) no premiums have been allocated to the Fixed Account.
(2) Assumes net interest of 5% compounded annually.
(3) Manufacturers Securities Services, LLC has voluntarily agreed to waive
fees payable to it and/or to reimburse expenses for a period of one year
from January 1, 1997 to the extent necessary to prevent the total of
advisory fees and expenses for the Quantitative Equity Trust, Real Estate
Securities Trust and Capital Growth Bond Trust for such period from
exceeding .50% of average net assets. The investment management fees and
expenses used to calculate the policy values do not reflect this waiver.
If this waiver were reflected in the calculations, Policy Values and Cash
Surrender Values would be slightly higher.
(4) Provided the No Lapse Guarantee Cumulative Premium Test has been and
continues to be met, the No Lapse Guarantee will keep the Policy in force
until the end of the first 5 Policy Years.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES. IT IS EMPHASIZED THAT THE
HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED
A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING
THE INVESTMENT ALLOCATION MADE BY THE POLICYOWNER, AND THE INVESTMENT RETURNS
FOR THE FUNDS OF THE TRUST. THE POLICY VALUE, CASH SURRENDER VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
<PAGE> 60
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE> 61
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
MALE NON-SMOKER ISSUE AGE 55 (STANDARD)
$500,000 FACE AMOUNT DEATH BENEFIT OPTION 1
$15,095 ANNUAL PLANNED PREMIUM
ASSUMING GUARANTEED CHARGES
<TABLE>
<CAPTION>
0% Hypothetical 6% Hypothetical 12% Hypothetical
Gross Investment Return Gross Investment Return Gross Investment Return
---------------------------- ----------------------------- ----------------------------------
End of Cash Cash Cash
Policy Accumulated Policy Surrender Death Policy Surrender Death Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit Value Value(3) Benefit Value Value(3) Benefit
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 15,850 $10,042 $ 244 $500,000 $ 10,765 $ 968 $500,000 $ 11,492 $ 1,694 $ 500,000
2 32,492 19,891 5,085 500,000 21,968 7,162 500,000 24,136 9,331 500,000
3 49,966 29,243 14,437 500,000 33,316 18,510 500,000 37,739 22,934 500,000
4 68,314 38,087 23,282 500,000 44,804 29,998 500,000 52,398 37,592 500,000
5 87,580 46,390 31,584 500,000 56,406 41,601 500,000 68,202 53,397 500,000
6 107,809 54,120 42,275 500,000 68,102 56,257 500,000 85,264 73,419 500,000
7 129,049 61,242 52,359 500,000 79,868 70,984 500,000 103,712 94,829 500,000
8 151,351 67,701 61,778 500,000 91,663 85,741 500,000 123,685 117,763 500,000
9 174,768 73,429 70,467 500,000 103,441 100,479 500,000 145,343 142,382 500,000
10 199,356 78,355 78,355 500,000 115,153 115,153 500,000 168,884 168,884 500,000
15 342,015 90,953 90,953 500,000 175,935 175,935 500,000 333,980 333,980 500,000
20 524,087 68,122 68,122 500,000 233,252 233,252 500,000 626,484 626,484 670,338
25 756,463 0(4) 0(4) 500,000(4) 279,609 279,609 500,000 1,107,520 1,107,520 1,162,896
30 1,053,039 0(4) 0(4) 500,000(4) 306,873 306,873 500,000 1,864,482 1,864,482 1,957,706
</TABLE>
- ----------
(1) All values shown are as of the end of the policy year indicated, have been
rounded to the nearest dollar, and assume that (a) premiums paid after the
initial premium are received on the policy anniversary, (b) no policy loan has
been made, (c) no partial withdrawal of the Cash Surrender Value has been made
and (d) no premiums have been allocated to the Fixed Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the No Lapse Guarantee Cumulative Premium Test has been and
continues to be met, the No Lapse Guarantee will keep the Policy in force until
the end of the first 5 Policy Years.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES. IT IS EMPHASIZED THAT THE
HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED
A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING
THE INVESTMENT ALLOCATION MADE BY THE POLICYOWNER, AND THE INVESTMENT RETURNS
FOR THE FUNDS OF THE TRUST. THE POLICY VALUE, CASH SURRENDER VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE> 62
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
MALE NON-SMOKER ISSUE AGE 55 (STANDARD)
$500,000 FACE AMOUNT DEATH BENEFIT OPTION 2
$17,920 ANNUAL PLANNED PREMIUM
ASSUMING CURRENT CHARGES
<TABLE>
<CAPTION>
0% Hypothetical 6% Hypothetical 12% Hypothetical
Gross Investment Return Gross Investment Return Gross Investment Return
------------------------------ ------------------------------- ----------------------------------
End of Cash Cash Cash
Policy Accumulated Policy Surrender Death Policy Surrender Death Policy Surrender Death
Year(1) Premiums(2) Value(3) Value(3)(4) Benefit Value(3) Value(3)(4) Benefit Value(3) Value(3)(4) Benefit
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 18,816 $ 13,394 $ 2,184 $513,394 $ 14,315 $ 3,105 $514,315 $ 15,238 $ 4,028 $ 515,238
2 38,573 26,532 11,726 526,532 29,199 14,393 529,199 31,980 17,174 531,980
3 59,317 39,066 24,261 539,066 44,313 29,508 544,313 50,001 35,196 550,001
4 81,099 51,294 36,488 551,294 59,960 45,155 559,960 69,733 54,927 569,733
5 103,970 63,237 48,431 563,237 76,181 61,375 576,181 91,363 76,557 591,363
6 127,985 74,872 63,028 574,872 92,966 81,122 592,966 115,050 103,205 615,050
7 153,200 86,015 77,132 586,015 110,145 101,261 610,145 140,795 131,911 640,795
8 179,676 96,580 90,658 596,580 127,634 121,712 627,634 168,703 162,780 668,703
9 207,476 106,619 103,658 606,619 145,490 142,529 645,490 199,032 196,071 699,032
10 236,666 116,124 116,124 616,124 163,709 163,709 663,709 232,006 232,006 732,006
15 406,022 160,845 160,845 660,845 268,285 268,285 768,285 458,720 458,720 958,720
20 622,169 174,194 174,194 674,194 367,040 367,040 867,040 795,725 795,725 1,295,725
25 898,033 101,614 101,614 601,614 392,033 392,033 892,033 1,236,159 1,236,159 1,736,159
30 1,250,113 0(5) 0(5) 500,000(5) 323,023 323,023 823,023 1,844,482 1,844,482 2,344,482
</TABLE>
- ----------
(1) All values shown are as of the end of the policy year indicated, have been
rounded to the nearest dollar, and assume that (a) premiums paid after the
initial premium are received on the policy anniversary, (b) no policy loan has
been made, (c) no partial withdrawal of the Cash Surrender Value has been made
and (d) no premiums have been allocated to the Fixed Account.
(2) Assumes net interest of 5% compounded annually.
(3) Manufacturers Securities Services, LLC has voluntarily agreed to waive fees
payable to it and/or to reimburse expenses for a period of one year from January
1, 1997 to the extent necessary to prevent the total of advisory fees and
expenses for the Quantitative Equity Trust, Real Estate Securities Trust and
Capital Growth Bond Trust for such period from exceeding .50% of average net
assets. The investment management fees and expenses used to calculate the policy
values do not reflect this waiver. If this waiver were reflected in the
calculations, Policy Values and Cash Surrender Values would be slightly higher.
(4) Provided the No Lapse Guarantee Cumulative Premium Test has been and
continues to be met, the No Lapse Guarantee will keep the Policy in force until
the end of the first 5 Policy Years.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES. IT IS EMPHASIZED THAT THE
HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED
A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING
THE INVESTMENT ALLOCATION MADE BY THE POLICYOWNER, AND THE INVESTMENT RETURNS
FOR THE
<PAGE> 63
FUNDS OF THE TRUST. THE POLICY VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN
BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE> 64
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
MALE NON-SMOKER ISSUE AGE 55 (STANDARD)
$500,000 FACE AMOUNT DEATH BENEFIT OPTION 2
$17,920 ANNUAL PLANNED PREMIUM
ASSUMING GUARANTEED CHARGES
<TABLE>
<CAPTION>
0% Hypothetical 6% Hypothetical 12% Hypothetical
Gross Investment Return Gross Investment Return Gross Investment Return
----------------------------- ----------------------------- ---------------------------------
End of Cash Cash Cash
Policy Accumulated Policy Surrender Death Policy Surrender Death Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit Value Value(3) Benefit Value Value(3) Benefit
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 18,816 $ 12,621 $ 1,411 $512,621 $ 13,499 $ 2,289 $513,499 $ 14,380 $ 3,170 $ 514,380
2 38,573 24,908 10,102 524,908 27,440 12,634 527,440 30,080 15,274 530,080
3 59,317 36,543 21,738 536,543 41,506 26,701 541,506 46,889 32,084 546,889
4 81,099 47,506 32,701 547,506 55,669 40,864 555,669 64,882 50,076 564,882
5 103,970 57,749 42,944 557,749 69,871 55,066 569,871 84,112 69,306 584,112
6 127,985 67,227 55,382 567,227 84,052 72,208 584,052 104,639 92,794 604,639
7 153,200 75,888 67,005 575,888 98,146 89,262 598,146 126,524 117,641 626,524
8 179,676 83,659 77,737 583,659 112,056 106,134 612,056 149,808 143,886 649,808
9 207,476 90,453 87,492 590,453 125,669 122,708 625,669 174,519 171,558 674,519
10 236,666 96,179 96,179 596,179 138,860 138,860 638,860 200,684 200,684 700,684
15 406,022 108,762 108,762 608,762 198,852 198,852 698,852 363,211 363,211 863,211
20 622,169 79,172 79,172 579,172 226,343 226,343 726,343 576,018 576,018 1,076,018
25 898,033 0(4) 0(4) 500,000(4) 180,769 180,769 680,769 833,780 833,780 1,333,780
30 1,250,113 0(4) 0(4) 0(4) 8,085 8,085 508,085 1,124,290 1,124,290 1,624,290
</TABLE>
- ----------
(1) All values shown are as of the end of the policy year indicated, have been
rounded to the nearest dollar, and assume that (a) premiums paid after the
initial premium are received on the policy anniversary, (b) no policy loan has
been made, (c) no partial withdrawal of the Cash Surrender Value has been made
and (d) no premiums have been allocated to the Fixed Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the No Lapse Guarantee Cumulative Premium Test has been and
continues to be met, the No Lapse Guarantee will keep the Policy in force until
the end of the first 5 Policy Years.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES. IT IS EMPHASIZED THAT THE
HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED
A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING
THE INVESTMENT ALLOCATION MADE BY THE POLICYOWNER, AND THE INVESTMENT RETURNS
FOR THE FUNDS OF THE TRUST. THE POLICY VALUE, CASH SURRENDER VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE> 65
APPENDIX B
DEFINITIONS
The following terms have the following meanings when used in this Prospectus:
ADDITIONAL RATING -- an addition to the cost of insurance rate for insureds who
do not meet at least the underwriting requirements of the standard risk class.
BUSINESS DAY -- any day that the New York Stock Exchange is open for trading and
trading is not restricted. The net asset value of the underlying shares of a
sub-account of the Separate Account will be determined at the end of each
Business Day.
CASH SURRENDER VALUE -- the Policy Value less the deferred sales charge, the
deferred underwriting charge and any outstanding monthly deductions due.
EFFECTIVE DATE -- the date that we become obligated under the Policy and when
the first monthly deductions are taken.
FIXED ACCOUNT -- that part of the Policy Value which reflects the value the
policyowner has in our general account.
GUIDELINE ANNUAL PREMIUM (GAP) -- used to determine the proportion of premiums
and the Policy Value attributable to an increase in Face Amount for the purpose
of calculating the new Deferred Sales Charge after such increase.
INITIAL PREMIUM -- at least 1/12 of the Target Premium. The Initial Premium must
be received within 60 days after the policy date.
INVESTMENT ACCOUNT -- that part of the Policy Value which reflects the value the
policyowner has in one of the sub-accounts of the Separate Account.
ISSUE AGE -- the age on the nearest birthday, at policy date, as shown in the
Policy.
LOAN ACCOUNT -- that part of the Policy Value which reflects the value the
policyowner has transferred from the Fixed Account or the Investment Accounts as
collateral for a policy loan.
MATURITY DATE - the Policy anniversary nearest the life insured's attained age
100.
MODIFIED POLICY DEBT -- as of any date, the Policy Debt plus the amount of
interest to be charged to the next policy anniversary, all discounted from the
next policy anniversary to such date at an annual rate of 4%.
MONTHLY NO LAPSE GUARANTEE PREMIUM -- 1/12 of the No Lapse Guarantee Premium.
NET CASH SURRENDER VALUE -- the Cash Surrender Value less Policy Debt.
NET POLICY VALUE -- the Policy Value less the value in the Loan Account.
NET PREMIUM -- amount of premium allocated to the Investment Accounts or Fixed
Account. It equals gross premiums less the deduction for state, local and
Federal taxes.
NO LAPSE GUARANTEE -- Our guarantee that the Policy will not go into default
even if a combination
<PAGE> 66
of Policy loans, adverse investment experience and other factors should cause
the Policy's Net Cash Surrender Value to be insufficient to meet the monthly
deductions due at the beginning of a policy month.
NO LAPSE GUARANTEE CUMULATIVE PREMIUM TEST -- a test that, if satisfied in the
No Lapse Guarantee Period, will maintain the No Lapse Guarantee. To satisfy the
No Lapse Guarantee Cumulative Premium Test, the sum of premiums paid, less
withdrawals, and less Policy loans must equal or exceed the sum of No Lapse
Guarantee Premiums since issue as at the beginning of each policy month.
NO LAPSE GUARANTEE PERIOD -- is the first 5 policy years for life insureds with
an issue age up to and including 85. It is not offered to life insureds whose
Issue Age exceeds 85.
NO LAPSE GUARANTEE PREMIUM -- is a measure of premium used in determining
compliance with the No Lapse Guarantee Cumulative Premium Test. The No Lapse
Guarantee premium for each policyowner is set forth in the Policy.
PLANNED PREMIUM -- The premium the policyowner plans to pay periodically.
Subject to certain requirements of law, the Planned Premium may be changed at
any time.
POLICY DATE -- The date from which policy years, policy months and policy
anniversaries are determined. Monthly deductions are due on the policy date. If
a check for at least the Initial Premium accompanies the application, the policy
date is the date the application and check are received at the Service Office.
If an application accepted by us is not accompanied by a check for the Initial
Premium, the policy will be issued with a policy date which is 7 days after
issuance of the policy.
POLICY DEBT -- as of any date, the aggregate amount of policy loans, including
borrowed interest, less any loan repayments.
POLICY VALUE -- the sum of the values in the Loan Account, the Fixed Account and
the Investment Accounts.
SELECT LOAN -- A loan on which the differential between the interest credited
and the interest charged is currently 0%; provided, however, if at some time in
the future it is determined that the current differential could cause the loan
to be treated as a taxable distribution under any applicable ruling, regulation
or court decision, we have the right to increase the differential on all
subsequent Select Loans either (i) to an amount that may be presented in such
ruling, regulation or court decision that would result in the transaction being
treated as a loan under Federal tax law or (ii) if no amount is prescribed, to
an amount that we feel would be more likely to result in the transaction being
treated as a loan under Federal tax law.
SELECT LOAN AMOUNT -- the amount of any Select Loan.
SERVICE OFFICE -- the office designated to service the Policies, which is shown
on the cover page of this prospectus.
SURRENDER CHARGE PERIOD -- the period (usually 15 years) following issuance of
the Policy or any increase in face amount during which surrender charges may be
assessed if the Policy is surrendered or lapsed, the face amount is decreased or
a partial withdrawal takes place.
TARGET PREMIUM -- a premium amount used to measure the maximum deferred sales
charge under a Policy. The Target Premium for the initial face amount is set
forth in the Policy. The policyowner will be advised of the Target Premium for
any increase in face amount.
WITHDRAWAL TIER AMOUNT -- as of any date, the net Cash Surrender Value at the
previous anniversary multiplied by 10%.
<PAGE> 67
PART II
OTHER INFORMATION
UNDERTAKINGS
Representation of Insurer Pursuant to Section 26 of the Investment Company Act
of 1940, as amended.
The Manufacturers Life Insurance Company of New York (the "Company") hereby
represents that the fees and charges deducted under the policies issued
pursuant to this registration statement, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by the Company.
Rule 484 Undertaking.
Article VII of the By-laws of the Company provides as follows:
Section VII.1. Indemnification of Directors and Officers. The Corporation may
indemnify any person made, or threatened to be made, a party to an action by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that he or she, his or her testator, testatrix or intestate, is or was
a director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of any other corporation of any type or
kind, domestic or foreign, of any partnership, joint venture, trust, employee
benefit plan or other enterprise, against amounts paid in settlement and
reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him or her in connection with the defense or settlement of such
action, or in connection with an appeal therein, if such director or officer
acted, in good faith, for a purpose which he or she reasonably believed to be
in, or, in the case of service for any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise,
<PAGE> 68
not opposed to, the best interests of the Corporation, except that no
indemnification under this Section shall be made in respect of (1) a threatened
action, or a pending action which is settled or is otherwise disposed of, or (2)
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the Corporation, unless and only to the extent that the court in
which the action was brought, or , if no action was brought, any court of
competent jurisdiction, determines upon application that, in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such portion of the settlement amount and expenses as the court
deems proper.
The Corporation may indemnify any person made, or threatened to be made, a party
to an action or proceeding (other than one by or in the right of the Corporation
to procure a judgment in its favor), whether civil or criminal, including an
action by or in the right of any other corporation of any type or kind, domestic
or foreign, or any partnership, joint venture, trust, employee benefit plan or
other enterprise, which any director or officer of the Corporation served in any
capacity at the request of the Corporation, by reason of the fact that he or
she, his or her testator, testatrix or intestate, was a director or officer of
the Corporation, or served such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, if such director or officer acted, in good
faith, for a purpose which he or she reasonably believed to be in, or, in the
case of service for any other corporation or any partnership, joint venture,
trust, employee benefit plan or other enterprise, not opposed to, the best
interests of the Corporation and, in criminal actions or proceedings, in
addition, had no reasonable cause to believe that his or her conduct was
unlawful.
The termination of any such civil or criminal action or proceeding by judgment,
settlement, conviction or upon a plea of nolo contendere, of its equivalent,
shall not in itself create a presumption that any such director or officer did
not act, in good faith, for a purpose which he or she reasonably believed to be
in, or, in the case of service for any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise, not opposed to,
the best interest of the Corporation or that he or she had reasonable cause to
believe that his or her conduct was unlawful.
Notwithstanding the foregoing, Registrant hereby makes the following undertaking
pursuant to Rule 484 under the Securities Act of 1933:
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE> 69
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following papers and documents:
The facing sheet;
The Prospectus, consisting of 44 pages;
Representation pursuant to Section 26 of the Investment Company Act of
1940
The signatures;
Written consents of the following persons:
Tracy A. Kane, Esq., Counsel (to be filed by amendment)
John G. Vrysen, Chief Actuary (to be filed by amendment)
Ernst & Young LLP (to be filed by amendment)
Jones & Blouch L.L.P. (to be filed by amendment)
The following exhibits are filed as part of this Registration Statement:
1. Copies of all exhibits required by paragraph A of the instructions as
to exhibits in Form N-8B-2 are set forth below under designations based
on such instructions:
A(1) Resolutions of Board of Directors of First North
American Life Assurance Company establishing FNAL
Variable Life Account I were previously filed in the
Registrant's initial registration statement on Form
S-6 (File No. 333-33351) as filed with the Commission
on August 8, 1997.
A(2) Not applicable.
A(3)(a) Underwriting and Distribution Agreement between The
Manufacturers Life Insurance Company of New York
(Depositor) and Manufacturers Securities Services,
LLC (Underwriter) is incorporated by reference to
Exhibit (b)(3)(a) to post-effective amendment No. 7
to the Registration Statement on Form N-4, file
number 33-46217, filed February 25, 1998 on behalf of
The Manufacturers Life Insurance Company of New York
Separate Account A.
A(3)(b) Selling Agreement between The Manufacturers Life
Insurance Company of New York, Manufactures
Securities Services, LLC (Underwriter), Selling
Broker Dealers, and General Agent is incorporated by
reference to Exhibit (b)(3)(b) to post-effective
amendment No. 7 to the Registration Statement on Form
N-4, file number 33-46217, filed February 25, 1998 on
behalf of The Manufacturers Life Insurance Company of
New York Separate Account A.
A(3)(c) Not applicable.
A(4) Not applicable.
A(5) Form of Flexible Premium Variable Life Insurance
Policy is incorporated by reference to Exhibit
A(8)(a) to pre-effective amendment No. 1 to a
Registration Statement on Form S-6, file number
333-33351, filed on March 16, 1998 on behalf of The
Manufacturers Life Insurance Company of New York
Separate Account B.
<PAGE> 70
A(6)(a)(i) Declaration of Intention and Charter of First North
American Life Assurance Company is incorporated by
reference to Exhibit (b)(6)(i) to post-effective
amendment No. 7 to the Registration Statement on Form
N-4, file number 33-46217, filed February 25, 1998 on
behalf of The Manufacturers Life Insurance Company of
New York Separate Account A.
A(6)(a)(ii) Certificate of amendment of the Declaration of
Intention and Charter of First North American Life
Assurance Company is incorporated by reference to
Exhibit (b)(6)(i) to post-effective amendment No. 7
to the Registration Statement on Form N-4, file
number 33-46217, filed February 25, 1998 on behalf of
The Manufacturers Life Insurance Company of New York
Separate Account A.
A(6)(a)(iii) Certificate of amendment of the Declaration of
Intention and Charter of The Manufacturers Life
Insurance Company of New York is incorporated by
reference to Exhibit (b)(6)(i) to post-effective
amendment No. 7 to the Registration Statement on Form
N-4, file number 33-46217, filed February 25, 1998 on
behalf of The Manufacturers Life Insurance Company of
New York Separate Account A.
(A)(6)(b) By-laws of The Manufacturers Life Insurance Company
of New York are incorporated by reference to Exhibit
(b)(6)(i) to post-effective amendment No. 7 to the
Registration Statement on Form N-4, file number
33-46217, filed February 25, 1998 on behalf of The
Manufacturers Life Insurance Company of New York
Separate Account A.
A(7) Not applicable.
A(8)(a) Form of Reinsurance Agreement between The
Manufacturers Life Insurance Company of New York and
The Manufacturers Life Insurance Company (USA) is
incorporated by reference to Exhibit A(8)(a) to
pre-effective amendment No. 1 to a Registration
Statement on Form S-6, file number 333-33351, filed
on March 16, 1998 on behalf of The Manufacturers Life
Insurance Company of New York Separate Account B.
A(8)(b) Administrative Services Agreement between The
Manufacturers Life Insurance Company and The
Manufacturers Life Insurance Company of New York is
incorporated by reference to Exhibit (b)(8)(a) to
post-effective amendment No. 7 to the Registration
Statement on Form N-4, file number 33-46217, filed
February 25, 1998 on behalf of The Manufacturers Life
Insurance Company of New York Separate Account A.
A(8)(c) Investment Services Agreement between The
Manufacturers Life Insurance Company of New York and
The Manufacturers Life Insurance Company is
incorporated by reference to Exhibit A(8)(a) to
pre-effective amendment No. 1 to a Registration
Statement on Form S-6, file number 333-33351, filed
on March 16, 1998 on behalf of The Manufacturers Life
Insurance Company of New York Separate Account B.
A(9) Not applicable.
A(10)(a) Form of Application for Flexible Premium Variable
Life Insurance Policy is
<PAGE> 71
incorporated by reference to Exhibit A(8)(a) to
pre-effective amendment No. 1 to a Registration
Statement on Form S-6, file number 333-33351, filed
on March 16, 1998 on behalf of The Manufacturers Life
Insurance Company of New York Separate Account B.
A(10)(b) Form of supplement to the Application for Flexible
Premium Variable Life Insurance Policy is
incorporated by reference to Exhibit A(8)(a) to
pre-effective amendment No. 1 to a Registration
Statement on Form S-6, file number 333-33351, filed
on March 16, 1998 on behalf of The Manufacturers Life
Insurance Company of New York Separate Account B.
2. Consents of the following:
A Opinion and consent of Tracy A. Kane, Esq., Secretary
and Counsel of The Manufacturers Life Insurance
Company of New York (to be filed by amendment)
B Consent of John G. Vrysen, Chief Actuary of The
Manufacturers Life Insurance Company of New York (to
be filed by amendment)
C Consent of Jones & Blouch LLP (to be filed by
amendment)
D Consent of Ernst & Young LLP (to be filed by
amendment)
E Consent of Coopers & Lybrand, L.L.P. (to be filed by
amendment)
3. No financial statements are omitted from the prospectus pursuant to
instruction 1(b) or (c) of Part I.
4. Not applicable.
5. Not applicable.
6. Memorandum Regarding Issuance, Face Amount Increase, Redemption and
Transfer Procedures for the Policies is incorporated by reference to
the Registrant's registration statement on Form S-6 (File No.
333-33351) as filed with the Commission on August 8, 1997.
7. Powers of Attorney are incorporated by reference to Exhibit A(8)(a) to
pre-effective amendment No. 1 to a Registration Statement on Form S-6,
file number 333-33351, filed on March 16, 1998 on behalf of The
Manufacturers Life Insurance Company of New York Separate Account B.
<PAGE> 72
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 the
registrant, THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE
ACCOUNT B has duly caused this registration statement to be signed on its behalf
by the undersigned thereunto duly authorized, and its seal to be hereunto
affixed and attested, all in the city of Boston, and Commonwealth of
Massachusetts, on the 23rd day of February, 1999.
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK SEPARATE
ACCOUNT B
(Registrant)
By: THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK
(Depositor)
By: /s/ A. SCOTT LOGAN
___________________
A. Scott Logan
President
Attest
/s/ TRACY A. KANE
_______________________
Tracy A. Kane
Secretary
<PAGE> 73
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, this registration
statement has been signed by the following persons in the capacities indicated
on this 23rd day of February, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ A. SCOTT LOGAN Director and President February 23, 1999
_____________________ (Principal Executive (Date)
A. Scott Logan Officer)
*____________________ Chairman of the Board February 23, 1999
John D. Richardson of Directors (Date)
*_____________________ Director February 23, 1999
John D. DesPrez, III (Date)
*_____________________ Director February 23, 1999
Ruth Ann Flemming (Date)
*_____________________ Director February 23, 1999
Neil M. Merkl (Date)
*_____________________ Director February 23, 1999
Robert C. Perez (Date)
*_____________________ Director February 23, 1999
James K. Robinson (Date)
*_____________________ Director February 23, 1999
Theodore Kilkuskie (Date)
*_____________________ Director February 23, 1999
Bruce Avedon (Date)
*_____________________ Director February 23, 1999
Bruce Gordon (Date)
/s/ David W. LIBBEY Treasurer (Principal February 23, 1999
______________________ Financial and Accounting (Date)
David W. Libbey Officer)
*By: /s/ TRACY A. KANE February 23, 1999
Tracy A. Kane (Date)
Attorney-in-Fact Pursuant
to Powers of Attorney
</TABLE>
