As filed with the Securities
and Exchange Commission on
April 26, 2000
Registration Nos. 333-47219 No. 811-08677
----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20549
---------------------------------------------------------------------
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment
No.
Post-Effective Amendment No. _7
[ X]
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X]
Amendment No. 8
SEPARATE ACCOUNT VA-6NY
-----------------------
(Exact Name of Registrant)
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
-----------------------------------------------
(Name of Depositor)
100 MANHATTANVILLE ROAD, PURCHASE, NEW YORK 10577
--------------------------------------------------
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (914) 701-6000
Name and Address of Agent for Service: Copy to:
JAMES W. DEDERER, ESQ. FREDERICK R. BELLAMY, ESQ.
GENERAL COUNSEL SUTHERLAND, ASBILL & BRENNAN, L.L.P.
TRANSAMERICA LIFE INSURANCE 1275 PENNSYLVANIA AVENUE, N.W.
COMPANY OF NEW YORK WASHINGTON, D.C. 20004-2404
100 MANHATTANVILLE ROAD
PURCHASE, NEW YORK 10577
Approximate date of proposed public offering: AS SOON AS PRACTICABLE
AFTER EFFECTIVENESS OF THE REGISTRATION STATEMENT.
Title of securities being registered: Interests in a separate account
under flexible premium deferred variable annuity contracts.
It is proposed that this filing will become
effective: |_|immediately upon filing
pursuant to paragraph (b) |X| on May 1,
2000pursuant to paragraph (b) |_|60 days
after filing pursuant to paragraph (a)(1)
|_| on _ pursuant to paragraph (a)(1)
If appropriate, check the following box:
|_|this Post-Effective Amendment designates
a new effective date for a previously filed
Post-Effective Amendment.
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 495
Showing Location in Part A (Prospectus),
Part B (Statement of Additional Information) and Part C
of Registration Statement Information Required by Form N-4
----------------------------------------------------------
PART A
<TABLE>
<CAPTION>
Item of Form N-4 Prospectus Caption
<S> <C> <C>
1. Cover Page.............................................. Cover Page
2. Definitions............................................. Definitions
3. Synopsis................................................ Summary of this Prospectus; Variable Account Fee
Table
4. Condensed Financial Information......................... Condensed Financial Information
5. General
(a) Depositor.......................................... Transamerica and the Separate Account
(b) Registrant......................................... Transamerica and the Separate Account
(c) Portfolio Company.................................. The Funds
(d) Fund Prospectus.................................... The Funds
(e) Voting Rights...................................... Voting Rights
(f) Administrator....................................... Charges under the Contracts
6. Deductions and Expenses
(a) General............................................ Charges under the Contracts
(b) Sales Load %....................................... Charges under the Contracts
(c) Special Purchase Plan.............................. Not Applicable
(d) Commissions........................................ Underwriter
(e) Fund Expenses...................................... Charges under the Contracts
(f) Operating Expenses................................. Fee Table
7. Contracts
(a) Persons with Rights................................ Description of the Contracts; Surrender of a
Contract; Death Benefits; Voting Rights; Ownership
(b) (i) Allocation of Purchase Payments
Payments..................................... Description of the Contracts
(ii) Transfers.................................... Transfers
(iii) Exchanges.................................... Federal Tax Matters
(c) Changes............................................ The Funds; Voting Rights
(d) Inquiries.......................................... Voting Rights
8. Annuity Period.......................................... Settlement Payments
9. Death Benefit........................................... Death Benefits
10. Purchase and Contract Value
(a) Purchases.......................................... Description of the Contracts
(b) Valuation.......................................... Description of the Contracts
(c) Daily Calculation.................................. Description of the Contracts
(d) Underwriter........................................ Underwriter
11. Redemptions
(a) By Contract Owners................................. Surrender of a Contract
By Annuitant....................................... Not Applicable
(b) Texas ORP.......................................... Not Applicable
(c) Check Delay........................................ Surrender of a Contract
(d) Lapse.............................................. Not Applicable
(e) Free Look.......................................... Right to Cancel
12. Taxes................................Federal Tax Matters
13. Legal Proceedings....................................... Legal Proceedings
14. Table of Contents for the
Statement of
Additional Information.................................. Table of Contents of the Statement of Additional
Information
PART B
Item of Form N-4 Statement of Additional Information Caption
15. Cover Page.............................................. Cover Page
16. Table of Contents....................................... Table of Contents
17. General Information
and History............................................. General Information and History
18. Services
(a) Fees and Expenses
of Registrant...................................... (Prospectus) Variable Account Fee Table;
(Prospectus) The Funds
(b) Management Contracts............................... Not Applicable
(c) Custodian.......................................... Safekeeping of Separate Account Assets; Records and
Reports
Independent Auditors ............................. Accountants
(d) Assets of Registrant............................... Not Applicable
(e) Affiliated Person.................................. Not Applicable
(f) Principal Underwriter.............................. The Underwriter
19. Purchase of Securities
Being Offered........................................... (Prospectus) Description of the Contracts
Offering Sales Load..................................... Charges under the Contracts
20. Underwriters............................................ The Underwriter
21. Calculation of Performance Data......................... Calculation of Yields and Total Returns
22. Annuity Payments........................................ (Prospectus) Settlement Option Payments
23. Financial Statements.................................... Financial Statements
PART C -- OTHER INFORMATION
Item of Form N-4 Part C Caption
24. Financial STATEMENTS
and Exhibits
(a) Financial Statements............................... Financial Statements
(b) Exhibits........................................... Exhibits
25. Directors and Officers of
the Depositor........................................... Directors and Officers of the Depositor
26. Persons Controlled By or Under Common Control
with the Depositor or Registrant ....................... Persons Controlled By or Under Common Control with
the Depositor or Registrant
27. Number of Contract Owners............................... Number of Contract Owners
28. Indemnification......................................... Indemnification
29. Principal Underwriters.................................. Principal Underwriter
30. Location of Accounts
and Records............................................. Location of Accounts and Records
31. Management Services..................................... Management Services
32. Undertakings............................................ Undertakings
Signature Page.......................................... Signature Page
</TABLE>
<PAGE>
PROSPECTUS FOR THE
TRANSAMERICA CLASSIC(R) VARIABLE ANNUITY
A FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
ISSUED BY
TRANSAMERICA LIFE INSURANCE COMPANY
OF NEW YORK
OFFERING 17 SUB-ACCOUNTS WITHIN THE VARIABLE ACCOUNT
DESIGNATED AS SEPARATE ACCOUNT VA-6NY
IN ADDITION TO
A FIXED ACCOUNT
<TABLE>
<CAPTION>
<S> <C> <C>
o THIS PROSPECTUS CONTAINS PORTFOLIOS ASSOCIATED WITH SUB-ACCOUNTS
---------------------------------------
INFORMATION YOU SHOULD ALGER AMERICAN INCOME AND GROWTH
KNOW BEFORE INVESTING. ALLIANCE VP GROWTH AND INCOME
ALLIANCE VP PREMIER GROWTH
o PLEASE KEEP THIS PROSPECTUS DREYFUS VIF APPRECIATION
FOR FUTURE REFERENCE. DREYFUS VIF SMALL CAP
JANUS ASPEN SERIES BALANCED
o YOU CAN OBTAIN MORE INFORMATION ABOUT JANUS ASPEN SERIES WORLDWIDE GROWTH
THE POLICY BY REQUESTING A COPY OF THE MFS VIT EMERGING GROWTH
STATEMENT OF ADDITIONAL INFORMATION ("SAI") MFS VIT GROWTH WITH INCOME
DATED MAY 1, 2000. THE SAI IS AVAILABLE FREE MFS VIT RESEARCH
BY WRITING TO TRANSAMERICA LIFE INSURANCE MS UIF FIXED INCOME
COMPANY OF NEW YORK, MS UIF HIGH YIELD
ANNUITY SERVICE CENTER, MS UIF INTERNATIONAL MAGNUM
401 N. TRYON ST., SUITE 700, OCC ACCUMULATION TRUST MANAGED
CHARLOTTE, NC 28202 OR OCC ACCUMULATION TRUST SMALL CAP
BY CALLING 877-717-8861. TRANSAMERICA VIF GROWTH
TRANSAMERICA VIF MONEY MARKET
</TABLE>
THE CURRENT SAI HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
AND IS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. THE TABLE OF
CONTENTS OF THE SAI IS INCLUDED AT THE END OF THIS PROSPECTUS.
o THE SEC'S WEB SITE IS HTTP://WWW.SEC.GOV
o TRANSAMERICA'S WEB SITE IS
HTTP://WWW.TRANSAMERICA.COM
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THIS INVESTMENT
OFFERING OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PLEASE NOTE THAT THE POLICY AND THE PORTFOLIOS ARE NOT BANK DEPOSITS, ARE NOT
FEDERALLY INSURED, ARE NOT ENDORSED BY ANY BANK OR GOVERNMENT AGENCY, ARE NOT
GUARANTEED TO ACHIEVE THEIR GOALS AND ARE SUBJECT TO RISKS, INCLUDING THE LOSS
OF PREMIUMS.
MAY 1, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Summary......................................................................................................5
Transamerica Life Insurance Company of New York and the Variable Account...................................14
Transamerica Life Insurance Company of New York...................................................14
Published Ratings.................................................................................14
Insurance Marketplace Standards Association.......................................................14
The Variable Account..............................................................................15
The Portfolios.............................................................................................15
Portfolios Not Publicly Available.................................................................18
Addition, Deletion, or Substitution...............................................................19
The Policy.................................................................................................19
Ownership.........................................................................................20
Premiums...................................................................................................20
Allocation of Premiums............................................................................20
Investment Option Limit...........................................................................21
Policy value...............................................................................................21
How Variable Accumulation Units Are Valued........................................................21
Transfers..................................................................................................22
Before the Annuity Date...........................................................................22
Other Restrictions................................................................................22
Dollar Cost Averaging.............................................................................22
Special Dollar Cost Averaging Option..............................................................23
Eligibility Requirement for Dollar Cost Averaging ................................................23
Automatic Asset Rebalancing.......................................................................23
After the Annuity Date............................................................................23
Cash Withdrawals...........................................................................................24
Systematic Withdrawal Option......................................................................24
Automatic Payment Option (APO)....................................................................25
Death Benefit..............................................................................................25
Payment of Death Benefit..........................................................................26
Designation of Beneficiaries......................................................................26
Death of Owner of Joint Owner Before Annuity Date.................................................26
If Annuitant Dies Before Annuity Date.............................................................27
Death After Annuity Date..........................................................................27
Survival Provision................................................................................27
Charges, Fees and Deductions...............................................................................27
Contingent Deferred Sales Load/Surrender Charge...................................................28
Free Withdrawals - Allowed Amount.................................................................28
Other Free Withdrawals............................................................................28
Administrative Charges............................................................................29
Mortality and Expense Risk Charge.................................................................29
Premium Tax Charges...............................................................................29
Transfer Fee......................................................................................30
Option and Service Fees...........................................................................30
Taxes.............................................................................................30
Portfolio Expenses................................................................................30
Sales in Special Situations.......................................................................30
DISTRIBUTION OF THE POLICY.................................................................................30
Settlement Option Payments.................................................................................31
Annuity Date......................................................................................31
Annuity Amount....................................................................................31
Settlement Option Payments........................................................................31
Election of Settlement Option Forms and Payment Options...........................................31
Payment Options...................................................................................31
Fixed Payment Option..............................................................................31
Variable Payment Option...........................................................................32
Settlement Option Forms...........................................................................32
Federal Tax Matters........................................................................................33
Introduction......................................................................................33
Premiums..........................................................................................34
Taxation of Annuities.............................................................................34
Qualified Policies................................................................................36
Policies Purchased by Nonresident Aliens and Foreign Corporations.................................38
Taxation of Transamerica .........................................................................38
Tax Status of Policy..............................................................................39
Possible Changes in Taxation......................................................................39
Other Tax Consequences............................................................................39
Performance Data...........................................................................................39
Legal Proceedings..........................................................................................41
Legal Matters..............................................................................................41
Accountants AND FINANCIAL STATEMENTS.......................................................................41
Voting Rights..............................................................................................41
Available Information......................................................................................42
Statement of Additional Information - Table of Contents....................................................43
Appendix A - The FIXED Account.............................................................................44
Appendix B.................................................................................................46
Example of Variable Accumulation Unit Value Calculations..........................................46
Example of Variable Annuity Unit Value Calculations...............................................46
Example of Variable Annuity Payment Calculations..................................................46
APPENDIX C.................................................................................................47
Condensed Financial Information...................................................................47
Appendix D.................................................................................................49
Definitions.......................................................................................49
APPENDIX E.................................................................................................50
Disclosure Statement for Individual Retirement Annuities..........................................50
</TABLE>
THE POLICY IS AVAILABLE ONLY IN NEW YORK
8
3
<PAGE>
SUMMARY
This summary provides you with a brief overview of some of the more important
aspects of the Transamerica Classic(R) Variable Annuity policy. The remainder of
the prospectus and the policy provide further details.
The policy is a flexible premium deferred annuity and it has two phases, the
accumulation phase and the annuitization phase. During the accumulation phase,
your earnings accumulate on a tax-deferred basis for individuals. Tax deferral
is not available for non-qualified policies owned by corporations and some
trusts.
As long as the policy is in effect, you may make additional premium payments any
time before the annuity date and before any owner's, joint owner's or
annuitant's 86th birthday, transfer money among the investment options and
withdraw some or all of the policy value.
On a future date you select, the annuity date, the annuitization phase begins.
During this phase, we apply the policy value, after certain adjustments to a
settlement option that provides periodic payments to you. The dollar amount of
the payments will depend on the amount of the money invested and earned during
the accumulation phase, and on other factors, such as the annuitant's age and
sex and if variable payouts are elected.
If you or a joint owner die during the accumulation phase, we will pay a death
benefit to the beneficiary you designated in an amount at least equal to the
policy value.
SUB-ACCOUNT VALUES WILL VARY ACCORDING TO INVESTMENT EXPERIENCE. Except for
amounts in the fixed account, the policy value will vary depending on the
investment experience of each of the variable sub-accounts you select. All
benefits and values provided under the policy, when based on the investment
experience of the variable account, are variable and are not guaranteed as to
dollar amount. Therefore, before the annuity date, you bear the entire
investment risk under the policy for amounts allocated to the variable account.
There is no guaranteed or minimum cash surrender value on amounts allocated to
the variable account, so the proceeds of a surrender could be less than the
amount invested.
WHAT IS THE POLICY'S OBJECTIVE?
We designed the policy to assist individuals in long-term financial planning for
retirement or other purposes. You may use the policy as:
a) a non-qualified annuity;
b) a qualified annuity as:
o a rollover or contributory individual retirement annuity, or IRA, under
Sections 408(a) or 408(b) of the Internal Revenue Code, or Code;
o a conversion, rollover or contributory Roth IRA under Code Section 408A;
o a simplified employee pension plan, or SEP/IRA, under Code Section 408(k);
o a Rev. Rul. 90-24 transfer or rollover tax sheltered annuity, or TSA, under
Code Section 403(b), with no additional premiums allowed; and
o a qualified pension or profit sharing plan under Code Section 401.
Generally, qualified policies contain restrictive provisions limiting the timing
and mount of premium payments to, and distributions from, the qualified policy.
Some qualified policies may not be available in all situations.
WHO SHOULD PURCHASE THE POLICY?
The policy is designed for people seeking long-term tax deferred accumulation of
assets, generally for retirement or other long-term purposes, and for persons
who have maximized their use of other retirement savings methods, such as 401(k)
plans and individual retirement accounts. The tax-deferred feature is most
attractive to people in high federal and state tax brackets. You should not buy
this policy if you are looking for a short-term investment or if you cannot take
the risk of losing money that you put in.
There are various additional fees and charges associated with variable
annuities. You should consider whether the features and benefits unique to
variable annuities, such as the opportunity for lifetime income payments, a
guaranteed death benefit and the guaranteed level of certain charges are
appropriate for your needs. Because variable annuities also provide tax-deferral
outside of qualified plans, the tax deferral features of variable annuities are
unnecessary when purchased to fund a qualified plan.
HOW MUCH CAN I INVEST AND HOW OFTEN?
To purchase a policy, you must make an initial premium payment of at least
$5,000 or, if for contributory IRAs, SEP/IRAs and Roth IRAs, $2,000. Once we
receive the initial premium, we will establish and maintain an account for each
policy.
You may also make additional premium payments of at least $200, unless an
automatic premium payment plan is selected, See PREMIUMS on page 20.
HOW CAN I ALLOCATE MY MONEY?
You may choose to allocate all or part of your premiums to:
o one or more of the 17 variable sub-accounts described in THE PORTFOLIOS on
page 15; and/or
o the fixed account.
CAN I EXAMINE THE POLICY?
Yes. As the owner, you have the right to examine the policy for a limited
period, or free look period. You may cancel the policy during this period by
delivering or mailing a written notice of cancellation, or sending a telegram
to:
o
the agent through whom you purchased the policy; or
o our Service Center.
You must return the policy before midnight of the tenth day after receipt of the
policy, or longer in some situations or if required by state law. Notice given
by mail and the return of the policy, properly addressed and postage prepaid, by
mail will be deemed by us to have been made on the date postmarked. Unless
otherwise required by law, we will refund the premiums allocated to the fixed
account, minus any withdrawals, plus the variable accumulated value as of the
date your written notice to cancel and your policy are received by us. See
PREMIUMS on page 20.
WHAT CHARGES, EXPENSES AND FEES WILL
I INCUR?
The following table assists you in understanding the various costs and expenses
that you will bear directly and indirectly. The table reflects expenses of the
variable account and the mutual fund portfolios, as well as policy expenses. The
table assumes that the entire policy value is in the variable account. You
should consider the information below together with the narrative provided under
the heading CHARGES, FEES AND DEDUCTIONS on page 27 of this prospectus, and with
the prospectuses for the portfolios. In addition to the expenses listed below,
premium tax charges may apply.
11
9
<PAGE>
SALES LOAD(1)
Sales Load Imposed on Premiums 0%
Maximum Contingent Deferred Sales Load(2) 6%
RANGE OF CONTINGENT DEFERRED SALES LOAD OVER TIME:
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
YEARS SINCE SALES LOAD
----------
PREMIUM RECEIPT as a percentage of premium
---------------
<S> <C> <C>
Less than 1 year 6%
1 year but less than 2 years 6%
2 years but less than 3 years 5%
3 years but less than 4 years 5%
4 years but less than 5 years 4%
5 years but less than 6 years 4%
6 years but less 7 years 2%
7 or more years 0%
<PAGE>
OTHER POLICY EXPENSES
Transfer Fee, first 18 per policy year(3) 0
Fees For Other Services and Options(4) 0
Annual Policy Fee(5) $30
VARIABLE ACCOUNT ANNUAL EXPENSES(6)
-----------------------------------
as a percentage of the variable accumulated value
Mortality and Expense Risk Charge 1.20%
Administrative Expense Charge(7) 0.15%
Total Variable Account Annual Expenses 1.35%
</TABLE>
PORTFOLIO EXPENSES
as a percentage of assets after fee waiver and/or expense reimbursement(8)
<TABLE>
<CAPTION>
TOTAL
MANAGEMENT OTHER PORTFOLIO
PORTFOLIO FEES EXPENSES ANNUAL
--------- ---- --------
EXPENSES
<S> <C> <C> <C>
Alger American Income & Growth 0.625% 0.075% 0.70%
Alliance VP Growth & Income 0.63% 0.08% 0.71%
Alliance VP Premier Growth 1.00% 0.05% 1.05%
Dreyfus VIF Appreciation 0.75% 0.03% 0.78%
Dreyfus VIF Small Cap 0.75% 0.03% 0.78%
Janus Aspen Series Balanced(9) 0.65% 0.02% 0.67%
Janus Aspen Series Worldwide Growth(9) 0.65% 0.05% 0.70%
MFS VIT Emerging Growth 0.75% 0.09% 0.84%
MFS VIT Growth with Income 0.75% 0.13% 0.88%
MFS VIT Research 0.75% 0.11% 0.86%
MS UIF Fixed Income 0.14% 0.56% 0.70%
MS UIF High Yield 0.19% 0.61% 0.80%
MS UIF International Magnum 0.29% 0.87% 1.16%
OCC Accumulation Trust Managed(10) 0.77% 0.06% 0.83%
OCC Accumulation Trust Small Cap 0.80% 0.09% 0.89%
Transamerica VIF Growth 0.70% 0.15% 0.85%
Transamerica VIF Money Market 0.00% 0.60% 0.60%
</TABLE>
The portfolios have provided us with expense information regarding the
portfolios. In preparing the tables above and below and the examples that
follow, we have relied on the figures provided by the portfolios. We have no
reason to doubt the accuracy of that information, but we have not verified those
figures. These figures are for the year ended December 31, 1999. Actual expenses
in future years may be higher or lower than these figures.
Notes to Fee Table:
1. The contingent deferred sales load applies to each policy, regardless of
how the policy value is allocated between the variable account and the
fixed account.
2. A portion of the premiums may be withdrawn each policy year without
imposition of any contingent deferred sales load, and after seven years, a
premium may be withdrawn free of any contingent deferred sales load. See
CHARGES, FEES AND DEDUCTIONS on page 27.
3. A transfer fee of $10 will be imposed for each transfer in excess of 18 in
a policy year.
4. We currently do not impose fees for any other services, or options.
However, we reserve the right to impose a fee for various services and
options including dollar cost averaging, systematic withdrawals, automatic
payouts, asset allocation and asset rebalancing.
5. The current policy fee is $30, or 2% of the policy value, if less, per
policy year. This fee will be waived for policy values over $50,000.
6. The variable account annual expenses do not apply to the fixed account.
7. The current annual administrative expense charge of 0.15% may be increased
to no more than 0.35%.
8. From time to time, the portfolios' investment advisers, each in its own
discretion, may voluntarily waive all or part of their fees and/or
voluntarily assume certain portfolio expenses. The expenses shown in the
Portfolio Expenses table are the expenses paid for 1999. The expenses shown
in that table reflect a portfolio's adviser's waivers of fees or
reimbursement of expenses, if applicable. It is anticipated that such
waivers or reimbursements will continue for calendar year 2000. Without
such waivers or reimbursements, the annual expenses for 1999 for certain
portfolios would have been, as a percentage of assets, as follows:
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL PORTFOLIO
FEE EXPENSES ANNUAL EXPENSE
<S> <C> <C> <C>
MS UIF Fixed Income 0.40% 0.56% 0.96%
MS UIF High Yield 0.50% 0.61% 1.11%
MS UIF International Magnum 0.80% 0.87% 1.67%
Transamerica VIF Growth 0.75% 0.15% 0.90%
Transamerica VIF Money Market 0.35% 1.04% 1.39%
</TABLE>
9. Expenses are based upon expenses for the fiscal year ended December 31,
1999, restated to reflect a reduction in the management fee. All
expenses are shown without the effect of expense offset arrangements.
10. The Adviser is contractually obligated to waive that portion of the
advisory fee and to assume any necessary expense to limit total
operating expenses of the portfolio to 1.00% of average net assets (net
of expenses offset) on an annual basis.
- -------------------------------------------------------
EXAMPLES
The following tables show the total expenses you would incur in various
situations assuming the following assumptions:
o a $1,000 investment;
o a 5% annual return on assets; and
o all amounts were allocated to the variable sub-account indicated.
These examples show expenses for policies based on total portfolio expenses
after fee waivers and reimbursements, if applicable, for the portfolios for
1999. There is no guarantee that any fee waivers or expense reimbursements will
continue in the future. These examples assume an average policy value of $40,000
and, therefore, a deduction of 0.075% has been made to reflect the $30 policy
fee. No transfer fees or other option or service fees or premium tax charges
have been assessed. Premium tax charges may apply. For annuitizations before the
first policy anniversary, and for annuitizations under a form that does not
include life contingencies, the contingent deferred sales load may apply. The
Year 1 column in example 3 illustrates this occurrence.
EXAMPLE 1: If you surrender the policy at the end of the applicable time period:
<TABLE>
<CAPTION>
---------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------------------------------------------------------
---------------------------------------
<S> <C> <C> <C> <C>
Alger American Income & Growth $73 $109 $148 $246
Alliance VP Growth & Income $73 $109 $149 $247
Alliance VP Premier Growth $76 $120 $166 $281
Dreyfus VIF Appreciation $73 $111 $152 $254
Dreyfus VIF Small Cap $73 $111 $152 $254
Janus Aspen Series Balanced $72 $108 $147 $243
Janus Aspen Series Worldwide Growth $73 $109 $148 $246
MFS VIT Emerging Growth $74 $113 $155 $260
MFS VIT Growth with Income $74 $114 $157 $264
MFS VIT Research $74 $114 $156 $262
MS UIF Fixed Income $73 $109 $148 $246
MS UIF High Yield $74 $112 $153 $256
MS UIF International Magnum $77 $123 $171 $292
OCC Accumulation Trust Managed $74 $113 $155 $259
OCC Accumulation Trust Small Cap $74 $115 $158 $265
Transamerica VIF Growth $74 $114 $156 $261
Transamerica VIF Money Market $72 $106 $143 $235
------------------------------------------------------------------------------------------------
EXAMPLE 2: If you do not surrender and do not annuitize the policy:
---------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
---------------------------------------------------------
---------------------------------------
Alger American Income & Growth $22 $67 $114 $246
Alliance VP Growth & Income $22 $67 $115 $247
Alliance VP Premier Growth $25 $77 $132 $281
Dreyfus VIF Appreciation $22 $69 $118 $254
Dreyfus VIF Small Cap $22 $69 $118 $254
Janus Aspen Series Balanced $21 $66 $113 $243
Janus Aspen Series Worldwide Growth $22 $67 $114 $246
MFS VIT Emerging Growth $23 $71 $121 $260
MFS VIT Growth with Income $23 $72 $123 $264
MFS VIT Research $23 $71 $122 $262
MS UIF Fixed Income $22 $67 $114 $246
MS UIF High Yield $23 $70 $119 $256
MS UIF International Magnum $26 $80 $137 $292
OCC Accumulation Trust Managed $23 $70 $121 $259
OCC Accumulation Trust Small Cap $23 $72 $124 $265
Transamerica VIF Growth $23 $71 $122 $261
Transamerica VIF Money Market $21 $64 $109 $235
------------------------------------------------------------------------------------------------
EXAMPLE 3: If you elect to annuitize at the end of the applicable period under a
Settlement Option with life contingencies:
---------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------------------------------------------------------
---------------------------------------
Alger American Income & Growth $73 $67 $114 $246
Alliance VP Growth & Income $73 $67 $115 $247
Alliance VP Premier Growth $76 $77 $132 $281
Dreyfus VIF Appreciation $73 $69 $118 $254
Dreyfus VIF Small Cap $73 $69 $118 $254
Janus Aspen Series Balanced $72 $66 $113 $243
Janus Aspen Series Worldwide Growth $73 $67 $114 $246
MFS VIT Emerging Growth $74 $71 $121 $260
MFS VIT Growth with Income $74 $72 $123 $264
MFS VIT Research $74 $71 $122 $262
MS UIF Fixed Income $73 $67 $114 $246
MS UIF High Yield $74 $70 $119 $256
MS UIF International Magnum $77 $80 $137 $292
OCC Accumulation Trust Managed $74 $70 $121 $259
OCC Accumulation Trust Small Cap $74 $72 $124 $265
Transamerica VIF Growth $74 $71 $122 $261
Transamerica VIF Money Market $72 $64 $109 $235
------------------------------------------------------------------------------------------------
</TABLE>
These examples should not be considered representations of past or future
expenses. Actual expenses paid may be greater or less than those shown, subject
to the guarantees in the policy. The assumed 5% annual rate of return is
hypothetical and should not be considered a representation of past or future
annual returns, which may be greater or less than this assumed rate.
<PAGE>
53
CONDENSED FINANCIAL INFORMATION
You will find condensed financial information on each sub-account in APPENDIX C
on page 47. You will find the audited financial statements and report of
independent auditors for the variable account in the Statement of Additional
Information.
WHAT ARE MY INVESTMENT CHOICES?
The policy gives you the opportunity to select from a number of investment
options. Investment options include variable sub-accounts and the fixed account
option. Currently, you may not elect more than a total of 18 investment options
over the life of the policy.
VARIABLE SUB-ACCOUNT OPTIONS
The variable account is a separate account, designated as Separate Account
VA-6NY, that is subdivided into variable sub-accounts. Assets of each variable
sub-account are invested in a specified mutual fund portfolio. The variable
sub-accounts currently available for investment are:
Alger American Income & Growth Alliance VP Growth & Income* Alliance VP Premier
Growth* Dreyfus VIF Appreciation* Dreyfus VIF Small Cap Janus Aspen Series
Balanced Janus Aspen Series Worldwide Growth MFS VIT Emerging Growth MFS VIT
Growth with Income MFS VIT Research MS UIF Fixed Income* MS UIF High Yield* MS
UIF International Magnum* OCC Accumulation Trust Managed OCC Accumulation Trust
Small Cap Transamerica VIF Growth Transamerica VIF Money Market
*Several funds have changed their names, These name changes have no reflection
on the investment policies, strategies, management or any other material
function of the funds. The Alliance VP Growth & Income sub-account was formerly
known as the Alliance VPF Growth & Income sub-account. The Alliance VP Premier
Growth sub-account was formerly known as the Alliance VPF Premier Growth
sub-account. The Dreyfus VIF Appreciation sub-account was formerly known as the
Dreyfus VIF Capital Appreciation sub-account. The MS UIF Fixed Income
sub-account was formerly known as the MSDW UF Fixed Income sub-account. The MS
UIF High Yield sub-account was formerly known as the MSDW UF High Yield
sub-account. The MS UIF International Magnum sub-account was formerly known as
the MSDW UF International Magnum sub-account.
The portfolios pay their investment advisers and administrators certain fees
charged against the assets of each portfolio. The variable accumulated value, if
any, of a policy and the amount of any variable settlement option payments will
vary to reflect the investment performance of the variable sub-accounts to which
amounts have been allocated. Additionally, applicable charges are deducted. For
more information see CHARGES, FEES AND DEDUCTIONS on page 27, THE PORTFOLIOS on
page 15, and the accompanying portfolio prospectuses.
THE FIXED ACCOUNT
The policy provides an option to invest premiums in the fixed account which is
part of our general account.
We credit interest on the amounts in the fixed account at a rate of not less
than 3% annually. We may credit interest at a rate in excess of 3% at our
discretion for any class. Each interest rate will be guaranteed to be credited
for at least 12 months.
CAN I MAKE TRANSFERS AMONG THE SUB-ACCOUNTS AND THE FIXED ACCOUNT?
Before the annuity date, you may transfer values between the variable
sub-accounts and the fixed account, within limits. For transfers after the
annuity date, see After the Annuity Date on page 23.
Transfers out of the fixed account are restricted to four per policy year and to
a limited percentage of the fixed policy value. We may allow more frequent
transfers under certain services and options, for example, dollar cost
averaging.
We currently impose a transfer fee of $10 for each transfer in excess of 18 made
during the same policy year.
WHAT IF I NEED MY MONEY?
You may withdraw all or part of the cash surrender value on or before the
annuity date. The cash surrender value of your policy is the policy value, less
any policy fee, and less any contingent deferred sales load and applicable
premium tax charges. The policy fee generally will be deducted on a full
surrender of a policy if the policy value is then less than $50,000. We may
delay payment of any withdrawal from the fixed account for up to six months.
Withdrawals may be taxable, subject to withholding and a penalty tax.
Withdrawals from qualified policies may be subject to severe restrictions and,
in certain circumstances, prohibited. See FEDERAL TAX MATTERS on page 33.
WHAT CHARGES WILL I INCUR ON A WITHDRAWAL?
We do not deduct a sales charge when premiums are paid, although premium tax
charges may be deducted. However, if any part of the policy value is withdrawn,
we may deduct a contingent deferred sales load, or surrender charge, of up to 6%
of premiums. After we have held a premium for seven years, you may withdraw it
without charge. See Contingent Deferred Sales Load/Surrender Charge on page 27.
We do not assess the contingent deferred sales load on payment of death
benefits, on transfers within the policy or on certain annuitizations.
Also, beginning 30 days from the policy effective date, or at the end of the
free look period if this ends later, you may withdraw any portion of the allowed
amount each policy year without imposition of any contingent deferred sales
load/surrender charge.
For policies purchased on or after December 8, 1999, the allowed amount each
policy year is equal to:
during the first policy year, the greater of:
o accumulated earnings not previously withdrawn; or
o 15% of the total premiums received as of the date of withdrawal; and
b) after the first policy year, the greater of:
o accumulated earnings not previously withdrawn; or
o 15% of premiums less than seven years old, determined as of the last policy
anniversary.
Withdrawals will be made first from earnings and then from premiums on a
first-in/first-out basis. If an
allowed amount is not withdrawn during a policy year, it does not carry over to
the next policy year.
Premiums not previously withdrawn that have been held for seven full policy
years and accumulated earnings, if any, not previously withdrawn may be
withdrawn without charge.
For policies purchased before December 8, 1999, the allowed amount each policy
year is equal to:
a) 15% of the total premiums received during the last seven years determined
as of the last policy anniversary; minus
b) any withdrawals during the present policy year.
In the first policy year, the 15% will be applied to total premiums received at
the time of the first withdrawal.
Withdrawals will be made first from premiums on a first-in/first-out basis and
then from earnings. If the allowed amount is not fully withdrawn or paid out
during a policy year, it does not carry over to the next policy year.
Premiums not previously withdrawn that have been held for seven full policy
years and accumulated earnings, if any, not previously withdrawn, may be
withdrawn without charge.
WHAT ARE THE OTHER CHARGES AND
DEDUCTIONS?
We deduct:
o a mortality and expense risk charge of 1.20% annually of the assets in the
variable account;
o an administrative expense charge of 0.15% annually of these assets. The
administrative expense charge may change, but we guarantee it won't exceed
a maximum effective annual rate of 0.35%; and
o a policy fee of currently $30, or 2% of the policy value, if less, at the
end of each policy year and upon surrender. If the policy value is more
than $50,000 on the last business day of a policy year, or as of the date
the policy is surrendered, we will waive the policy fee for that year.
After the annuity date, we will deduct the annual annuity fee of $30 in equal
installments from each periodic payment under the variable payment option.
For each transfer in excess of 18 during a policy year, we will impose a
transfer fee of $10. See Transfer Fee on page 30.
Also, New York currently has no premium tax or retaliatory premium tax. If New
York imposes these taxes in the future, or if you become a resident of a state
other than New York where such taxes apply, the charges could be deducted from
premiums, amounts withdrawn and/or the annuity purchase amount at annuitization.
See Premium Tax Charges on page 29.
OTHER SERVICES OR OPTIONS
Currently, we do not deduct fees for any other services or options under the
policy. However, we reserve the right to impose fees to cover processing for
certain services and options in the future. This may include dollar cost
averaging, systematic withdrawals, automatic payouts, asset allocation and
automatic asset rebalancing.
HOW AND WHEN ARE SETTLEMENT OPTION
PAYMENTS MADE?
You may select to receive settlement option payments on a fixed basis, a
variable basis or a combination of a fixed and variable basis. You have
flexibility in choosing the annuity date, but it may generally not be a date
later than an annuitant's 90th birthday. Certain qualified policies may have
restrictions as to the annuity date and the types of settlement options
available.
Four settlement options are available under the policy:
1. life annuity;
2. life and contingent annuity;
3. life annuity with period certain; or
4. joint and survivor annuity.
WHAT HAPPENS IF I DIE BEFORE THE ANNUITY
DATE?
If you or a joint owner die before the annuity date and both you and a joint
owner are less than age 85, the death benefit will be the greatest of three
amounts:
a) the policy value;
b) the sum of all premiums, less previous withdrawals taken, and less any
contingent deferred sales loads applicable to those withdrawals and
applicable premium tax charges; and
c) the highest policy value on any policy anniversary before the earlier of
your or a joint owner's 85th birthday, plus premiums paid since that policy
anniversary, less previous withdrawals taken since that policy anniversary,
and less any contingent deferred sales loads applicable to those
withdrawals and applicable premium tax charges since that policy
anniversary.
If you or a joint owner die before the annuity date and after either your or a
joint owner's 85th birthday, the death benefit will be the greater of:
a) the policy value; and
b) the total of all premiums not previously withdrawn, less previous
withdrawals taken, and less any contingent deferred sales loads applicable
to those withdrawals and applicable premium tax charges.
The death benefit will generally be paid within seven days of receipt of the
required proof of death of an owner and election of the method of settlement or
as soon thereafter as we have sufficient information to make the payment. If no
settlement method is elected, the death benefit will be distributed within five
years after the owner's death. No contingent deferred sales load is imposed. The
death benefit may be paid as either a lump sum or as a settlement option.
If the owner is not a natural person, we will treat the annuitant as the owner
for purposes of the death benefit.
WHAT ARE THE FEDERAL INCOME TAX
CONSEQUENCES?
An owner who is a natural person generally should not be taxed on increases in
the policy value until a distribution under the policy occurs. A taxable event
would occur, for example, with a withdrawal or settlement option payment, or as
the result of a pledge, loan, or assignment of a policy. Generally, a portion,
up to 100%, of any distribution or deemed distribution is taxable as ordinary
income. The taxable portion of distributions is generally subject to income tax
withholding unless the recipient elects otherwise. Withholding is mandatory for
certain qualified policies. In addition, a federal penalty tax may apply to
certain distributions. See FEDERAL TAX MATTERS on page 33.
WHO DO I CONTACT IF I HAVE QUESTIONS?
We will answer your questions about procedures or the policy if you write to:
The Transamerica Annuity Service Center
P.O. Box 31848
Charlotte, North Carolina
28231-1848
Or call us at: 1-877-717-8861
NOTE: Effective June 5, 2000, you can write us at:
P. O. Box 3181
Cedar Rapids, Iowa 52406-3183
All inquiries should include the policy number and the owner's name.
Please Note: The foregoing summary is qualified in its entirety by the detailed
information in the remainder of this prospectus and in the prospectuses for the
portfolios. Please refer to this prospectus and the portfolio prospectuses for
more detailed information. For qualified policies, the requirements of a
particular retirement plan, an endorsement to the policy, or limitations or
penalties imposed by the Code or the Employee Retirement Income Security Act of
1974, or ERISA, as amended, may impose additional limits or restrictions. These
limits or restrictions may be on premiums, withdrawals, distributions, or
benefits, or on other provisions of the policy. This prospectus does not
describe such limitations or restrictions. See FEDERAL TAX MATTERS on page 33.
TRANSAMERICA LIFE INSURANCE
COMPANY OF NEW YORK
AND THE VARIABLE ACCOUNT
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
Transamerica Life Insurance Company of New York, or Transamerica, is a stock
life insurance company incorporated under the laws of the State of New York on
February 5, 1986. It is a wholly-owned subsidiary of AEGON, N.V. and is
principally engaged in the sale of life insurance and annuity policies. The
address of Transamerica is 100 Manhattanville Road, Purchase, New York 10577.
PUBLISHED RATINGS
We may from time to time publish our ratings in advertisements, sales literature
and reports to owners. We receive ratings and other information from one or more
independent rating organizations such as A.M. Best Company, Standard & Poor's,
Moody's, and Duff & Phelps. The ratings reflect our financial strength and/or
claims-paying ability. These ratings should not be considered as bearing on the
investment performance or safety of the variable account. Ratings and investment
performance are unrelated. Each year the A.M. Best Company reviews the financial
status of thousands of insurers, resulting in the assignment of Best's Ratings.
These ratings reflect A.M. Best's current opinion of the relative financial
strength and operating performance of an insurance company in comparison to the
norms of the life/health insurance industry.
In addition, our claims-paying ability as measured by Standard & Poor's
Insurance Ratings Services, Moody's, or Duff & Phelps may be referred to in
advertisements or sales literature or in reports to owners. These ratings are
opinions provided by the companies named above. These opinions relate to how
well they have determined w are prepared, from a financial standpoint, to meet
our insurance and annuity obligations. The terms of our obligations are stated
within the fixed account of this policy. These ratings do not reflect the
investment performance of the variable account or the degree of risk associated
with an investment in the variable account.
INSURANCE MARKETPLACE STANDARDS
ASSOCIATION
In recent years, the insurance industry has recognized the need to develop
specific principles and practices to help maintain the highest standards of
marketplace behavior and enhance credibility with consumers. As a result, the
industry established the Insurance Marketplace Standards Association, or IMSA.
As an IMSA member, we agree to follow a set of standards in our advertising,
sales and service for individual life insurance and annuity products. The IMSA
logo, which you will see on our advertising and promotional materials,
demonstrates that we take our commitment to ethical conduct seriously.
THE VARIABLE ACCOUNT
Separate Account VA-6NY of Transamerica, or the variable account, was
established by Transamerica as a separate account under the laws of the State of
New York following September 11, 1996, resolutions adopted by Transamerica's
Board of Directors. The variable account is registered with the Securities and
Exchange Commission, or the Commission under the Investment Company Act of 1940
as a unit investment trust. It meets the definition of a separate account under
the federal securities laws. However, the Commission does not supervise the
management or the investment practices or policies of the variable account.
We own the assets of the variable account, but they are held separately from our
other assets. Section 4240 of the New York Insurance Code provides that the
assets of a separate account are not chargeable with liabilities incurred in any
other business operation of the insurance company. This is the case except to
the extent that assets in the separate account exceed the reserves and other
liabilities of the separate account.
Income, gains and losses incurred on the assets in the variable account, whether
or not realized, are credited to or charged against the variable account without
regard to our other income, gains or losses. Therefore, the investment
performance of the variable account is entirely independent of the investment
performance of our general account assets or any other separate account
maintained by us.
The variable account currently has 17 variable sub-accounts available under the
policy, each of which invests solely in a specific corresponding portfolio. At
our discretion, we may make changes to the variable sub-accounts.
THE PORTFOLIOS
Each of the variable sub-accounts offered under the contract invests exclusively
in one of the portfolios. Descriptions of each portfolio's investment objective
follow. The management fees listed below are specified in each portfolio
adviser's contract before any fee waivers.
THE INCOME & GROWTH PORTFOLIO OF THE ALGER AMERICAN FUND seeks, primarily, a
high level of dividend income. Capital appreciation is a secondary objective of
the portfolio. The portfolio invests in dividend paying equity securities, such
as common or preferred stocks, preferably those which the Manager believes also
offer opportunities for capital appreciation.
Adviser: Fred Alger Management, Inc.
Management Fee: 0.625%.
THE GROWTH AND INCOME PORTFOLIO OF THE ALLIANCE VARIABLE PRODUCTS SERIES FUND,
INC. seeks reasonable current income and reasonable opportunity for appreciation
through investments primarily in dividend-paying common stocks of good quality.
Whenever the economic outlook is unfavorable for investment in common stock,
this portfolio may invest in other types of securities, such as bonds,
convertible bonds, preferred stock and convertible preferred stocks. The
portfolio managers will purchase and sell portfolio securities at times and in
amounts as management deems advisable in light of market, economic and other
conditions.
Adviser: Alliance Capital Management L.P.
Management Fee: 0.63%.
THE PREMIER GROWTH PORTFOLIO OF THE ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
seeks growth of capital by pursuing aggressive investment policies. Since this
portfolio's investments will be made based upon their potential for capital
appreciation, current income will not be a high priority for this portfolio. The
portfolio will invest mainly in equity securities, such as common stocks,
securities convertible into common stocks and rights and warrants to subscribe
for or purchase common stocks. Equity investments will be in a limited number of
large, carefully selected, high-quality U.S. companies. In the Adviser's
judgement, the companies chosen will be those that are likely to achieve
superior earnings growth. Approximately 25 companies believed by the Adviser to
show superior potential for capital appreciation will usually constitute
approximately 70% of the portfolio's net assets at any one time. The portfolio
thus differs from more typical equity mutual funds by investing most of its
assets in a relatively small number of intensively researched companies. Under
normal circumstances the portfolio will invest at least 85% of the value of its
total assets in the equity securities of U.S. companies.
Adviser: Alliance Capital Management L.P.
Management Fee: 1.00%.
THE APPRECIATION PORTFOLIO OF THE DREYFUS VARIABLE INVESTMENT FUND seeks
long-term capital growth consistent with the preservation of capital; current
income is a secondary goal. To pursue these goals, the portfolio invests in
common stocks focusing on "blue chip" companies with total market values of more
than $5 billion at the time or purchase.
Adviser: The Dreyfus Corporation.
Sub-Adviser: Fayez Sarofim & Co.
Management Fee: 0.75%.
THE SMALL CAP PORTFOLIO OF THE DREYFUS VARIABLE INVESTMENT FUND seeks to
maximize capital appreciation. To pursue this goal, the portfolio generally
invests at least 65% of its assets in the common stock of U.S. and foreign
companies. The portfolio focuses on small-cap companies with total market values
of less than $1.5 million.
Adviser: The Dreyfus Corporation.
Management Fee: 0.75%.
THE BALANCED PORTFOLIO OF THE JANUS ASPEN SERIES seeks long-term capital growth
consistent with preservation of capital and current income. Normally, this
diversified portfolio invests 40-60% of its assets in securities selected
primarily for their growth potential. The balance of its holdings is invested in
securities selected primarily for their capacity to generate income. Such
holdings are likely to consist of bonds and preferred stocks. Typically, at
least 25% of this portfolio is made up of fixed-income securities.
Adviser: Janus Capital Corporation.
Management Fee: 0.65%.
THE WORLDWIDE GROWTH PORTFOLIO OF THE JANUS ASPEN SERIES seeks long-term growth
of capital in a manner consistent with the preservation of capital. It is a
diversified portfolio that pursues its objective primarily through investments
in common stocks of foreign and domestic issuers. The portfolio has the
flexibility to invest on a worldwide basis in companies and other organizations
of any size, regardless of country of origin or place of principal business
activity. The portfolio normally invests in issuers from at least five different
countries, including the United States. The portfolio may at times invest in
fewer than five countries or even a single country.
Adviser: Janus Capital Corporation.
Management Fee: 0.65%.
THE EMERGING GROWTH SERIES OF THE MFS VARIABLE INSURANCE TRUST seeks long-term
growth of capital. The series may invest up to 25% of its net assets in foreign
securities, including emerging market securities. Emerging markets are generally
defined as countries in the initial stages of their industrialization cycles
with low per capita income.
Adviser: Massachusetts Financial Services Company.
Management Fee: 0.75%.
THE GROWTH WITH INCOME SERIES OF THE MFS VARIABLE INSURANCE TRUST seeks
long-term growth of capital and future income while providing more current
dividend income than is normally obtainable from a portfolio of only growth
stocks. The series invests, under normal market conditions, at least 65% of its
total assets in common stock and related securities, such as preferred stocks,
convertible securities and depositary receipts for those securities. The series
will also seek to provide income equal to approximately 90% of the dividend
yield on the Standard & Poor's 500 Composite Index. While the fund may invest in
companies of any size, the fund generally focuses on companies with larger
market capitalizations that the series' adviser believes have sustainable growth
prospects and attractive valuations based on current and expected earnings or
cash flow. The series may invest in foreign securities through which it may have
exposure to foreign currencies.
Adviser: Massachusetts Financial Services Company.
Management Fee: 0.75%.
THE RESEARCH SERIES OF THE MFS VARIABLE INSURANCE TRUST seeks long-term growth
of capital and future income. The series invests, under normal market
conditions, at least 80% of its total assets in common stocks and related
securities, such as preferred stocks, convertible securities and depositary
receipts. The series focuses on companies that the series' adviser believes have
favorable prospects for long-term growth, attractive valuations based on current
and expected earnings or cash flow, dominant or growing market share and
superior management. The series may invest in foreign equity securities
(including emerging market securities) through which it may have exposure to
foreign currencies.
Adviser: Massachusetts Financial Services Company.
Management Fee: 0.75%.
THE MORGAN STANLEY UNIVERSAL INSTITUTIONAL FUNDS, INC. FIXED INCOME PORTFOLIO
seeks above-average total return over a market cycle of three to five years by
investing primarily in a diversified mix of dollar denominated investment grade
fixed income securities, particularly U.S. Government, corporate and mortgage
securities. The Portfolio ordinarily will maintain an average weighted maturity
in excess of five years. The Portfolio may invest opportunistically in
non-dollar denominated securities and below investment grade securities.
Adviser: Miller Anderson & Sherrerd, LLP. Management Fee: 0.40% of the first
$500 million; 0.35% of the next $500 million; and 0.30% of the assets over $1
billion.
THE MORGAN STANLEY UNIVERSAL INSTITUTIONAL FUNDS, INC. HIGH YIELD PORTFOLIO
seeks above-average total return over a market cycle of three to five years by
investing primarily in high yield securities (commonly referred to as "junk
bonds"). The Portfolio also may invest in investment grade fixed income
securities, including U.S. Government securities, corporate bonds and mortgage
securities. The Portfolio may invest to a limited extent in foreign fixed income
securities, including emerging market securities.
Adviser: Miller Anderson & Sherrerd, LLP. Management Fee: 0.50% of the first
$500 million; 0.45% of the next $500 million; and 0.40% of the assets over $1
billion.
THE MORGAN STANLEY UNIVERSAL INSTITUTIONAL FUNDS, INC. INTERNATIONAL MAGNUM
PORTFOLIO seeks long-term capital appreciation by investing primarily in equity
securities of non-U.S. issuers domiciled in EAFE countries. The Adviser seeks to
achieve superior long-term returns by creating a diversified portfolio of
undervalued international equity securities. To achieve this goal, the Adviser
uses a combination of strategic geographic asset allocation and fundamental,
value oriented stock selection. The countries in which the portfolio will invest
are those comprising the Morgan Stanley Capital International EAFE Index, which
includes Australia, Japan, New Zealand, most nations located in Western Europe
and the more developed countries in Asia, such as Hong Kong and Singapore.
Collectively, we refer to these as the EAFE countries. The portfolio may invest
up to 5% of its total assets in securities of issuers domiciled in non-EAFE
countries. Under normal circumstances, at least 65% of the total assets of the
portfolio will be invested in equity securities of issuers in at least three
different EAFE countries.
Adviser: Morgan Stanley Asset Management* Management Fee: 0.80% of the first
$500 million; 0.75% of the next $500 million; and 0.70% of the assets over $1
billion.
*On December 1, 1998, Morgan Stanley Asset Management Inc. changed its name to
Morgan Stanley Dean Witter Investment Management Inc., but continues to do
business in certain instances using the name Morgan Stanley Asset Management,
THE MANAGED PORTFOLIO OF THE OCC ACCUMULATION TRUST seeks growth of capital over
time through investment in a portfolio consisting of common stocks, bonds and
cash equivalents, the percentages of which will vary based on the Adviser's
assessments of the relative outlook for such investments. Debt securities are
expected to be predominantly investment grade intermediate to long term U.S.
government and corporate debt. The portfolio will also invest in high quality
short term money market and cash equivalent securities and may invest almost all
of its assets in such securities when necessary to preserve capital. In
addition, the portfolio may also purchase foreign securities. These foreign
securities must be listed on a domestic or foreign securities exchange or
represented by American depositary receipts.
Adviser: OpCap Advisors. Management Fee: 0.80% of the first $400 million and
0.75% of the next $400 million and 0.70% of net assets over $800 million.
THE SMALL CAP PORTFOLIO OF THE OCC ACCUMULATION TRUST seeks capital appreciation
through investments in a diversified portfolio of stocks issued by small
companies. It will consist of primarily of equity securities of companies with
market capitalizations of under $1 billion. Under normal circumstances, at least
65% of the portfolio's assets will be invested in equity securities. The
majority of securities purchased by the portfolio will be traded on the New York
Stock Exchange, the American Stock Exchange or in the over-the-counter market.
The portfolio's holdings may also include options, warrants, bonds, notes and
convertible bonds. In addition, the portfolio may also purchase foreign
securities. Foreign securities must be listed on a domestic or foreign
securities exchange or be represented by American depositary receipts.
Adviser: OpCap Advisors.
Management Fee: 0.80% of the first $400 million and 0.75% of the next $400
million and 0.70% of net assets over $800 million. THE GROWTH PORTFOLIO OF THE
TRANSAMERICA VARIABLE INSURANCE FUND, INC. seeks long-term capital growth. It
invests at least 65% of its assets in a diversified selection of equity
securities of domestic growth companies of any size. The manager uses a
"bottom-up" approach to investing and constructs the portfolio one company at a
time. The manager focuses on identifying fundamental change in its early stages
and investing in premier companies. In the manager's view, characteristics of
premier companies include one or more of the following: share-holder-oriented
management; dominance in market share; cost production advantages; leading
brands; self-financed growth; and attractive reinvestment opportunities. The
manager of the portfolio believes in long-term investing and does not try to
time the market. However, when in the judgment of the manager market conditions
warrant, the portfolio may, for temporary defensive purposes, hold part or all
of its assets in cash or cash equivalents.
Adviser: Transamerica Investment Management, LLC.
Sub-Adviser: Transamerica Investment Services, Inc.
Management Fee: 0.75%.
THE MONEY MARKET PORTFOLIO OF THE TRANSAMERICA VARIABLE INSURANCE FUND, INC.
seeks to maximize current income consistent with liquidity and the preservation
of principal. The portfolio invests primarily in high quality U.S.
dollar-denominated money market instruments with remaining maturities of 13
months or less. These include: obligations issued or guaranteed by the U.S. and
foreign governments and their agencies and instrumentalities; obligations of
U.S. and foreign banks, or their foreign branches, and U.S. savings banks;
short-term corporate obligations, including commercial paper, notes and bonds;
other short-term debt obligations with remaining maturities of 397 days or less;
and repurchase agreements involving any of the securities mentioned above. The
portfolio may also purchase other marketable, non-convertible corporate debt
securities of U.S. issuers. These investments include bonds, debentures,
floating rate obligations, and issues with optional maturities.
Adviser: Transamerica Investment Management, LLC.
Sub-Adviser: Transamerica Investment Services, Inc.
Management Fee: 0.35%.
Meeting investment objectives depends on various factors, including, but not
limited to, how well the portfolio managers anticipate changing economic and
market conditions. There is no assurance that any of these portfolios will
achieve their stated objectives.
An investment in the policy is not a deposit or obligation of, or guaranteed or
endorsed, by any bank. Nor is the policy federally insured by the Federal
Deposit Insurance Corporation or any other government agency. Investing in the
policy involves certain investment risks, including possible loss of principal.
Since all of the portfolios are available to registered separate accounts
offering variable annuity and variable life products of Transamerica and to
other insurance companies as well, there is a possibility of a material
conflict. If such a conflict arises between the interests of the variable
account and one or more other separate accounts investing in the portfolios, the
affected insurance companies will take steps to resolve the matter. These steps
may include stopping their separate accounts from investing in the portfolios.
See the portfolios' prospectuses for greater detail on this subject.
You can find additional information concerning the investment objectives and
policies of all of the portfolios, the investment advisory services and
administrative services and charges in the current prospectuses for the
portfolios which accompany this prospectus.
Carefully read the prospectuses of the portfolios which interest you before you
make any decision concerning how you will invest in, or transfer monies among,
the variable sub-accounts.
We may receive payments from some or all of the portfolios or their advisers, in
varying amounts. These payments may be based on the amount of assets allocated
to the portfolios. The payments are for administrative or distribution services.
PORTFOLIOS NOT PUBLICLY AVAILABLE
The portfolios are open-end management investment companies, or portfolios or
series of, open-end management companies registered with the SEC under the 1940
Act, that are often referred to as mutual funds. This SEC registration does not
involve SEC supervision of the investments or investment policies of the
portfolios. Shares of the portfolios are not offered to the public but solely to
the insurance company separate accounts and other qualified purchasers as
limited by federal tax laws. These portfolios are not the same as mutual funds
that may have very similar names that are sold directly to the public, and the
performance of such publicly available funds, which have different portfolios
and expenses, should not be considered as an indication of the performance of
the portfolios. The assets of each portfolio are held separate from the assets
of the other portfolios. Each portfolio operates as a separate investment
vehicle. The income or losses of one portfolio have no effect on the investment
performance of another portfolio. The sub-accounts reinvest dividends and/or
capital gains distributions received from a portfolio in more shares of that
portfolio as retained assets.
ADDITION, DELETION, OR SUBSTITUTION
We do not control the portfolios. For this reason, we cannot guarantee that any
of the variable sub-accounts offered under the policy or any of the portfolios
will always be available to you for investment purposes. We retain the right to
make changes in the variable account and in its investments.
Subject to the approval of the New York Insurance Department, we reserve the
right to eliminate the shares of any portfolio held by a variable sub-account.
We may also substitute shares of another portfolio or of another investment
company for the shares of any portfolio. We would do this if the shares of the
portfolio are no longer available for investment or if, in our judgment,
investment in any portfolio would be inappropriate in view of the purposes of
the variable account. To the extent required by the 1940 Act, if we substitute
shares in a variable sub-account that you own, we will provide you with advance
notice. We will also seek advance permission from the Commission. This does not
prevent the variable account from purchasing other securities for other series
or classes of variable annuity policies. Nor does it prevent the variable
account from effecting an exchange between series or classes of variable
policies on the basis of requests made by owners.
We reserve the right to create new variable sub-accounts for the policies when,
in our sole discretion, marketing, tax, investment or other conditions warrant
that we do. Any new variable sub-accounts will be made available to existing
owners on a basis to be determined by us. Each additional variable sub-account
will purchase shares in a mutual fund portfolio or other investment vehicle. We
may also eliminate one or more variable sub-accounts if, in our sole discretion,
marketing, tax, investment or other conditions warrant that we do. So, in the
event any variable sub-account is eliminated, we will notify owners and request
a re-allocation of the amounts invested in the eliminated variable sub-account.
In the event of any substitution or change, we may make the changes in the
policy that we deem necessary or appropriate to reflect substitutions or
changes. Furthermore, if we believe it to be in the best interest of persons
having voting rights under the policies, the variable account may be operated as
a management company under the 1940 Act or any other form permitted by law. It
may also be deregistered under such Act in the event that registration is no
longer required. Finally, it may also be combined with one or more other
separate accounts.
THE POLICY
The Transamerica Classic(R) policy is a flexible premium deferred variable
annuity policy. It is part of the Transamerica Series(R) of variable insurance
products. Other variable policies are also available from us. The rights and
benefits of this policy are described below and in the policy. We reserve the
right to modify the policy if required by law. We also reserve the right to give
the owner the benefit of any federal or state statute, rule or regulation. The
obligations under the policy are obligations of Transamerica.
The policies are available on a non-qualified basis and on a qualified basis.
Policies available on a qualified basis are as follows:
a) rollover and regular IRAs, under Code Sections 408(a) and 408(b);
b) conversion, rollover and contributory Roth IRAs under Code Section 408A;
c) SEP/IRAs that qualify for special federal income tax treatment under Code
Section 408(k);
d) rollover Code Section 403(b) annuities, including Rev. Rul. 90-24
transfers, with no additional premiums; and
e) pension and profit sharing plans intended to qualify under Code Section
401.
Generally, qualified policies contain certain restrictive provisions limiting
the timing and amount of premiums to, and distributions from, the qualified
policy.
OWNERSHIP
As the owner, you are entitled to the rights granted by the policy. If you die,
your rights belong to a joint owner, if any, and then to your beneficiary. If
there are joint owners, the one designated as the primary owner will receive all
mail and any tax reporting information.
For non-qualified policies, the owner is entitled to designate the annuitant(s)
and, if the owner is an individual, as opposed to a trust, corporation or other
legal entity, the owner can change the annuitant(s) at any time before the
annuity date. Any such change will be subject to our then current underwriting
requirements. We reserve the right to reject any change of annuitants which has
been made without our prior written consent.
If the owner of a non-qualified policy is not an individual, the annuitant(s)
may not be changed once the policy is issued. Different rules apply to qualified
policies.
For each policy, a different account will be established and values, benefits
and charges will be calculated separately. The various administrative rules
described below will apply separately to each policy, unless otherwise noted.
PREMIUMS
All premiums must be paid to our Service Center in a check payable to
Transamerica. We will issue you a confirmation when we receive each premium.
The initial premium must be at least $5,000 or, if for regular IRAs, SEP/IRAs
and Roth IRAs, it must be for at least $2,000.
We will issue your policy and credit your initial premium generally within two
business days after we receive the initial premium and sufficient information to
issue a policy. For us to issue you a policy, you must provide us sufficient
information in a form acceptable to us. We reserve the right to reject any
premium or request for issuance of a policy. Normally we will not issue policies
with owners, joint owners, or annuitants more than 85 years old. Nor will we
normally accept premiums after any owner's, (or annuitant's if non-individual
owner), 86th birthday. In our discretion we may waive these restrictions in
appropriate cases.
If we cannot credit the initial premium allocated to the variable sub-account(s)
within two days of receipt because the information is incomplete, or for any
other reason, we will contact you. We will explain the reason for the delay and
will refund the initial premium within five business days. If you consent to us
retaining the initial premium, we will credit it as soon as the requirements are
fulfilled.
Before the annuity date and before you, a joint owner or any annuitant reaches
age 86, you may make additional premium payments at any time while the policy is
in effect. The minimum amount of each additional premium payment must be at
least $200 each, or at least $100 if made through an automatic premium plan. If
you elect to use this option additional premiums will be automatically deducted
from your bank account and allocated to the policy. In addition, minimum
allocation amounts apply. See Allocation of Premiums on page 20. We credit
additional premiums to the policy as of the date we receive your payment.
Total premiums for any policy may not exceed $1,000,000 without our prior
approval.
In no event may the sum of all premiums for a policy during any taxable year
exceed the limits imposed by any applicable federal or state law, rules, or
regulations.
ALLOCATION OF PREMIUMS
You specify how premiums will be allocated under the policy. You may allocate
premiums among one or more of the variable sub-accounts and the fixed account as
long as the portions are whole number percentages. We may waive this minimum
allocation amount under certain options and circumstances.
Each premium will be subject to the allocation percentages in effect at the time
of receipt of such premium. You may change the allocation percentages for
additional premiums at any time by submitting a request for such change to our
Service Center in a form and manner acceptable to us. Any changes to the
allocation percentages are subject to the limitations above. Any change will
take effect with the first premium we receive which accompanies your request. If
we receive your request separately, all premiums arriving after it will be
subject to its terms. Your allocation choices will continue in effect until you
change them again.
If you exercise the free look option for an IRA, we are legally required to
return the greater of:
a) the premium; or
b) the policy value.
Your initial premium allocated to the variable account may be held in the money
market variable sub-account during the applicable free look period plus 5 days
for delivery. Any allocations you make to the money market variable sub-account
will automatically be transferred at the end of the free-look period plus 5 days
according to your original allocation instructions. This transfer will not count
against the 18 transfers allowed free of charge during the first policy year.
INVESTMENT OPTION LIMIT
Currently, you may not allocate monies to more than eighteen investment options
over the life of the policy. Investment options include variable sub-accounts
and fixed account. Each variable sub-account and the fixed account that ever
received a transfer or premium allocation counts as one towards this total of
eighteen limit. We may waive this limit in the future.
For example, if you make an allocation to the money market variable sub-account
and later transfer all of the funds out of this money market variable
sub-account, this would count as one option for the purposes of the limitation,
even if it held no value. If you transfer from a variable sub-account to another
variable sub-account and later back to the first, the count towards the
limitation would be two, not three. If you select a guarantee period and renew
for the same term, the count will be one; but if you renew to a guarantee period
with a different term, the count will be two.
POLICY VALUE
Before the annuity date, the policy value is equal to:
a) the fixed account accumulated value; plus
b) the variable accumulated value.
The variable accumulated value is determined at the end of each valuation day.
To determine the variable accumulated value on a day that is not a valuation
day, the value as of the end of the next valuation day will be used. The
variable accumulated value is expected to change from valuation period to
valuation period, reflecting how investments within selected portfolios
performed. The variable accumulated value will also reflect deductions for
charges and fees. A valuation period begins at the close of the New York Stock
Exchange (generally 4:00 p.m. ET) on each valuation day and ends at the close of
the New York Stock Exchange on the next succeeding valuation day. A valuation
day is each day that the New York Stock Exchange is open for regular business.
HOW VARIABLE ACCUMULATION UNITS ARE VALUED
Premiums allocated to a variable sub-account are credited to the variable
accumulated value in the form of variable accumulation units. The number of
variable accumulation units credited for each variable sub-account is determined
by dividing the premium allocated to the variable sub-account by the variable
accumulation unit value for that variable sub-account. In the case of the
initial premium, variable accumulation units for that payment will be credited
to the variable accumulated value within two valuation days of the later of the
date our Service Center receives:
a) sufficient information, in an acceptable manner and form; or
b) the initial premium.
In the case of any additional premium payment, variable accumulation units for
that payment will be credited at the end of the valuation period during which we
receive the payment. The value of a variable accumulation unit for each variable
sub-account is established at the end of each valuation period and is calculated
by multiplying the value of that unit at the end of the prior valuation period
by the variable sub-account's net investment factor for the valuation period.
The value of a variable accumulation unit can go either up or down.
The net investment factor is used to determine the value of accumulation and
annuity unit values for the end of a valuation period. The applicable formula
can be found in the Statement of Additional Information.
Transfers involving variable sub-accounts will result in the crediting and/or
cancellation of variable accumulation units having a total value equal to the
dollar amount being transferred to or from a particular variable sub-account.
The crediting and cancellation of such units is made using the variable
accumulation unit value of the applicable variable sub-account as of the end of
the valuation day in which the transfer is effective.
TRANSFERS
BEFORE THE ANNUITY DATE
Before the annuity date, you may transfer all or any portion of the policy value
among the variable sub-accounts and the fixed account. Transfers are restricted
into or out of the fixed account.
Transfers among the variable sub-accounts and the fixed account may be made by
submitting a request to our Service Center in a form and manner acceptable to
us. The transfer request must specify:
a) the variable sub-accounts and/or the fixed account from which your transfer
is to be made;
b) the amount of your transfer; and
c) the variable sub-accounts and/or fixed account to receive the transferred
amount.
The minimum amount which you may transfer from the variable sub-accounts and the
fixed account is $1,000. Transfers among the variable sub-accounts are also
subject to the terms and conditions imposed by the portfolios.
We currently impose a transfer fee of $10 for each transfer in excess of 18 made
during the same policy year. We reserve the right to waive the transfer fee or
vary the number of transfers without charge. We may also choose not to count
transfers under certain options or services for purposes of the allowed number
without charge. See Other Restrictions below for additional limitations
regarding transfers. A transfer generally will be effective on the date the
request for transfer is received by our Service Center.
If a transfer reduces the value in a variable sub-account or in the fixed
account to less than $1,000, then we reserve the right to transfer the remaining
amount along with the amount requested to be transferred. We will do this
according to the transfer instructions provided by you. Under current law, there
will not be any tax liability for transfers within the policy.
OTHER RESTRICTIONS
We reserve the right without prior notice, to modify, restrict, suspend or
eliminate the transfer privileges at any time and for any reason. For example,
restrictions may be necessary to protect owners from adverse impacts on
portfolio management of large and/or numerous transfers by market timers or
others. We have determined that the movement of significant variable sub-policy
values from one variable sub-account to another may prevent the underlying
portfolio from taking advantage of investment opportunities. This is likely to
arise when the volume of transfers is high, since each portfolio must maintain a
significant cash position in order to handle redemptions. Such movement may also
cause a substantial increase in portfolio transaction costs which must be
indirectly borne by owners. Therefore, we reserve the right to require that all
transfer requests be made by the owner and not by a third party holding a power
of attorney. We also require that each transfer you request be made by a
separate communication to us. We also reserve the right to require that each
transfer request be submitted in writing and be manually signed by owners. We
may choose not to allow telephone or facsimile transfer requests.
DOLLAR COST AVERAGING
Before the annuity date, you may request that amounts be automatically
transferred on a monthly basis from a source account. The source accounts are
currently either the money market sub-account or the fixed account. You can do
this by submitting a request to our Service Center in a form and manner
acceptable to us. Other source accounts may be available. Call our Service
Center for information regarding availability.
You may only dollar cost average from one source account at a time. The
transfers will begin when you request, but no sooner than one week following,
receipt of such request. For new variable annuity policies, dollar cost
averaging transfers will not begin until the later of:
a) 30 days after the policy effective date; or
b) the estimated end of the free look period which allows 5 days for delivery.
Transfers will continue for the number of consecutive months which you selected
unless:
a) you terminate the transfers;
b) we automatically terminate the transfers because there are insufficient
amounts in the source account; or
c) for other reasons that are described in the election form.
You may request that monthly transfers be continued for a specific length of
time. You can do this by giving notice to our Service Center in a form and
manner acceptable to us within 30 days before the last monthly transfer. If you
do not make a request to continue the monthly transfers, this option will
terminate automatically with the last transfer at the end of the length of time
you initially designated.
ELIGIBILITY REQUIREMENTS FOR DOLLAR COST AVERAGING
In order to be eligible for dollar cost averaging, the value of your source
account must be at least $5,000. This limit may be changed for new elections of
this service. Dollar cost averaging transfers can not be made from a source
account from which systematic withdrawals or automatic payouts are also being
made.
Currently, we do not charge for the dollar cost averaging option nor do they
count toward the number of transfers allowed without charge per policy year. We
may charge in the future for dollar cost averaging.
Dollar cost averaging transfers may not be made to or from the fixed account.
Dollar cost averaging may not be elected at the same time that the special
Dollar Cost Averaging option or the automatic asset rebalancing is in effect.
SPECIAL DOLLAR COST AVERAGING OPTION
When you apply for the policy, you may elect to allocate the entire initial
premium to either the six or twelve month special Dollar Cost Averaging account
of the fixed account. The initial premium will be credited with interest at a
guaranteed fixed rate. Amounts will then be transferred from the special Dollar
Cost Averaging account to the variable sub-accounts pro rata on a monthly basis
for six or twelve months (depending on the option you select) in the allocations
you specified when you applied for the policy. The four transfers per year limit
does not apply to the special Dollar Cost Averaging option.
Amounts from the sub-accounts and/or fixed account may not be transferred into
the special Dollar Cost Averaging accounts. In addition, if you request a
transfer (other than a Dollar Cost Averaging transfer) or a withdrawal from a
special Dollar Cost Averaging account, any amounts remaining in the special
account will be transferred to the variable sub-accounts according to your
original allocation instructions. The special Dollar Cost Averaging option will
end and cannot be reelected.
AUTOMATIC ASSET REBALANCING
After premiums have been allocated among the variable sub-accounts, the
performance of each variable sub-account may cause proportions of the values in
the variable sub-accounts to vary from the percentages which you initially
defined. You may instruct us to automatically rebalance the amounts in the
variable account by reallocating amounts among the variable sub-accounts, at the
time, and in the percentages, specified in your instructions to us and accepted
by us. You may elect to have the rebalancing done on an annual, semi-annual or
quarterly basis. You may elect to have amounts allocated among the variable
sub-accounts using whole percentages The fixed account cannot be rebalanced.
You may elect to establish, change or terminate the automatic asset rebalancing
by submitting a request to our Service Center in a form and manner acceptable to
us. Automatic asset rebalancing currently will not count towards the number of
transfers without charge in a policy year. We reserve the right to discontinue
the automatic asset rebalancing service at any time for any reason. There is
currently no charge for the automatic asset rebalancing service. We may charge
for this service in the future, and may count the transfers toward those allowed
without charge.
Automatic asset rebalancing may not be elected at the same time that dollar cost
averaging is in effect.
AFTER THE ANNUITY DATE
If a variable payment option is elected, you may make transfers among variable
sub-accounts after the annuity date by giving a written request to our Service
Center, subject to the following provisions:
a) you may not make any more than four transfers per policy year after the
annuity date; and
b) the minimum amount transferred from one variable sub-account to another is
the amount supporting a current $50 monthly payment.
Transfers among variable sub-accounts after the annuity date will be processed
based on the formula outlined in the appendix in the Statement of Additional
Information. No transfers are allowed into or out of the fixed account.
CASH WITHDRAWALS
If you own a non-qualified policy, you may withdraw all or part of the cash
surrender value at any time before the annuity date by giving a written request
to our Service Center. For qualified policies, you should refer to the terms of
the particular retirement plan or arrangement for any additional limitations or
restrictions, including prohibitions, on cash withdrawals.
The cash surrender value is equal to the policy value, minus any policy fee, and
minus any contingent deferred sales load and applicable premium tax charges. A
full surrender will result in a cash withdrawal payment equal to the cash
surrender value at the end of the valuation period during which the election is
received. It must be received along with all completed forms required at that
time by us. No surrenders or withdrawals may be made after the annuity date.
Partial withdrawals must be at least $1,000.
In the case of a partial withdrawal, you may direct our Service Center to
withdraw amounts from specific variable sub-accounts and/or from the fixed
account. If you do not specify, the withdrawal will be taken pro rata from the
policy value.
A partial withdrawal request cannot be fulfilled if it would reduce your policy
value to less than $2,000. In such instances, you will be notified.
We will generally process any withdrawal requests, including surrender requests,
as of the end of the valuation period during which the request and all completed
forms are received. We will pay any cash withdrawal, settlement option payment
or lump sum death benefit due from the variable account and process of any
transfers within seven days from the date we receive your request. However, we
may postpone such payment if:
o the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the Exchange is otherwise restricted;
o an emergency exists as defined by the Commission, or the Commission
requires that trading be restricted; or
o the Commission permits a delay for the protection of owners.
The withdrawal request will be effective when we receive all required withdrawal
request forms. Payments to you for any monies derived from a premium which you
made by check may be delayed until your check has cleared your bank.
We may delay payment of any withdrawal from the fixed account for up to six
months after we receive the request for such withdrawal. If we delay payment for
more than 30 days, we will pay interest on the withdrawal amount up to the date
of payment.
Since you assume the investment risk for all amounts in the variable account and
because certain withdrawals are subject to a contingent deferred sales load and
other charges, the total amount paid upon surrender of your policy may be more
or less than the total premiums.
You may elect, under the systematic withdrawal option or automatic payout
option, but not both, to withdraw certain amounts on a periodic basis from the
variable sub-accounts before the annuity date.
The tax consequences of a withdrawal or surrender are discussed later in this
prospectus, including that withdrawals and surrenders may be taxable and, if
taken before age 59 1/2, subject to the 10% federal tax penalty.
SYSTEMATIC WITHDRAWAL OPTION
Before the annuity date, you may elect to have withdrawals automatically made
from one or more variable sub-accounts on a monthly basis. Other distribution
modes may be permitted. The withdrawals will not begin until the later of:
a) 30 days after the policy effective date; or
b) the end of the free look period.
Withdrawals will be from the variable sub-accounts and/or the fixed account in
the percentage allocations that you specify. Unless you specify otherwise,
withdrawals will be pro rata from policy value. You cannot make systematic
withdrawals from a variable sub-account from which dollar cost averaging
transfers are being made. Likewise, systematic withdrawals cannot be used at the
same time that the automatic payout option is in effect. To be eligible for the
systematic withdrawal option, the policy value must be at least $12,000 at the
time of election. The minimum monthly amount that can be withdrawn is $100.
Currently you can elect any amount over $100 to be withdrawn systematically.
You may also make partial withdrawals while receiving systematic withdrawals.
If the total of all withdrawals (systematic, automatic or partial) in a policy
year exceeds the allowed amount to be withdrawn without charge for that year,
your policy value will be charged any contingent deferred sales load that may
apply.
The withdrawals will continue indefinitely unless you terminate them. If you
choose to terminate this option, you may not elect to use it again until the end
of the next 12 full months.
We reserve the right to impose an annual fee of up to $25 for processing
payments under this option. This fee, which is currently waived, will be
deducted in equal installments from each systematic withdrawal during a policy
year.
Systematic withdrawals may be taxable and, before age 59 1/2, subject to a 10%
federal tax penalty.
AUTOMATIC PAYOUT OPTION
Before the annuity date, for certain policies other than Roth IRAs, you may
elect the automatic payout option, or APO, to satisfy minimum distribution
requirements under the following sections of the Code:
o 401(a)(9);
o 403(b); and
o 408(b)(3).
For IRAs and SEP/IRAs, this option may be elected no earlier than six months
before the calendar year in which you attain age 70 1/2. Payments may not begin
earlier than January of such calendar year.
For other qualified policies, APO can be elected no earlier than six months
before the later of:
a) when you attain age 70 1/2; or
b) when you retire from employment.
Additionally, APO withdrawals may not begin before the later of:
a) 30 days after the policy effective date; or
b) the end of the free look period.
APO may be elected in any calendar month, but no later than the month of your
84th birthday.
OTHER AUTOMATIC PAYOUT OPTION INFORMATION. Withdrawals will be from the variable
sub-accounts and/or the fixed account you designate and in the percentage
allocations you specify. If you do not indicate otherwise, withdrawals will be
pro rata from policy value. If you take a withdrawal from a variable sub-account
from which you have designated that dollar cost averaging transfers be made,
then the dollar cost averaging option will terminate. The calculation of the APO
amount will reflect the total policy value although the withdrawals are only
from the variable sub-accounts. This calculation and APO are based solely on the
value in this policy.
To be eligible for this option, you must meet the following conditions:
a) your policy value must be at least $12,000 at the time at which you select
this option; and
b) the annual withdrawal amount is the larger of the required minimum
distribution under Code Sections 401(a)(9), 403(b), or 408(b)(3), or $500.
These conditions may change. Currently, withdrawals under this option are only
paid annually.
The withdrawals will continue indefinitely unless you terminate them. If there
are insufficient amounts in the variable account to make a withdrawal, this
option generally will terminate. Once terminated, APO may not be elected again.
DEATH BENEFIT
If an owner dies before the annuity date and any owner is under age 85, the
death benefit will be equal to the greatest of:
a) the policy value; and
b) the sum of all premiums, less withdrawals taken, including any contingent
deferred sales load and the
applicable premium tax charges; and
c) the highest policy value on any policy anniversary before the earlier of
the owner's or joint owner's 85th birthday, plus premiums paid since that
policy anniversary, less withdrawals taken since that policy anniversary,
including any contingent deferred sales load and applicable premium tax
charges.
If an owner dies before the annuity date and after either owner's 85th birthday,
the death benefit will be the greater of:
a) the policy value; and
b) the total of all premiums not previously withdrawn, less withdrawals taken,
including applicable contingent deferred sales loads and applicable premium
tax charges.
For purposes of calculating the death benefit, the policy value is determined as
of the date the benefit is paid.
If the owner is not a natural person, such as a trust, corporation or other
legal entity, an annuitant's death will be treated as the death of an owner for
purposes of the death benefit.
PAYMENT OF DEATH BENEFIT
We will generally pay the death benefit when we receive proof of death of an
owner. Once we receive this proof, and the beneficiary has selected a method of
settlement, the death benefit generally will be paid within seven days, or as
soon thereafter as we have sufficient information to make the payment.
The death benefit will be determined as of the end of the valuation period
during which our Service Center receives:
a) proof of death of the owner or joint owner; and
b) the written notice of the settlement option elected by the person to whom
the death benefit is payable.
If no settlement method is elected, the death benefit will be a lump sum
distributed within five years after an owner's death. No contingent deferred
sales load will apply.
Until the death benefit is paid, the policy value allocated to the variable
account fluctuates with investment performance of the applicable portfolios. For
this reason, the amount of the death benefit depends on the policy value at the
time the death benefit is paid, not at the time of death.
DESIGNATION OF BENEFICIARIES
You may select one or more beneficiaries by designating the person or persons to
receive the amounts payable under the policy. The persons you designate will
receive the percentage you establish if:
o you die before the annuity date and there is no joint owner; or
o you die after the annuity date and settlement option payments have begun
under a selected settlement option that guarantees payments for a certain
period of time.
If a beneficiary dies before the owner, that beneficiary's interest in the
annuity will end upon his or her death.
A beneficiary may be named or changed at any time in a form and manner
acceptable to us. Any change made to an irrevocable beneficiary must also
include the written consent of the beneficiary, except as otherwise required by
law.
If more than one beneficiary is named, each named beneficiary will share equally
in any benefits or rights granted by the policy unless the owner gives us other
instructions at the time the beneficiaries are named.
We may rely on any affidavit by any responsible person in determining the
identity or non-existence of any beneficiary not identified by name.
DEATH OF OWNER OR JOINT OWNER BEFORE THE ANNUITY DATE
If the owner or joint owner dies before the annuity date, we will pay the death
benefit as specified in this section. The entire death benefit must be
distributed within five years after the owner's death. If the owner is not an
individual, an annuitant's death will be treated as the death of the owner as
provided in Code Section 72 (s)(6). The policy will remain in force with the
annuitant's surviving spouse as the new annuitant, however, if:
o the policy is owned by a trust; and
o the beneficiary is either the annuitant's surviving spouse, or a trust
holding the policy solely for the benefit of such spouse.
The manner in which we will pay the death benefit depends on the status of the
persons involved in the policy. The death benefit will be payable to the first
person from the applicable list below:
If the owner is the annuitant:
o the joint owner, if any; or
o the beneficiary, if any
If the owner is not the annuitant:
o the joint owner, if any; or
o the beneficiary, if any; or
o the annuitant; or
o the joint annuitant; if any.
If the death benefit is payable to the owner's surviving spouse, or to a trust
for the sole benefit of such surviving spouse, we will continue the policy with
the owner's spouse as the new annuitant (if the owner was the annuitant) and the
new owner (if applicable), unless such spouse selects another option as provided
below.
If the death benefit is payable to someone other than the owner's surviving
spouse, we will pay the death benefit in a lump sum payment to, or for the
benefit of, such person within five years after the owner's death, unless such
person or persons selects another option as provided below.
In lieu of the automatic form of death benefit specified above, the person or
persons to whom the death benefit is payable may elect to receive it:
o in a lump sum; or
o as settlement option payments, provided the person making the election is
an individual. Such payments must begin within one year after the owner's
death and must be in equal amounts over a period of time not extending
beyond the individual's life or life expectancy.
Election of either option must be made no later than 60 days before the one-year
anniversary of the owner's death. Otherwise, the death benefit will be settled
under the appropriate automatic form of benefit specified above.
If the person to whom the death benefit is payable dies before the entire death
benefit is paid, we will pay the remaining death benefit in a lump sum to the
payee named by such person or, if no payee was named, to such person's estate.
If the death benefit is payable to a non-individual, subject to the special rule
for a trust for the sole benefit of a surviving spouse, we will pay the death
benefit in a lump sum within one year after the owner's death.
IF THE ANNUITANT DIES BEFORE THE ANNUITY DATE
If an owner and an annuitant are not the same individual and the annuitant, or
the last of joint annuitants, dies before the annuity date, the owner will
become the annuitant until a new annuitant is selected.
DEATH AFTER THE ANNUITY DATE
If an owner or the annuitant dies after the annuity date, any amounts payable
will continue to be distributed at least as rapidly as under the settlement and
payment option then in effect on the date of death.
Upon the owner's death after the annuity date, any remaining ownership rights
granted under the policy will pass to the person to whom the death benefit would
have been paid if the owner had died before the annuity date, as specified
above.
SURVIVAL PROVISION
The interest of any person to whom the death benefit is payable who dies at the
time of, or within 30 days after, the death of the owner will also terminate if
no benefits have been paid to such beneficiary, unless the owner had given us
written notice of some other arrangement.
CHARGES, FEES AND DEDUCTIONS
No deductions are currently made from premiums, although we reserve the right to
charge for any applicable premium tax charges. Therefore, the full amount of the
premiums are invested in one or more of the variable sub-accounts and/or the
fixed account.
CONTINGENT DEFERRED SALES LOAD/
SURRENDER CHARGE
No deduction for sales charges is made from premiums at the time they are made.
However, a contingent deferred sales load, or surrender charge, of up to 6% of
premiums may be imposed on certain withdrawals or surrenders. This charge is
designed to partially cover certain expenses incurred by us relating to the sale
of the policy, including commissions paid to salespersons, the costs of
preparation of sales literature and other promotional costs and acquisition
expenses.
The contingent deferred sales load/surrender charge percentage varies according
to the number of years between when a premium was credited to the policy and
when the withdrawal is made. The amount of this charge is determined by
multiplying the amount withdrawn that is subject to the charge by the contingent
deferred sales load percentage according to the following table. In no event
will the total contingent deferred sales load/surrender charge assessed against
the policy exceed 6% of the total premiums.
CONTINGENT
DEFERRED
NUMBER OF YEARS SALES LOAD AS A
SINCE RECEIPT OF PERCENTAGE OF
PREMIUM PREMIUM
- ------- -------
Less than 2 years 6%
2 years but less than 3 years 5%
3 years but less than 4 years 5%
4 years but less than 5 years 4%
5 years but less than 6 years 4%
6 years but less than 7 years 2%
7 years or more 0%
FREE WITHDRAWALS-ALLOWED AMOUNT
Beginning 30 days after the policy effective date, or the end of the free look
period, if later, you may make a withdrawal up to the allowed amount without
incurring a contingent deferred sales load/surrender charge each policy year
before the annuity date.
For policies purchased on or after December 8, 1999, the allowed amount each
policy year is equal to:
a) during the first policy year, the greater of:
o accumulated earnings not previously withdrawn; or
o 15% of the total premiums received as of the date of withdrawal; and
b) after the first policy year, the greater of:
o accumulated earnings not previously withdrawn; or
o 15% of premiums received less than seven years old, determined as of the
last policy anniversary.
Withdrawals will be made first from earnings and then from premiums on a
first-in/first-out basis. If an allowed amount is not withdrawn during a policy
year, it does not carry over to the next policy year.
Premiums not previously withdrawn that have been held at least seven full policy
years and accumulated earnings, if any, not previously withdrawn may be
withdrawn without charge.
For policies purchased before December 8, 1999, the allowed amount each policy
year is equal to:
o 15% of the total premiums received during the last seven years determined
as of the last policy anniversary; minus
o any withdrawals during the present policy year.
In the first policy year, the 15% will be applied to total premiums received at
the time of the first withdrawal.
Withdrawals will be made first from premiums on a first-in/first-out basis and
then from earnings. If the allowed amount is not fully withdrawn or paid out
during a policy year, it does not carry over to the next policy year.
Premiums not previously withdrawn that have been held at least seven full policy
years and accumulated earnings, if any, not previously withdrawn may be
withdrawn without charge.
OTHER FREE WITHDRAWALS
In addition, no contingent deferred sales load is assessed:
o upon annuitization after the first policy year to an option involving life
contingencies; or
o upon payment of the death benefit before the annuity date.
Any applicable contingent deferred sales load will be deducted from the amount
requested for both partial withdrawals, including withdrawals under the
systematic withdrawal option or the APO, and full surrenders, unless you elect
to add the amount of the applicable load to the amount requested for a partial
withdrawal to cover the applicable contingent deferred sales load.
ADMINISTRATIVE CHARGES
POLICY FEE. At the end of each policy year and before the annuity date, we
deduct an annual policy fee as partial compensation for expenses relating to the
issue and maintenance of the policy and the variable account. The annual policy
fee is equal to the lesser of $30 or 2% of the policy value. If the policy is
surrendered, the policy fee, unless waived, will be deducted from a full
surrender before the application of any contingent deferred sales load. The
policy fee will be deducted on a pro rata basis, based on values, from the
policy value. The fee deductions will be based on both the variable sub-accounts
and the fixed account. We will waive the policy fee for a policy year if the
policy value exceeds $50,000 on the last business day of that policy year or as
of the date you surrender the policy.
ANNUITY FEE. After the annuity date, we deduct an annual annuity fee of $30 to
help cover processing costs. This fee will be deducted in equal amounts from
each variable payment made during the year. This fee is $2.50 each month if
monthly payments are made. This fee will not be changed. No annuity fee will be
deducted from fixed payments. This fee may be waived.
ADMINISTRATIVE EXPENSE CHARGE. We also make a daily deduction for the
administrative expense charge from the variable account before the annuity date
at an effective current annual rate of 0.15% of assets held in each variable
sub-account to reimburse us for administrative expenses. We have the ability in
most states to increase or decrease this charge, but the charge is guaranteed
not to exceed 0.35%. We will provide 30 days written notice of any change in
fees. The administrative charges do not bear any relationship to the actual
administrative costs of a particular policy. The administrative expense charge
is reflected in the variable accumulation or variable annuity unit values for
each variable sub-account.
MORTALITY AND EXPENSE RISK CHARGE
Before the annuity date, we deduct a charge for bearing certain mortality and
expense risks under the policies. This is a daily charge at an effective annual
rate of 1.20% of the assets in the variable account. We guarantee that this
charge of 1.20% will never increase. The mortality and expense risk charge is
reflected in the variable accumulation and variable annuity unit values for each
variable sub-account.
Variable accumulated values and variable settlement option payments are not
affected by changes in actual mortality experience incurred by us. The mortality
risks assumed by us arise from our contractual obligations to make settlement
option payments determined in accordance with the settlement option tables and
other provisions contained in the policy and to pay death benefits before the
annuity date.
The expense risk assumed by us is the risk that our actual expenses in
administering the policies and the variable account will exceed the amount
recovered through the administrative expense charge, policy fees, transfer fees
and any fees imposed for certain options and services.
If the mortality and expense risk charge is insufficient to cover actual costs
and risks assumed, we will bear these losses. If this charge is more than
sufficient, any excess will accrue to us. Currently, we expect a profit from
this charge.
We anticipate that the contingent deferred sales load will not generate
sufficient funds to pay the cost of distributing the policies. To the extent
that the contingent deferred sales load is insufficient to cover the actual cost
of policy distribution, the deficiency will be met from our general corporate
assets which may include amounts, if any, derived from the mortality and expense
risk charge.
PREMIUM TAX CHARGES
New York currently has no premium tax or retaliatory tax. If New York imposes
these taxes in the future, or if you become a resident of a state where such
taxes apply, we reserve the right to deduct a charge for these premium taxes
from premium payments, from amounts withdrawn, or from amounts applied on the
annuity date.
TRANSFER FEE
We currently impose a fee for each transfer in excess of the first 18 in a
single policy year. We will deduct the charge from the amount transferred. This
fee is $10 and will be used to help cover our costs of processing transfers. We
reserve the right to waive this fee or to not count transfers under certain
options and services as part of the number of allowed annual transfers without
charge.
OPTION AND SERVICE FEES
We reserve the right to impose reasonable fees for administrative expenses
associated with processing certain options and services. These fees would be
deducted from each use of the option or service during a policy year.
TAXES
No charges are currently made for taxes. However, we reserve the right to deduct
charges in the future for federal, state, and local taxes or the economic burden
resulting from the application of any tax laws that we determine to be
attributable to the policies.
PORTFOLIO EXPENSES
The value of the assets in the variable account reflects the value of portfolio
shares and therefore the fees and expenses paid by each portfolio. For more
information, see the portfolios' prospectuses.
SALES IN SPECIAL SITUATIONS
We may sell the policies in special situations that are expected to involve
reduced expenses for us. These instances may include sales:
o in certain group arrangements, such as employee savings plans;
o to current or former officers, directors and employees, and their families,
of Transamerica and its affiliates;
o to officers, directors, and employees, and their families, and the
portfolios' investment advisers and their affiliates; or
o to officers, directors, employees and sales agents also known as registered
representatives, and their families, and broker-dealers and other financial
institutions that have sales agreements with us to sell the policies.
In these situations:
a) the contingent deferred sales load may be reduced or waived;
b) the mortality and expense risk charge or administration charges may be
reduced or waived; and/or
c) certain amounts may be credited to the policy value (for examples, amounts
related to commissions or sales compensation otherwise payable to a
broker-dealer may be credited to the policy value.
These reductions in fees or charges or credits to policy value will not unfairly
discriminate against any policy owner. These reductions in fees or charges or
credits to policy value may be taxable and treated as premiums for purposes of
income tax and any possible premium tax charge.
DISTRIBUTION OF THE POLICY
Transamerica Securities Sales Corporation (TSSC), is the principal underwriter
of the policies under a Distribution Agreement with Transamerica. TSSC may also
serve as an underwriter and distributor of other policies issued through the
variable account and certain other separate accounts of Transamerica and
affiliates of Transamerica. TSSC is an indirect wholly-owned subsidiary of
Transamerica Corporation, a subsidiary of AEGON, N.V. TSSC is registered with
the Commission as a broker/dealer and is a member of the National Association of
Securities Dealers, Inc. (NASD). Its principal offices are located at 1150 South
Olive Street, Los Angeles, California 90015. TSSC may enter into sales
agreements with broker/dealers to solicit applications for the policies through
registered representatives who are licensed to sell securities and variable
insurance products.
Under the Sales Agreements, TSSC will pay broker-dealers compensation based on a
percentage of each premium. The percentage may be up to 5.75%, and in certain
situations additional amounts for marketing allowances, production bonuses,
service fees, sales awards and meetings, and asset based trailer commissions may
be paid. The compensation amounts paid broker-dealers by TSSC are not deducted
directly from or directly reduce a policy's value.
SETTLEMENT OPTION PAYMENTS
ANNUITY DATE
The annuity date is the date that the annuitization phase of the policy begins.
On the annuity date, we will apply the annuity amount, defined below, to provide
payments under the settlement option you select. You select the annuity date
which you may change from time to time by giving notice to our Service Center in
a form and manner acceptable to us. Notice of each change must be received by
our Service Center at least 30 days before the then-current annuity date. The
annuity date cannot be earlier than the first policy anniversary except for
certain qualified policies.
The latest annuity date which may be elected is the first day of the calendar
month immediately preceding the month of the annuitant's or joint annuitants'
85th birthday.
The annuity date must be the first day of a calendar month. The first settlement
option payment will be on the first day of the month immediately following the
annuity date. Certain qualified policies may have restrictions as to the annuity
date and the types of settlement options available.
ANNUITY AMOUNT
The annuity amount is the policy value, minus any applicable contingent deferred
sales load and any applicable premium tax charges. Any contingent deferred sales
load will be waived if the settlement option payments involve life contingencies
and begin on or after the first policy anniversary.
If the amount of the monthly payment from the settlement option you selected
would result in a monthly settlement option payment of less than $20, or if the
annuity amount is less than $2,000, we reserve the right to offer a less
frequent mode of payment or pay the cash surrender value in a cash payment.
Monthly settlement option payments from the variable payment option will further
be subject to a minimum monthly payment of $50 from each variable sub-account
from which such payments are made.
SETTLEMENT OPTION PAYMENTS
You may choose from the settlement options below. We may consent to other plans
of payment before the annuity date. For settlement options involving life
contingencies, the actual age and/or sex of the annuitant, or a joint annuitant
will affect the amount of each payment. Sex-distinct rates generally are not
allowed under certain qualified policies and in some jurisdictions. We reserve
the right to ask for satisfactory proof of the annuitant's or joint annuitant's
age. We may delay settlement option payments until satisfactory proof is
received. Since payments to older annuitants are expected to be fewer in number,
the amount of each annuity payment shall be greater for older annuitants than
for younger annuitants.
You may choose from the two payment options described below. The annuity date
and settlement options available for qualified policies may also be controlled
by endorsements, the plan or applicable law.
ELECTION OF SETTLEMENT OPTION FORMS AND
PAYMENT OPTIONS
Before the annuity date, and while the annuitant is living, you may, by written
request, change the settlement option or payment option. The request for change
must be received by our Service Center at least 30 days before the annuity date.
In the event that a settlement option form and payment option is not selected at
least 30 days before the annuity date, we will make settlement option payments
according to the 120 month period certain and life settlement option and the
applicable provisions of the policy.
PAYMENT OPTIONS
You may elect a fixed or a variable payment option, or a combination of both, in
25% increments of the annuity amount.
Unless specified otherwise, the annuity amount in the variable account will be
used to provide a variable payment option and the amount in the fixed account
will be used to provide a fixed payment option. In this event, the initial
allocation of variable annuity units for the variable sub-accounts will be in
proportion to the policy value in the variable sub-accounts on the annuity date.
FIXED PAYMENT OPTION
A fixed payment option provides for payments which will remain constant
according to the terms of the settlement option you select. If you select a
fixed payment option, the portion of the annuity amount used to provide that
payment option will be transferred to the general account assets of
Transamerica. The amount of payments will be established by the fixed settlement
option which you select and by the age and sex, if sex-distinct rates are
allowed by law, of the annuitants. Payment amounts will not reflect investment
performance after the annuity date. The fixed payment amounts are determined by
applying the fixed settlement option purchase rate, which is specified in the
policy, to the portion of the annuity amount applied to the payment option.
Payments may vary after the death of an annuitant under some options; the
amounts of variances are fixed on the annuity date.
VARIABLE PAYMENT OPTION
A variable payment option provides for payments that vary in dollar amount,
based on the investment performance of the selected variable sub-accounts. The
variable settlement option purchase rate tables in the policy reflect an
assumed, but not guaranteed, annual interest rate of 5.35%. If the actual net
investment performance of the variable sub-accounts is less than 5.35%, then the
dollar amount of the actual payments will decrease. If the actual net investment
performance of the variable sub-accounts is higher than 5.35%, then the dollar
amount of the actual payments will increase. If the net investment performance
exactly equals the 5.35% rate, then the dollar amount of the actual payments
will remain constant. We may offer other assumed annual interest rates.
Variable payments will be based on the variable sub-accounts you select, and on
the monies which you allocate among them.
For further details as to the determination of variable payments, see the
Statement of Additional Information.
SETTLEMENT OPTION FORMS
As owner, you may choose any of the settlement option forms described below.
Subject to our approval, you may select any other settlement option forms
offered by us in the future.
1. Life Annuity. Payments start on the first day of the month immediately
following the annuity date, if --------------------- the annuitant is living.
Payments end with the payment due just before the annuitant's death. There is no
death benefit. It is possible that no payment will be made if the annuitant dies
after the annuity date but before the first payment is due; only one payment
will be made if the annuitant dies before the second payment is due, and so
forth.
2. Life and Contingent Annuity. Payments start on the first day of the month
immediately following the annuity --------------------------- date, if the
annuitant is living. Payments will continue for as long as the annuitant lives.
After the annuitant dies, payments will be made to the contingent annuitant for
as long as the contingent annuitant lives. The continued payments can be in the
same amount as the original payments, or in an amount equal to one-half or
two-thirds thereof. Payments will end with the payment due just before the death
of the contingent annuitant. There is no death benefit after both die. If the
contingent annuitant does not survive the annuitant, payments will end with the
payment due just before the death of the annuitant. It is possible that no
payments or very few payments will be made, if the annuitant and contingent
annuitant die shortly after the annuity date.
The written request for this form must:
a) name the contingent annuitant; and
b) state the percentage of payments to be made after the annuitant dies.
Once payments start under this settlement option form, the person named as
contingent annuitant for purposes of being the measuring life, may not be
changed. We will require proof of age for the annuitant and for the
contingent annuitant before payments start.
3. Life Annuity With Period Certain. Payments start on the first day of the
month immediately following the -------------------------------- annuity date,
if the annuitant is living. Payments will be made for the longer of:
a) the annuitant's life; or
b) the period certain
The period certain may be 120, 180 or 240 months.
If the annuitant dies after all payments have been made for the period
certain, payments will cease with the payment that is paid just before the
annuitant dies. No death benefit will then be payable to the beneficiary.
If the annuitant dies during the period certain, the rest of the period
certain payments will be made to the beneficiary, unless you provide
otherwise.
The written request for this form must:
a) state the length of the period certain; and
b) name the beneficiary.
4. Joint and Survivor Annuity. Payments will be made starting on the first day
of the month immediately following the annuity date, if and for as long as
the annuitant and joint annuitant are living. After the annuitant or joint
annuitant dies, payments will continue as long as the survivor lives.
Payments end with the payment due just before the death of the survivor.
The continued payments can be in the same amount as the original payments,
or in an amount equal to one-half or two-thirds thereof. It is possible
that no payments or very few payments will be made under this arrangement
if the annuitant and joint annuitant both die shortly after the annuity
date.
The written request for this form must:
a) name the joint annuitant; and
b) state the percentage of continued payments to be made upon the first death.
Once payments start under this settlement option form, the person named as
joint annuitant, for the purpose of being the measuring life, may not be
changed. We will need proof of age for the annuitant and joint annuitant
before payments start.
5. Other Forms of Payment. We can provide benefits under any other settlement
option not described in this section as long as we agree to these options
and they comply with any applicable state or federal law or regulation.
Requests for any other settlement option must be made in writing to our
Service Center at least 30 days before the annuity date.
After the annuity date:
a) you will not be allowed to make any changes in the settlement option and
payment option;
b) no additional premiums will be accepted under the policy; and
c) no further withdrawals will be allowed for fixed payment options or for
variable payment options under which payments are being made based on life
contingencies.
As the owner of a non-qualified policy, you may, at any time after the policy
date, write to us at our Service Center to change the payee of benefits being
provided under the policy. The effective date of change in payee will be the
later of:
a) the date we receive the written request for such change; or
b) the date specified by you.
As the owner of a qualified policy, you may not change payees, except as
permitted by the retirement plan, arrangement or federal law.
FEDERAL TAX MATTERS
INTRODUCTION
The following discussion is a general description of federal tax considerations
for U.S. persons relating to the policy and is not intended as tax advice. This
discussion is not intended to address the tax consequences resulting from all of
the situations in which a person may be entitled to or may receive a
distribution under the policy. If you are concerned about these tax
implications, you should consult a competent tax adviser before initiating any
transaction. This discussion is based upon our understanding of the present
federal income tax laws as they are currently interpreted by the Internal
Revenue Service, or IRS. No representation is made as to the likelihood of the
continuation of the present federal income tax laws or of the current
interpretation by the IRS. Moreover, no attempt has been made to consider any
applicable state or other tax laws. If a prospective owner is not a U.S. person,
see Policies Purchased by Nonresident Aliens and Foreign Corporations below.
The policy may be purchased on a non-tax qualified basis, as a non-qualified
policy, or purchased and used in connection with plans or arrangements
qualifying for special tax treatment as a qualified policy. Qualified policies
are designed for use in connection with plans or arrangements entitled to
special income tax treatment under Code Sections 401, 403(b), 408 and 408A. The
ultimate effect of federal income taxes on the amounts held under a policy, on
settlement option payments, and on the economic benefit to the owner, the
annuitant, or the beneficiary may depend on:
o the type of retirement plan or arrangement for which the policy is
purchased;
o the tax and employment status of the individual concerned; or
o our tax status.
In addition, certain requirements must be satisfied when purchasing a qualified
policy with proceeds from a tax qualified retirement plan or other arrangement.
Certain requirements must also be met when receiving distributions from a
qualified policy, in order to continue receiving favorable tax treatment.
Therefore, purchasers of qualified policies should seek competent legal and tax
advice regarding the suitability of the policy for their individual situation,
the applicable requirements, and the tax treatment of the rights and benefits of
the policy. The following discussion is based on the assumption that the policy
qualifies as an annuity for federal income tax purposes and that all premiums
made to qualified policies are in compliance with all requirements under the
Code and the specific retirement plan or arrangement.
PREMIUMS
At the time the initial premium is paid, as prospective purchaser, you must
specify whether you are purchasing a non-qualified policy or a qualified policy.
If the initial premium is derived from an exchange, transfer, conversion or
surrender of another annuity policy, we may require that the prospective
purchaser provide information regarding the federal income tax status of the
previous annuity policy. We require that persons purchase separate policies if
they desire to invest monies qualifying for different annuity tax treatment
under the Code. Each such separate policy requires the minimum initial premium
previously described. Additional premiums under a policy must qualify for the
same federal income tax treatment as the initial premium under the policy. We
will not accept an additional premium under a policy if the federal income tax
treatment of such premium would be different from that of the initial premium.
TAXATION OF ANNUITIES
IN GENERAL. Code Section 72 governs taxation of annuities in general. We believe
that an owner who is a natural person generally is not taxed on increases in the
value of a policy until distribution occurs by withdrawing all or part of the
policy value for example, via withdrawals or settlement option payments. For
this purpose, the assignment, pledge, or agreement to assign or pledge any
portion of the policy value, and in the case of a qualified policy, any portion
of an interest in the plan, generally will be treated as a distribution. The
taxable portion of a distribution is taxable as ordinary income.
The owner of any policy who is not a natural person generally must include in
income any increase in the excess of the policy value over the "investment in
the policy" during the taxable year. There are some exceptions to this rule and
a prospective owner that is not a natural person should discuss these with a
competent tax adviser.
The following discussion generally applies to a policy owned by a natural
person.
WITHDRAWALS. For non-qualified policies, partial withdrawals, including
withdrawals under the systematic withdrawal option, are generally treated as
taxable income to the extent that the policy value immediately before the
withdrawal exceeds the investment in the policy at that time. The investment in
the policy generally equals the amount of non-deductible premiums made.
For withdrawals from qualified policies, including withdrawals under the
systematic withdrawal option or the automatic payout option, a ratable portion
of the amount received is taxable, generally based on the ratio of the
investment in the policy to the individual's total accrued benefit under the
retirement plan or arrangement. The investment in the policy generally equals
the amount of non-deductible premiums made by or on behalf of any individual.
For certain qualified policies, the investment in the policy can be zero.
Special tax rules applicable to certain distributions from qualified policies
are discussed below, under Qualified Policies.
Full surrenders are treated as taxable income to the extent that the amount
received exceeds the investment in the policy.
SETTLEMENT OPTION PAYMENTS. Although the tax consequences may vary depending on
the settlement option elected under the policy, in general a ratable portion of
each payment that represents the amount by which the policy value exceeds the
investment in the policy will be taxed based on the ratio of the investment in
the policy to the total benefit payable. After the investment in the policy is
recovered, the full amount of any additional settlement option payments is
taxable.
For variable payments, the taxable portion is generally determined by an
equation that establishes a specific dollar amount of each payment that is not
taxed. The dollar amount is determined by dividing the investment in the policy
by the total number of expected periodic payments. However, the entire
distribution will be taxable once the recipient has recovered the dollar amount
of his or her investment in the policy.
For fixed payments, in general there is no tax on the portion of each payment
which represents the same ratio that the investment in the policy bears to the
total expected value of the payments for the term selected. However, the
remainder of each settlement option payment is taxable. Once the investment in
the policy has been fully recovered, the full amount of any additional
settlement option payments is taxable. If settlement option payments cease as a
result of an annuitant's death before full recovery of the investment in the
policy, consult a competent tax adviser regarding deductibility of the
unrecovered amount.
WITHHOLDING. The Code requires us to withhold federal income tax from
withdrawals. However, except for certain qualified policies, an owner will be
entitled to elect, in writing, not to have tax withholding apply. Withholding
applies to the portion of the distribution which is includible in income and
subject to federal income tax. The federal income tax withholding rate is 10%,
or 20% in the case of certain qualified plans, of the taxable amount of the
distribution. Withholding applies only if the taxable amount of the distribution
is at least $200. Some states also require withholding for state income taxes.
The withholding rate varies according to the type of distribution and the
owner's tax status. Eligible rollover distributions from Section 401(a) plans
and Section 403(b) tax sheltered annuities are subject to mandatory federal
income tax withholding at the rate of 20%. An eligible rollover distribution is
the taxable portion of any distribution from such a plan, except for certain
distributions or settlement option payments made in a specified form. The 20%
mandatory withholding does not apply, however, for certain direct rollovers to
other plans or arrangements.
The federal income tax withholding rate for a distribution that is not an
eligible rollover distribution is 10% of the taxable amount of the distribution.
If distributions are delivered to foreign countries, federal income tax will
generally be withheld at a 10% rate unless you certify to us that you are not a
U.S. citizen residing abroad or a tax avoidance expatriate as defined in Code
Section 877. Such certification may result in mandatory withholding of federal
income taxes at a different rate.
PENALTY TAX. A federal income tax penalty equal to 10% of the amount treated as
taxable income may be imposed. In general, however, there is no penalty tax on
distributions:
a) made on or after the date on which the owner attains age 59 1/2;
b) made as a result of death or disability of the owner; or
c) received in substantially equal periodic payments as a life annuity or a
joint and survivor annuity for the life(ves) or life expectancy(ies) of the
owner and a designated beneficiary.
Other exceptions to the tax penalty may apply to certain distributions from a
qualified policy.
TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed from the policy
because of the death of an owner. Generally such amounts are includible in the
income of the recipient as follows:
a) if distributed in a lump sum, they are taxed in the same manner as a full
surrender as described above; or
b) if distributed under a settlement option, they are taxed in the same manner
as settlement option payments, as described above.
For these purposes, the investment in the policy is not affected by the owner's
death. That is, the investment in the policy remains the amount of any premiums
paid which are not excluded from gross income.
TRANSFERS, ASSIGNMENTS, OR EXCHANGES OF THE POLICY. For non-qualified policies,
a transfer of ownership of a policy, the designation of an annuitant, payee, or
other beneficiary who is not also the owner, or the exchange of a policy may
result in certain tax consequences to the owner that are not discussed herein.
An owner contemplating any such designation, transfer, assignment, or exchange
should contact a competent tax adviser with respect to the potential tax effects
of such a transaction. Qualified policies may not be assigned or transferred,
except as permitted by the Code or ERISA.
MULTIPLE POLICIES. All deferred non-qualified policies that are issued by
Transamerica or its affiliates to the same owner during any calendar year are
treated as one policy for purposes of determining the amount includible in gross
income under Code Section 72(e). In addition, the Treasury Department has
specific authority to issue regulations that prevent the avoidance of Section
72(e) through the serial purchase of policies or otherwise. Congress has also
indicated that the Treasury Department may have authority to treat the
combination purchase of an immediate annuity policy and separate deferred
annuity policies as a single annuity policy under its general authority to
prescribe rules that may be necessary to enforce the income tax laws.
QUALIFIED POLICIES
IN GENERAL. The qualified policies are designed for use with several types of
retirement plans and arrangements. The tax rules applicable to participants and
beneficiaries in retirement plans or arrangements vary according to the type of
plan and the terms and conditions of the plan. Special tax treatment may be
available for certain types of contributions and distributions. Adverse tax
consequences may result from contributions in excess of specified limits;
distributions before age 59 1/2, subject to certain exceptions; distributions
that do not conform to specified commencement and minimum distribution rules;
and in other specified circumstances.
We make no attempt to provide more than general information about use of the
policies with the various types of retirement plans. Owners and participants
under retirement plans, as well as annuitants and beneficiaries, are cautioned
that the rights of any person to any benefits under qualified policies may be
subject to the terms and conditions of the plans themselves, regardless of the
terms and conditions of the policy (including any endorsements) issued in
connection with such a plan. Some retirement plans are subject to distribution
and other requirements that are not incorporated in the administration of the
policies. Owners are responsible for determining that contributions and other
transactions with respect to the policies satisfy applicable law. Purchasers of
policies for use with any retirement plan should consult their legal counsel and
tax adviser regarding the suitability of the policy.
For qualified plans under Section 401(a), 403(a) and 403(b), the Code requires
that distributions generally must begin no later than the later of April 1 of
the calendar year following the year in which the owner:
a) reaches age 70 1/2; or
b) retires.
If the plan participant is a 5 percent owner, as defined in the Code,
distributions generally must begin no later than April 1 of the calendar year
following the calendar year in which the participant reaches age 70 1/2.
For IRAs and SEP/IRAs described in Section 408, distributions generally must
begin no later than the later of April 1 of the calendar year following the
calendar year in which the owner or plan participant reaches age 70 1/2. Roth
IRAs under Section 408A do not require distributions at any time before the
owner's death.
QUALIFIED PENSION AND PROFIT SHARING PLANS. Code Section 401(a) permits
employers to establish various types of retirement plans for employees. Such
retirement plans may permit the purchase of the policy in order to provide
retirement savings under the plans. Adverse tax consequences to the plan, to the
participant or to both may result if this policy is assigned or transferred to
any individual as a means to provide benefits payments. If you are buying a
policy for use with such plans, you should seek competent advice. Advice you
receive should address the suitability of the proposed plan documents and the
policy to your specific needs.
INDIVIDUAL RETIREMENT ANNUITIES (IRA), SIMPLIFIED EMPLOYEE PLANS (SEP) AND ROTH
IRAS. The sale of a policy for use with any IRA may be subject to special
disclosure requirements of the IRS, which are included as APPENDIX E -
DISCLOSURE STATEMENT - Individual Retirement Annuities. If you purchase a policy
for use with an IRA, you will be provided with another copy of the Disclosure
Statement for Individual Retirement Annuities.
You will have the right to cancel your purchase within 7 days of whichever is
earliest:
a) the establishment of your IRA; or
b) your purchase.
If you intend to make such a purchase, you should seek competent advice as to
the suitability of the policy you are considering purchasing for use with an
IRA.
The policy is designed for use with traditional IRA rollovers and contributory
IRAs. A contributory IRA is a policy to which initial and subsequent premiums
are subject to limitations imposed by the Code. Code Section 408 permits
eligible individuals to contribute to an individual retirement program known as
an Individual Retirement Annuity or Individual Retirement Account, or IRA. Also,
distributions from certain other types of qualified plans may be rolled over on
a tax-deferred basis into an IRA.
Earnings in an IRA are not taxed until distributed. IRA contributions are
limited each year to the lesser of $2,000 or 100% of the owner's compensation,
including earned income as defined in Code Section 401(c)(2). These
contributions may be deductible in whole or in part depending on the
individual's adjusted gross income and whether or not the individual is
considered an active participant in a qualified plan. The limit on the amount
contributed to an IRA does not apply to distributions from certain other types
of qualified plans that are rolled over on a tax-deferred basis into an IRA.
Amounts in the IRA, other than nondeductible contributions, are taxed when
distributed from the IRA. Distributions before age 59 1/2, unless certain
exceptions apply, are subject to a 10% penalty tax.
Eligible employers that meet specified criteria under Code Section 408(k) could
establish simplified employee pension plans, or SEP/IRAs, for their employees
using IRAs. Employer contributions that may be made to such plans are larger
than the amounts that may be contributed to regular IRAs, and may be deductible
to the employer. SEP/IRAs are subject to certain Code requirements regarding
participation and amounts of contributions.
The policy may also be used for Roth IRA conversions and contributory Roth IRAs.
A contributory Roth IRA is a policy to which initial and subsequent premiums are
subject to limitations imposed by the Code. Code Section 408A permits eligible
individuals to contribute to an individual retirement program known as a Roth
IRA, although contributions are not tax deductible. In addition, distributions
from a non-Roth IRA may be converted to a Roth IRA. A non-Roth IRA is an
individual retirement account or annuity described in Section 408(a) or 408(b),
other than a Roth IRA. Distributions from a Roth IRA generally are not taxed,
except that, once total distributions exceed contributions to the Roth IRA,
income tax and a 10% penalty tax may apply to distributions you take:
a) before age 59 1/2, subject to certain exceptions; or
b) during the five taxable years starting with the year in which you first
contributed to a Roth IRA.
If you intend to purchase such a policy, you should seek competent advice as to
the suitability of the policy for use with Roth IRAs.
TAX SHELTERED ANNUITIES. Under Code Section 403(b), payments made by public
school systems and certain tax exempt organizations to purchase annuity policies
for their employees are excludable from the gross income of the employee,
subject to certain limitations. However, these payments may be subject to Social
Security and Medicare (FICA) taxes.
Code Section 403(b)(11) restricts the distribution under Code Section 403(b)
annuity policies of:
a) elective contributions made in years beginning after December 31, 1988;
b) earnings on those contributions; and
c) earnings in such years on amounts held as of the last year beginning before
January 1, 1989.
Distribution of those amounts may only occur upon death of the employee,
attainment of age 59 1/2, separation from service, disability, or financial
hardship. In addition, income attributable to elective contributions may not be
distributed in the case of hardship.
Pre-1989 contributions and earnings through December 31, 1989 are not subject to
the restrictions described above. However, funds transferred to a qualified
policy from a Section 403(b)(7) custodial account will be subject to the
restrictions.
RESTRICTIONS UNDER QUALIFIED POLICIES. There may be other restrictions that
apply to the election, commencement, or distribution of benefits under qualified
policies, or under the terms of the plans under which policies are issued. A
qualified policy will be amended as necessary to conform to the requirements of
the Code.
POLICIES PURCHASED BY
NONRESIDENT ALIENS AND FOREIGN
CORPORATIONS
The discussion above provides general information regarding U.S. federal income
tax consequences to annuity owners that are U.S. persons. Taxable distributions
made to owners who are not U.S. persons will generally be subject to U.S.
federal income tax withholding at a 30% rate, unless a lower treaty rate
applies. In addition, distributions may be subject to state and/or municipal
taxes and taxes that may be imposed by the owner's country of citizenship or
residence. Prospective foreign owners are advised to consult with a qualified
tax adviser regarding U.S., state, and foreign taxation for any annuity policy
purchase.
TAXATION OF TRANSAMERICA
We are taxed as a life insurance company under Part I of Subchapter L of the
Code. Since the variable account is not an entity separate from Transamerica,
and its operations form a part of Transamerica, it will not be taxed separately
as a regulated investment company under Subchapter M of the Code. Investment
income and realized capital gains are automatically applied to increase reserves
under the policies. Under existing federal income tax law, we believe that the
variable account investment income and realized net capital gains will not be
taxed to the extent that such income and gains are applied to increase the
reserves under the policies.
Accordingly, we do not anticipate that it will incur any federal income tax
liability attributable to the variable account and, therefore, we do not intend
to make provisions for any such taxes. However, if changes in the federal tax
laws or interpretations thereof result in our being taxed on income or gains
arising from the variable account, then we may impose a charge against the
variable account (with respect to some or all policies) in order to set aside
provisions to pay such taxes.
TAX STATUS OF THE POLICY
DIVERSIFICATION REQUIREMENTS. Code Section 817(h) requires that for
non-qualified policies, the investments of the portfolios be adequately
diversified in accordance with Treasury regulations in order for the policies to
qualify as annuity policies under federal tax law. The variable account, through
the portfolios, intends to comply with the diversification requirements
prescribed by the Treasury in Reg. Sec. 1.817-5, which affect how the
portfolios' assets may be invested.
In certain circumstances, owners of variable annuity policies may be considered
the owners, for federal income tax purposes, of the assets of the separate
accounts used to support their policies. In those circumstances, income and
gains from the separate account assets would be includible in the variable
policy owner's gross income. The IRS has stated in published rulings that a
variable policy owner will be considered the owner of separate account assets if
the policy owner 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 for the
investments of a segregated asset account may cause the investor, as the owner,
rather than the insurance company, to be treated as the owner of the assets in
the account." This announcement also stated that guidance would be issued by way
of regulations or rulings on the "extent to which policyholders may direct their
investments to particular 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 policy owners were not owners of separate account assets. For example, the
owner has additional flexibility in allocating premium payments and policy
values. These differences could result in an owner being treated as the owner of
a pro rata portion of the assets of the variable 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
variable account.
REQUIRED DISTRIBUTIONS. In order to be treated as an annuity policy for federal
income tax purposes, Code Section 72(s) requires any non-qualified policy to
provide that:
a) if any owner dies on or after the annuity date but before the time the
entire interest in the policy has been distributed, the remaining portion
of such interest will be distributed at least as rapidly as under the
method of distribution being used as of the date of that owner's death; and
b) if any owner dies before the annuity date, the entire interest in the
policy will be distributed within five years after the date of the owner's
death. This requirement will be considered satisfied as to any portion of
the owner's interest, which is payable to or for the benefit of a
designated beneficiary, provided it is distributed over the life of the
designated beneficiary, or over a period not extending beyond the life
expectancy of that beneficiary, provided that such distributions begin
within one year of the owner's death.
The owner's designated beneficiary refers to a natural person designated by the
owner as a beneficiary. Upon the owner's death, ownership of the policy passes
to the designated beneficiary and the mandatory distribution rules apply.
However, if the owner's designated beneficiary is the surviving spouse of the
deceased owner, the policy may be continued with the surviving spouse as the new
owner, postponing application of such payout requirements.
The non-qualified policies contain provisions which are intended to comply with
the requirements of Code Section 72(s), although no regulations interpreting
these requirements have yet been issued. All provisions in the policy will be
interpreted to maintain this tax qualification. We may make changes in order to
maintain this qualification or to conform the policy to any applicable changes
in the tax qualification requirements. We will provide you with a copy of any
changes made to the policy.
POSSIBLE CHANGES IN TAXATION
Legislation has been proposed in the past that, if enacted, would adversely
modify the federal taxation of certain insurance and annuity policies. For
example, one proposal would tax transfers among investment options and tax
exchanges involving variable policies. A second proposal would reduce the
investment in the policy under cash value life insurance and certain annuity
policies by certain amounts, thereby increasing the amount of income for
purposes of computing gain. Although the likelihood of there being any changes
is uncertain, there is always the possibility that the tax treatment of the
policies could be changed by legislation or other means. Moreover, it is also
possible that any change could be retroactive, that is, effective before the
date of the change. You should consult a tax adviser with respect to legislative
developments and their effect on the policy.
OTHER TAX CONSEQUENCES
As noted above, the foregoing discussion of the federal income tax consequences
is not exhaustive and special rules are provided with respect to other tax
situations not discussed in this prospectus. Further, the federal income tax
consequences discussed herein reflect our understanding of current law and the
law may change. Federal estate and gift tax consequences and state and local
estate, inheritance, and other tax consequences of ownership or receipt of
distributions under the policy depend on the individual circumstances of each
owner or recipient of the distribution. A competent tax adviser should be
consulted for further information.
PERFORMANCE DATA
From time to time, we may advertise yields and average annual total returns for
the variable sub-accounts. In addition, we may advertise the effective yield of
the money market variable sub-account. THESE FIGURES WILL BE BASED ON HISTORICAL
INFORMATION AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE.
The yield of the money market variable sub-account refers to the annualized
income generated by an investment in that variable sub-account over a specified
seven-day period. The yield is calculated by assuming that the income generated
for that seven-day period is generated each seven-day period over a 52-week
period and is shown as a percentage of the investment. The effective yield is
calculated similarly but, when annualized, the income earned by an investment in
that variable sub-account is assumed to be reinvested. The effective yield will
be slightly higher than the yield because of the compounding effect of this
assumed reinvestment. These money market yields will not reflect deductions of
fees for optional riders, if any, unless otherwise noted.
The yield of a variable sub-account, other than the money market variable
sub-account, refers to the annualized income generated by an investment in the
variable sub-account over a specified thirty-day period. The yield is calculated
by assuming that the income generated by the investment during that thirty-day
period is generated each thirty-day period over a twelve-month period and is
shown as a percentage of the investment. These money market yields will not
reflect deductions of fees for optional riders, if any, unless otherwise noted.
The yield calculations do not reflect the effect of any contingent deferred
sales load or premium taxes that may be applicable to a particular policy. To
the extent that the contingent deferred sales load or premium taxes are
applicable to a particular policy, the yield of that policy will be reduced. For
additional information regarding yields and total returns, please refer to the
Statement of Additional Information.
The average annual total return of a variable sub-account refers to return
quotations assuming an investment has been held in the variable sub-account for
various periods of time including, but not limited to, a period measured from
the date the variable sub-account began operations. When a variable sub-account
has been in operation for 1, 5, and 10 years, respectively, the average annual
total return for these periods will be provided. The average annual total return
quotations will represent the average annual compounded rates of return that
would equate an initial investment of $1,000 to the redemption value of that
investment, including the deduction of any applicable contingent deferred sales
load but excluding deduction of any premium taxes, as of the last day of each of
the periods for which total return quotations are provided. These total returns
will not reflect deductions of fees for optional riders, if any, unless
otherwise noted.
Performance information for any variable sub-account reflects only the
performance of a hypothetical policy under which policy value is allocated to a
variable sub-account during a particular time period on which the calculations
are based. Performance information should be considered in light of the
investment objectives and policies and characteristics of the portfolios in
which the variable sub-account invests, and the market conditions during the
given time period, and should not be considered as a representation of what may
be achieved in the future. For a description of the methods used to determine
yield and total returns, see the Statement of Additional Information.
Reports and promotional literature may also contain other information including:
a) the ranking of any variable sub-account derived from rankings of variable
annuity separate accounts or their investment products tracked by Lipper
Analytical Services, Inc., VARDS, IBC/Donoghue's Money Fund Report,
Financial Planning Magazine, Money Magazine, Bank Rate Monitor, Standard
and Poor's Indices, Dow Jones Industrial Average, and other rating
services, companies, publications, or other persons who rank separate
accounts or other investment products on overall performance or other
criteria; and
b) the effect of tax deferred compounding on variable sub-account investment
returns, or returns in general, which may be illustrated by graphs, charts,
or otherwise, and which may include a comparison, at various points in
time, of the return from an investment in a policy, or returns in general,
on a tax-deferred basis, assuming one or more tax rates, with the return on
a currently taxable basis. Other ranking services and indices may be used.
In its advertisements and sales literature, we may discuss, and may illustrate
by graphs, charts, or through other means of written communication:
o the implications of longer life expectancy for retirement planning;
o the tax and other consequences of long-term investment in the policy;
o the effects of the policy's lifetime payout options; and
o the operation of certain special investment features of the policy -- such
as the dollar cost averaging option.
We may explain and depict in charts, or other graphics, the effects of certain
investment strategies, such as allocating premiums between the fixed account and
a variable sub-account. We may also discuss the Social Security system and its
projected payout levels and retirement plans generally, using graphs, charts and
other illustrations.
We may from time to time also disclose average annual total return in
non-standard formats and cumulative non-annualized total return for the variable
sub-accounts. The non-standard average annual total return and cumulative total
return will assume that no contingent deferred sales load is applicable. We may
from time to time also disclose yield, standard total returns, and non-standard
total returns for any or all variable sub-accounts.
All non-standard performance data will only be disclosed if the standard
performance data is also disclosed. For additional information regarding the
calculation of other performance data, please refer to the Statement of
Additional Information.
We may also advertise performance figures for the variable sub-accounts based on
the performance of a portfolio before the time the variable account began
operations.
LEGAL PROCEEDINGS
There is no pending material legal proceeding affecting the variable account or
the principal underwriter of the contracts. Transamerica is involved in various
kinds of routine litigation which, in management's judgment, are not of material
importance to Transamerica's assets or to the variable account.
LEGAL MATTERS
The organization of Transamerica, its authority to issue the policy and the
validity of the form of the policy have been passed upon by David M. Goldstein,
Counsel to Transamerica.
ACCOUNTANTS AND FINANCIAL
STATEMENTS
The statutory-basis financial statements of Transamerica at December 31, 1999,
and for each of the three years in the period ended December 31, 1999, and the
financial statements of Separate Account VA-6NY at December 31, 1999, and for
the period then ended, appearing in the Statement of Additional information have
been audited by Ernst & Young LLP, Independent Auditors as set forth in their
reports appearing in the Statement of Additional Information. The financial
statements audited by Ernst & Young LLP have been included in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.
VOTING RIGHTS
To the extent required by applicable law, all portfolio shares held in the
variable account will be voted by Transamerica at regular and special
shareholder meetings of the respective portfolio. The shares will be voted in
accordance with instructions received from persons having voting interests in
the corresponding variable sub-account. If, however, the 1940 Act or any
regulation thereunder should be amended, or if the present interpretation
thereof should change, or if Transamerica determines that it is allowed to vote
all portfolio shares in its own right, Transamerica may elect to do so.
The person with the voting interest is the owner. The number of votes which are
available to an owner will be calculated separately for each variable
sub-account. Before the annuity date, that number will be determined by applying
his or her percentage interest, if any, in a particular variable sub-account to
the total number of votes attributable to that variable sub-account. The owner
holds a voting interest in each variable sub-account to which the policy value
is allocated. After the annuity date, the number of votes decreases as
settlement option payments are made and as the reserves for the policy decrease.
The number of votes of a portfolio will be determined as of the date coincident
with the date established by that portfolio for determining shareholders
eligible to vote at the meeting of the portfolios. Voting instructions will be
solicited by written communication before such meeting in accordance with
procedures established by the respective portfolios.
Shares for which no timely instructions are received and shares held by
Transamerica for which owners have no beneficial interest will be voted in
proportion to the voting instructions which are received with respect to all
policies participating in the variable sub-account. Voting instructions to
abstain on any item to be voted upon will be applied on a pro rata basis.
Each person or entity having a voting interest in a variable sub-account will
receive proxy material, reports and other material relating to the appropriate
portfolio.
It should be noted that generally the portfolios are not required, and do not
intend, to hold annual or other regular meetings of shareholders.
AVAILABLE INFORMATION
Transamerica has filed a registration statement with the Securities and Exchange
Commission under the 1933 Act relating to the policy offered by this prospectus.
THIS PROSPECTUS HAS BEEN FILED AS A PART OF THE REGISTRATION STATEMENT AND DOES
NOT CONTAIN ALL OF THE INFORMATION SET FORTH IN THE REGISTRATION STATEMENT AND
EXHIBITS thereto.
Reference is hereby made to such Registration Statement and exhibits for further
information relating to Transamerica and the policy. Statements contained in
this prospectus, as to the content of the policy and other legal instruments,
are summaries. For a complete statement of the terms thereof, reference is made
to the instruments filed as exhibits to the Registration Statement. The
Registration Statement and the exhibits thereto may be inspected and copied at
the office of the Commission, located at 450 Fifth Street, N.W., Washington,
D.C.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ADDITIONAL INFORMATION
A Statement of Additional Information is available which contains more details
concerning the subjects discussed in this prospectus. The following is the Table
of Contents for that Statement:
TABLE OF CONTENTS PAGE
<S> <C>
THE POLICY ...................................................................................... 3
NET INVESTMENT FACTOR ........................................................................... 3
VARIABLE PAYMENT OPTIONS......................................................................... 3
Variable Annuity Units and Payments.............................................................. 3
Variable Annuity Unit Value...................................................................... 3
Transfers After the Annuity Date................................................................. 4
GENERAL PROVISIONS............................................................................... 4
Non-Participating....................................................................... 4
Misstatement of Age or Sex.............................................................. 4
Proof of Existence and Age.............................................................. 4
Annuity Data............................................................................ 4
Assignment.............................................................................. 4
Annual Report........................................................................... 5
Incontestability........................................................................ 5
Entire Policy........................................................................... 5
Changes in the Policy................................................................... 5
Protection of Benefits.................................................................. 5
Delay of Payments....................................................................... 5
Notices and Directions.................................................................. 6
CALCULATION OF YIELDS AND TOTAL RETURNS ......................................................... 6
Money Market Sub-Account Yield Calculation.............................................. 6
Other Sub-Account Yield Calculations.................................................... 6
Standard Total Return Calculations...................................................... 7
Historical Portfolio Performance Data................................................... 7
Other Performance Data.................................................................. 7
HISTORICAL PERFORMANCE DATA...................................................................... 8
General Limitations..................................................................... 8
Adjusted Historical Performance Data.................................................... 8
DISTRIBUTION OF THE POLICY.......................................................................14
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS...........................................................14
STATE REGULATION.................................................................................14
RECORDS AND REPORTS..............................................................................14
FINANCIAL STATEMENTS.............................................................................14
APPENDIX.........................................................................................15
</TABLE>
<PAGE>
APPENDIX A
THE FIXED ACCOUNT
This prospectus is generally intended to serve as a disclosure document only for
the policy and the variable account. For complete details regarding the fixed
account, see the policy itself.
THE POLICY VALUE ALLOCATED TO THE FIXED ACCOUNT BECOMES PART OF THE GENERAL
ACCOUNT OF TRANSAMERICA, WHICH SUPPORTS INSURANCE AND ANNUITY OBLIGATIONS.
BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS, INTERESTS IN THE GENERAL
ACCOUNT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "1933
ACT"), NOR IS THE GENERAL ACCOUNT REGISTERED AS AN INVESTMENT COMPANY UNDER THE
1940 ACT.
ACCORDINGLY, NEITHER THE GENERAL ACCOUNT NOR ANY INTERESTS THEREIN ARE GENERALLY
SUBJECT TO THE PROVISIONS OF THE 1933 ACT OR THE 1940 ACT, AND TRANSAMERICA HAS
BEEN ADVISED THAT THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
REVIEWED THE DISCLOSURES IN THIS PROSPECTUS WHICH RELATE TO THE FIXED ACCOUNT.
The fixed account is part of our general account. Our general account consists
of all our general assets, other than those in the variable account, or in any
other separate account. We have sole discretion to invest the assets of our
general account subject to applicable law.
The allocation or transfer of funds to the fixed account does not entitle the
owner to share in the investment performance of our general account.
Currently, we guarantee that we will credit interest at a rate of not less than
3% per year, compounded annually, to amounts allocated to the fixed account
under the policies. However, we reserve the right to change the minimum rate
according to state insurance law. We may credit interest at a rate in excess of
3% per year.
There is no specific formula for the determination of excess interest credits.
Some of the factors that we may consider in determining whether to credit excess
interest to amounts allocated to the fixed account and the amount in that
account are:
o general economic trends;
o rates of return currently available;
o returns anticipated on the company's investments;
o regulatory and tax requirements; and
o competitive factors.
ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF 3%
PER YEAR WILL BE DETERMINED AT OUR SOLE DISCRETION. THE OWNER ASSUMES THE RISK
THAT INTEREST CREDITED TO THE FIXED ACCOUNT ALLOCATIONS MAY NOT EXCEED THE
MINIMUM GUARANTEE OF 3% FOR ANY GIVEN YEAR.
Rates of interest credited to the fixed account will be guaranteed for at least
twelve months and will vary according to the timing and class of the allocation,
transfer or renewal. At any time after the end of the twelve month period for a
particular allocation, we may change the annual rate of interest for that class.
This new annual rate of interest will remain in effect for at least twelve
months. New premiums made to the policy which are allocated to the fixed account
may receive different rates of interest.
These rates of interest may differ from those interest rates credited to amounts
transferred from the variable sub-accounts and from those credited to amounts
remaining in the fixed account and receiving renewal rates. These rates of
interest may also differ from rates for allocations applied under certain
options and services we may be offering.
TRANSFERS
Each policy year, you may transfer a portion of the value of the fixed account
to variable sub-accounts. The maximum percentage that may be transferred will be
declared annually by us. This percentage will be determined by us at our sole
discretion, but will not be less than 10% of the value of the fixed account on
the preceding policy anniversary and will be declared each year. Currently, this
percentage is 25%.
You are limited to four transfers from the fixed account each policy year, and
the total of all such transfers cannot exceed the current maximum. If we permit
dollar cost averaging from the fixed account to the variable sub-accounts, the
above restrictions are not applicable.
Generally, transfers may not be made from any variable sub-account to the fixed
account for the six-month period following any transfer from the fixed account
to one or more of the variable sub-accounts. Additionally, transfers may not be
made from the fixed account to:
a) the Transamerica VIF Money Market Sub-Account; or
b) any variable sub-account identified by Transamerica and investing in a
portfolio of fixed income investments.
We reserve the right to modify the limitations on transfers to and from the
fixed account and to defer transfers from the fixed account for up to six months
from the date of request.
SPECIAL DOLLAR COST AVERAGING OPTION
When you apply for the policy, you may elect to allocate the entire initial
premium to either the six or twelve month special Dollar Cost Averaging account
of the fixed account. The initial premium will be credited with interest at a
guaranteed fixed rate. Amounts will then be transferred from the special Dollar
Cost Averaging account to the variable sub-accounts pro rata on a monthly basis
for six or twelve months (depending on the option you select) in the allocations
you specified when you applied for the premium. The four transfers per year
limit does not apply to the special Dollar Cost Averaging option.
Amounts from the sub-accounts and/or fixed account may not be transferred into
the special Dollar Cost Averaging accounts. In addition, if you request a
transfer (other than a Dollar Cost Averaging transfer) or a withdrawal from a
special Dollar Cost Averaging account, any amounts remaining in the special
account will be transferred to the variable sub-accounts according to your
original allocation instructions. The special Dollar Cost Averaging option will
end and cannot be reelected.
<PAGE>
APPENDIX B
EXAMPLE OF VARIABLE ACCUMULATION UNIT VALUE CALCULATIONS
Suppose the net asset value per share of a portfolio at the end of the current
valuation period is $20.15; at the end of the immediately preceding valuation
period it was $20.10; the valuation period is one day; and no dividends or
distributions caused the portfolio to go "ex-dividend" during the current
valuation period. $20.15 divided by $20.10 is 1.002488.
Subtracting the one day risk factor for mortality and expense risk charge and
the administrative expense charge of .00367% (the daily equivalent of the
current charge of 1.35% on an annual basis) gives a net investment factor of
1.00245.
If the value of the variable accumulation unit for the immediately preceding
valuation period had been 15.500000, the value for the current valuation period
would be 15.53798 (15.5 x 1.00245).
EXAMPLE OF VARIABLE ANNUITY UNIT VALUE CALCULATIONS
Suppose the circumstances of the first example exist, and the value of a
variable annuity unit for the immediately preceding valuation period had been
13.500000.
If the first variable annuity payment is determined by using an annuity payment
based on an assumed interest rate of 4% per year, the value of the variable
annuity unit for the current valuation period would be 13.53163 (13.5 x 1.00245
(the net investment factor) x 0.999893).
0.999893 is the factor, for a one day valuation period, that neutralizes the
assumed rate of four percent (4%) per year used to establish the variable
annuity rates found in the policy.
EXAMPLE OF VARIABLE ANNUITY PAYMENT CALCULATIONS
Suppose that the account is currently credited with 3,200.000000 variable
accumulation units of a particular variable sub-account.
Also suppose that the variable accumulation unit value and the variable annuity
unit value for the particular variable sub-account for the valuation period
which ends immediately preceding the first day of the month is 15.500000 and
13.500000 respectively, and that the variable annuity rate for the age and
elected is $5.73 per $1,000.
Then the first variable annuity payment would be:
3,200 x 15.5 x 5.73 divided by 1,000 = $284.21,
and the number of variable annuity units credited for future payments would be:
284.21 divided by 13.5 = 21.052444.
For the second monthly payment, suppose that the variable annuity unit value on
the 10th day of the second month is 13.565712. Then the second variable annuity
payment would be
$285.59 (21.052444 x 13.565712).
<PAGE>
APPENDIX C
CONDENSED FINANCIAL INFORMATION
The following condensed financial information is derived from the financial
statements of Separate Account VA-6NY. The data should be read in conjunction
with the financial statements, related notes, and other financial information
appearing in the Statement of Additional Information.
The following table sets forth certain information regarding the sub-accounts
for the period from February 8, 1999, the date of commencement of operations of
the separate account, through December 31, 1999. The variable accumulation unit
values and the number of variable accumulation units outstanding for each
sub-account for the periods shown are as follows:
<PAGE>
<TABLE>
<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
Alger American Alliance VPF Alliance VPF Dreyfus VIF Dreyfus VIF
Income & Growth Growth & Income Premier Growth Capital Small Cap
Sub-Account Sub-Account Sub-Account Appreciation Sub-Account
Sub-Account
------------------ ------------------- ------------------ ------------------- ------------------
Accumulation Unit
<S> <C> <C> <C> <C> <C>
Value at Beginning $13.07 $11.75 $15.16 $12.78 $9.19
of Period
Accumulation Unit
Value at End of $18.45 $13.05 $18.88 $14.01 $11.63
Period
Number of
Accumulation Units
Outstanding at End 20,454.496 35,921.156 67,859.000 27,264.942 15,139.412
of Period
Janus Aspen Janus Aspen Series MFS VIT MFS VIT MFS VIT
Series Balanced Worldwide Growth Emerging Growth Growth with Income Research
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
------------------ ------------------- ------------------ ------------------- ------------------
Accumulation Unit
Value at Beginning $13.59 $13.00 $13.73 $11.73 $12.10
of Period
Accumulation Unit
Value at End of $16.55 $20.53 $23.04 $12.69 $14.87
Period
Number of
Accumulation Units
Outstanding at End 70,631.182 32,624.907 10,752.253 33,284.624 11,885.844
of Period
MSDW UF MSDW UF MSDW UF OCC Accumulation OCC Accumulation
Fixed Income High Yield Int'l Magnum Trust Managed Trust Small Cap
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
------------------ ------------------- ------------------ ------------------- ------------------
Accumulation Unit
Value at Beginning $10.58 $10.48 $10.59 $10.27 $8.38
of Period
Accumulation Unit
Value at End of $10.29 $10.90 $13.23 $10.92 $8.69
Period
Number of
Accumulation Units
Outstanding at End 9,706.172 6,892.039 1,445.779 1,945.488 1,049.819
of Period
Transamerica Transamerica
VIF Growth VIF Money Market
Sub-Account Sub-Account
------------------ -------------------
Accumulation Unit
Value at Beginning $15.21 $1.04
of Period
Accumulation Unit
Value at End of $19.19 $1.07
Period
Number of
Accumulation Units
Outstanding at End 40,508.249 74,489.911
of Period
</TABLE>
<PAGE>
APPENDIX D
DEFINITIONS
ANNUITY DATE: The date on which the annuitization phase of the policy begins.
CASH SURRENDER VALUE: The amount we will pay to the owner if the policy is
surrendered on or before the annuity date. The cash surrender value is equal to:
the policy value; LESS any policy fee, and LESS contingent deferred sales loads
and applicable premium tax charges.
CODE: The Internal Revenue Code of 1986, as amended, and the rules and
regulations issued under it.
CONTINGENT DEFERRED SALES LOAD: A charge equal to a percentage of premiums
withdrawn from the policy that are less than seven years old. See Contingent
Deferred Sales Load/Surrender Charge on page 28 for the specific percentages.
FIXED ACCOUNT: An account which credits a rate of interest for a period of at
least twelve months for each allocation or transfer.
FIXED ACCOUNT ACCUMULATED VALUE: The total dollar value of all amounts the owner
allocates or transfers to the fixed account; PLUS interest credited; LESS any
amounts withdrawn, applicable fees or premium tax charges, and/or transfers out
to the variable account before the annuity date.
GENERAL ACCOUNT: The assets of Transamerica that are not allocated to a separate
account.
GUARANTEED INTEREST RATE: The annual effective rate of interest after daily
compounding credited to the fixed account.
POLICY ANNIVERSARY: The anniversary of the policy effective date each year.
POLICY EFFECTIVE DATE: The effective date of the policy as shown in the policy.
POLICY VALUE: The sum of the variable accumulated value and the fixed account
accumulated value.
POLICY YEAR: A 12-month period starting on the policy effective date and ending
with the day before the policy anniversary, and each 12-month period thereafter.
PORTFOLIO: The investment portfolio underlying each variable sub-account in
which we will invest any amounts the owner allocates to that variable
sub-account.
SERVICE CENTER: Transamerica's Annuity Service Center, at P.O. Box 31848,
Charlotte, North Carolina 28231-1848, telephone 877-717-8861. Effective June 5,
2000, our address will change to P.O. Box 3183, Cedar Rapids, Iowa 52406-3183.
STATUS, QUALIFIED AND NON-QUALIFIED: The policy has a qualified status if it is
issued in connection with a retirement plan or program. Otherwise, the status is
non-qualified.
SURRENDER CHARGE: See CONTINGENT DEFERRED SALES LOAD.
VALUATION DAY: Any day the New York Stock Exchange is open. To determine the
value of an asset on a day that is not a valuation day, we will use the value of
that asset as of the end of the next valuation day.
VALUATION PERIOD: The time interval between the closing, which is generally 4:00
p.m. Eastern Time of the New York Stock Exchange on consecutive valuation days.
VARIABLE ACCOUNT: Separate Account VA-6NY, a separate account established and
maintained by Transamerica for the investment of a portion of its assets
pursuant to Section 4240 of the New York Insurance Code.
VARIABLE ACCUMULATION UNIT: A unit of measure used to determine the variable
accumulated value before the annuity date. The value of a variable accumulation
unit varies with each variable sub-account.
VARIABLE ACCUMULATED VALUE: The total dollar value of all variable accumulation
units under the policy before the annuity date.
VARIABLE SUB-ACCOUNT(S): One or more divisions of the variable account which
invests solely in shares of one of the underlying portfolios.
<PAGE>
APPENDIX E
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
DISCLOSURE STATEMENT
FOR INDIVIDUAL RETIREMENT ANNUITIES
The following information is being provided to you, the owner, in accordance
with the requirements of the Internal Revenue Service (IRS). This Disclosure
Statement contains information about opening and maintaining an Individual
Retirement Account or Annuity (IRA), and summarizes some of the financial and
tax consequences of establishing an IRA.
Part I of this Disclosure Statement discusses Traditional IRAs, while Part II
addresses Roth IRAs. Because the tax consequences of the two categories of IRAs
differ significantly, it is important that you review the correct part of this
Disclosure Statement to learn about your particular IRA. This Disclosure
Statement does not discuss Education IRAs or SIMPLE-IRAs, except as necessary in
the context of discussing other types of IRAs.
Your Transamerica Life Insurance Company of New York's Individual Retirement
Annuity, also referred to as a Transamerica Life IRA Policy has been approved as
to form by the IRS. In addition, we are using an IRA and a Roth IRA Endorsement
based on the IRS-approved text. Please note that IRS approval applies only to
the form of the policy and does not represent a determination of the merits of
such IRA policy.
It may be necessary for us to amend your Transamerica Life IRA or Roth IRA
Policy in order for us to obtain or maintain IRS approval of its tax
qualification. In addition, laws and regulations adopted in the future may
require changes to your policy in order to preserve its status as an IRA. We
will send you a copy of any such amendment.
No contribution to a Transamerica Life IRA will be accepted under a SIMPLE plan
established by any employer pursuant to Internal Revenue Code Section 408(p). No
transfer or rollover of funds attributable to contributions made by an employer
to your SIMPLE IRA under the employer's SIMPLE plan may be transferred or rolled
over to your Transamerica Life IRA before the expiration of the two year period
beginning on the date you first participated in the employer's SIMPLE plan. In
addition, depending on
the annuity policy you purchased, contributory IRAs may or may not be available.
This Disclosure Statement includes the non-technical explanation of some of the
changes made by the Tax Reform Act of 1986 applicable to IRAs and more recent
changes made by the Small Business Job Protection Act of 1996, the Health
Insurance Portability and Accountability Act of 1996, the Tax Relief Act of 1997
and the IRS Restructuring and Reform Act of 1998.
The information provided applies to contributions made and distributions
received after December 31, 1986, and reflects the relevant provisions of the
Code as in effect on January 1, 2000. This Disclosure Statement is not intended
to constitute tax advice, and you should consult a tax professional if you have
questions about your own circumstances.
REVOCATION OF YOUR IRA OR ROTH IRA
You have the right to revoke your Traditional IRA or Roth IRA issued by us
during the seven calendar day period following its establishment. The
establishment of your Traditional IRA or Roth IRA policy will be the policy
effective date. This seven day calendar period may or may not coincide with the
free look period of your policy.
In order to revoke your Traditional IRA or Roth IRA, you must notify us in
writing and you must mail or deliver your revocation to us postage prepaid, at:
401 North Tryon Street, Charlotte, NC 28202. The date of the postmark, or the
date of certification or registration if sent by certified or registered mail,
will be considered your revocation date. If you revoke your Traditional IRA or
Roth IRA during the seven day period, an amount equal to your premium will be
returned to you without any adjustment.
DEFINITIONS
CODE - Internal Revenue Code of 1986, as amended, and regulations issued
thereunder.
CONTRIBUTIONS - Premiums paid to your policy.
POLICY - The annuity policy, certificate or policy which you purchased.
COMPENSATION - For purposes of determining allowable contributions, the term
compensation includes all earned income, including net earnings from
self-employment and alimony or separate maintenance payments received under a
decree of divorce or separate maintenance and includable in your gross income,
but does not include deferred compensation or any amount received as a pension
or annuity.
REGULAR CONTRIBUTIONS - IN GENERAL
As is more fully discussed below, for 1998 and later years, the maximum total
amount that you may contribute for any tax year to your regular IRAs and your
regular Roth IRAs combined is $2,000, or if less, your compensation for that
year. Once you attain age 70 1/2, this limit is reduced to zero only for your
regular IRAs, not for your Roth IRAs, but the separate limit on Roth IRA
contributions can be reduced to zero for taxpayers with adjusted gross income,
also referred to as AGI, above certain levels, as described below in Part II,
Section 1. While your Roth IRA contributions are never deductible, your regular
IRA contributions are fully deductible, unless you, or your spouse, is an active
participant in some form of tax-qualified retirement plan for the tax year. In
the latter case, any deductible portion of your regular IRA contributions for
each year is subject to the limits that are described below in Part I, Section
2, and any remaining regular IRA contributions for that year must be reported to
the IRS as nondeductible IRA contributions, along with your Roth IRA
contributions.
IRA PART I: TRADITIONAL IRAS
The rules that apply to a Traditional Individual Retirement Account or Annuity,
or IRA or Traditional IRA, and which includes a regular or Spousal IRA and a
rollover IRA, generally also apply to IRAs under Simplified Employee Pension
plans, or SEP-IRAs, unless specific rules for SEP-IRAs are stated.
1. CONTRIBUTIONS
(A) REGULAR IRA. Regular IRA contributions must be in cash and are subject to
the limits described above. Such contributions are also subject to the minimum
amount under the Transamerica IRA policy. In addition, any of your regular
contributions to an IRA for a tax year must be made by the due date, not
including extensions, for your federal tax return for that tax year. See also
Part II, Section 4 below about recharacterizing IRA and Roth IRA contributions
by such date.
(B) SPOUSAL IRA. If you and your spouse file a joint federal income tax return
for the taxable year and if your spouse's compensation, if any, includable in
gross income for the year is less than the compensation includable in your gross
income for the year, you and your spouse may each establish your own separate
regular IRA, and Roth IRA, and may make contributions to such IRAs for your
spouse that are not limited by your spouse's lower amount of compensation.
Instead, the limit for the total contribution to spousal IRAs that can be made
by you or your spouse for the tax year is:
1. $2,000; or
2. if less, the total combined compensation for both you and your spouse
reduced by any deductible IRA contributions and any Roth IRA contributions
for such year.
As with any regular IRA contributions, those for your spouse cannot be made for
any tax year in which your spouse has attained age 70 1/2, must be in cash, and
must be made by the due date, not including extensions, for your federal income
tax return for that tax year.
C) ROLLOVER IRA. Rollover contributions to a Traditional IRA are unlimited in
dollar amount. These can include rollover contributions of eligible
distributions received by you from another Traditional IRA or tax-qualified
retirement plan. Generally, any distribution from a tax-qualified retirement
plans, such as a pension or profit sharing plan, Code Section 401(k) plan, H.R.
10 or Keogh plan, or a Traditional IRA can be rolled over to a Traditional IRA
unless it is a required minimum distribution as discussed below in Part I,
Section 4(a) or it is part of a series of payments to be paid to you over your
life, life expectancy or a period of at least 10 years. In addition, certain
hardship withdrawals and distributions of "after-tax" plan contributions, i.e.,
amounts which are not subject to federal income tax when distributed from a
tax-qualified retirement plan, are not eligible to be rolled over to an IRA.
If a distribution from a tax-qualified plan or a Traditional IRA is paid to you
and you want to roll over all or part of the eligible distributed amount to a
Transamerica Life Traditional IRA, the rollover must be accomplished within 60
days of the date you receive the amount to be rolled over. However, you may roll
over any amount from one Traditional IRA into another Traditional IRA only once
in any 365-day period. A timely rollover of an eligible distributed amount that
has been paid to you directly will prevent its being taxable to you at the time
of distribution; that is, none of it will be includable in your gross income
until you withdraw some amount from your rollover IRA. However, any such
distribution directly to you from a tax-qualified retirement plan is generally
subject to a mandatory 20% withholding tax.
By contrast, a direct transfer from a tax-qualified retirement plan to a
Traditional IRA is considered a "direct" rollover and is not subject to any
mandatory withholding tax, or other federal income tax, upon the direct
transfer. If you elect to make such a "direct" rollover from a tax-qualified
plan to a Transamerica Life Traditional IRA, the transferred amount will be
deposited directly into your rollover IRA.
Strict limitations apply to rollovers, and you should seek competent tax advice
in order to comply with all the rules governing rollovers.
(D) DIRECT TRANSFERS FROM ANOTHER TRADITIONAL IRA. You may make an initial or
subsequent contribution to your Transamerica Life Traditional IRA by directing
the fiduciary or issuer of any of your existing IRAs to make a direct transfer
of all or part of such IRAs in cash to your Transamerica Life Traditional IRA.
Such a direct transfer between Traditional IRAs is not considered a rollover ,
e.g., for purposes of the 1-year waiting period or withholding.
(E) SIMPLIFIED EMPLOYEE PENSION PLAN, OR SEP-IRA. If an IRA is established that
meets the requirements of a SEP-IRA, generally your employer may contribute an
amount not to exceed the lesser of 15% of your includable compensation ($160,000
for 1999, adjusted for inflation thereafter) or $30,000, even after you attain
age 70 1/2. The amount of such contribution is not includable in your income for
federal income tax purposes. In the case of a SEP-IRA that has a grandfathered
qualifying form of salary reduction, referred to as a SARSEP, that was
established by an employer before 1997, generally any employee, including a
self-employed individual, who:
1. has worked for the employer for 3 of the last 5 preceding tax years;
2. is at least age 21; and
3. has received from the employer compensation of at least $400 for the
current tax year, adjusted for inflation after 2000; is eligible to make a
before tax salary reduction contribution to the SARSEP for the current tax
year of up to $10,500, adjusted for inflation after 2000, subject to the
overall limits for SEP-IRA contributions.
Your employer is not required to make a SEP-IRA contribution in any year nor
make the same percentage contribution each year. But if contributions are made,
they must be made to the SEP-IRA for all eligible employees and must not
discriminate in favor of highly compensated employees. If these rules are not
met, any SEP-IRA contributions by the employer could be treated as taxable to
the employees and could result in adverse tax consequences to the participating
employee. For further details about SARSEPs and SEP-IRAs, e.g., for computing
contribution limits for self-employed individuals, see IRS Publication 590, as
indicated below.
(F) RESPONSIBILITY OF THE OWNER. Contributions, rollovers, or transfers to any
IRA must be made in accordance with the appropriate sections of the Code. It is
your full and sole responsibility to determine the tax deductibility of any
contribution to your Traditional IRA, and to make such contributions in
accordance with the Code. Transamerica does not provide tax advice, and assumes
no liability for the tax consequences of any contribution to your Transamerica
Life Traditional IRA.
2. DEDUCTIBILITY OF CONTRIBUTIONS FOR A REGULAR IRA
(A) GENERAL RULES. The deductible portion of the contributions made to the
regular IRAs for you, or your spouse, for a tax year depends on whether you, or
your spouse, is an "active participant" in some type of a tax-qualified
retirement plan for such year, as described in Section 2(b) immediately below.
If you and your spouse file a joint return for a tax year and neither of you is
an active participant for such year, then the permissible contributions to the
regular IRAs for each of you are fully deductible up to $2,000 each, i.e., your
combined deductible IRA contribution limit for the tax year could be $4,000.
Similarly, if you are not married, or treated as such, for the tax year and you
are not an active participant for such year, the permissible contributions to
your regular IRAs for the tax year are fully deductible up to $2,000. For
instance, if you and your spouse file separate returns for the tax year and you
did not live together at any time during such tax year, then you are treated as
unmarried for such year, and if you were not an active participant for the tax
year, then your deductible limit for your regular IRA contribution is $2,000,
even if your spouse was an active participant for such year.
If you are an active participant for the tax year, then your $2,000 limit is
subject to a phase-out rule if your AGI for such year exceeds a Threshold Level,
depending on your tax filing status and the calendar year. If, however, you are
not an active participant for the tax year but your spouse is, then your $2,000
limit is subject to the phase-out rule only if your AGI exceeds a higher
Threshold Level. See Part I, Section 2(c), below.
(B) ACTIVE PARTICIPANT. You are an "active participant" for a year if you
participate in some type of tax-qualified retirement plan. For example, if you
participate in a qualified pension or profit sharing plan, a Code Section 401(k)
plan, certain government plans, a tax-sheltered arrangement under Code Section
403, a SIMPLE plan or a SEP-IRA plan, you are considered to be an active
participant. Your Form W-2 for the year should indicate your participation
status.
(C) ADJUSTED GROSS INCOME, OR AGI. If you are an active participant, you must
look at your AGI for the year, or if you and your spouse file a joint tax
return, you use your combined AGI, to determine whether you can make a
deductible IRA contribution for that taxable year. The instructions for your tax
return will show you how to calculate your AGI for this purpose. If you are at
or below a certain AGI level, called the Threshold Level, you are treated as if
you were not an active participant and you can make a deductible contribution
under the same rules as a person who is not an active participant.
If you are an active participant for the tax year, then your Threshold Level
depends upon whether you are a married taxpayer filing a joint tax return, an
unmarried taxpayer, or a married taxpayer filing a separate tax return. If you
are a married taxpayer but file a separate tax return, the Threshold Level is
$0. If you are a married taxpayer filing a joint tax return, or an unmarried
taxpayer, your Threshold Level depends upon the taxable year, and can be
determined using the appropriate table below:
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
MARRIED FILING JOINTLY UNMARRIED
TAXABLE THRESHOLD TAXABLE THRESHOLD
YEAR LEVEL YEAR LEVEL
<S> <C> <C> <C> <C>
1999 $51,000 1999 $31,000
2000 $52,000 2000 $32,000
2001 $53,000 2001 $33,000
2002 $54,000 2002 $34,000
2003 $60,000 2003 $40,000
2004 $65,000 2004 $45,000
2005 $70,000 2005 and
2006 $75,000 thereafter $50,000
2007 and
thereafter $80,000
</TABLE>
<PAGE>
If you are not an active participant for the tax year but your spouse is, and
you are not treated as unmarried for filing purposes, then your Threshold Level
is $150,000.
If your AGI is less than $10,000 above your Threshold Level, or $20,000 for
married taxpayers filing jointly for the taxable year beginning on or after
January 1, 2007, you will still be able to make a deductible contribution, but
it will be limited in amount. The amount by which your AGI exceeds your
Threshold
Level is called your Excess AGI. The Maximum Allowable Deduction is $2,000, even
for Spousal IRAs. You can calculate your Deduction Limit as follows:
10,000 - Excess AGI X Maximum Allowable = Deduction
10,000 Deduction = Limit
For taxable years beginning on or after January 1, 2007, married taxpayers
filing jointly should substitute 20,000 for 10,000 in the numerator and
denominator of the above equation. You must round up any computation of the
Deduction Limit to the next highest $10 level, that is, to the next highest
number which ends in zero. For example, if the result is $1,525, you must round
it up to $1,530. If the final result is below $200 but above zero, your
Deduction Limit is $200. Your Deduction Limit cannot in any event exceed 100% of
your compensation.
3. NONDEDUCTIBLE CONTRIBUTIONS TO REGULAR IRAS
The amounts of your regular IRA contributions which are not deductible will be
nondeductible contributions to such IRAs. You may also choose to make a
nondeductible contribution to your regular IRA, even if you could have deducted
part or all of the contribution. Interest or other earnings on your regular IRA
contributions, whether from deductible or nondeductible contributions, will not
be taxed until taken out of your IRA and distributed to you.
If you make a nondeductible contribution to an IRA, you must report the amount
of the nondeductible contribution to the IRS as a part of your tax return for
the year, e.g., on Form 8606.
4. DISTRIBUTIONS
(A) REQUIRED MINIMUM DISTRIBUTIONS, OR RMD. Distributions from your Traditional
IRAs must be made or begin no later than April 1 of the calendar year following
the calendar year in which you attain age 70 1/2, the required beginning date.
You may take RMDs from any Traditional IRA you maintain, but not from any Roth
IRA, as long as:
a) distributions begin when required;
b) distributions are made at least once a year; and
c) the amount to be distributed is not less than the minimum required under
current federal tax law.
If you own more than one Traditional IRA, you can choose whether to take your
RMD from one Traditional IRA or a combination of your Traditional IRAs. A
distribution may be made at once in a lump sum, as qualifying partial
withdrawals or as qualifying settlement option payments. Qualifying partial
withdrawals and settlement option payments must be made in equal or
substantially equal amounts over:
1. your life or the joint lives of you and your beneficiary; or
2. a period not exceeding your life expectancy, as redetermined annually under
IRS tables in the income tax regulations, or the joint life expectancy of
you and your beneficiary, as redetermined annually, if that beneficiary is
your spouse.
Also, special rules may apply if your designated beneficiary, other than your
spouse, is more than ten years younger than you.
If qualifying settlement option payments start before the April 1 following the
year you turn age 70 1/2, then the annuity date of such settlement option
payments will be treated as the required beginning date for purposes of the RMD
provisions, above, and the death benefit provisions, below.
If you die before the entire interest in your Traditional IRAs is distributed to
you, but after your required beginning date, the entire interest in your
Traditional IRAs must be distributed to your beneficiaries at least as rapidly
as under the method in effect at your death. If you die before your required
beginning date and if you have a designated beneficiary, distributions to your
designated beneficiary can be made in substantially equal installments over the
life or life expectancy of the designated beneficiary, beginning by December 31
of the calendar year that is one year after the year of your death. Otherwise,
if you die before your required beginning date and your surviving spouse is not
your designated beneficiary, distributions must be completed by December 31 of
the calendar year that is five years after the year of your death.
If your designated beneficiary is your surviving spouse, and you die before your
required beginning date, your surviving spouse can become the new
owner/annuitant and can continue the Transamerica Life Traditional IRA on the
same basis as before your death. If your surviving spouse does not wish to
continue the policy as his or her IRA, he or she may elect to receive the death
benefit in the form of qualifying settlement option payments in order to avoid
the 5-year rule. Such payments must be made in substantially equal amounts over
your spouse's life or a period not extending beyond his or her life expectancy.
Your surviving spouse must elect this option and begin receiving payments no
later than the later of the following dates:
1. December 31 of the year following the year you died; or
2. December 31 of the year in which you would have reached the required
beginning date if you had not died.
Either you or, if applicable, your beneficiary, is responsible for assuring that
the RMD is taken in a timely manner and that the correct amount is distributed.
(B) TAXATION OF IRA DISTRIBUTIONS. Because nondeductible Traditional IRA
contributions are made using income which has already been taxed, that is, they
are not deductible contributions, the portion of the Traditional IRA
distributions consisting of nondeductible contributions will not be taxed again
when received by you. If you make any nondeductible contributions to your
Traditional IRAs, each distribution from any of your Traditional IRAs will
consist of a nontaxable portion, return of nondeductible contributions, and a
taxable portion, return of deductible contributions, if any, and earnings.
Thus, if you receive a distribution from any of your Traditional IRAs and you
previously made deductible and nondeductible contributions to such IRAs, you may
not take a Traditional IRA distribution which is entirely tax-free. The
following formula is used to determine the nontaxable portion of your
distributions for a taxable year.
Remaining nondeductible contributions
Divided by
Year-end total adjusted Traditional IRA balances
Multiplied by
Total distributions for the year
Equals:
Nontaxable distributions for the year
To figure the year-end total adjusted Traditional IRA balance, you must treat
all of your Traditional IRAs as a single Traditional IRA. This includes all
regular IRAs, as well as SEP-IRAs, SIMPLE IRAs and Rollover IRAs, but not Roth
IRAs. You also add back to your year-end total Traditional IRA balances,
specifically the distributions taken during the year from your Traditional IRAs.
Please refer to IRS Publication 590, Individual Retirement Arrangements for
instructions, including worksheets, that can assist you in these calculations.
Transamerica Life Insurance Company of New York will report all distributions
from your Transamerica Traditional IRA to the IRS as fully taxable income to
you.
Even if you withdraw all of the assets in your Traditional IRAs in a lump sum,
you will not be entitled to use any form of lump sum treatment or income
averaging to reduce the federal income tax on your distribution. Also, no
portion of your distribution qualifies as a capital gain. Moreover, any
distribution made before you reach age 59 1/2, may be subject to a 10% penalty
tax on early distributions, as indicated below.
(C) WITHHOLDING. Unless you elect not to have withholding apply, federal income
tax will be withheld from your Traditional IRA distributions. If you receive
distributions under a settlement option, tax will be withheld in the same manner
as taxes withheld on wages, calculated as if you were married and claim three
withholding allowances. If you are receiving any other type of distribution, tax
will be withheld in the amount of 10% of the distribution. If payments are
delivered to foreign countries, federal income, tax will generally be withheld
at a 10% rate unless you certify to Transamerica that you are not a U.S. citizen
residing abroad or a tax avoidance expatriate as defined in Code Section 877.
Such certification may result in mandatory withholding of federal income taxes
at a different rate.
5. PENALTY TAXES
(A) EXCESS CONTRIBUTIONS. If at the end of any taxable year the total regular
IRA contributions you made to your Traditional IRAs and your Roth IRAs, other
than rollovers or transfers, exceed the maximum allowable deductible and
nondeductible contributions for that year, the excess contribution amount will
be subject to a nondeductible 6% excise penalty tax. Such penalty tax cannot
exceed 6% of the value of your IRAs at the end of such year.
However, if you withdraw the excess contribution, plus any earnings on it,
before the due date for filing your federal income tax return, including
extensions, for the taxable year in which you made the excess contribution, the
excess contribution will not be subject to the 6% penalty tax. The amount of the
excess contribution withdrawn will not be considered an early distribution, nor
otherwise be includible in your gross income if you have not taken a deduction
for the excess amount. Also, the earnings withdrawn will be taxable income to
you and may be subject to the 10% penalty tax on early distributions.
Alternatively, excess contributions for one year may be withdrawn in a later
year or may be carried forward as regular IRA contributions in the following
year to the extent that the excess, when aggregated with your regular IRA
contributions, if any, for the subsequent year, does not exceed the maximum
allowable deductible and nondeductible amount for that year. The 6% excise tax
will be imposed on excess contributions in each subsequent year they are neither
returned to you nor applied as permissible regular IRA contributions for such
year.
(B) EARLY DISTRIBUTIONS. Since the purpose of an IRA is to accumulate funds for
retirement, your receipt or use of any portion of your IRA before you attain age
59 1/2 constitutes an early distribution subject to a 10% penalty tax unless the
distribution occurs as a result of your death or disability or is part of a
series of substantially equal payments made over your life expectancy or the
joint life expectancies of you and your beneficiary, as determined from IRS
tables in the income tax regulations.
Also, the 10% penalty tax will not apply if distributions are used to pay for
medical expenses in excess of 7.5% of your AGI or if distributions are used to
pay for health insurance premiums for you, your spouse and/or your dependents if
you are an unemployed individual who is receiving unemployment compensation
under federal or state programs for at least 12 consecutive weeks.
The 10% penalty tax also will not apply to an early distribution made to pay for
certain qualifying first-time homebuyer expenses of you or certain family
members, or for certain qualifying higher education expenses for you or certain
family members. First-time homebuyer expenses must be paid within 120 days of
the distribution from the IRA and include up to $10,000 of the costs of
acquiring, constructing, or reconstructing a principal residence, including any
usual or reasonable settlement, financing or other closing costs. Higher
education expenses include tuition, fees, books, supplies, and equipment
required for enrollment, attendance, and room and board at a post-secondary
educational institution. The amount of an early distribution, excluding any
nondeductible contribution included therein, is includable in your gross income
and may be subject to the 10% penalty tax unless you transfer it to another IRA
as a qualifying rollover contribution. Effective January 1, 2000, the 10%
penalty tax will not apply if distributions are made pursuant to an IRS levy to
pay your outstanding tax liability.
(C) FAILURE TO SATISFY RMD. If the RMD rules described above in Part I, Section
4(a) apply to you and if the amount distributed during a calendar year is less
than the minimum amount required to be distributed, you will be subject to a
penalty tax equal to 50% of the excess of the amount required to be distributed
over the amount actually distributed.
(D) POLICY LOANS AND PROHIBITED TRANSACTIONS. If you or any beneficiary engage
in any prohibited transaction, such as any sale, exchange or leasing of any
property between you and the Traditional IRA, or any interference with the
independent status of such IRA, the Traditional IRA will lose its tax exemption
and be treated as having been distributed to you. The value of the entire
Traditional IRA, excluding any nondeductible contributions included therein,
will be includable in your gross income; and, if at the time of the prohibited
transaction you are under age 59 1/2, you may also be subject to the 10% penalty
tax on early distributions, as described above in Part I, Section 5(b).
If you borrow from or pledge your Traditional IRA, or your benefits under the
policy, as security for a loan, the portion borrowed or pledged as security will
cease to be tax-qualified, the value of that portion will be treated as
distributed to you, and you will have to include the value of the portion
borrowed or pledged as security in your income that year for federal tax
purposes. You may also be subject to the 10% penalty tax on early distributions.
(E) OVERSTATEMENT OR UNDERSTATEMENT OF NONDEDUCTIBLE CONTRIBUTIONS. If you
overstate your nondeductible Traditional IRA contributions on your federal
income tax return, without reasonable cause, you may be subject to a reporting
penalty. Such a penalty also applies for failure to file any form required by
the IRS to report nondeductible contributions. These penalties are in addition
to any ordinary income or penalty taxes, interest, and penalties for which you
may be liable if you underreport income upon receiving a distribution from your
Traditional IRA. See Part I, Section 4(b) above for the tax treatment of such
distributions.
IRA PART II: ROTH IRAS
1. CONTRIBUTIONS
(A) REGULAR ROTH IRA. You may make contributions to a regular Roth IRA in any
amount up to the contribution limits described in Part II, Section 3, below.
Such contributions are also subject to the minimum amount under the Transamerica
Life Roth IRA policy. Such contribution must be in cash. Your contribution for a
tax year must be made by the due date, not including extensions, for your
federal income tax return for that tax year. Unlike Traditional IRAs, you may
continue making Roth IRA contributions after reaching age 70 1/2 to the extent
that your AGI does not exceed the levels described below.
(B) SPOUSAL ROTH IRA. If you and your spouse file a joint federal income tax
return for the taxable year and if your spouse's compensation, if any,
includable in gross income for the year is less than the compensation includable
in your gross income for the year, you and your spouse may each establish your
own individual Roth IRA and may make contributions to those Roth IRAs in
accordance with the rules and limits for contributions contained in the Code,
which are described in Part II, Section 3, below. Such contributions must be in
cash. Your contribution to a Spousal Roth IRA for a tax year must be made by the
due date, not including extensions, for your federal income tax return for that
tax year.
(C) ROLLOVER ROTH IRA. You may make contributions to a Rollover Roth IRA within
60 days after receiving a distribution from an existing Roth IRA, subject to
certain limitations discussed in Part II, Section 3, below.
(D) TRANSFER ROTH IRA. You may make an initial or subsequent contribution to
your Transamerica Life Roth IRA by directing a fiduciary or issuer of any of
your existing Roth IRAs to make a direct transfer of all or a portion of the
assets from such Roth IRAs to your Transamerica Life Roth IRA.
(E) CONVERSION ROTH IRA. You may make contributions to a Conversion Roth IRA
within 60 days of receiving a distribution from an existing Traditional IRA or
by instructing the fiduciary or issuer of any of your existing Traditional IRAs
to make a direct transfer of all or a portion of the assets from such a
Traditional IRA to your Transamerica Life Roth IRA, subject to certain
restrictions and subject to income tax on some or all of the converted amounts.
If your AGI, not including the conversion amount, is greater than $100,000 for
the tax year, or if you are married and you and your spouse file separate tax
returns, you may not convert or transfer any amount from a Traditional IRA to a
Roth IRA.
(F) RESPONSIBILITY OF THE OWNER. Contributions, rollovers, transfers or
conversions to a Roth IRA must be made in accordance with the appropriate
sections of the Code. It is your full and sole responsibility to make
contributions to your Roth IRA in accordance with the Code. Transamerica Life
Insurance Company of New York does not provide tax advice, and assumes no
liability for the tax consequences of any contribution to your Roth IRA.
2. DEDUCTIBILITY OF CONTRIBUTIONS
Your Roth IRA permits only nondeductible after-tax contributions. However,
distributions from your Roth IRA are generally not subject to federal income
tax. See Part II, 4(b) below. This is unlike a Traditional IRA, which permits
deductible and nondeductible contributions, but which provides that most
distributions are subject to federal income tax.
3. CONTRIBUTION LIMITS
Contributions for each taxable year to all Traditional and Roth IRAs may not
exceed the lesser of 100% of your compensation or $2,000 for any calendar year,
subject to AGI phase-out rules described below in Section 3(a). Rollover,
transfer and conversion contributions, if properly made, do not count towards
your maximum annual contribution limit, nor do employer contributions to a
SEP-IRA or SIMPLE IRA.
(A) REGULAR ROTH IRAS. The maximum amount you may contribute to a regular Roth
IRA will depend on the amount of your AGI for the calendar year. Your maximum
$2,000 contribution limit begins to phase out when your AGI reaches $95,000 as
unmarried or $150,000 when married filing jointly. Under this phase out, your
maximum regular Roth IRA contributions generally will not be less than $200;
however, no contribution is allowed if your AGI exceeds $110,000 as unmarried or
$160,000 when married filing jointly. If you are married and you and your spouse
file separate tax returns, your maximum regular Roth IRA contribution phases out
between $0 and $10,000. If you are married but you and your spouse lived apart
for the entire taxable year and file separate federal income tax returns, your
maximum contribution is calculated as if you were not married. You should
consult your tax adviser to determine your maximum contribution.
You may make contributions to a regular Roth IRA after age 70 1/2, subject to
the phase-out rules. Regular Roth IRA contributions for a tax year should be
reported on your tax return for that year, specifically, on Form 8606.
(B) SPOUSAL ROTH IRAS. Contributions to your lower-earning spouse's Spousal
Roth IRA may not exceed the lesser of:
1. 100% of both spouses' combined compensation minus any Roth IRA or
deductible Traditional IRA contribution for the spouse with the higher
compensation for the year; or
2. $2,000, as reduced by the phase-out rules described above for regular Roth
IRAs.
A maximum of $4,000 may be contributed to both spouses' Roth IRAs. Contributions
can be divided between the spouses' Roth IRAs as you and your spouse wish, but
no more than $2,000 in regular Roth IRA contributions can be contributed to
either individual's Roth IRA each year.
(C) ROLLOVER ROTH IRAS. There is no limit on the amounts that you may rollover
from one Roth IRA into another Roth IRA, including your Transamerica Life Roth
IRA. You may roll over a distribution from any single Roth IRA to another Roth
IRA only once in any 365-day period.
(D) TRANSFER ROTH IRAS. There is no limit on amounts that you may transfer
directly from one Roth IRA into another Roth IRA, including your Transamerica
Life Roth IRA. Such a direct transfer does not constitute a rollover for
purposes of the 1-year waiting period.
(E) CONVERSION ROTH IRAS. There is no limit on amounts that you may convert from
your Traditional IRA into your Transamerica Life Roth IRA if you are eligible to
open a Conversion Roth IRA as described in Part II, Section 1(e), above. In the
case of a conversion from a SIMPLE-IRA, the conversion may only be done after
the expiration of your 2-year participation period described in Code Section
72(t)(6). However, the distribution proceeds from your Traditional IRA are
includable in your taxable income to the extent that they represent a return of
deductible contributions and earnings on any contributions. The distribution
proceeds from your Traditional IRA are not subject to the 10% early distribution
penalty tax, described below, if the distribution proceeds are deposited to your
Roth IRA within 60 days.
You can also make contributions to a Roth IRA by instructing the fiduciary or
issuer, custodian or trustee of your existing Traditional IRAs to transfer the
assets in your Traditional IRAs to the Roth IRA, which can be a successor to
your existing Traditional IRAs. The transfer will be treated as a distribution
from your Traditional IRAs, and that amount will be includable in your taxable
income to the extent that it represents a return of deductible contributions and
earnings on any contributions, but will not be subject to the 10% early
distribution penalty tax.
If you converted from a Traditional IRA to a Roth IRA during 1998, the income
reportable upon distribution from the Traditional IRA may be reportable entirely
for 1998 or reportable ratably over four years beginning in 1998.
4. RECHARACTERIZATION OF IRA CONTRIBUTIONS
(A) ELIGIBILITY. By making a timely transfer and election, you generally can
treat a contribution made to one type of IRA as made to a different type of IRA
for a taxable year. For example, if you make contributions to a Roth IRA and
later discover that you are not eligible to make Roth IRA contributions, you may
recharacterize all or a portion of the contribution as a Traditional IRA
contribution by the filing due date, including extensions, for the applicable
tax year.
You may not recharacterize amounts paid into a Traditional IRA that represented
tax-free rollovers or transfers, or employer contributions.
(B) ELECTION. You may elect to recharacterize a contribution amount made to one
type of IRA by simply making a trustee-to-trustee transfer of such amount, plus
net income attributable to it, to a second type of IRA on or before the federal
income tax due date, including extensions, for the tax year for which the
contribution was initially made. After the recharacterization has been made, you
may not revoke or modify the election.
(C) TAXATION OF A RECHARACTERIZATION. For federal income tax purposes, a
recharacterized contribution will be treated as having been contributed to the
transferee IRA, rather than to the transferor IRA, on the same date and for the
same tax year that the contribution was initially made to the transferor IRA. A
recharacterized transfer is not considered a rollover for purposes of the 1-year
waiting period.
The transfer of the contribution amount being recharacterized must include the
net income attributable to such amount. If such amount has experienced net
losses as of the time of the recharacterization transfer, the amount
transferred, the original contribution amount less any losses, will generally
constitute a transfer of the entire contribution amount. You must treat the
contribution amount as made to the transferee IRA on your federal income tax
return for the year to which the original contribution amount related.
For reconversions following a recharacterization, see Publication 590 and
Treasury Regulation Section 1.408A-5.
5. DISTRIBUTIONS
(A) REQUIRED MINIMUM DISTRIBUTION, OR RMD. Unlike a Traditional IRA, there are
no rules that require that any distribution be made to you from your Roth IRA
during your lifetime.
If you die before the entire value of your Roth IRA is distributed to you, the
balance of your Roth IRA must be distributed by December 31 of the calendar year
that is five years after your death. However, if you die and you have a
designated beneficiary, your beneficiary may elect to take distributions in the
form of qualifying settlement option payments in substantially equal
installments over the life or life expectancy of the designated beneficiary,
beginning by December 31 of the calendar year that is one year after your death.
If your beneficiary is your surviving spouse, he or she can become the new
owner/annuitant and can continue the Transamerica Life Roth IRA on the same
basis as before your death. If your surviving spouse does not wish to continue
the Transamerica Life Roth IRA as his or her Roth IRA, he or she may elect to
receive the death benefit in the form of qualifying settlement option payments
in order to avoid the 5-year distribution requirement. Such payments must be
made in substantially equal amounts over your spouse's life or a period not
extending beyond his or her life expectancy. Your surviving spouse must elect
this option and begin receiving payments no later than the later of the
following dates:
1. December 31 of the year following the year you died; or
2. December 31 of the year in which you would have reached age 701/2.
Your beneficiary is responsible for assuring that the RMD following your death
is taken in a timely manner and that the correct amount is distributed.
(B) TAXATION OF ROTH IRA DISTRIBUTIONS. The amounts that you withdraw from your
Roth IRA are generally tax-free. For federal income tax purposes, all of your
Roth IRAs are aggregated and Roth IRA distributions are treated as made first
from Roth IRA contributions and second from earnings. Distributions that are
treated as made from Roth IRA contributions are treated as made first from
regular Roth IRA contributions, which are always tax-free, and second from
conversion or rollover Roth IRA contributions on a first-in, first-out basis. A
distribution allocable to a particular conversion or rollover Roth IRA
contribution is treated as consisting first of the portion, if any, of the
conversion contribution that was previously includible in gross income by reason
of the conversion.
In any event, since the purpose of a Roth IRA is to accumulate funds for
retirement, your receipt or use of Roth IRA earnings before you attain age 59
1/2, or within 5 years of your first contribution to the Roth IRA, including a
contribution rolled over, transferred or converted from a Traditional IRA, will
generally be treated as an early distribution subject to regular income tax and
to the 10% penalty tax described below in Section 6(b).
No income tax will apply to earnings that are withdrawn before you attain age 59
1/2, but which are withdrawn five or more years after the first contribution to
the Roth IRA, including a rollover or transfer contribution or conversion from a
Traditional IRA, where the withdrawal is made:
1. upon your death or disability; or
2. to pay qualified first-time homebuyer expenses of you or certain family
members.
No portion of your Roth IRA distribution qualifies as a capital gain. There is
also a separate 5-year rule for the recapture of the 10% penalty tax that is
described below in Section 6(b) and that applies to any Roth IRA distribution
made before age 59 1/2 if any conversion or rollover contribution has been made
to any Roth IRA owned by the individual within the 5 most recent taxable years,
even if this current distribution from the Roth IRA is otherwise tax-free under
the rules described in this Subsection 5(b).
(C) WITHHOLDING. If the distribution from your Roth IRA is subject to federal
income tax, unless you elect not to have withholding apply, federal income tax
will be withheld from your Roth IRA distributions. If you receive distributions
under a settlement option, tax will be withheld in the same manner as taxes
withheld on wages, calculated as if you were married and claim three withholding
allowances. If you are receiving any other type of distribution, tax will be
withheld in the amount of 10% of the amount of the distribution. If payments are
delivered to foreign countries, federal income tax will generally be withheld at
a 10% rate unless you certify to Transamerica Life Insurance Company of New York
that you are not a U.S. citizen residing abroad or a "tax avoidance expatriate"
as defined in Code Section 877. Such certification may result in mandatory
withholding of federal income taxes at a different rate.
6. PENALTY TAXES
(A) EXCESS CONTRIBUTIONS. If at the end of any taxable year your total regular
Roth IRA contributions, other than rollovers, transfers or conversions, exceed
the maximum allowable contributions for that year, taking into account
Traditional IRA contributions, the excess contribution amount will be subject to
a nondeductible 6% excise penalty tax. Such penalty tax cannot exceed 6% of the
value of your Roth IRAs at the end of such year. However, if you withdraw the
excess contribution, plus any earnings on it, before the due date for filing
your federal income tax return, including extensions, for the taxable year in
which you made the excess contribution, the excess contribution will not be
subject to the 6% penalty tax.
The amount of the excess contribution withdrawn will not be considered an early
distribution, but the earnings withdrawn will be taxable income to you and may
be subject to the 10% penalty tax on early distributions. Alternatively, excess
contributions for one year may be withdrawn in a later year or may be carried
forward as Roth IRA contributions in a later year to the extent that the excess,
when aggregated with your regular Roth IRA contributions, if any, for the
subsequent year, does not exceed the maximum allowable contribution for that
year. The 6% excise tax will be imposed on excess contributions in each
subsequent year they are neither returned to you nor applied as permissible
regular Roth IRA contributions for such year.
B) EARLY DISTRIBUTIONS. Since the purpose of a Roth IRA is to accumulate funds
for retirement, your receipt or use of any portion of your Roth IRA before you
attain age 59 1/2 constitutes an early distribution subject to the 10% penalty
tax on the earnings in your Roth IRA. This penalty tax will not apply if the
distribution occurs as a result of your death or disability or is part of a
series of substantially equal payments made over your life expectancy or the
joint life expectancies of you and your beneficiary, as determined from IRS
tables in the income tax regulations. Also, the 10% penalty tax will not apply
if distributions are used to pay for medical expenses in excess of 7.5% of your
AGI; or if distributions are used to pay for health insurance premiums for you,
your spouse and/or your dependents if you are an unemployed individual who is
receiving unemployment compensation under federal or state programs for at least
12 consecutive weeks.
The 10% penalty tax also will not apply to an early distribution made to pay for
certain qualifying first-time homebuyer expenses for you or certain family
members, or for certain qualifying higher education expenses for you or certain
family members. First-time homebuyer expenses must be paid within 120 days of
the distribution from the Roth IRA and include up to $10,000 of the costs of
acquiring, constructing, or reconstructing a principle residence, including any
usual or reasonable settlement, financing or other closing costs. Higher
education expenses include tuition, fees, books, supplies, and equipment
required for enrollment, attendance, and room and board at a post-secondary
educational institution.
Effective January 1, 2000, the 10% penalty tax will not apply if distributions
are made pursuant to an IRS levy to pay your outstanding tax liability.
There is also a separate 5-year recapture rule for the 10% penalty tax in the
case of a Roth IRA distribution made before age 59 1/2 that is made within 5
years after a conversion or rollover contribution from a Traditional IRA. This
recapture rule exists because such a prior Roth IRA contribution avoided the 10%
penalty tax when it was rolled over or converted from the Traditional IRA. Under
this 5-year recapture rule, any Roth IRA distribution made before age 59 1/2
that is attributable to any conversion or rollover contribution from a
Traditional IRA made within the previous 5 years to any of the individual's Roth
IRAs is generally subject to the 10% penalty tax, and its exceptions, to the
extent that such prior Roth IRA contribution was subject to ordinary tax upon
the conversion or rollover, even if the Roth IRA distribution is otherwise
tax-free.
Under the distribution ordering rules for a Roth IRA, all of an individual's
Roth IRAs and distributions therefrom are treated as made: first from regular
Roth IRA contributions; then from conversion or rollover Roth IRA contributions
on a first-in, first-out basis; and last from earnings. However, whenever any
Roth IRA distribution amount is attributable to any conversion or rollover
contribution made within the 5 most recent tax years, this distributed amount is
attributed first to the taxable portion of such prior contribution, for purposes
of determining the amount of this Roth IRA distribution that is subject to the
recapture of the 10% PENALTY TAX, UNLESS SOME EXCEPTION TO THE PENALTY TAX
APPLIES TO THE CURRENT ROTH IRA DISTRIBUTION, SUCH AS AGE 59 1/2, DISABILITY OR
CERTAIN HEALTH, EDUCATION OR HOMEBUYER EXPENSES, AS DESCRIBED ABOVE IN THIS
SUBSECTION 6(B).
(C) FAILURE TO SATISFY RMDS UPON DEATH. If the RMD rules described above in Part
II, Section 4(a) apply to the beneficiary of your Roth IRA after your death and
if the amount distributed during a calendar year is less than the minimum amount
required to be distributed, your beneficiary will be subject to a penalty tax
equal to 50% of the excess of the amount required to be distributed over the
amount actually distributed.
(D) POLICY LOANS AND PROHIBITED TRANSACTIONS. If you or any beneficiary engage
in any prohibited transaction, such as any sale, exchange or leasing of any
property between you and the Roth IRA, or any interference with the independent
status of the Roth IRA, the Roth IRA will lose its tax exemption and be treated
as having been distributed to you. The value of any earnings on your Roth IRA
contributions will be includable in your gross income; and if at the time of the
prohibited transaction, you are under age 59 1/2 you may also be subject to the
10% penalty tax on early distributions, as described above in Part II, Section
5(b). If you borrow from or pledge your Roth IRA, or your benefits under the
policy, as a security for a loan, the portion borrowed or pledged as security
will cease to be tax-qualified, the value of that portion will be treated as
distributed to you, and you may be subject to the 10% penalty tax on early
distributions from a Roth IRA.
IRA PART III: OTHER INFORMATION
(1) FEDERAL ESTATE AND GIFT TAXES
Any amount in or distributed from your Traditional and/or Roth IRAs upon your
death may be subject to federal estate tax, although certain credits and
deductions may be available. The exercise or non-exercise of an option that
would pay a survivor an annuity at or after your death should not be considered
a transfer for federal gift tax purposes.
(2) TAX REPORTING
You must report contributions to, and distributions from, your Traditional IRA
and Roth IRA, including the year-end aggregate account balance of all
Traditional IRAs and Roth IRAs, on your federal income tax return for the year
specifically on IRS Form 8606. For Traditional IRAs, you must designate on the
return how much of your annual contribution is deductible and how much is
nondeductible. You need not file IRS Form 5329 with your income tax return for a
particular year unless for that year you are subject to a penalty tax because
there has been an excess contribution to, an early distribution from, or
insufficient RMDs from your Traditional IRA or Roth IRA, as applicable.
(3) VESTING
Your interest in your Traditional IRA or Roth IRA is nonforfeitable at all
times.
(4) EXCLUSIVE BENEFIT
Your interest in your Traditional IRA or Roth IRA is for the exclusive benefit
of you and your beneficiaries.
(5) IRS PUBLICATION 590
Additional information about your Traditional IRA or Roth IRA or about SEP-IRAs
and SIMPLE-IRAs can be obtained from any district office of the IRS or by
calling 1-800-TAX-FORM for a free copy of IRS Publication 590, Individual
Retirement Arrangements.
<PAGE>
Please forward, without charge, a copy of the Statement of Additional
Information concerning the Transamerica Series(R) Transamerica Classic(R)
Variable Annuity issued by Transamerica Life Insurance Company of New York to:
Please print or type and fill in all information:
- -------------------------------------------------------------------------
Name
- -------------------------------------------------------------------------
Address
- -------------------------------------------------------------------------
City/State/Zip
- -------------------------------------------------------------------------
Date: ________________________ Signed: ______________________________
Return to Transamerica Life Insurance Company of New York, Annuity Service
Center, 401 North Tryon Street, Suite 700, Charlotte, North Carolina 28202.
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION FOR
TRANSAMERICA SERIES(R)
TRANSAMERICA CLASSIC(R)
VARIABLE ANNUITY
SEPARATE ACCOUNT VA-6NY
ISSUED BY
TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
This statement of additional information expands upon subjects discussed in the
May 1, 2000, prospectus for the Transamerica Classic Variable Annuity ("policy")
issued by Transamerica Life Insurance Company of New York ("Transamerica")
through Separate Account VA-6NY. You may obtain a free copy of the prospectus by
writing to: Transamerica Life Insurance Company of New York, Annuity Service
Center, 401 North Tryon Street, Suite 700, Charlotte, NC 28202, until June 5,
2000. After June 5, 2000, the address is P.O. Box 3183, Cedar Rapids, Iowa
52406-3183 or, if by overnight mail, 4333 Edgewood Road NE, Cedar Rapids, Iowa
52499, or calling 877-717-8861. Terms used in the current prospectus for the
policy are incorporated into this statement.
This Statement of Additional Information is not a prospectus and should be read
only in conjunction with the prospectus for the policy and the portfolios.
Dated May 1, 2000
<PAGE>
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TABLE OF CONTENTS
PAGE
<S> <C>
THE POLICY ...................................................................................... 3
NET INVESTMENT FACTOR ........................................................................... 3
VARIABLE SETTLEMENT OPTION PAYMENTS.............................................................. 3
Variable Annuity Units and Payments......................................................... 3
Variable Annuity Unit Value................................................................. 3
Transfers After the Annuity Date............................................................ 4
GENERAL PROVISIONS............................................................................... 4
Non-Participating........................................................................... 4
Misstatement of Age or Sex.................................................................. 4
Proof of Existence and Age.................................................................. 4
Annuity Data................................................................................ 4
Assignment.................................................................................. 4
Annual Report............................................................................... 5
Incontestability............................................................................ 5
Entire Policy............................................................................... 5
Changes in the Policy....................................................................... 5
Protection of Benefits...................................................................... 5
Delay of Payments........................................................................... 5
Notices and Directions...................................................................... 6
CALCULATION OF YIELDS AND TOTAL RETURNS ......................................................... 6
Money Market Sub-Account Yield Calculation.................................................. 6
Other Sub-Account Yield Calculations........................................................ 6
Standard Total Return Calculations.......................................................... 7
Adjusted Historical Portfolio Performance Data.............................................. 7
Other Performance Data...................................................................... 7
HISTORICAL PERFORMANCE DATA...................................................................... 8
General Limitations......................................................................... 8
Historical Performance Data................................................................. 8
DISTRIBUTION OF THE POLICY....................................................................... 14
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS........................................................... 14
STATE REGULATION................................................................................. 14
RECORDS AND REPORTS.............................................................................. 14
FINANCIAL STATEMENTS............................................................................. 14
APPENDIX - Accumulation Transfer Formula......................................................... 15
</TABLE>
<PAGE>
THE POLICY
The following pages provides additional information about the policy which may
be of interest to some owners.
NET INVESTMENT FACTOR
For any sub-account of the variable account, the net investment factor for a
valuation period, before the annuity date, is (a) divided by (b), minus (c)
minus (d):
Where (a) is:
The net asset value per share held in the sub-account, as of the end of the
valuation period; PLUS the per-share amount of any dividend or capital gain
distributions if the "ex-dividend" date occurs in the valuation period;
PLUS OR MINUS a per-share charge or credit as we may determine, as of the
end of the valuation period, for taxes.
Where (b) is:
The net asset value per share held in the sub-account as of the end of the
last prior valuation period.
Where (c) is:
The daily mortality and expense risk charge of 0.00329% (1.20% annually)
times the number of calendar days in the current valuation period.
Where (d) is:
The daily administrative expense charge, currently 0.000411% (0.15%
annually) times the number of calendar days in the current valuation
period. This charge may be increased, but will not exceed 0.00096% (0.35%
annually).
A valuation day is defined as any day that the New York Stock Exchange is open.
VARIABLE SETTLEMENT OPTION PAYMENTS
The variable settlement options provide for payments that fluctuate in dollar
amount, based on the investment performance of the elected variable
sub-account(s).
VARIABLE ANNUITY UNITS AND PAYMENTS
For the first monthly payment, the number of variable annuity units credited in
each variable sub-account will be determined by dividing: (a) the product of the
portion of the value to be applied to the variable sub-account and the variable
annuity purchase rate specified in the policy; BY (b) the value of one variable
annuity unit in that sub-account on the annuity date.
The amount of each subsequent variable payment equals the product of the number
of variable annuity units in each variable sub-account and the variable
sub-account's variable annuity unit value as of the tenth day of the month
before the payment due date. The amount of each payment may vary.
VARIABLE ANNUITY UNIT VALUE
The value of a variable annuity unit in a variable sub-account on any valuation
day is determined as described below. The net investment factor for the
valuation period (for the appropriate payment frequency) just ended is
multiplied by the value of the variable annuity unit for the sub-account on the
preceding valuation day. The net investment factor after the annuity date is
calculated in the same manner as before the annuity date and then multiplied by
an interest factor. The interest factor equals (.999893)n where n is the number
of days since the preceding valuation day. This compensates for the 4% interest
assumption built into the variable annuity purchase rates. We may offer assumed
interest rates other than 4%. The appropriate interest factor will be applied to
compensate for the assumed interest rate.
TRANSFERS AFTER THE ANNUITY DATE
After the annuity date, you may transfer variable annuity units from one
sub-account to another, subject to certain limitations (See "Transfers" page 22
of the prospectus). The dollar amount of each subsequent monthly annuity payment
after the transfer must be determined using the new number of variable annuity
units multiplied by the variable sub-account's variable annuity unit value on
the tenth day of the month preceding payment. We reserve the right to change
this day of the month.
The formula used to determine a transfer after the annuity date can be found in
the Appendix to this statement of additional information.
GENERAL PROVISIONS
NON-PARTICIPATING
The policy is non-participating. No dividends are payable and the policy will
not share in our profits or surplus earnings.
MISSTATEMENT OF AGE OR SEX
If the age or sex of the annuitant or any other measuring life has been
misstated, the settlement option payments under the policy will be whatever the
annuity amount applied on the annuity date would purchase on the basis of the
correct age or sex of the annuitant and/or other measuring life. Any
overpayments or underpayments by us as a result of any such misstatement may be
respectively charged against or credited to the settlement option payment or
payments to be made after the correction so as to adjust for such overpayment or
underpayment.
PROOF OF EXISTENCE AND AGE
Before making any payment under the policy, we may require proof of the
existence and/or proof of the age of an owner and/or an annuitant or any other
measuring life, or any other information deemed necessary in order to provide
benefits under the policy.
ANNUITY DATA
We will not be liable for obligations which depend on receiving information from
a payee or measuring life until such information is received in a satisfactory
form.
ASSIGNMENT
No assignment of a policy will be binding on us unless made in writing and given
to us at our Service Center. We are not responsible for the adequacy of any
assignment. Your rights and the interest of any annuitant or non-irrevocable
beneficiary will be subject to the rights of any assignee of record.
ANNUAL REPORT
At least once each policy year prior to the annuity date, you will be given a
report of the current account value allocated to each sub-account of the
variable account and the fixed account. This report will also include any other
information required by law or regulation. After the annuity date, a
confirmation will be provided with every variable annuity payment.
INCONTESTABILITY
Each policy is incontestable from the policy effective date.
ENTIRE POLICY
We have issued the policy in consideration and acceptance of the payment of the
initial premium. All statements you made, as owner, are considered
representations and not warranties. We will not use any statement in defense of
a claim unless it is made in the application and a copy of the application is
attached to the policy when issued.
The group annuity policy has been issued to a trust organized under Missouri
law. However, the sole purpose of the trust is to hold the group annuity policy.
You have all rights and benefits under the individual certificate issued under
the group policy.
CHANGES IN THE POLICY
Only two authorized officers of Transamerica, acting together, have the
authority to bind us or to make any change in the individual policy or the group
policy or individual certificates thereunder and then only in writing. We will
not be bound by any promise or representation made by any other persons.
We may not change or amend the policy, except as provided in the policy, without
your consent. However, we may change or amend the policy if such change or
amendment is necessary for the policy to comply with any state or federal law,
rule or regulation.
PROTECTION OF BENEFITS
To the extent permitted by law, no benefit (including death benefits) under the
policy will be subject to any claim or process of law by any creditor.
DELAY OF PAYMENTS
Payment of any cash withdrawal, lump sum death benefit, or variable payment or
transfer due from the variable account will occur within seven days from the
date the election becomes effective, except that we may be permitted to postpone
such payment if: (1) the New York Stock Exchange is closed for other than usual
weekends or holidays, or trading on the Exchange is otherwise restricted; or (2)
an emergency exists as defined by the Securities and Exchange Commission
(Commission), or the Commission requires that trading be restricted; or (3) the
Commission permits a delay for the protection of owners.
In addition, while it is our intention to process all transfers from the
sub-accounts immediately upon receipt of a transfer request, we have the right
to delay effecting a transfer from a variable sub-account for up to seven days.
We may delay effecting such a transfer if there is a delay of payment from an
affected portfolio. If this happens, then we will calculate the dollar value or
number of units involved in the transfer from a variable sub-account on or as of
the date we receive a transfer request in an acceptable form and manner, but
will not process the transfer to the transferee sub-account until a later date
during the seven-day delay period when the portfolio underlying the transferring
sub-account obtains liquidity to fund the transfer request through sales of
portfolio securities, new premiums, transfers by investors or otherwise. During
this period, the amount transferred would not be invested in a variable
sub-account.
We may delay payment of any withdrawal from the fixed account for a period of
not more than six months after we receive the request for such withdrawal. If we
delay payment for more than 10 days, we will pay interest on the withdrawal
amount up to the date of payment. (See "Cash Withdrawals" page 24 of the
prospectus.)
NOTICES AND DIRECTIONS
We will not be bound by any authorization, direction, election or notice which
is not received at our Service Center in a form and manner acceptable to us.
Any written notice requirement by us to you will be satisfied by our mailing of
any such required written notice, by first-class mail, to your last known
address as shown on our records.
CALCULATION OF YIELDS AND TOTAL RETURNS
MONEY MARKET SUB-ACCOUNT YIELD CALCULATION
In accordance with regulations adopted by the Commission, we are required to
compute the money market sub-account's current annualized yield for a seven-day
period in a manner which does not take into consideration any realized or
unrealized gains or losses on shares of the money market series or on its
portfolio securities. This current annualized yield is computed by determining
the net change (exclusive of realized gains and losses on the sale of securities
and unrealized appreciation and depreciation) in the value of a hypothetical
account having a balance of one unit of the money market sub-account at the
beginning of such seven-day period, dividing such net change in account value by
the value of the account at the beginning of the period to determine the base
period return and annualizing this quotient on a 365-day basis. The net change
in account value reflects the deductions for the annual account fee, the
mortality and expense risk charge and administrative expense charges and income
and expenses accrued during the period. Because of these deductions, the yield
for the money market sub-account of the variable account will be lower than the
yield for the money market series or any comparable substitute funding vehicle.
The Commission also permits us to disclose the effective yield of the money
market sub-account for the same seven-day period, determined on a compounded
basis. The effective yield is calculated by compounding the unannualized base
period return by adding one to the base period return, raising the sum to a
power equal to 365 divided by 7, and subtracting one from the result.
The yield on amounts held in the money market sub-account normally will
fluctuate on a daily basis. Therefore, the disclosed yield for any given past
period is not an indication or representation of future yields or rates of
return. The money market sub-account's actual yield is affected by changes in
interest rates on money market securities, average portfolio maturity of the
money market series or substitute funding vehicle, the types and quality of
portfolio securities held by the money market series or substitute funding
vehicle, and operating expenses. In addition, the yield figures do not reflect
the effect of any contingent deferred sales load (of up to 6% of premiums) that
may be applicable to a policy.
OTHER SUB-ACCOUNT YIELD CALCULATIONS
We may from time to time disclose the current annualized yield of one or more of
the variable sub-accounts (except the money market sub-account) for 30-day
periods. The annualized yield of a sub-account refers to the income generated by
the sub-account over a specified 30-day period. Because this yield is
annualized, the yield generated by a sub-account during the 30-day period is
assumed to be generated each 30-day period. The yield is computed by dividing
the net investment income per variable accumulation unit earned during the
period by the price per unit on the last day of the period, according to the
following formula:
YIELD = 2[{a-b + 1}6 - 1]
----
cd
Where:
a = net investment income earned during the period by the portfolio
attributable to the shares owned by the sub-account.
b = expenses for the sub-account accrued for the period (net of
reimbursements).
c = the average daily number of variable accumulation units outstanding
during the period.
d = the maximum offering price per variable accumulation unit on the last day
of the period.
Net investment income will be determined in accordance with rules established by
the Commission. Accrued expenses will include all recurring fees that are
charged to all policies. The yield calculations do not reflect the effect of any
contingent deferred sales load that may be applicable to a particular policy.
Contingent deferred sales loads range from 6% to 0% of the amount of account
value withdrawn depending on the elapsed time since the receipt of each premium.
Because of the charges and deductions imposed by the variable account, the yield
for the sub-account will be lower than the yield for the corresponding
portfolio. The yield on amounts held in the variable sub-accounts normally will
fluctuate over time. Therefore, the disclosed yield for any given period is not
an indication or representation of future yields or rates of return. The
variable sub-account's actual yield will be affected by the types and quality of
portfolio securities held by the portfolio, and its operating expenses.
STANDARD TOTAL RETURN CALCULATIONS
We may from time to time also disclose average annual total returns for one or
more of the sub-accounts for various periods of time. Average annual total
return quotations are computed by finding the average annual compounded rates of
return over one, five and ten year periods that would equate the initial amount
invested to the ending redeemable value, according to the following formula:
P{1 + T} = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the one, five or
ten-year period at the end of the one, five, or
ten-year period (or fractional portion of such
period).
All recurring fees are recognized in the ending redeemable value. The standard
average annual total return calculations will reflect the effect of any
contingent deferred sales load that may be applicable to a particular period.
ADJUSTED HISTORICAL PORTFOLIO PERFORMANCE DATA
We may also disclose "historical" performance data for a portfolio, for periods
before the variable sub-account commenced operations. Such performance
information will be calculated based on the performance of the portfolio and the
assumption that the sub-account was in existence for the same periods as those
indicated for the portfolio, with a level of policy charges currently in effect.
This type of adjusted historical performance data may be disclosed on both an
average annual total return and a cumulative total return basis. Moreover, it
may be disclosed assuming that the policy is not surrendered (i.e., with no
deduction for the contingent deferred sales load) and assuming that the policy
is surrendered at the end of the applicable period (i.e., reflecting a deduction
for any applicable contingent deferred sales load).
OTHER PERFORMANCE DATA
We may from time to time also disclose average annual total returns in a
non-standard format in conjunction with the standard described above. The
non-standard format will be identical to the standard format except that the
contingent deferred sales load percentage will be assumed to be 0%.
Transamerica may from time to time also disclose cumulative total returns in
conjunction with the standard format described above. The cumulative returns
will be calculated using the following formula assuming that the contingent
deferred sales load percentage will be 0%.
CTR = {ERV/P}- 1
Where:
CTR = the cumulative total return net of sub-account recurring charges for the
period.
ERV = ending redeemable value of a hypothetical $1,000 payment at the beginning
of the one, five, or ten-year period at the end of the one, five, or
ten-year period (or fractional portion of the period).
P = a hypothetical initial payment of $1,000.
All non-standard performance data will be advertised only if the standard
performance data is also disclosed.
HISTORICAL PERFORMANCE DATA
GENERAL LIMITATIONS
THE FIGURES BELOW REPRESENT PAST PERFORMANCE AND ARE NOT INDICATIVE OF FUTURE
PERFORMANCE. The figures may reflect the waiver of advisory fees and
reimbursement of other expenses which may not continue in the future.
Portfolio information, including historical daily net asset values and capital
gains and dividends distributions regarding each portfolio, has been provided by
that portfolio. The adjusted historical sub-account performance data is derived
from the data provided by the portfolios. We have no reason to doubt the
accuracy of the figures provided by the portfolios. We have not verified these
figures.
HISTORICAL PERFORMANCE DATA
The charts below show adjusted historical performance data for the sub-accounts,
including adjusted historical performance, for the periods prior to the February
8, 1999, inception of the sub-accounts, based on the performance of the
corresponding portfolios since their inception date, with a level of charges
equal to those currently assessed under the policy. THESE FIGURES ARE NOT AN
INDICATION OF THE FUTURE PERFORMANCE OF THE SUB-ACCOUNTS.
The date next to each sub-account name indicates the date of commencement of
operation of the corresponding portfolio.
Notes:
1. On September 16, 1994, an investment company which had commenced operations
on August 1, 1988, called Quest for Value Accumulation Trust (the "Old
Trust") was effectively divided into two investment funds - The Old Trust
and the present OCC Accumulation Trust (the "Present Trust") at which time
the Present Trust commenced operations. The total net assets of the Small
Cap Portfolio immediately after the transaction were $139,812,573 in the
Old Trust and $8,129,274 in the Present Trust. For the period prior to
September 16, 1994, the performance figures for the Small Cap Portfolio of
the Present Trust reflect the performance of the Small Cap Portfolio of the
Old Trust.
2. The Growth Portfolio of the Transamerica Variable Insurance Fund, Inc., is
the successor to Separate Account Fund C of Transamerica Occidental Life
Insurance Company, a management investment company funding variable
annuities, through a reorganization on November 1, 1996. Accordingly, the
performance data for the Transamerica VIF Growth Portfolio includes
performance of its predecessor.
3. On September 16, 1994, an investment company which had commenced operations
on August 1, 1988, called Quest for Value Accumulation Trust (the "Old
Trust") was effectively divided into two investment funds - The Old Trust
and the present OCC Accumulation Trust (the "Present Trust") at the time of
the transaction there was $682,601,380 in the Old Trust and $51,345,102 in
the Present Trust. For the period prior to September 16, 1994, the
performance figures for the Managed Portfolio of the Present Trust reflect
the performance of the Managed Portfolio of the Old Trust.
Historical Performance Data Charts
1. Average Annual Total Returns - Assuming surrender
1. Average Annual Total Returns - Assuming no surrender
3. Cumulative Total Returns - Assuming surrender
4. Cumulative Total Returns - Assuming no surrender
<PAGE>
<TABLE>
<CAPTION>
1. AVERAGE ANNUAL TOTAL RETURNS - Assuming surrender, for periods since
inception of the portfolio, including adjusted historical performance, for each
sub-account are as follows. These figures include mortality and expense charges
of 1.20% per annum, administrative expense charge of 0.15% per annum, a policy
fee of $30 per annum adjusted for average account size and the applicable
contingent deferred sales load (maximum of 6% of premiums).
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
For the period
from
SUB-ACCOUNT For the For the For the 5-year commencement of
(date of commencement 1-year 3-year period period ending For the 10-year portfolio
of operation of period ending 12/31/99 period ending operations to
corresponding portfolio) ending 12/31/99 12/31/99 12/31/99
12/31/99
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
Alger American Income & 35.38% 34.29% 30.88% 17.25% 16.04%
Growth (11/15/88)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Alliance VP Growth & 4.71% 17.44% 21.88% NA 13.84%
Income (1/14/91)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Alliance VP Premier Growth 25.38% 35.18% 33.92% NA 24.54%
(6/26/92)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Dreyfus VIF Appreciation 4.80% 20.25% 23.47% NA 18.26%
(4/5/93)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Dreyfus VIF Small Cap 16.33% 8.80% 13.90% NA 33.74%
(8/31/90)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Janus Aspen Series Balanced 19.89% 24.93% 22.63% NA 18.80%
(9/13/93)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Janus Aspen Series Worldwide 57.09% 34.64% 31.50% NA 27.79%
Growth (9/13/93)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
MFS VIT Emerging Growth 69.19% 39.74% NA NA 34.20%
(7/24/95)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
MFS VIT Growth w/ Income 0.10% 16.50% NA NA 18.94%
(10/9/95)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
MFS VIT Research 17.22% 19.86% NA NA 20.70%
(7/26/95)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
MS UIF Fixed Income -8.11% NA NA NA 2.47%
(1/2/97)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
MS UIF High Yield 0.50% NA NA NA 5.64%
(1/2/97)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
MS UIF International 18.35% NA NA NA 10.82%
Magnum (1/2/97)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
OCC Accumulation Trust -1.58% 8.46% 17.67% 14.96% 16.03%
Managed (8/1/88)(3)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
OCC Accumulation Trust -8.32% 0.12% 6.29% 9.54% 9.90%
Small Cap (8/1/88) (1)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Transamerica VIF Growth 30.78% 39.77% 39.35% 25.03% NA
(2/26/69) (2)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Transamerica VIF Money -1.95% NA NA NA 0.87%
Market (1/2/98)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
<PAGE>
2. AVERAGE ANNUAL TOTAL RETURNS - Assuming no surrender, for periods since
inception of the portfolio, including adjusted historical performance, for each
sub-account are as follows. These figures include mortality and expense charges
of 1.20% per annum, administrative expense charge of 0.15% per annum, a policy
fee of $30 per annum adjusted for average account size, the applicable
contingent deferred sales load (maximum 6% of premiums).
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
For the period
from
SUB-ACCOUNT For the For the For the 5-year commencement of
(date of commencement of operation 1-year 3-year period period ending For the 10-year portfolio
of period ending 12/31/99 period ending operations to
corresponding portfolio) ending 12/31/99 12/31/99 12/31/99
12/31/99
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Alger American Income 40.48% 35.07% 31.11% 17.25% 16.04%
& Growth (11/15/88)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Alliance VP Growth & 9.81% 18.46% 22.19% NA 13.84%
Income (1/14/91)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Alliance VP Premier 30.48% 35.95% 34.13% NA 24.54%
Growth (6/26/92)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Dreyfus VIF Appreciation 9.90% 21.23% 23.76% NA 18.36%
(4/5/93)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Dreyfus VIF Small Cap 21.43% 9.99% 14.30% NA 33.74%
(8/31/90)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Janus Aspen Series Balanced 24.99% 25.83% 22.93% NA 18.91%
(9/13/93)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Janus Aspen Series Worldwide 62.19% 35.41% 31.73% NA 27.86%
Growth (9/13/93)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
MFS VIT Emerging 74.29% 40.46% NA NA 34.47%
Growth (7/24/95)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
MFS VIT Growth w/ 5.20% 17.53% NA NA 19.39%
Income (10/9/95)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
MFS VIT Research 22.32% 20.84% NA NA 21.10%
(7/26/95)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
MS UIF Fixed Income -3.01% NA NA NA 3.80%
(1/2/97)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
MS UIF High Yield 5.60% NA NA NA 6.90%
(1/2/97)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
MS UF International 23.45% NA NA NA 11.96%
Magnum (1/2/97)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
OCC Accumulation Trust 3.52% 9.65% 18.02% 14.96% 16.03%
Managed (8/1/88) (3)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
OCC Accumulation Trust -3.22% 1.51% 6.82% 9.54% 9.90%
Small Cap (8/1/88) (1)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Transamerica VIF Growth 35.88% 40.49% 39.53% 25.03% NA
(2/26/69) (2)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
Transamerica VIF Money 3.15% NA NA NA 3.37%
Market (1/2/98)
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
<PAGE>
3. CUMULATIVE TOTAL RETURNS - Assuming surrender, adjusted historical cumulative
total returns for periods since inception of the portfolio, including adjusted
historical performance for each sub-account are as follows. These figures
include mortality and expenses charges of 1.20% per annum, administrative
expenses charge of 0.15% per annum, a policy fee of $30 per annum adjusted for
average account size and the applicable contingent deferred sales load (maximum
6% of premiums).
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
For the period
from
SUB-ACCOUNT For the 1- For the 3- For the 5- For the 10- commencement of
(date of commencement of operation year period year period year period year period portfolio
of ending ending ending 12/31/99 ending 12/31/99 operations to
corresponding portfolio) 12/31/99 12/31/99 12/31/99
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
- ------------------------------------------------------------------------------------------------------------------------
Alger American Income & 35.38% 142.18% 283.98% 391.13% 424.01%
Growth (11/15/88)
- ------------------------------------------------------------------------------------------------------------------------
Alliance VP Growth & 4.71% 61.98% 168.99% NA 219.75%
Income (1/14/91)
- ------------------------------------------------------------------------------------------------------------------------
Alliance VP Premier 25.38% 147.03% 330.72% NA 420.95%
Growth (6/26/92)
- ------------------------------------------------------------------------------------------------------------------------
Dreyfus VIF Appreciation 4.80% 73.90% 186.91% NA 210.00%
(4/5/93)
- ------------------------------------------------------------------------------------------------------------------------
Dreyfus VIF Small Cap 16.33% 28.80% 91.68% NA 1412.05%
(8/31/90)
- ------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Balanced 19.89% 95.00% 177.36% NA 196.23%
(9/13/93)
- ------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Worldwide 57.09% 144.06% 293.29% NA 369.19%
Growth (9/13/93)
- ------------------------------------------------------------------------------------------------------------------------
MFS VIT Emerging 69.19% 172.87% NA NA 269.54%
Growth (7/24/95)
- ------------------------------------------------------------------------------------------------------------------------
MFS VIT Growth w/ 0.10% 58.11% NA NA 108.34%
Income (10/9/95)
- ------------------------------------------------------------------------------------------------------------------------
MFS VIT Research 17.22% 72.20% NA NA 130.52%
(7/26/95)
- ------------------------------------------------------------------------------------------------------------------------
MS UIF Fixed Income -8.11% NA NA NA 7.57%
(1/2/97)
- ------------------------------------------------------------------------------------------------------------------------
MS UIF High Yield 0.50% NA NA NA 17.88%
(1/2/97)
- ------------------------------------------------------------------------------------------------------------------------
MS UIF International 18.35% NA NA NA 36.07%
Magnum (1/2/97)
- ------------------------------------------------------------------------------------------------------------------------
OCC Accumulation Trust -1.58% 27.58% 125.59% 303.15% 446.79%
Managed (8/1/88) (3)
- ------------------------------------------------------------------------------------------------------------------------
OCC Accumulation Trust -8.32% 0.36% 35.68% 148.81% 194.05%
Small Cap (8/1/88) (1)
- ------------------------------------------------------------------------------------------------------------------------
Transamerica VIF Growth 30.78% 173.07% 425.42% 833.22% N/A
(2/26/69) (2)
- ------------------------------------------------------------------------------------------------------------------------
Transamerica VIF Money -1.95% NA NA NA 1.74%
Market (1/2/98)
- ------------------------------------------------------------------------------------------------------------------------
<PAGE>
4. CUMULATIVE TOTAL RETURNS - Assuming no surrender, adjusted historical
cumulative total returns for periods since inception of the portfolio, including
adjusted historical performance for each sub-account are as follows. These
figures include mortality and expense charges of 1.20% per annum, administrative
expense charge of 0.15% per annum, a policy fee of $30 per annum adjusted for
average account size, the applicable contingent deferred sales load (maximum 6%
of premiums).
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
For the period
from
SUB-ACCOUNT For the 1- commencement of
(date of commencement of operation year period For the For the 5-year For the 10-year portfolio
of ending 3-year period period ending period ending operations to
corresponding portfolio) 12/31/99 ending 12/31/99 12/31/99 12/31/99
12/31/99
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
- ------------------------------------------------------------------------------------------------------------------------
Alger American Income & 40.48% 146.43% 287.38% 391.13% 424.01%
Growth (11/15/88)
- ------------------------------------------------------------------------------------------------------------------------
Alliance VP Growth & 9.81% 66.23% 172.39% NA 219.75%
Income (1/14/91)
- ------------------------------------------------------------------------------------------------------------------------
Alliance VP Premier 30.48% 151.28% 334.12% NA 420.95%
Growth (6/26/92)
- ------------------------------------------------------------------------------------------------------------------------
Dreyfus VIF Appreciation 9.90% 78.15% 190.31% NA 211.70%
(4/5/93)
- ------------------------------------------------------------------------------------------------------------------------
Dreyfus VIF Small Cap 21.43% 33.05% 95.08% NA 1412.05%
(8/31/90)
- ------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Worldwide 24.99% 99.25% 180.76% NA 197.93%
Growth (9/13/93)
- ------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Balanced 62.19% 148.31% 296.69% NA 370.89%
(9/13/93)
- ------------------------------------------------------------------------------------------------------------------------
MFS VIT Emerging 74.29% 177.12% NA NA 272.94%
Growth (7/24/95)
- ------------------------------------------------------------------------------------------------------------------------
MFS VIT Growth w/ 5.20% 62.36% NA NA 111.74%
Income (10/9/95)
- ------------------------------------------------------------------------------------------------------------------------
MFS VIT Research 22.32% 76.45% NA NA 133.92%
(7/26/95)
- ------------------------------------------------------------------------------------------------------------------------
MS UIF Fixed Income -3.01% NA NA NA 11.82%
(1/2/97)
- ------------------------------------------------------------------------------------------------------------------------
MS UIF High Yield 5.60% NA NA NA 22.13%
(1/2/97)
- ------------------------------------------------------------------------------------------------------------------------
MS UIF International 23.45% NA NA NA 40.32%
Magnum (1/2/97)
- ------------------------------------------------------------------------------------------------------------------------
OCC Accumulation Trust 3.52% 31.83% 128.99% 303.15% 446.79%
Small Cap (8/1/88) (1)
- ------------------------------------------------------------------------------------------------------------------------
OCC Accumulation Trust -3.22% 4.61% 39.08% 148.81% 194.05%
Managed (8/1/88) (3)
- ------------------------------------------------------------------------------------------------------------------------
Transamerica VIF Growth 35.88% 177.32% 428.82% 833.22% N/A
(2/26/69) (2)
- ------------------------------------------------------------------------------------------------------------------------
Transamerica VIF Money 3.15% NA NA NA 6.84%
Market (1/2/98)
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DISTRIBUTION OF THE POLICY
Transamerica Securities Sales Corporation ("TSSC") is principal underwriter of
the policies under a Distribution Agreement with Transamerica. TSSC may also
serve as principal underwriter and distributor of other policies issued through
the variable account and certain other separate accounts of Transamerica and
affiliates of Transamerica. TSSC is an indirect wholly-owned subsidiary of
Transamerica Insurance Corporation. TSSC is registered with the Commission as a
broker-dealer and is a member of the National Association of Securities Dealers,
Inc. ("NASD"). Transamerica pays TSSC for acting as the principal underwriter
under a distribution agreement.
TSSC has entered into sales agreements with other broker-dealers to solicit
applications for the policies through registered representatives who are
licensed to sell securities and variable insurance products. These agreements
provide that applications for the policies may be solicited by registered
representatives of the broker-dealers appointed by Transamerica to sell its
variable life insurance and variable annuities. These broker-dealers are
registered with the Commission and are members of the NASD. The registered
representatives are authorized under applicable state regulations to sell
variable life insurance and variable annuities.
Under the agreements, applications for policies will be sold by broker-dealers
which will receive compensation as described in the prospectus.
The offering of the policies is expected to be continuous and TSSC does not
anticipate discontinuing the offering of the policies. However, TSSC reserves
the right to discontinue the offering of the policies.
During fiscal year 1999, $420,921in commissions were paid to TSSC as underwriter
of Separate Account VA-6NY; no amounts were retained by TSSC. Under the sales
agreements, TSSC will pay broker-dealers compensation based on a percentage of
each premium. This percentage may be up to 5.75% and in certain situations
additional amounts for marketing allowances, production bonuses, service fees,
sales awards and meetings, and asset based trailer commissions may be paid.
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS
Title to assets of the variable account is held by Transamerica. The assets of
the variable account are kept separate and apart from Transamerica general
account assets. Records are maintained of all purchases and redemptions of
portfolio shares held by each of the sub-accounts.
STATE REGULATION
We are subject to the insurance laws and regulations of all the states where we
are licensed to operate. The availability of certain policy rights and
provisions depends on state approval and/or filing and review processes. Where
required by state law or regulation, the policy will be modified accordingly.
RECORDS AND REPORTS
All records and accounts relating to the variable account will be maintained by
us or by our Service Center. As presently required by the provisions of the 1940
Act and regulations promulgated thereunder which pertain to the variable
account, reports containing such information as may be required under the 1940
Act or by other applicable law or regulation will be sent to owners
semi-annually at their last known address of record.
FINANCIAL STATEMENTS
This Statement of Additional Information contains the financial statements of
the variable account as of and for the period ended December 31, 1999.
The financial statements for Transamerica included in this Statement of
Additional Information should be considered only as bearing on our ability to
meet our obligations under the policies. They should not be considered as
bearing on the investment performance of the assets in the variable account.
<PAGE>
APPENDIX
ACCUMULATION TRANSFER FORMULA
Transfers after the annuity date are implemented according to the
following formulas:
(1) Determine the number of units to be transferred from the variable
sub-account as follows: = AT/AUV1
(2) Determine the number of variable accumulation units remaining in
such variable sub-account (after the transfer):
= UNIT1 AT/AUV1
(3) Determine the number of variable accumulation units in the
transferee variable sub-account (after the transfer):
= UNIT2 + AT/AUV2
(4) Subsequent variable accumulation payments will reflect the changes
in variable accumulation units in each variable sub-account as of the
next variable accumulation payment's due date.
Where:
(AUV1) is the variable accumulation unit value of the variable
sub-account that the transfer is being made from as of the end of the
valuation period in which the transfer request was received.
(AUV2) is the variable accumulation unit value of the variable
sub-account that the transfer is being made to as of the end of the
valuation period in which the transfer request was received.
(UNIT1) is the number of variable accumulation units in the variable
sub-account that the transfer is being made from, before the transfer.
(UNIT2) is the number of variable accumulation units in the variable
sub-account that the transfer is being made to, before the transfer.
(AT) is the dollar amount being transferred from the variable
sub-account.
<PAGE>
Audited Financial Statements
Separate Account VA-6NY of
Transamerica Life Insurance
Company of New York
Period from February 5, 1999 (Commencement of
Operations) to December 31, 1999
with Report of Independent Auditors
<PAGE>
Separate Account VA-6NY of
Transamerica Life Insurance
Company of New York
Audited Financial Statements
Period from February 5, 1999 (Commencement of Operations) to December 31, 1999
<TABLE>
<CAPTION>
CONTENTS
<S> <C>
Report of Independent Auditors................................................................................1
Audit Financial Statements
Statement of Assets and Liabilities...........................................................................2
Statement of Operations.......................................................................................5
Statement of Changes in Net Assets............................................................................8
Notes to Financial Statements.................................................................................11
</TABLE>
<PAGE>
1
Report of Independent Auditors
Unitholders of Separate Account VA-6NY
of Transamerica Life Insurance Company of New York
Board of Directors, Transamerica Life Insurance Company of New York
We have audited the accompanying statement of assets and liabilities of Separate
Account VA-6NY of Transamerica Life Insurance Company of New York (comprised of
the Alliance Premier Growth, Alliance Growth and Income, Oppenheimer Managed,
Oppenheimer Small Cap, Transamerica VIF Growth, Transamerica VIF Money Market,
MFS Research, MFS Growth with Income, MFS Emerging Growth, Morgan Stanley
International Mangum, Morgan Stanley Fixed Income, Morgan Stanley High Yield,
Alger American Income and Growth, Janus Aspen Worldwide Growth, Janus Aspen
Balanced, Dreyfus Capital Appreciation, and Dreyfus Small Cap Sub-Accounts) as
of December 31, 1999, the related statements of operations and changes in net
assets for the period from February 5, 1999 (commencement of operations) to
December 31, 1999. The financial statements are the responsibility of the
Separate Account VA-6NY's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1999, by
correspondence with the fund managers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
sub-accounts comprising Separate Account VA-6NY of Transamerica Life Insurance
Company of New York at December 31, 1999, the results of their operations and
the changes in their net assets for the period from February 5, 1999
(commencement of operations) to December 31, 1999 in conformity with accounting
principles generally accepted in the United States.
March 24, 2000
<PAGE>
2
Separate Account VA-6NY of Transamerica Life Insurance
Company of New York
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
December 31, 1999
ALLIANCE ALLIANCE TRANSAMERICA TRANSAMERICA
PREMIER GROWTH AND OPPENHEIMER OPPENHEIMER VIF VIF MONEY
GROWTH INCOME MANAGED SMALL CAP GROWTH MARKET
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ------------- --------------- --------------- -------------- ---------------
Assets:
<S> <C> <C> <C> <C> <C> <C>
Investments, at fair value $ 1,281,348 $ 468,717 $ 21,242 $ 9,116 $ 777,585 $ 79,701
Due from Transamerica Life - 8 1 3 - 105
------------- ------------- --------------- --------------- -------------- ---------------
Total assets 1,281,348 468,725 21,243 9,119 777,585 79,806
Liabilities:
Due to Transamerica Life 52 - - - 57 -
------------- ------------- --------------- --------------- -------------- ---------------
Total liabilities 52 - - - 57 -
------------- ------------- --------------- --------------- -------------- ---------------
Net assets $ 1,281,296 $ 468,725 $ 21,243 $ 9,119 $ 777,528 $ 79,806
============= ============= =============== =============== ============== ===============
Accumulation units outstanding 67,859.000 35,921.156 1,945.488 1,049.819 40,508.249 74,489.911
============= ============= =============== =============== ============== ===============
Net asset value and redemption
price per unit $ 18.881740 $ 13.048717 $ 10.919111 $ 8.686259 $ 19.194313 $ 1.071367
============= ============= =============== =============== ============== ===============
Other sub-account information:
Number of mutual fund shares 31,677.319 21,510.630 486.647 404.822 29,221.529 79,700.810
Net asset value per share $ 40.45 $ 21.79 $ 43.65 $ 22.52 $ 26.61 $ 1.00
Investment cost $ 1,104,641 $ 468,292 $ 20,941 $ 9,581 $ 650,737 $ 79,701
See accompanying notes.
<PAGE>
4
MORGAN MORGAN ALGER
MFS MFS EMERGING STANLEY STANLEY MORGAN AMERICAN
MFS RESEARCH GROWTH WITH GROWTH INTERNATIONAL FIXED INCOME STANLEY INCOME AND
SUB-ACCOUNT INCOME SUB-ACCOUNT MAGNUM SUB-ACCOUNT HIGH YIELD GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
- ---------------- -------------- -------------- --------------- -------------- -------------- --------------
$ 176,779 $ 422,393 $ 247,778 $ 19,129 $ 99,823 $ 75,103 $ 377,306
3 6 - - 1 2 -
- ---------------- -------------- -------------- --------------- -------------- -------------- --------------
176,782 422,399 247,778 19,129 99,824 75,105 377,306
- - 28 - - - 23
- ---------------- -------------- -------------- --------------- -------------- -------------- --------------
- - 28 - - - 23
- ---------------- -------------- -------------- --------------- -------------- -------------- --------------
$ 176,782 $ 422,399 $ 247,750 $ 19,129 $ 99,824 $ 75,105 $ 377,283
================ ============== ============== =============== ============== ============== ==============
11,885.844 33,284.624 10,752.253 1,445.779 9,706.172 6,892.039 20,454.496
================ ============== ============== =============== ============== ============== ==============
$ 14.873323 $ 12.690514 $ 23.041683 $ 13.230929 $ 10.284590 $ 10.897356 $ 18.444991
================ ============== ============== =============== ============== ============== ==============
7,574.080 19,821.333 6,530.795 1,377.163 9,932.624 7,334.274 21,462.232
$ 23.34 $ 21.31 $ 37.94 $ 13.89 $ 10.05 $ 10.24 $ 17.58
$ 155,375 $ 406,721 $ 170,281 $ 16,092 $ 104,392 $ 78,193 $ 299,906
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Separate Account VA-6NY of Transamerica Life Insurance
Company of New York
Statement of Assets and Liabilities (continued)
December 31, 1999
JANUS
ASPEN JANUS ASPEN DREYFUS
WORLDWIDE BALANCED CAPITAL DREYFUS SMALL
GROWTH SUB-ACCOUNT APPRECIATION CAP
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ------------- --------------- ---------------
Assets:
<S> <C> <C> <C> <C>
Investments, at fair value $ 669,803 $ 1,169,219 $ 381,833 $ 176,038
Due from Transamerica Life - - 4 -
------------- ------------- --------------- ---------------
Total assets 669,803 1,169,219 381,837 176,038
Liabilities:
Due to Transamerica Life 94 49 - 1
------------- ------------- --------------- ---------------
Total liabilities 94 49 - 1
------------- ------------- --------------- ---------------
Net assets $ 669,709 $ 1,169,170 $ 381,837 $ 176,037
============= ============= =============== ===============
Accumulation units outstanding 32,624.907 70,631.182 27,264.942 15,139.412
============= ============= =============== ===============
Net asset value and redemption
price per unit $ 20.527537 $ 16.553171 $ 14.004688 $ 11.627730
============= ============= =============== ===============
Other sub-account information:
Number of mutual fund shares 14,027.278 41,877.474 9,576.944 2,653.565
Net asset value per share $ 47.75 $ 27.92 $ 39.87 $ 66.34
Investment cost $ 485,567 $ 1,053,029 $ 370,437 $ 160,337
See accompanying notes.
<PAGE>
5
Separate Account VA-6NY of Transamerica Life Insurance
Company of New York
Statement of Operations
Period from February 5, 1999 (Commencement of Operations) to December 31, 1999
ALLIANCE ALLIANCE TRANSAMERICA
PREMIER GROWTH AND OPPENHEIMER OPPENHEIMER VIF
GROWTH INCOME MANAGED SMALL CAP GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- -------------- --------------- ---------------
Investment income $ 4,237 $ 6,942 $ - $ - $ 328
Expenses:
Mortality and expense risk charge 6,936 2,125 143 58 2,883
------------- --------------- -------------- --------------- ---------------
Net investment income (loss) (2,699) 4,817 (143) (58) (2,555)
Net realized and unrealized gain
(loss) on investments:
Realized gain (loss) on
investment transactions 793 172 17 (20) 139
Unrealized appreciation
(depreciation) of investments 176,706 424 301 (464) 126,848
------------- --------------- -------------- --------------- ---------------
Net gain (loss) on investments 177,499 596 318 (484) 126,987
------------- --------------- -------------- --------------- ---------------
Increase (decrease) in net assets
resulting from operations $ 174,800 $ 5,413 $ 175 $ (542) $ 124,432
============= =============== ============== =============== ===============
</TABLE>
See accompanying notes.
<PAGE>
6
<TABLE>
<CAPTION>
MORGAN MORGAN ALGER
TRANSAMERICA MFS MFS EMERGING STANLEY STANLEY MORGAN AMERICAN
VIF MONEY MFS RESEARCH GROWTH WITH GROWTH INTERNATIONAL FIXED INCOME STANLEY INCOME AND
MARKET SUB-ACCOUNT INCOME SUB-ACCOUNT MAGNUM SUB-ACCOUNT HIGH YIELD GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
- ----------------- -------------- -------------- -------------- --------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 872 $ 1,030 $ 405 $ - $ 169 $ 4,472 $ 5,694 $ 2,401
343 1,179 1,932 1,011 130 642 478 1,553
- ----------------- -------------- -------------- -------------- --------------- -------------- -------------- -------------
529 (149) (1,527) (1,011) 39 3,830 5,216 848
- 2,225 94 6,829 113 (19) 19 1,904
- 21,404 15,671 77,498 3,037 (4,570) (3,090) 77,400
- ----------------- -------------- -------------- -------------- --------------- -------------- -------------- -------------
- 23,629 15,765 84,327 3,150 (4,589) (3,071) 79,304
- ----------------- -------------- -------------- -------------- --------------- -------------- -------------- -------------
$ 529 $ 23,480 $ 14,238 $ 83,316 $ 3,189 $ (759) $ 2,145 $ 80,152
================= ============== ============== ============== =============== ============== ============== =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
7
Separate Account VA-6NY of Transamerica Life Insurance
Company of New York
Statement of Operations (continued)
Period from February 5, 1999 (Commencement of Operations) to December 31, 1999
JANUS ASPEN
WORLDWIDE JANUS DREYFUS
GROWTH ASPEN CAPITAL DREYFUS SMALL
SUB-ACCOUNT BALANCED APPRECIATION CAP
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Investment income $ 382 $ 14,851 $ 3,483 $ -
Expenses:
Mortality and expense risk charge 3,101 5,643 1,697 557
------------- --------------- -------------- ---------------
Net investment income (loss) (2,719) 9,208 1,786 (557)
Net realized and unrealized gain
(loss) on investments:
Realized gain (loss) on
investment transactions 1,095 1,145 905 137
Unrealized appreciation
(depreciation) of investments 184,235 116,190 11,395 15,700
------------- --------------- -------------- ---------------
Net gain (loss) on investments 185,330 117,335 12,300 15,837
------------- --------------- -------------- ---------------
Increase (decrease) in net assets
resulting from operations $ 182,611 $ 126,543 $ 14,086 $ 15,280
============= =============== ============== ===============
</TABLE>
See accompanying notes.
<PAGE>
8
Separate Account VA-6NY of Transamerica Life Insurance
Company of New York
Statement of Changes in Net Assets
Period from February 5, 1999 (Commencement of Operations) to December 31, 1999
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE TRANSAMERICA TRANSAMERICA
PREMIER GROWTH AND OPPENHEIMER OPPENHEIMER VIF VIF MONEY
GROWTH INCOME MANAGED SMALL CAP GROWTH MARKET
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- -------------- --------------- --------------- --------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) $ (2,699) $ 4,817 $ (143) $ (58) $ (2,555) $ 529
Realized gain (loss) on
investment transactions 793 172 17 (20) 139 -
Unrealized appreciation
(depreciation) of investments 176,706 424 301 (464) 126,848 -
------------- --------------- -------------- --------------- --------------- --------------
Increase (decrease) in net
assets resulting from 174,800 5,413 175 (542) 124,432 529
operations
Changes from accumulation unit
transactions 1,106,496 463,312 21,068 9,661 653,096 79,277
------------- --------------- -------------- --------------- --------------- --------------
Total increase in net assets 1,281,296 468,725 21,243 9,119 777,528 79,806
Net assets at beginning of period - - - - - -
------------- --------------- -------------- --------------- --------------- --------------
Net assets at end of period $ 1,281,296 $ 468,725 $ 21,243 $ 9,119 $777,528 $ 79,806
============= =============== ============== =============== =============== ==============
See accompanying notes.
<PAGE>
10
MORGAN MORGAN ALGER
MFS MFS EMERGING STANLEY STANLEY MORGAN AMERICAN
MFS RESEARCH GROWTH WITH GROWTH INTERNATIONAL FIXED INCOME STANLEY INCOME AND
SUB-ACCOUNT INCOME SUB-ACCOUNT MAGNUM SUB-ACCOUNT HIGH YIELD GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
- ---------------- -------------- -------------- --------------- -------------- -------------- --------------
$ (149) $ (1,527) $ (1,011) $ 39 $ 3,830 $ 5,216 $ 848
2,225 94 6,829 113 (19) 19 1,904
21,404 15,671 77,498 3,037 (4,570) (3,090) 77,400
- ---------------- -------------- -------------- --------------- -------------- -------------- --------------
23,480 14,238 83,316 3,189 (759) 2,145 80,152
153,302 408,161 164,434 15,940 100,583 72,960 297,131
- ---------------- -------------- -------------- --------------- -------------- -------------- --------------
176,782 422,399 247,750 19,129 99,824 75,105 377,283
- - - - - - -
- ---------------- -------------- -------------- --------------- -------------- -------------- --------------
$176,782 $ 422,399 $ 247,750 $ 19,129 $ 99,824 $ 75,105 $ 377,283
================ ============== ============== =============== ============== ============== ==============
</TABLE>
<PAGE>
Separate Account VA-6NY of Transamerica Life Insurance
Company of New York
Statement of Changes in Net Assets (continued)
Period from February 5, 1999 (Commencement of Operations) to December 31, 1999
<TABLE>
<CAPTION>
JANUS ASPEN
WORLDWIDE JANUS DREYFUS
GROWTH ASPEN CAPITAL DREYFUS SMALL
SUB-ACCOUNT BALANCED APPRECIATION CAP
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- -------------- ---------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C>
Net investment income (loss) $ (2,719) $ 9,208 $ 1,786 $ (557)
Realized gain (loss) on
investment transactions 1,095 1,145 905 137
Unrealized appreciation
(depreciation) of investments 184,235 116,190 11,395 15,700
------------- --------------- -------------- ---------------
Increase (decrease) in net
assets resulting from 182,611 126,543 14,086 15,280
operations
Changes from accumulation unit
transactions 487,098 1,042,627 367,751 160,757
------------- --------------- -------------- ---------------
Total increase in net assets 669,709 1,169,170 381,837 176,037
Net assets at beginning of period - - - -
------------- --------------- -------------- ---------------
Net assets at end of period $ 669,709 $ 1,169,170 $ 381,837 $ 176,037
============= =============== ============== ===============
</TABLE>
See accompanying notes.
<PAGE>
Separate Account VA-6NY of Transamerica Life Insurance
Company of New York
Notes to Financial Statements
December 31, 1999
16
1. ORGANIZATION
Separate Account VA-6NY of Transamerica Life Insurance Company of New York
("Separate Account") was established by Transamerica Life Insurance Company of
New York ("Transamerica Life") as a separate account under the laws of the State
of New York pursuant to September 11, 1996 resolutions of Transamerica's Board
of Directors. The Separate Account is registered with the Securities and
Exchange Commission (the "Commission") under the Investment Company Act of 1940
as a unit investment trust and is designed to provide annuity benefits pursuant
to deferred annuity contracts ("Contract") issued by Transamerica Life. The
Separate Account commenced operations when initial deposits were received on
February 5, 1999.
In accordance with the terms of the Contract, all payments allocated to the
Separate Account by contract owners must be allocated to purchase units of any
or all of the Separate Account's seventeen sub-accounts, each of which invests
exclusively in a specific corresponding mutual fund portfolio. The mutual fund
portfolios are: Alliance Premier Growth, Alliance Growth and Income, Oppenheimer
Managed, Oppenheimer Small Cap, Transamerica VIF Growth, Transamerica VIF Money
Market, MFS Research, MFS Growth with Income, MFS Emerging Growth, Morgan
Stanley International Magnum, Morgan Stanley Fixed Income, Morgan Stanley High
Yield, Alger American Income and Growth, Janus Aspen Worldwide Growth, Janus
Aspen Balanced, Dreyfus Capital Appreciation, and Dreyfus Small Cap, (together
"the Funds"). The funds are open-end, diversified investment companies
registered under the Investment Company Act of 1940.
2. SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the Separate Account have been prepared
in accordance with accounting principles generally accepted in the United
States. The preparation of financial statements requires management to make
estimates and assumptions that affect amounts reported in the financial
statements and accompanying notes. Such estimates and assumptions could change
in the future as more information becomes known which could impact the amounts
reported and disclosed herein. The accounting principles followed and the
methods of applying those principles are presented below:
Investment Valuation--Investments in the Funds' shares are carried at fair
(net asset) value. Realized investment gains or losses on investments are
determined on a specific identification basis which approximates average
cost. Investment transactions are accounted for on the date the order to buy
or sell is executed (trade date).
<PAGE>
Separate Account VA-6NY of Transamerica Life Insurance
Company of New York
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Investment Income--Investment income consists of dividend income (both
ordinary and capital gains) and is recognized on the ex-dividend date. All
distributions received are reinvested in the respective sub-accounts.
Federal Income Taxes--Operations of the Separate Account are part of, and
will be taxed with, those of Transamerica Life, which is taxed as a "life
insurance company" under the Internal Revenue Code. Under current federal
income tax law, income from assets maintained in the Separate Account for
the exclusive benefit of participants is generally not subject to federal
income tax.
3. EXPENSES AND CHARGES
Mortality and expense risk charges are deducted from each sub-account of the
Separate Account on a daily basis which is equal, on an annual basis, to 1.20%
of the daily net asset value of the sub-account. This amount can never increase
and is paid to Transamerica Life. An administrative expense charge is also
deducted by Transamerica Life from each sub-account on a daily basis which is
equal, on an annual basis, to .15% of the daily net asset value of the
sub-account. This amount may change, but it is guaranteed not to exceed a
maximum effective annual rate of .35%.
The following charges are deducted from a contract holder's account by
Transamerica Life and not directly from the Separate Account. An annual contract
fee is deducted at the end of each contract year prior to the annuity date.
Currently, this charge is $30. This charge may change but is guaranteed not to
exceed $60. After the annuity date this charge is referred to as the Annuity
Fee. The Annuity Fee is $30. Additionally, there is a $10 fee for each transfer
in excess of eighteen in any contract year. In the event that a contract holder
withdraws all or a portion of the contract holder's account, a contingent
deferred sales load (CDSL) not exceeding 6% of premiums may be applied to the
amount of the contract value withdrawn to cover certain expenses relating to the
sale of contracts. The amount of the CDSL is based upon elapsed time since the
premium was received and disappears after the seventh year. The CDSL charge for
1999 was $5,487.
4. REMUNERATION
The Separate Account pays no remuneration to directors, advisory boards or
officers or such other persons who may from time to time perform services for
the Separate Account.
<PAGE>
<TABLE>
<CAPTION>
5. ACCUMULATION UNITS
The changes in accumulation units and amounts are as follows:
ALLIANCE ALLIANCE
PERIOD FROM FEBRUARY 5, 1999 PREMIER GROWTH AND OPPENHEIMER OPPENHEIMER TRANSAMERICA
TO DECEMBER 31, 1999 GROWTH INCOME MANAGED SMALL CAP VIF GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
- ---------------------------- ------------- -------------- -------------- -------------- --------------
Accumulation units:
<S> <C> <C> <C> <C> <C>
Units sold 65,868.444 34,163.006 1,945.488 1,049.819 39,600.628
Units redeemed (220.392) (64.782) - - (241.232)
Units transferred 2,210.948 1,822.932 - - 1,148.853
------------- -------------- -------------- -------------- --------------
67,859.000 35,921.156 1,945.488 1,049.819 40,508.249
============= ============== ============== ============== ==============
TRANSAMERICA MORGAN STANLEY
VIF MONEY MFS RESEARCH MFS GROWTH MFS EMERGING INTERNATIONAL
MARKET SUB-ACCOUNT WITH INCOME GROWTH MAGNUM
SUB-ACCOUNT SUB-ACCOUNT
------------- -------------- -------------- -------------- --------------
Accumulation units:
Units sold 88,870.087 16,452.696 31,452.165 13,354.823 1,521.875
Units redeemed - (4,856.296) - (2,963.009 (76.096)
Units transferred (14,380.176) 289.444 1,832.459 360.439 -
------------- -------------- -------------- -------------- --------------
74,489.911 11,885.844 33,284.624 10,752.253 1,445.779
============= ============== ============== ============== ==============
ALGER
MORGAN MORGAN STANLEY AMERICAN JANUS ASPEN
STANLEY FIXED HIGH YIELD GROWTH AND WORLDWIDE JANUS ASPEN
INCOME SUB-ACCOUNT INCOME GROWTH BALANCED
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- -------------- -------------- -------------- --------------
Accumulation units:
Units sold 8,827.368 6,731.384 19,645.579 32,799.611 69,570.446
Units redeemed - (22.978) - (248.942) (83.812)
Units transferred 878.804 183.633 808.917 74.238 1,144.548
------------- -------------- -------------- -------------- --------------
9,706.172 6,892.039 20,454.496 32,624.907 70,631.182
============= ============== ============== ============== ==============
<PAGE>
5. ACCUMULATION UNITS (CONTINUED)
DREYFUS
CAPITAL DREYFUS SMALL
APPRECIATION CAP
SUB-ACCOUNT SUB-ACCOUNT
------------- -------------
Accumulation units:
Units sold 26,416.309 15,018.738
Units redeemed (121.772) (24.147)
Units transferred 970.405 144.821
------------- -------------
27,264.942 15,139.412
============= =============
ALLIANCE ALLIANCE
PERIOD FROM FEBRUARY 5, PREMIER GROWTH AND OPPENHEIMER OPPENHEIMER TRANSAMERICA
1999 TO DECEMBER 31, GROWTH INCOME MANAGED SMALL CAP VIF GROWTH
1999 SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
- ---------------------------- ------------- -------------- -------------- -------------- --------------
Amounts:
Sales $ 1,074,039 $ 440,636 $ 21,068 $ 9,661 $ 638,463
Redemptions (3,594) (836) - - (3,889)
Transfers 36,051 23,512 - - 18,522
------------- -------------- -------------- -------------- --------------
Net increase $ 1,106,496 $ 463,312 $ 21,068 $ 9,661 $ 653,096
============= ============== ============== ============== ==============
TRANSAMERICA MORGAN STANLEY
VIF MONEY MFS RESEARCH MFS GROWTH MFS EMERGING INTERNATIONAL
MARKET SUB-ACCOUNT WITH INCOME GROWTH MAGNUM
SUB-ACCOUNT SUB-ACCOUNT
------------- -------------- -------------- -------------- --------------
Amounts:
Sales $ 94,581 $ 212,205 $ 385,690 $ 204,235 $ 16,779
Redemptions - (62,636) - (45,303) (839)
Transfers (15,304) 3,733 22,471 5,502 -
------------- -------------- -------------- -------------- --------------
Net increase $ 79,277 $ 153,302 $ 408,161 $ 164,434 $ 15,940
============= ============== ============== ============== ==============
ALGER
MORGAN MORGAN STANLEY AMERICAN JANUS ASPEN
STANLEY FIXED HIGH YIELD GROWTH AND WORLDWIDE JANUS ASPEN
INCOME SUB-ACCOUNT INCOME GROWTH BALANCED
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- -------------- -------------- -------------- --------------
Amounts:
Sales $ 91,476 $ 71,259 $ 285,454 $ 489,707 $ 1,026,969
Redemptions - (243) (77) (3,717) (1,237)
Transfers 9,107 1,944 11,754 1,108 16,895
------------- -------------- -------------- -------------- --------------
Net increase $ 100,583 $ 72,960 $ 297,131 $ 487,098 $ 1,042,627
============= ============== ============== ============== ==============
<PAGE>
5. ACCUMULATION UNITS (CONTINUED)
DREYFUS
CAPITAL DREYFUS SMALL
APPRECIATION CAP
SUB-ACCOUNT SUB-ACCOUNT
------------- -------------
Amounts:
Sales $ 356,304 $ 159,475
Redemptions (1,642) (256)
Transfers 13,089 1,538
------------- -------------
Net increase $ 367,751 $ 160,757
============= =============
6. INVESTMENT TRANSACTIONS
The aggregate cost of purchases and the aggregate proceeds from the sales of
investments for the period from February 5,1999 to December 31, 1999 were:
ALLIANCE ALLIANCE
PREMIER GROWTH AND OPPENHEIMER OPPENHEIMER TRANSAMERICA
GROWTH INCOME MANAGED SMALL CAP VIF GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------- -------------- -------------- --------------
Aggregate purchases $1,115,244 $ 472,696 $ 31,543 $ 10,143 $ 657,832
============== ============== ============== ============== ==============
Aggregate proceeds from sales $ 11,396 $ 4,575 $ 10,619 $ 542 $ 7,234
============== ============== ============== ============== ==============
TRANSAMERICA MFS GROWTH MFS EMERGING MORGAN
VIF MONEY MFS RESEARCH WITH INCOME GROWTH STANLEY
MARKET SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT INTERNATIONAL
SUB-ACCOUNT MAGNUM
-------------- -------------- -------------- -------------- ---------------
Aggregate purchases $ 95,264 $ 223,089 $ 408,559 $ 217,144 $ 16,948
============== ============== ============== ============== ===============
Aggregate proceeds from sales $ 15,563 $ 69,939 $ 1,932 $ 53,692 $ 969
============== ============== ============== ============== ===============
<PAGE>
6. INVESTMENT TRANSACTIONS (CONTINUED)
MORGAN ALGER JANUS
STANLEY MORGAN AMERICAN ASPEN JANUS
FIXED INCOME STANLEY HIGH INCOME AND WORLDWIDE ASPEN
SUB-ACCOUNT YIELD GROWTH GROWTH BALANCED
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------- -------------- -------------- ---------------
Aggregate purchases $ 105,144 $ 78,979 $ 307,437 $ 492,391 $ 1,063,136
============== ============== ============== ============== ===============
Aggregate proceeds from sales $ 732 $ 804 $ 9,435 $ 7,919 $ 11,252
============== ============== ============== ============== ===============
DREYFUS
CAPITAL DREYFUS
APPRECIATION SMALL CAP
SUB-ACCOUNT SUB-ACCOUNT
---------------- -------------
Aggregate purchases $ 379,310 $ 161,266
================ =============
Aggregate proceeds from sales $ 2,410 $ 8,433
================ =============
</TABLE>
<PAGE>
FINANCIAL STATEMENTS - STATUTORY BASIS
Transamerica Life Insurance Company of New York
Years ended December 31, 1999, 1998 and 1997
with Report of Independent Auditors
<PAGE>
<TABLE>
<CAPTION>
Transamerica Life Insurance Company of New York
Financial Statements-Statutory Basis
Years ended December 31, 1999, 1998 and 1997
CONTENTS
<S> <C>
Report of Independent Auditors..........................................................................1
Audited Financial Statements
Balance Sheets - Statutory Basis........................................................................3
Statements of Operations - Statutory Basis..............................................................5
Statements of Changes in Capital and Surplus - Statutory Basis..........................................6
Statements of Cash Flow - Statutory Basis...............................................................7
Notes to Financial Statements - Statutory Basis.........................................................9
Statutory-Basis Financial Statement Schedules
Summary of Investments - Other Than Investments in Related Parties -
Statutory Basis.....................................................................................27
Supplementary Insurance Information - Statutory Basis..................................................28
Reinsurance - Statutory Basis..........................................................................30
</TABLE>
<PAGE>
1
Report Of Independent Auditors
Board of Directors
Transamerica Life Insurance
Company of New York
We have audited the accompanying statutory-basis balance sheets of Transamerica
Life Insurance Company of New York as of December 31, 1999 and 1998, and the
related statutory-basis statements of operations, changes in capital and
surplus, and cash flow for each of the three years in the period ended December
31, 1999. Our audits also include the accompanying statutory-basis financial
statement schedules required by Article 7 of Regulation S-X. These financial
statements and schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
As described in Note 1 to the financial statements, the Company presents its
financial statements in conformity with accounting practices prescribed or
permitted by the State of New York Insurance Department, which practices differ
from accounting principles generally accepted in the United States. The
variances between such practices and accounting principles generally accepted in
the United States also are described in Note 1. The effects on the financial
statements of these variances are not reasonably determinable but are presumed
to be material.
In our opinion, because of the effects of the matters described in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the financial position
of Transamerica Life Insurance Company of New York at December 31, 1999 and
1998, or the results of its operations or its cash flows for each of the three
years in the period ended December 31, 1999.
<PAGE>
However, in our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Transamerica Life
Insurance Company of New York at December 31, 1999 and 1998, and the results of
its operations and its cash flow for each of the three years in the period ended
December 31, 1999, in conformity with accounting practices prescribed or
permitted by the State of New York Insurance Department. Also, in our opinion,
the related financial statement schedules, when considered in relation to the
basic statutory-basis financial statements taken as a whole, present fairly in
all material respects the information set forth therein.
March 14, 2000
<PAGE>
3
<TABLE>
<CAPTION>
Transamerica Life Insurance Company of New York
Balance Sheets - Statutory Basis
(Dollars in thousands, except per share amounts)
DECEMBER 31
1999 1998
------------------------------------
ADMITTED ASSETS Cash and invested assets:
<S> <C> <C>
Bonds $ 764,615 $ 564,092
Real estate 323 333
Policy loans 14,398 13,297
Cash and short-term investments 40,120 45,804
Receivable for securities sold 3,574 1,593
------------------------------------
Total cash and invested assets 823,030 625,119
Accrued investment income 14,577 11,205
Reinsurance balances recoverable 3,240 3,550
Receivable from parent and affiliates 2,840 -
Deferred and uncollected premiums 742 1,121
Separate account assets 587,827 431,905
------------------------------------
Total admitted assets $ 1,432,256 $ 1,072,900
====================================
<PAGE>
8
DECEMBER 31
1999 1998
------------------------------------
LIABILITIES AND CAPITAL AND SURPLUS
Liabilities:
Reserves for future policy benefits $ 755,636 $ 566,814
Policy and contract claims payable 2,684 1,867
Supplementary contracts without life contingencies 979 1,306
Reinsurance balances 29,694 26,243
Accounts payable and accrued expenses 12,693 2,625
Other liabilities (primarily remittances and item not allocated)
9,565 27,995
Payable to parent and affiliates - 3,961
Asset valuation reserve 4,107 3,116
Interest maintenance reserve 711 1,689
Separate accounts reserve adjustment (22,048) (17,643)
Separate account liabilities 587,827 431,905
------------------------------------
Total liabilities 1,381,848 1,049,878
Capital and surplus:
Common Stock ($1,000 par value):
Authorized, issued and outstanding -
2,000,000 shares 2,000 2,000
Contributed surplus 83,920 59,920
Unassigned surplus (35,512) (38,898)
------------------------------------
Total capital and surplus 50,408 23,022
------------------------------------
Total liabilities and capital and surplus $ 1,432,256 $ 1,072,900
====================================
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Transamerica Life Insurance Company of New York
Statements of Operations - Statutory Basis
(Dollars in thousands)
YEAR ENDED DECEMBER 31
1999 1998 1997
-------------------------------------------------
Revenues:
<S> <C> <C> <C>
Premiums and annuity considerations $ 19,360 $ 17,988 $ 36,216
Fund deposits 321,513 246,760 103,949
Net investment income 48,557 36,867 35,415
Commissions and expense allowances on reinsurance ceded
4,221 4,934 4,834
Other 8,409 6,249 4,255
-------------------------------------------------
402,060 312,798 184,669
Benefits and expenses:
Benefits paid or provided for:
Death benefits 5,446 5,465 6,315
Annuity benefits 14,285 14,173 13,134
Health and disability benefits 434 275 167
Surrender benefits and other fund withdrawals
72,716 52,986 55,947
Increase in reserves 188,495 134,474 14,426
Other 309 438 268
-------------------------------------------------
281,685 207,811 90,257
Expenses:
Commissions and expense allowances 24,441 21,026 11,629
Other operating expenses 15,212 12,390 11,151
Transfers to separate accounts 75,468 77,955 71,478
-------------------------------------------------
115,121 111,371 94,258
-------------------------------------------------
396,806 319,182 184,515
-------------------------------------------------
Gain from operations before federal income taxes and net
realized gains (losses) 5,254 (6,384) 154
Federal income tax expense (benefit) 2,627 (1,570) (271)
-------------------------------------------------
Gain from operations before net realized
gains (losses) 2,627 (4,814) 425
Net realized gains (losses) on investment transactions
7 (77) (30)
-------------------------------------------------
Net income $ 2,634 $ (4,891) $ 395
=================================================
See accompanying notes.
<PAGE>
Transamerica Life Insurance Company of New York
Statements of Changes in Capital and Surplus - Statutory Basis
(Dollars in thousands)
YEAR ENDED DECEMBER 31
1999 1998 1997
------------------------------------------------------
Capital and surplus at beginning of year $ 23,022 $ 23,591 $ 22,822
Net income (loss) 2,634 (4,891) 395
Decrease (increase) in non-admitted assets and
related items 1,834 (249) (464)
Increase in liability for reinsurance in
unauthorized companies (91) - -
(Increase) decrease in asset valuation reserve
(991) (429) 1,000
Contributed capital 24,000 5,000 -
Prior year adjustments - - (162)
------------------------------------------------------
Capital and surplus at end of year $ 50,408 $ 23,022 $ 23,591
======================================================
See accompanying notes.
<PAGE>
Transamerica Life Insurance Company of New York
Statements of Cash Flow - Statutory Basis
(Dollars in thousands)
YEAR ENDED DECEMBER 31
1999 1998 1997
------------------------------------------------------
OPERATING ACTIVITIES
Premiums and annuity considerations $ 12,266 $ 26,673 $ 37,024
Fund deposits 321,513 246,760 103,949
Allowances and reserve adjustments received on
reinsurance ceded 3,920 1,242 4,939
Investment income received 43,839 36,613 34,141
Other revenues 7,922 5,939 4,949
Life and accident and health claims paid (4,636) (7,929) (5,258)
Surrender benefits and other fund withdrawals paid
(72,727) (53,876) (55,947)
Annuity and other benefits paid to policyholders
(14,782) (14,613) (13,666)
Commissions, other expenses and taxes
paid (40,579) (31,129) (21,906)
Net transfer (to) from separate accounts (79,873) (83,072) (75,587)
Federal income taxes received (paid) 860 (615) (418)
------------------------------------------------------
Net cash provided by operating activities 177,723 125,993 12,220
INVESTING ACTIVITIES
Proceeds from bonds sold, matured
or repaid 180,402 101,518 88,795
Cost of bonds acquired (382,306) (209,941) (90,776)
Net increase in policy loans (1,101) (1,602) (863)
------------------------------------------------------
Net cash used in investing activities (203,005) (110,025) (2,844)
<PAGE>
Transamerica Life Insurance Company of New York
Statements of Cash Flow - Statutory Basis (continued)
(Dollars in thousands)
YEAR ENDED DECEMBER 31
1999 1998 1997
------------------------------------------------------
FINANCING AND MISCELLANEOUS ACTIVITIES Other cash provided:
Capital and surplus paid-in $ 24,000 $ 5,000 $ -
Other sources 21,149 24,417 3,397
------------------------------------------------------
Total other cash provided 45,149 29,417 3,397
Other cash applied:
Other applications, net (25,551) (2,790) (18,643)
------------------------------------------------------
Total other cash applied (25,551) (2,790) (18,643)
------------------------------------------------------
Net cash provided by (used in) financing and
miscellaneous activities 19,598 26,627 (15,246)
------------------- -------------------
------------------
Net (decrease) increase in cash and short-term
investments (5,684) 42,595 (5,870)
Cash and short-term investments:
Beginning of year 45,804 3,209 9,079
------------------------------------------------------
End of year $ 40,120 $ 45,804 $ 3,209
======================================================
See accompanying notes.
</TABLE>
<PAGE>
Transamerica Life Insurance Company of New York
Notes to Financial Statements - Statutory Basis
(Dollars in thousands)
December 31, 1999
9
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Transamerica Life Insurance Company of New York (the Company) is domiciled in
New York. The Company is a wholly owned subsidiary of Transamerica Occidental
Life Insurance Company (TOLIC), which is an indirect subsidiary of Transamerica
Corporation. During 1999, Transamerica Corporation was acquired by a subsidiary
of AEGON N.V., a holding company organized under the laws of the Netherlands.
NATURE OF BUSINESS
The Company engages primarily in providing life insurance, fixed and variable
pension and annuity products, structured settlements and investment products
which are distributed through a network of independent and company-affiliated
agents and independent brokers. The Company's customers are primarily in the
state of New York.
BASIS OF PRESENTATION
Certain amounts reported in the accompanying financial statements are based on
management's best estimates and judgment, subject to the minimum requirements
imposed by regulatory authorities. Actual results could differ from those
estimates.
The accompanying financial statements have been prepared in conformity with
accounting practices prescribed or permitted (SAP) by the State of New York
Insurance Department (the Department), which practices vary from generally
accepted accounting principles (GAAP). The more significant variances from GAAP
are as follows:
Bonds, where permitted, are carried at amortized cost. Under GAAP, those
bonds that are classified as "available for sale" are carried at their fair
value.
The costs of acquiring new and renewal business, such as commissions and
underwriting and policy issue costs, are expensed when incurred rather than
deferred and amortized over the terms of the related policies.
<PAGE>
Transamerica Life Insurance Company of New York
Notes to Financial Statements - Statutory Basis (continued)
(Dollars in thousands)
26
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
BASIS OF PRESENTATION (CONTINUED)
Certain assets recognized under GAAP, principally agents' debit balances
and furniture and equipment, are "non-admitted" and excluded from the
accompanying financial statements under SAP and are charged directly to
unassigned surplus.
Reserves for future policy benefits generally are calculated based on
mortality and interest assumptions that are statutorily required rather
than using estimated expected experience or actual account balances. The
policy liabilities are reported net, rather than gross, of ceded
reinsurance amounts.
Revenues for interest-sensitive life policies and investment-type contracts
consist of the entire premium received and benefits incurred represent the
total of death benefits paid and the change in policy reserves. Under GAAP,
premiums received in excess of policy charges are not recognized as revenue
and benefits represent the excess of benefits paid over the policy account
value and interest credited to the account value.
An Interest Maintenance Reserve (IMR) is provided which defers certain
realized capital gains and losses attributable to changes in the general
level of interest rates. Such deferred gains or losses are amortized into
investment income over the remaining period to maturity based on groupings
of individual securities sold in five-year bands.
An Asset Valuation Reserve (AVR) is provided which reclassifies a portion
of surplus to liabilities. The AVR is calculated according to a specified
formula as prescribed by the National Association of Insurance
Commissioners (NAIC) and is intended to stabilize the Company's surplus
against possible fluctuations in the market values of bonds, equity
securities, mortgage loans, real estate, and other invested assets. Changes
in the required AVR balance are charged or credited directly to unassigned
surplus.
<PAGE>
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
BASIS OF PRESENTATION (CONTINUED)
Deferred federal income taxes are not provided for differences between the
financial statement amounts and tax bases of assets and liabilities.
A liability for reinsurance balances has been provided for unsecured policy
reserves ceded to reinsurers not authorized by license to assume such
business ($91 in 1999, $0 in 1998 and 1997). Changes to those amounts are
credited or charged directly to unassigned surplus. Under GAAP, an
allowance for amounts deemed uncollectible would be established through a
charge to earnings.
Other significant accounting policies are as follows:
INVESTMENTS
Investments are shown on the following bases:
Bonds - where permitted, at amortized cost; all others are carried at
values prescribed by the Securities Valuation Office of the NAIC (NAIC
statement values); premiums and discounts are amortized using the interest
method. For loan-backed bonds, the interest method including anticipated
prepayments at the date of purchase is used. Prepayment assumptions for
loan-backed bonds are estimated using broker dealer survey values and are
based on the current interest rate and economic environment. The
retrospective adjustment method is used to value all securities, except for
interest-only securities which are valued using the prospective method.
Real estate - at depreciated cost less encumbrances.
Policy loans - at the aggregate unpaid principal balances.
<PAGE>
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENTS (CONTINUED)
Gains and losses on disposal of investments are recognized on the
specific-identification basis. Changes in the statutory fair values of bonds
carried at NAIC statement values, rather than amortized cost, are reported as
unrealized gains or losses directly in unassigned surplus and, accordingly, have
no effect on net income.
Short-term investments include investments with maturities of less than one year
at date of acquisition.
SEPARATE ACCOUNTS
The Company administers segregated asset accounts for variable annuity
contracts. The assets of the separate accounts are not subject to liabilities
arising out of any business the Company may conduct and are reported at fair
value. Investment risks associated with fair value changes are primarily borne
by the contract holders. Accordingly, investment income and realized investment
gains and losses attributable to separate accounts are not reported in the
Company's results of operation.
The assets and liabilities of the separate accounts are reported at market
value. In reporting reserve liabilities for the separate accounts, the Company
considers the impact of surrender charges and records this amount as a separate
account reserve adjustment.
POLICY RESERVES FOR FUTURE POLICY BENEFITS AND CONTRACT CLAIMS
Life, annuity, and accident and health benefit reserves are calculated based
upon published tables using such interest rate assumptions and valuation methods
that will provide, in the aggregate, reserves that meet the amounts required by
the Department. The Company waives deduction of deferred fractional premiums
upon death of the insureds and returns any portion of the final premium beyond
the date of death. Additional reserves are established where the gross premiums
on any insurance in force are less than the net premiums according to the
standard valuation set by the Department.
<PAGE>
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
POLICY RESERVES FOR FUTURE POLICY BENEFITS AND CONTRACT CLAIMS (CONTINUED)
Contract claim liabilities include provisions for reported claims and claims
incurred but not reported, net of reinsurance ceded.
PREMIUM REVENUES
Premiums from life insurance policies are recognized as revenue when due and
premiums from annuity contracts are recognized when received. Accident and
health premiums are earned pro rata over the terms of the policies.
OTHER REVENUES
Other revenues consists primarily of fee income earned as a percentage of
separate account assets.
REINSURANCE
Coinsurance premiums, commissions, expense reimbursements, and reserves related
to reinsured business are accounted for on bases consistent with those used in
accounting for the original policies and the terms of the reinsurance contracts.
Premiums ceded and recoverable losses have been reported as a reduction of
premium income and benefits, respectively.
RECLASSIFICATIONS
Certain reclassifications of 1997 and 1998 amounts have been made to conform
with the 1999 presentation.
<PAGE>
2. FAIR VALUES OF FINANCIAL INSTRUMENTS
Fair values for bonds are based on market values prescribed by the Securities
Valuation Office of the NAIC (NAIC market values) rather than on actual or
estimated market values. For bonds without available NAIC market values,
amortized costs are used as estimated fair values. As of December 31, 1999 and
1998, the fair value of investments in bonds includes $220,551 and $166,749,
respectively, of bonds that were valued at amortized cost.
Fair values for policy loans are estimated using discounted cash flow
calculations, based on current interest rates.
The carrying amounts of cash and short-term investments and accrued investment
income approximate their fair value.
Fair values for liabilities under investment-type contracts, included in
reserves for future policy benefits and other policy liabilities, are estimated
using discounted cash flow calculations, based on interest rates currently being
offered by similar contracts with maturities consistent with those remaining for
the contracts being valued.
<TABLE>
<CAPTION>
The carrying values and fair values of financial instruments are as follows:
DECEMBER 31
1999 1998
-----------------------------------------------------------------------
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
-----------------------------------------------------------------------
Financial assets:
<S> <C> <C> <C> <C>
Bonds $ 764,615 $ 737,519 $ 564,092 $ 591,868
Policy loans 14,398 17,636 13,297 15,577
Cash and short-term investments 40,120 40,120 45,804 45,804
Accrued investment income 14,577 14,577 11,205 11,205
<PAGE>
2. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)
Financial instruments which potentially subject the Company to concentration of
credit risk consist principally of temporary cash investments, bonds, and
reinsurance recoverables. The Company places its temporary cash investments with
high credit quality financial institutions. Concentration of credit risk with
respect to investments in bonds is limited due to the large number of such
investments and their dispersion across many different industries and geographic
areas. The Company places reinsurance with only highly rated insurance
companies. At December 31, 1999, the Company had no significant concentration of
credit risk.
3. INVESTMENTS
The carrying value and fair value of investments in debt securities are
summarized as follows:
GROSS GROSS
CARRYING UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
-----------------------------------------------------------------------
DECEMBER 31, 1999
U.S. Treasury securities and
obligations of U.S. government
corporations
and agencies $ 2,102 $ 31 $ 12 $ 2,121
Obligations of states and political
subdivisions 17,216 265 247 17,234
Corporate securities 603,827 2,636 26,068 580,395
Public utilities 140,670 270 3,971 136,969
Other asset-backed securities 800 - - 800
-----------------------------------------------------------------------
$ 764,615 $ 3,202 $ 30,298 $ 737,519
=======================================================================
<PAGE>
3. INVESTMENTS (CONTINUED)
GROSS GROSS
CARRYING UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
-----------------------------------------------------------------------
DECEMBER 31, 1998
U.S. Treasury securities and
obligations of U.S. government
corporations
and agencies $ 812 $ 100 $ - $ 912
Obligations of states and political
subdivisions 17,214 1,863 - 19,077
Foreign governments - - - -
Corporate securities 451,726 24,615 1,247 475,094
Public utilities 93,238 2,451 6 95,683
Other asset-backed securities 1,102 - - 1,102
-----------------------------------------------------------------------
$ 564,092 $ 29,029 $ 1,253 $ 591,868
=======================================================================
</TABLE>
The carrying value and fair value of bonds at December 31, 1999, by contractual
maturity, are shown below. Expected maturities may differ from contractual
maturities because certain borrowers have the right to call or prepay
obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
CARRYING FAIR
VALUE VALUE
------------------------------------
<S> <C> <C>
Due in one year or less $ 12,838 $ 12,551
Due after one year through five years 61,054 61,464
Due after five years through ten years 243,852 233,274
Due after ten years 446,071 429,430
------------------------------------
763,815 736,719
Other asset-backed securities 800 800
------------------------------------
$ 764,615 $ 737,519
====================================
</TABLE>
<PAGE>
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
Net investment income (expense) by major category of investments is summarized
as follows:
YEAR ENDED DECEMBER 31
1999 1998 1997
--------------------------------------------------
<S> <C> <C> <C>
Bonds $ 48,490 $ 36,818 $ 35,850
Policy loans 1,034 896 739
Cash and short-term investments 1,255 736 594
Other investments (1,922) (1,345) (1,532)
--------------------------------------------------
48,857 37,105 35,651
Investment expense (300) (238) (236)
--------------------------------------------------
$ 48,557 $ 36,867 $ 35,415
==================================================
The realized gains and losses and other information related to investments are
summarized as follows:
YEAR ENDED DECEMBER 31
1999 1998 1997
--------------------------------------------------
Net (losses) gains on disposition of investments in:
Bonds $ (1,063) $ 1,422 $ 6
Related income taxes 379 (575) (32)
Transfer from (to) the IMR 691 (924) (4)
--------------------------------------------------
Net investment gains (losses) $ 7 $ (77) $ (30)
==================================================
Gross gains on disposition of investment in
bonds $ 224 $ 1,547 $ 6
Gross losses on disposition of investment in
bonds $ (1,287) $ (125) $ -
</TABLE>
<PAGE>
4. REINSURANCE
The Company is involved in the cession of reinsurance to affiliated and
nonaffiliated companies. Risks are reinsured with other companies to permit the
recovery of a portion of the direct losses. These reinsured risks are treated as
though, to the extent of the reinsurance, they are risks for which the Company
is not liable.
Policy liabilities and accruals are reported in the accompanying financial
statements net of reinsurance ceded. The Company remains liable to the extent
the reinsuring companies do not meet their obligations under these reinsurance
treaties.
<TABLE>
<CAPTION>
The following summarizes reinsurance transactions:
CEDED TO CEDED TO
DIRECT AFFILIATED UNAFFILIATED NET
AMOUNT COMPANIES COMPANIES AMOUNT
-----------------------------------------------------------------------
Year ended
December 31, 1999:
<S> <C> <C> <C> <C>
Premium revenue $ 40,938 $ 830 $ 20,748 $ 19,360
=======================================================================
At December 31, 1999:
Life insurance in force $ 4,272,811 $ 262,213 $ 2,625,743 $ 1,384,855
=======================================================================
Reserves for future policy benefits
$ 802,895 $ 1,295 $ 45,964 $ 755,636
Policy and contract claims payable
4,395 - 1,711 2,684
-------------------
------------------ ------------------------------------
$ 807,290 $ 1,295 $ 47,675 $ 758,320
=======================================================================
Included in reinsurance balances in the accompanying balance sheet is $27,709 at
December 31, 1999, and $24,439 at December 31, 1998, of funds held under
coinsurance agreements.
<PAGE>
4. REINSURANCE (CONTINUED)
CEDED TO CEDED TO
DIRECT AFFILIATED UNAFFILIATED NET
AMOUNT COMPANIES COMPANIES AMOUNT
-----------------------------------------------------------------------
Year ended
December 31, 1998:
Premium revenue $ 37,996 $ 741 $ 19,267 $ 17,988
=======================================================================
At December 31, 1998:
Life insurance in force $ 4,521,321 $ 258,795 $ 2,539,998 $ 1,722,528
=======================================================================
Reserves for future policy benefits
$ 610,849 $ 1,511 $ 42,524 $ 566,814
Policy and contract claims payable
3,358 1,491 1,867
-----------------------------------------------------------------------
$ 614,207 $ 1,511 $ 44,015 $ 568,681
=======================================================================
Year ended
December 31, 1997:
Premium revenue $ 54,182 $ 768 $ 17,198 $ 36,216
=======================================================================
At December 31, 1997:
Life insurance in force $ 4,588,120 $ 297,518 $ 2,765,285 $ 1,525,317
=======================================================================
Reserves for future policy benefits
$ 471,364 $ 1,653 $ 36,879 $ 432,832
Policy and contract 2,014 73 692 1,249
-----------------------------------------------------------------------
$ 473,378 $ 1,726 $ 37,571 $ 434,081
=======================================================================
</TABLE>
<PAGE>
5. INCOME TAXES
The Company was included in a consolidated income tax return with Transamerica
Corporation through July 21, 1999. Under a tax sharing agreement with
Transamerica Corporation tax payments are made to, or refunds are received from,
Transamerica Corporation in amounts which would result if the Company filed
separate tax returns with federal taxing authorities. For the period from July
22, 1999 to December 31, 1999, the Company will file a separate tax return.
Amounts due to (from) Transamerica Corporation for federal income taxes were
$1,700 and $(1,400) at December 31, 1999 and 1998, respectively, and are
included in accounts payable and other liabilities in the accompanying balance
sheet.
<TABLE>
<CAPTION>
Following is a reconciliation of federal income taxes computed at the statutory
rate with the income tax provision, excluding income taxes related to net
realized gains on investment transactions:
YEAR ENDED DECEMBER 31
1999 1998 1997
------------------------------------------------------
Federal income taxes (recovery) at
<S> <C> <C> <C>
statutory rate $ 1,839 $ (2,234) $ 54
Difference between statutory and tax
reserves 26 (181) (57)
Deferred acquisition costs capitalized, net
of amortization 784 692 684
Difference in statutory and tax bases
of investments (72) (118) (74)
Adjustment to prior year tax provision
76 393 (532)
Other (26) (122) (346)
------------------------------------------------------
Provision (benefit) for income taxes $ 2,627 $ (1,570) $ (271)
======================================================
<PAGE>
6. DEFERRED AND UNCOLLECTED PREMIUMS
Components of deferred and uncollected premiums are as follows:
GROSS LOADING NET
------------------------------------------------------
DECEMBER 31, 1999
Life and annuity:
Ordinary first-year business $ 2 $ 2 $ -
Ordinary renewal business 792 50 742
------------------------------------------------------
$ 794 $ 52 $ 742
======================================================
DECEMBER 31, 1998
Life and annuity:
Ordinary first-year business $ 6 $ 13 $ (7)
Ordinary renewal business 888 58 830
Accident and health 298 - 298
------------------------------------------------------
$ 1,192 $ 71 $ 1,121
======================================================
</TABLE>
The gross deferred and uncollected premiums balance at December 31, 1999, of
$794 is composed of $1,115 direct deferred and uncollected premiums less
reinsurance premiums payable of $321.
The gross deferred and uncollected premiums balance at December 31, 1998, of
$1,192 is composed of $4,134 direct deferred and uncollected premiums less
reinsurance premiums payable of $2,942.
<PAGE>
7. ANNUITY RESERVES AND DEPOSIT LIABILITIES
A portion of the Company's policy reserves and other policyholders' funds
(including separate account liabilities) relates to liabilities established on a
variety of the Company's products that are not subject to significant mortality
or morbidity risk; however, there may be certain restrictions placed upon the
amount of funds that can be withdrawn without penalty. The amount of reserves on
these products, by withdrawal characteristics, is summarized as follows:
<TABLE>
<CAPTION>
DECEMBER 31
1999 1998
----------------------------------------------------------------
AMOUNT PERCENT AMOUNT PERCENT
----------------------------------------------------------------
Subject to discretionary withdrawal - with adjustment:
At book value less surrender charge
<S> <C> <C> <C> <C>
$ 154,139 13% $ 116,903 14%
At market value 561,722 47 414,263 50
----------------------------------------------------------------
715,861 60 531,166 64
Subject to discretionary withdrawal -
without adjustment 293,388 25 130,824 16
Not subject to discretionary withdrawal
provision 174,176 15 168,830 20
-------------------- -------------------
--------------- -------------
Total annuity reserves and deposit
liabilities 1,183,425 100% 830,820 100%
=============== =============
Less reinsurance 101 -
--------------------
-------------------
Net annuity reserves and deposit liabilities
$ 1,183,324* $ 830,820*
==================== ===================
</TABLE>
*Includes $561,722 and $414,263 of annuity reserves and deposit liabilities
reported in the separate account liability at December 31, 1999 and 1998,
respectively. Funding agreement liabilities that are a part of the separate
account liabilities are excluded from the above amounts.
<PAGE>
8. CAPITAL AND SURPLUS
The Company is subject to the requirements of the NAIC approved Risk Based
Capital (RBC) rules and at December 31, 1999 and 1998, the Company met the RBC
requirement.
The amount of dividends which can be paid by the Company without prior approval
of the State of New York Insurance Department is subject to restrictions related
to statutory surplus and gains from operations. No dividends were declared or
paid in 1999.
9. PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS
Substantially all employees of the Company are covered by the Retirement Plan
for Salaried Employees of Transamerica Corporation and Affiliates. Pension
benefits are based on the employee's compensation during the highest paid 60
consecutive months during the 120 months before retirement. The general policy
is to fund current service costs currently and prior service costs over periods
ranging from 10 to 30 years. Assets of those plans are invested principally in
publicly traded stocks and bonds.
The Company's total pension costs charged to income were not significant in
1999, 1998 nor 1997.
The Company also participates in various contributory defined benefit programs
sponsored by Transamerica Corporation that provide medical and certain other
benefits to eligible retirees. The Company accounts for the costs of such
benefit programs under the accrual method and amortizes its transition
obligation for retirees and fully eligible or vested employees over 20 years.
Postretirement benefit costs charged to income were not significant in 1999,
1998 nor 1997.
<PAGE>
10. ASSETS ON DEPOSIT
At December 31, 1999 and 1998, $811 of the Company's assets were on deposit with
public officials in compliance with regulatory requirements.
11. RELATED PARTY TRANSACTIONS
The Company has various transactions with Transamerica Corporation and its
affiliated companies in the normal course of operations. These transactions
include reinsurance transactions, computer services, investment services and
advertising.
The Company had amounts due from affiliates of $2,840 as of December 31, 1999,
and $3,961 due to affiliates as of December 31, 1998.
12. LEASES
Rental expense for equipment and properties occupied by the Company was $804 in
1999, $673 in 1998 and $880 in 1997. The following is a schedule by years of
future minimum rental payments required under operating leases that have initial
or remaining noncancelable lease terms in excess of one year as of December 31,
1999:
Year ending December 31:
2000 $ 743
2001 328
2002 328
2003 328
2004 328
Later years 3,440
------------------
$ 5,495
==================
<PAGE>
13. LITIGATION
The Company is a defendant in various legal actions arising from its operations.
These include legal actions similar to those faced by many other major life
insurers which allege damages related to sales practices for universal life
policies sold between January 1981 and June 1996. In one such action, the
Company and plaintiff's counsel entered into a settlement which was approved on
June 26, 1997. The settlement required prompt notification to affected
policyholders. Administrative and policy benefit costs associated with the
settlement for the Company were not material and have been borne to date by
TOLIC. Additional costs related to the settlement are not expected to be
material and will be incurred over a period of years. In the opinion of the
Company, any ultimate liability which might result from other litigation would
not have a materially adverse effect on the combined financial position of the
Company or the results of its operations.
14. SEPARATE ACCOUNTS
The Company administers segregated asset accounts for variable annuity
contracts. The assets held in these separate accounts are invested in various
mutual fund portfolios managed by third-party companies. The separate account
assets are stated at fair value and are not subject to liabilities arising out
of any other business the Company my conduct. Investment risks associated with
fair value changes are borne by the contract holders. Accordingly, investment
income and realized investment gains and losses attributable to separate
accounts are not reported in the Company's income statement.
<PAGE>
14. SEPARATE ACCOUNTS (CONTINUED)
<TABLE>
<CAPTION>
A reconciliation of the amounts transferred to and from the separate accounts is
presented below:
1999 1998 1997
------------------------------------------------------
Transfer as reported in the summary of operations of the separate accounts
statement:
<S> <C> <C> <C>
Transfers to separate accounts $ 114,905 $ 108,969 $ 93,929
Transfers from separate accounts 39,437 31,014 22,451
------------------------------------------------------
Transfers as reported in the statements
of net income $ 75,468 $ 77,955 $ 71,478
======================================================
</TABLE>
15. NAIC CODIFICATION
In 1998, the NAIC adopted codified statutory accounting principles
(Codification). Codification will likely change, to some extent, prescribed
statutory accounting practices and may result in changes to the accounting
practices that the Company uses to prepare its statutory-basis financial
statements. Codification will require adoption by the various states before it
becomes the prescribed statutory basis of accounting for insurance companies
domesticated within those states. Accordingly, before Codification becomes
effective for the Company, the state of New York must adopt Codification as the
prescribed basis of accounting on which domestic insurers must report their
statutory-basis results to the Insurance Department. At this time it is
anticipated that the state of New York will adopt Codification. Based on current
guidance, management believes that the impact of Codification will not be
material to the Company's statutory-basis financial statements.
<PAGE>
Statutory-Basis
Financial Statement Schedules
<PAGE>
27
Transamerica Life Insurance Company of New York
Summary of Investments - Other Than Investments in Related Parties -
Statutory Basis
(Dollars in thousands)
December 31, 1999
<TABLE>
<CAPTION>
SCHEDULE I
AMOUNT AT
ESTIMATED WHICH SHOWN
FAIR IN THE
TYPE OF INVESTMENT COST (1) VALUE BALANCE SHEET
- -----------------------------------------------------------------------------------------------------------
FIXED MATURITIES
Bonds:
U.S. Treasury securities and obligations of
U.S. government corporations and agencies
<S> <C> <C> <C>
$ 2,102 $ 2,121 $ 2,102
Obligations of states and political
subdivision 17,216 17,234 17,216
Public utilities 140,670 136,969 140,670
All other corporate bonds 603,827 580,395 603,827
Other asset-backed securities 800 800 800
-----------------------------------------------------------
Total fixed maturities 764,615 737,519 764,615
Real estate 323 525 323
Policy loans 14,398 17,636 14,398
Other long-term investments 3,574 3,574 3,574
Cash and short-term investments 40,120 40,120 40,120
-----------------------------------------------------------
Total investments $ 823,030 $ 799,374 $ 823,030
===========================================================
(1) Original cost of fixed maturities is reduced by repayments and adjusted
for amortization of premiums or accrual discounts.
<PAGE>
28
Transamerica Life Insurance Company of New York
Supplementary Insurance Information - Statutory Basis
(Dollars in thousands)
December 31, 1999
SCHEDULE III
FUTURE POLICY POLICY AND
BENEFITS AND CONTRACT PREMIUM
EXPENSES LIABILITIES REVENUE
------------------------------------------------------
Year ended December 31, 1999
Individual life $ 132,388 $ 2,886 $ 12,423
Group life and health 2,646 250 1,140
Annuity 620,602 (452) 327,310
------------------------------------------------------
755,636 2,684 340,873
Year ended December 31, 1998
Individual life 130,094 2,212 12,748
Group life and health 2,049 - 916
Annuity 434,671 (345) 251,084
------------------------------------------------------
566,814 1,867 264,748
Year ended December 31, 1997
Individual life 125,586 1,593 13,456
Group life and health 26 - 622
Annuity 306,819 (344) 126,087
------------------------------------------------------
$ 432,431 $ 1,249 $ 140,165
======================================================
</TABLE>
<PAGE>
29
Transamerica Life Insurance Company of New York
Supplementary Insurance Information - Statutory Basis (continued)
(Dollars in thousands)
December 31, 1999
SCHEDULE III
<TABLE>
<CAPTION>
BENEFITS, CLAIMS
LOSSES AND
NET SETTLEMENT OTHER
INVESTMENT EXPENSES OPERATING PREMIUMS
INCOME* EXPENSES* WRITTEN
-----------------------------------------------------------------------
Year ended December 31, 1999
<S> <C> <C> <C> <C>
Individual life $ 9,794 $ 12,923 $ 13,321 $ 29,740
Group life and health 171 613 1,323 5,035
Annuity 38,592 79,654 25,009 327,676
-----------------------------------------------------------------------
48,557 93,190 39,653 362,451
Year ended December 31, 1998
Individual life 9,460 11,981 12,845 29,822
Group life and health 134 217 1,053 3,850
Annuity 27,273 61,139 19,518 251,084
-----------------------------------------------------------------------
36,867 73,337 33,416 284,756
Year ended December 31, 1997
Individual life 10,096 14,574 11,935 30,131
Group life and health 102 107 484 1,912
Annuity 25,217 61,150 10,361 126,087
-----------------------------------------------------------------------
$ 35,415 $ 75,831 $ 22,780 $ 158,130
=======================================================================
</TABLE>
*Allocations of net investment income and other operating expenses are based on
a number of assumptions of estimates, and the results would change if
different methods were applied.
<PAGE>
30
Transamerica Life Insurance Company of New York
Reinsurance - Statutory Basis
(Dollars in thousands)
December 31, 1999
SCHEDULE IV
<TABLE>
<CAPTION>
CEDED TO
GROSS OTHER NET
AMOUNT COMPANIES AMOUNT
------------------------------------------------------
Year ended December 31, 1999
<S> <C> <C> <C>
Life insurance in force $ 4,272,811 $ 2,887,956 $ 1,384,855
======================================================
Premiums:
Individual life $ 35,537 $ 17,317 $ 18,220
Group life and health 5,035 3,895 1,140
Annuity 321,879 366 321,513
------------------------------------------------------
$ 362,451 $ 21,578 $ 340,873
======================================================
Year ended December 31, 1998
Life insurance in force $ 4,521,321 $ 2,798,793 $ 1,722,528
======================================================
Premiums:
Individual life $ 34,146 $ 17,074 $ 17,072
Group life and health 3,850 2,934 916
Annuity 246,760 - 246,760
------------------------------------------------------
$ 284,756 $ 20,008 $ 264,748
======================================================
Year ended December 31, 1997
Life insurance in force $ 4,588,120 $ 3,062,803 $ 1,525,317
======================================================
Premiums:
Individual life $ 52,270 $ 16,676 $ 35,594
Group life and health 1,912 1,290 622
Annuity 103,949 - 103,949
------------------------------------------------------
$ 158,131 $ 17,966 $ 140,165
======================================================
</TABLE>
<PAGE>
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Not Applicable.
(b) Exhibits:
(1) Resolutions of Board of Directors of Transamerica Life Insurance Company of
New York (the "Company") authorizing the creation of Separate Account
VA-6NY (the "Separate Account"). 1/
(2) Not Applicable.
(3) Form of Underwriting Agreement between the Company, the Separate Account
and Transamerica Securities Sales Corporation. 1/
(4) Form of Flexible Premium Deferred Variable Annuity Contract. 1/ 4/
(5) Form of Application for Flexible Premium Variable Annuity. 1/
(6) (a) Articles of Incorporation of Transamerica Life Insurance Company of New
York. 1/2/
(b) By-Laws of Transamerica Life Insurance Company of New York. 1/2/
(7) Not Applicable.
(8) Form of Participation Agreements regarding the Portfolio.
(a) re The Alger American Fund 1/
(b) re Alliance Variable Products Series
Fund, Inc.
1/ (c) re Dreyfus Variable Investment Fund
2/ (d) re Janus Aspen
Series 1/
(e) re MFS Variable Insurance Trust 1/
(f) re Morgan Stanley
Universal Funds, Inc. 1/
(g) re OCC Accumulation Trust 1/
(h) re
Transamerica Variable Insurance Fund, Inc. 1/
(9) Opinion and Consent of Counsel. 1/
(10) (a) Consent of Counsel. 1/
(b) Consent of Independent Auditors. 1/2/ 3/ 5/
(11) No financial statements are omitted from Item 23.
(12) Not Applicable.
(13) Performance Data Calculations. 1/
(14) Not Applicable.
(15) Powers of Attorney. 1/2 Thomas O'Neill
- ----------------------------
1/ Incorporated by reference to the like-numbered exhibit to the initial
filing of the Registration Statement of Transamerica Life Insurance Company
of New York's Separate Account VA-6NY on Form N-4, File No. 333-47219
(March 4, 1998).
2/ Incorporated by reference to the like-numbered exhibit to Pre-Effective
Amendment No. 1 of the Registration Statement of Transamerica Life
Insurance Company of New York's Separate Account VA-6NY on Form N-4, File
No. 333-47219 (June 11, 1998).
3/ Incorporated by reference to the like-numbered exhibit to Post-Effective
Amendment No. 1 of the Registration Statement of Transamerica Life
Insurance Company of New York's Separate Account VA-6NY on Form N-4, File
No. 333-47219 (April 29, 1999).
4/ Incorporated by reference to the like-numbered exhibit to Post-Effective
Amendment No. 2 of the Registration Statement of Transamerica Life
Insurance Company of New York's Separate Account VA-6NY on Form N-4, File
No. 333-47219 (July 30, 1999).
5/ Filed herewith.
<PAGE>
Item 25. Directors and Officers of the Depositor.
The names of Directors and Executive Officers of the Company, their
positions and offices with the Company, and their other affiliations
are as follows. The address of Directors and Executive Officers is 1150
South Olive Street, Los Angeles, California 90015-2211, unless
indicated by asterisk.
List of Directors of Transamerica Life Insurance Company of New York:
Marc C. Abrahms*
James T. Byrne, Jr.*
Alan T. Cunningham*
John A. Fibiger
Daniel E. Jund
Thomas O'Neill**
James B. Roszak
Robert Rubinstein*
Nooruddin S. Veerjee
*100 Manhattanville Road, Purchase, New York 10577
**Transamerica Square, 401 N. Tryon Street, Charlotte, North Carolina 28202
<TABLE>
<CAPTION>
List of Officers for Transamerica Life Insurance Company of New York:
<S> <C>
Alan T. Cunningham President
Robert Rubinstein Senior Vice President, Chief Actuary, Chief
Operating Officer and Secretary
James W. Dederer General Counsel
Rudy Veerjee, FSA Chairman
John Bailey Vice President
Nicki Bair FSA,MAAA Vice President
Patrick S. Baird Vice President
David Blankenship Vice President
Sandra C. Brown Vice President
Kirk W. Buese Vice President
David M. Carney Vice President
Roy Chong-Kit FSA,MAAA Vice President
Brenda K. Clancy Vice President
William S. Cook Vice President
Mark E. Dunn Vice President
Alan F. Fletcher Vice President
Eric B. Goodman Vice President
Kamran Haghighi Tax Officer
David R. Halfpap Vice President
Paul Hankwitz MD Vice President and Chief Medical Director
Robert L. Hansen Vice President
Marsha Hicks Vice President and Assistant Secretary
Frederick B. Howard Vice President
William M. Hurst Assistant Secretary
John D. Kettering Vice President
Ken Kilbane Vice President
Danny L. Kolsrud Vice President
Douglas C. Kolsrud Vice President
William J. Lyons Vice President and Chief Underwriter
James D. MacKinnon Vice President
Steven J. Myers Vice President
Thomas L. Nordstrom Vice President
Ralph M. O'Brien Vice President
Marcy T. Pech Vice President
Dennis Roland Investment Officer
Gary U. Rolle Investment Officer
Lindsay Schumacher Vice President
Clifford A. Sheets Vice President
Susan A. Silbert Investment Officer
Michael B. Simpson Vice President
Jon L. Skaags Vice President
Robert A. Smedley Vice President
Alexander Smith, Jr. Vice President, Administration and Controller
Michael S. Smith Vice President
Bradley L. Stofferahn Vice President
Gregory W. Theobald Vice President and Assistant Secretary
Craig D. Vermie Vice President
Timothy Weis Vice President
Sally S. Yamada Treasurer
Lisa Patterson Second Vice President
John Donner Assistant Secretary
Shirley LeMaster Senior Settlements Coordinator
Michael N. Meese Portfolio Manager
Julie Schloss Investment Administrator
Robert C. Woodcock Vice President and Assistant Secretary
Cindy L. Chanley Vice President
Roger N. Freeman Vice President
Marvin A. Johnson Vice President
Ronald L. Ziegler Vice President
Andrew Kanelos Second Vice President
Donna J. Spalding Second Vice President
Tonya J. Vessels Second Vice President
Gregory E. Miller-Breetz Assistant Secretary
Jack R. Dykhouse Vice President
Christopher Guckert Assistant Vice President
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant
Registrant is a separate account of Transamerica Life
Insurance Company of new York, is controlled by the Contract
Owners, and is not controlled by or under common control with
any other person. The Depositor, Transamerica Life Insurance
Company of New York, is wholly owned by Transamerica
Occidental Life Insurance Company, which is wholly owned by
Transamerica Insurance Corporation of California
(Transamerica-California). Transamerica-California may be
deemed to be controlled by its parent, Transamerica
Corporation, a subsidiary of AEGON, N.V.
The following chart indicates the persons controlled by or
under common control with Transamerica.
The following charts indicate the persons controlled by or under common control
with Transamerica Corporation and AEGON N.V.
TRANSAMERICA CORPORATION AND SUBSIDIARIES
WITH STATE OR COUNTRY OF INCORPORATION
Transamerica Corporation
(Common Parent Corporation)
Inter-America Corporation
Transamerica Corporation (Oregon)
Transamerica LP Holdings Corporation
Transamerica Finance Corporation
Transamerica HomeFirst, Inc. (Common)
Transamerica HomeFirst, Inc. (Preferred)
TREIC Enterprises, Inc.
Transamerica CBO I, Inc.
Transamerica International Holdings, Inc.
Transamerica Financial Products, Inc.
Pyramid Insurance Company Ltd. (Common)
Pyramid Insurance Company Ltd. (Preferred)
RTI Holdings, Inc. (dormant)
Transamerica Business Technologies Corporation
ARC Reinsurance Corporation
Transamerica Management, Inc.
Transamerica Intellitech, Inc.
Realist, Inc.
Transamerica Home Loan
Transamerica Lending Company
Transamerica Insurance Corporation of California
Arbor Life Insurance Company
Plaza Insurance Sales, Inc.
Transamerica International Insurance Services, Inc.
Transamerica Annuity Service Corporation
Transamerica Advisors, Inc.
Transamerica Securities Sales Corporation
Transamerica Products, Inc.
Transamerica Products I, Inc.
Transamerica Products II, Inc.
NEF Investment Company
Greenwich Potomac Holding Corporation
Transamerica Products IV, Inc.
Transamerica Service Company
Transamerica South Park Resources, Inc.
Transamerica Financial Resources Insurance Agency
Of Alabama, Inc.
Transamerica Financial Resources Insurance Agency
Of Massachusetts, Inc.
USA Administration Services, Inc.
Financial Resources Insurance Agency of Texas
Transamerica Financial Resources, Inc.
Gemini Investments, Inc.
Transamerica Senior Properties, Inc.
Transamerica Senior Living, Inc.
Transamerica Investment Services, Inc.
TA Leasing Holding Co., Inc.
Transamerica Leasing Inc.
Intermodal Equipment Inc.
Transamerica Distribution Services Inc.
Transamerica Transport Inc.
Transamerica Leasing Holdings Inc.
Transamerica Trailer Holdings I, Inc.
Transamerica Trailer Holdings II, Inc.
Transamerica Trailer Holdings III, Inc.
Trans Ocean Ltd.
Trans Ocean Container Finance Corp.
Trans Ocean Container Corp.
Trans Ocean Tank Services Corp.
SpaceWise, Inc.
Trans Ocean Regional Corporate Holdings
Trans Ocean Management Corp.
Greybox Logistics Services, Inc.
Transamerica Commercial Finance Corporation, I
Pacific Agency, Inc. (Indiana)
Transamerica Consumer Mortgage Receivables Corporation
Transamerica Mortgage Company
Transamerica Consumer Finance Holding Company
Metropolitan Mortgage Company
Easy Yes Mortgage, Inc. (Florida) (dormant)
Easy Yes Mortgage, Inc. (Georgia) (dormant)
First Florida Appraisal Services, Inc. (dormant)
First Georgia Appraisal Services, Inc. (dormant)
Freedom Tax Services, Inc. (dormant)
J.J. & W. Advertising, Inc. (dormant)
J.J. & W. Realty Services, Inc. (dormant)
Liberty Mortgage Company of Fort Myers, Inc. (dormant)
Metropolis Mortgage Company (dormant)
Perfect Mortgage Company (dormant)
TCF Asset Management Corporation
BWAC Twelve, Inc.
Transamerica Commercial Finance Corporation
BWAC International Corporation
BWAC Credit Corporation
BWAC Seventeen, Inc.
BWAC Twenty-One, Inc.
Transamerica GmbH, Inc.
Transamerica Insurance Finance Corporation Transamerica Insurance Finance
Corporation of California Transamerica Business Credit Corporation (Common)
Transamerica Business Credit Corporation (Preferred) Transamerica Insurance
Finance Company (Europe) Transamerica Inventory Finance Corporation Transamerica
Joint Ventures, Inc.
The Plain Company
Direct Capital Equity Investments, Inc. Transamerica Distribution Finance
Corporation Transamerica Retail Financial Services Corporation Transamerica
Vendor Financial Services Corporation TIFCO Lending Corporation TA Air I,
Corporation TA Air II, Corporation TA Air III, Corporation TA Air IV,
Corporation TBC I, Inc.
TBC II, Inc.
TBC III, Inc.
Transamerica Accounts Holding Corporation
TBC IV, Inc.
TBC V, Inc.
TA Air East, Corporation
TBC Tax I, Inc.
TBC Tax II, Inc.
TBC Tax III, Inc. TBC Tax IV, Inc. TBC Tax V, Inc. TBC Tax VI, Inc. TBC Tax VII,
Inc. TBC Tax VIII, Inc. TBC Tax IX, Inc.
Bay Capital Corporation
Gulf Capital Corporation
Coast Funding Corporation
Inventory Funding Trust (Delaware Trust, 1997 Form 8832)
Transamerica Bank N.A.
TBCC Funding Trust I (Delaware Trust, 1998 Form 8832) TBCC Funding Trust II
(Delaware Trust, 1998 Form 8832) TA Air V, Corporation TA Air VI, Corporation TA
Air VII, Corporation TA Air VIII, Corporation Transamerica Equipment Financial
Services Corporation
Transamerica Mezzanine Financing, Inc.
Transamerica Small Business Services, Inc.
Transamerica Distribution Finance - Overseas, Inc.
TA Marine I, Inc.
TA Marine II, Inc. TA Air IX, Corporation TA Air X, Corporation TBC VI, Inc.
Emergent Business Capital Holdings, Inc. TA Air XI Corporation Transamerica
Business Advisory Group, Inc. TA Air XII Corporation TA Air XIII Corporation TA
Air XIV Corporation TA Air XV Corporation Transamerica Realty Services, Inc.
Pyramid Investment Corporation The Gilwell Company Bankers Mortgage Company of
California Transamerica Minerals Company Transamerica Oakmont Corporation
Ventana Inn, Inc.
Transamerica Affordable Housing, Inc.
Transamerica Occidental Life Insurance Company
Transamerica Life Insurance & Annuity Company
Transamerica Assurance Company
Transamerica Life Insurance Company of New York
Transamerica Pacific Insurance Company, Ltd.
Transamerica International Re (Bermuda) Ltd.
Transamerica International Re (Bermuda) Ltd.
*Designates INACTIVE COMPANIES
A Division of Transamerica Corporation
Limited Partner; Transamerica Corporation is General Partner
VERENGING AEGON - Netherlands Membership Association
AEGON N.V. - Netherlands corporation (51.16%)
Transamerica Corporation and subsidiaries (100%) (DE) AEGON Nederland N.V. -
Netherlands corporation (100%) AEGON NEVAK HOLDING B.V. - Netherlands
corporation (100%) GRONINGER FINANCIERINGEN B.V. - Netherlands corporation
(100%) AEGON INTERNATIONAL N.V. - Netherlands corporation (100%)
Voting Trust - (Trustees - K.J. Storm, Donald J. Shepard, H.B. Van Wijk,
Dennis Hersch)(DE)
AEGON U.S. Holding Corporation (DE) (100%)
Short Hills Management Company (NJ) (100%) CORPA
Reinsurance Company (NY) (100%) AEGON Management
Company (IN) (100%) RCC North America Inc. (DE)
(100%)
AEGON USA, Inc. - holding co. (IA) (100%)
AEGON Funding Corp. (DE) (100%)
First AUSA Life Insurance Company - insurance
holding co. (MD) (100%) AUSA Life Insurance Company, Inc. -
insurance (NY) (82.33%) Life Investors Insurance Company of America
- insurance (IA) (100%)
Bankers United Life Assurance Company - insurance (IA) (100%)
Great American Insurance Agency, Inc. (IA) (100%)
Life Investors Alliance, LLC (DE) (100%)
PFL Life Insurance Company - insurance (IA) (100%) AEGON Financial
Services Group, Inc. (MN) (100%) AEGON Assignment Corporation of
Kentucky (KY) (100%) AEGON Assignment Corporation (IL) (100%)
Southwest Equity Life Insurance Company - insurance (AZ) (100%
Voting Common) Iowa Fidelity Life Insurance Company - insurance
(AZ) (100% Voting Common) Western Reserve Life Assurance Co. of
Ohio - insurance (OH) (100%) WRL Investment Management, Inc. -
investment adviser (FL) (100%) WRL Investment Services, Inc. -
transfer agent (FL)(100%) WRL Series Fund, Inc. - mutual fund (MD)
ISI Insurance Agency, Inc. and subsidiaries (CA) (100%) AEGON
Equity Group, Inc. (FL) (100%) Monumental General Casualty Company
- insurance (MD) (100%) United Financial Services, Inc. - general
agency (MD) (100%) Bankers Financial Life Insurance Company -
insurance (AZ) The Whitestone Corporation - insurance agency (MD)
(100%) Cadet Holding Corp. - holding company (IA) (100%) Monumental
General Life Insurance Company of Puerto Rico (PR) (51%)
AUSA Holding Company - holding company (MD) (100%)
Monumental General Insurance Group, Inc. - holding company (MD) (100%)
Monumental General Administrators, Inc. (MD) (100%)
Executive Management and Consultant Services, Inc. - consulting
services (MD) (100%)
Trip Mate Insurance Agency, Inc. (KS) (100%)
Monumental General Mass Marketing, Inc. - marketing (MD) (100%)
AUSA Financial Markets, Inc. - marketing (IA) (100%)
Endeavor Group (CA) (100%)
Endeavor Management Company (CA) (100%)
Universal Benefits Corporation - third party administrator (IA)
(100%) Investors Warranty of America, Inc. - provider of automobile
extended maintenance
contracts (IA) (100%)
Massachusetts Fidelity Trust Company - trust company (IA) (100%)
Money Services, Inc. - financial counseling for employees and
agents of affiliated companies (DE) (100%)
ORBA Insurance Services, Inc. (CA) (10.56%)
Zahorik Company, Inc. - broker-dealer (CA) (100%)
ZCI, Inc. (AL) (100%)
Long, Miller & Associates, L.L.C. (CA) (33-1/3%)
AEGON Asset Management Services, Inc. (DE) (100%)
InterSecurities, Inc. - broker-dealer (DE) (100%)
Associated Mariner Financial Group, Inc. - holding company
(MI) (100%)
Mariner Financial Services, Inc. - broker/dealer (MI)(100%)
Associated Mariner Agency of Hawaii, Inc. - insurance
agency (MI) (100%)
Associated Mariner Agency of New Mexico, Inc. (MI) (100%)
Idex Investor Services, Inc. - shareholder services (FL) (100%)
Idex Management, Inc. - investment adviser (DE) (100%)
IDEX Mutual Funds - mutual fund (MA)
Diversified Investment Advisors, Inc. - investment adviser
(DE) (100%)
Diversified Investors Securities Corporation - broker-dealer
(DE) (100%)
AEGON USA Securities, Inc. - broker-dealer (IA) (100%)
AEGON USA Managed Portfolios, Inc. - mutual fund (MD)
Creditor Resources, Inc. - credit insurance (MI) (100%)
CRC Creditor Resources Canadian Dealer Network Inc. - insurance
agency (Canada) (100%)
Weiner Agency, Inc. (MD) (100%)
AEGON USA Investment Management, Inc. - investment adviser
(IA) (100%)
AEGON USA Realty Advisors, Inc. - real estate investment services
(IA) (100%)
QSC Holding, Inc. (DE) (100%)
Landauer Realty Advisors, Inc. - real estate counseling
(IA) (100%)
Landauer Associates, Inc. - real estate counseling (DE) (100%)
Landauer Realty Associates, Inc. (TX) (100%)
Realty Information Systems, Inc. - information systems for
real estate investment management (IA) (100%)
USP Real Estate Investment Trust - real estate investment trust
(IA) RCC Properties Limited Partnership (IA)
Item 27. Number of Contractowners
Non-qualified: 108
Qualified: 69
Item 28. Indemnification
Transamerica Life Insurance Company of New York's ByLaws
provide in Article VIII as follows:
The Corporation shall indemnify to the fullest extent now or
hereafter provided for or permitted by law each person
involved in, or made or threatened to be made a party to, any
action suit, claim or proceeding, whether civil or criminal,
including any investigative, administrative, legislative, or
other proceeding, and including any action by or in the right
of the Corporation or any other corporation, or any
partnership, joint venture, trust, employee benefit plan, or
other enterprise (any such entity, other than the Corporation,
being hereinafter referred to as an "Enterprise"), and
including appeals therein (any such action or process being
hereinafter referred to as a "Proceeding"), by reason of the
fact that such person, such person's testator or intestate (i)
is or was a director or officer of the Corporation, or (ii) is
or was serving, at the request of the Corporation, as a
director, officer, or in any other capacity, or any other
Enterprise, against any and all judgments, amounts paid in
settlement, and expenses, including attorney's fees, actually
and reasonably incurred as a result of or in connection with
any Proceeding, except as provided in Subsection (b) below.
(b) No indemnification shall be made to or on
behalf of any such person if a judgment or other final
adjudication adverse to such person establishes that such
person's acts were committed in bad faith or were the
result of active and deliberate dishonesty and were
material to the cause of action so adjudicated, or that
such person personally gained in fact a financial profit
or other advantage to which such person was not legally
entitled. In addition, no indemnification shall be made
with respect to any Proceeding initiated by any such
person against the Corporation, or a director or officer
of the Corporation, other than to enforce the terms of
this Article VIII, unless such Proceeding was authorized
by the Board of Directors. Further, no indemnification
shall be made with respect to any settlement or compromise
of any Proceeding unless and until the Corporation has
consented to such settlement or compromise.
(c) Written notice of any Proceeding for which
indemnification may be sought by any person shall be given
to the Corporation as soon as practicable. The Corporation
shall then be permitted to participate in the defense of
any such proceeding or, unless conflicts of interest or
position exist between such person and the Corporation in
the conduct of such defense, to assume such defense. In
the event that the Corporation assumes the defense of any
such Proceeding, legal counsel selected by the Corporation
shall be reasonably acceptable to such person. After such
an assumption, the Corporation shall not be liable to such
person for any legal or other expenses subsequently
incurred unless such expenses have been expressly
authorized by the Corporation. In the event that the
Corporation participates in the defense of any such
Proceeding, such person may select counsel to represent
him in regard to such a Proceeding; however, such person
shall cooperate in good faith with any request that common
counsel be utilized by the parties to any Proceeding who
are similarly situated, unless to do so would be
inappropriate due to actual or potential differing
interests between or among such parties.
(d) In making any determination regarding any
person's entitlement to indemnification hereunder, it
shall be presumed that such person is entitled to
indemnification, and the Corporation shall have the burden
of proving the contrary.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling person of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
1933 Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liability (other than
the payment by the registrant of expenses incurred or paid by
the 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 1933 Act and will be governed by the final adjudication of
such issue.
The directors and officers of Transamerica Life Insurance
Company of New York are covered under a Directors and Officers
liability program which includes direct coverage to directors
and officers (Coverage A) and corporate reimbursement
(Coverage B) to reimburse the Company for indemnification of
its directors and officers. Such directors and officers are
indemnified for loss arising from any covered claim by reason
of any Wrongful Act in their capacities as directors or
officers. In general, the term "loss" means any amount which
the insureds are legally obligated to pay for a claim for
Wrongful Acts. In general, the term "Wrongful Acts" means any
breach of duty, neglect, error, misstatement, misleading
statement or omission caused, committed or attempted by a
director or officer while acting individually or collectively
in their capacity as such, claimed against them solely by
reason of their being directors and officers.
Item 29. Principal Underwriter
(a) Transamerica Securities Sales Corporation, the principal
underwriter, is also the underwriter for: Transamerica Investors,
Inc.; Transamerica Variable Insurance Fund, Inc.; Transamerica
Occidental Life Insurance Company's Separate Accounts: VL; VA-2L;
VA-2NL; VA-5; VUL-1 and VUL-2; Transamerica Life Insurance and
Annuity Company's Separate Accounts VA-1; VA-6; and VA-7; and
Transamerica Life Insurance Company of New York's Separate
Account VA-2LNY; VA-2NLNY; and VA-5NLNY. The Underwriter is
wholly-owned by Transamerica Insurance Corporation of California.
(b) The following table furnishes information with
respect to each director and officer of the principal
Underwriter currently distributing securities of the
registrant:
Nooruddin Veerjee Director and Chairman
Nicki Bair Director and President
Sandy Brown Director, Senior Vice President and Treasurer
Roy Chong-Kit Director
George Chuang Vice President and Chief Financial Officer
Chris Shaw Vice President and Compliance Officer
Item 30. Location of Accounts and Records
Physical possession of each account, book, or other
document required to be maintained is kept at the
Company's offices at 100 Manhattanville Road, Purchase,
New York 10577.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) The registrant undertakes that it will file a
post-effective amendment to this registration
statement as frequently as is necessary to ensure
that the audited financial statements in the
registration statement are never more than 16
months old for as long as premiums under the
policies offered herein are being accepted.
(b) Registrant hereby undertakes to include either
(1) as part of any application to purchase a
Contract offered by the prospectus, a space that
an applicant can check to request a Statement of
Additional Information, or (2) a post card or
similar written communication affixed to or
included in the prospectus that the applicant can
remove to send for a Statement of Additional
Information;
(c) Registrant hereby undertakes to deliver any
Statement of Additional Information and any
financial statements required to be made
available under Form N-4 promptly upon written or
oral request.
(d) Transamerica hereby represents that the fees and
charges deducted under the Contracts, in the
aggregate, are reasonable in relation to the
services rendered, the expenses expected to be
incurred, and the risks assumed by Transamerica.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Transamerica
Life Insurance Company of New York certifies that this Post-Effective Amendment
No. 7 to the Registration Statement meets all of the requirements for
effectiveness pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Post-Effective Amendment No. 7 to the Registration Statement to
be signed on its behalf by the undersigned in the City of Los Angeles, State of
California on the 26th day of April, 2000
SEPARATE ACCOUNT VA-6NY TRANSAMERICA
OF TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
LIFE INSURANCE COMPANY (DEPOSITOR)
OF NEW YORK
(REGISTRANT)
BY:______________________________________
William M. Hurst
Assistant Secretary
As Required by the Securities Act of 1933, this Post-Effective Amendment
No. 7 to the Registration Statement has been signed by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
__________________________* Chairman and Director April 26, 2000
Nooruddin S. Veerjee
_________________________ * President and Director April 26, 2000
Alan T. Cunningham
___________________________* Senior Vice President, April 26, 2000
Robert Rubinstein Chief Actuary, Chief Operating
Officer, Secretary and Director
___________________________* Vice President - Administration April 26, 2000
Alexander Smith and Controller
___________________________* Director April 26, 2000
Marc C. Abrahms
___________________________* Director April 26, 2000
James T. Byrne, Jr.
___________________________* Director April 26, 2000
John Fibiger
___________________________* Director April 26, 2000
James B. Roszak
___________________________* Director April 26, 2000
Daniel E. Jund
___________________________* Director April 26, 2000
Thomas P. O'Neill
</TABLE>
On April 26, 2000 as Attorney -in-Fact pursuant
- ---------------------- to powers of attorney previously filed
*By: William M. Hurst and filed herewith, and in his own capacity as
Assistant Secretary
Exhibit 10(b) Consent of Auditors
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Accountants and
Financial Statements" in Post-Effective Amendment No. 7 under the Securities Act
of 1933 and Post-Effective Amendment No. 8 under the Investment Company Act of
1940 to the Registration Statement (Form N-4 No. 333-472 19) and the related
Prospectus and Statement of Additional Information of Separate Account VA-6NY of
Transamerica Life Insurance Company of New York and to the use of our report
dated March 31, 2000 with respect to the statutory-basis financial statements of
Transamerica Life Insurance Company of New York and our report dated March 24,
2000 with respect to the financial statements of Separate Account VA-6NY, both
included in the Statement of Additional Information.
Los Angeles, California
April 24, 2000
