Registration No. 333-37883
No. 811-08439
SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM N-8B-2
REGISTRATION STATEMENT OF UNIT INVESTMENT TRUST
WHICH IS CURRENTLY ISSUING SECURITIES
PURSUANT TO SECTION 8(B) OF THE INVESTMENT COMPANY ACT OF 1940
TRANSAMERICA OCCIDENTAL LIFE SEPARATE ACCOUNT VUL-1
(Name of Unit Investment Trust)
1150 South Olive Street, Los Angeles, CA 90015
(Address of Principal Office of Registrant)
Issuer of periodic payment plan certificates only for purposes of
information provided herein.
Dated January ____, 1998
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I I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Furnish name of the trust and the Internal Revenue Service
Employer Identification Number.
The trust is the Transamerica Occidental Life
Separate Account VUL-1 (the "Separate Account"). The
Separate Account is a separate investment account of
Transamerica Occidental Life Insurance Company (the
"Company") and has no employer identification number.
(b) Furnish title of each class or series of securities
issued by the trust.
The securities are individual flexible payment
variable life insurance policies (the "Policies").
2. Furnish name and principal business address and zip code and
the Internal Revenue Service Employer Identification Number of
each depositor of the trust.
Transamerica Occidental Life Insurance Company, 1150 South
Olive Street, Los Angeles, California
90015
FEIN: 95-1060502
3. Furnish name and principal business address and zip code and
the Internal Revenue Service Employer Identification Number of
each custodian or trustee of the trust indicating for which
class or series of securities each custodian or trustee is
acting.
The Company will hold, in its own custody, all of the
securities.
4. Furnish name and principal business address and zip code and
the Internal Revenue Service Employer Identification Number of
each principal underwriter currently distributing securities
of the trust.
Distribution of the Policies has not yet commenced. When
distribution commences, the principal underwriter will be:
Transamerica Securities Sales Corporation, 1150 South Olive
Street, Los Angeles, California 90015
FEIN: 95-4044525
5. Furnish name of state or other sovereign power, the laws of
which govern with respect to the organization of the trust.
California.
6. (a) Furnish the dates of execution and termination of
agreement currently in effect under the terms of
which the trust was organized and issued or proposes
to issue securities.
The Separate Account was established under California
law pursuant to a resolution of the Board of
Directors of the Company on June 11, 1996.
(b) Furnish the dates of execution and termination of any
indenture or agreement currently in effect pursuant
to which the proceeds of payments on securities
issued or to be issued by the trust are held by the
custodian or trustee.
None.
7. Furnish in chronological order the following information with
respect to each change of name of the trust since January 1,
1930. If the name has never been changed, so state.
The name of the Separate Account has never been changed.
8. State the date on which the fiscal year of the trust ends.
December 31.
Material Litigation
9. Furnish a description of any pending legal proceedings, material
with respect to the security holders of the trust by reason of the nature of the
claim or the amount thereof, to which the trust, the depositor, or the principal
underwriter is a party or of which the assets of the trust are the subject,
including the substance of the claims involved in such proceeding and the title
of the proceeding. Furnish a similar statement with respect to any pending
administrative proceeding commenced by a governmental authority or any such
proceeding or legal proceeding known to be contemplated by a governmental
authority. Include any proceedings which, although immaterial itself, is
representative of, or one of, a group which in the aggregate is material.
There are no current or pending legal or administrative
proceedings to which Separate Account, the Company, or
principal underwriter, Transamerica Securities Sales
Corporation, is a party, which are material with respect to
the security holders of the Separate Account.
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
Except for terms defined in this Form N-8B-2, terms used in
this Form N-8B-2 have the same meaning as such terms are
defined in the prospectus (the "Prospectus") filed with the
Securities and Exchange Commission ("SEC") on October 14, 1997
by Transamerica Occidental Life Separate Account as part of a
Registration Statement, as amended from time to time, on Form
S-6 under the Securities Act of 1933 (the "Registration
Statement"), describing the Policies.
General Information Concerning the Securities of the Trust and the Rights of
Holders.
10. Furnish a brief statement with respect to the following
matters for each class or series of securities issued by the
trust.
(a) Whether the securities are of the registered or
bearer type.
The Policies are flexible payment variable life
insurance policies and, as such, are "registered" in
the name of the owner of a Policy (the "Policy
owner") and the records concerning the Policy owner
are maintained by or on behalf of the Company.
(b) Whether the securities are of the cumulative or
distributive type. The Policies are of the cumulative
type, providing for no distribution of income,
dividends or capital gains except in connection with
a voluntary surrender or partial withdrawal of Policy
Value by a Policy owner, or in connection with the
payment of death benefits.
(c) The rights of security holders with respect to partial
withdrawal or redemption.
A Policy may be surrendered at any time, subject to
the possible imposition of a
surrender charge. See Item 13(a) "Surrender Charge"
and Item 17(a) "Surrender."
After the first Policy year (and before the paid-up
option is exercised), partial withdrawals in a
minimum amount of $500 may be made from the Policy
value at any time upon written request filed at the
Company's Variable Life Service Center. A transaction
fee, which is the smaller of 2% of the amount
withdrawn or $25.00, will be assessed in all cases. A
partial withdrawal charge may also be deducted. The
partial withdrawal charge will not exceed the
surrender charge, and the outstanding surrender
charge will be reduced by the amount of the partial
withdrawal charges. See Item 13(a) "Charges on
Partial Withdrawal" and Item 17(a) "Partial
Withdrawal."
(d) The rights of security holders with respect to
conversion, transfer, partial-redemption, and similar
matters.
TRANSFER - The Policies permit net payments to be
allocated either to the Fixed Account, which is part
of the Company's General Account, or to the
sub-accounts of the Separate Account. Each
sub-account invests exclusively in a corresponding
mutual fund investment portfolio ("portfolio").
Subject to the consent of the Company, the Policy
owner may transfer amounts among all of the
sub-accounts and between the sub-accounts and the
Fixed Account, subject to certain restrictions, but
at no time may have allocations in more than seven
sub-accounts.
CONVERSION PRIVILEGE - During the first 24 Policy
months after the date of issue, subject to certain
restrictions, the Policy owner may convert the Policy
to a fixed Policy by transferring all Policy Value in
the sub-accounts to the Fixed Account and by
simultaneously changing the allocation of future
payments to the Fixed Account. A similar conversion
privilege is in effect for 24 Policy months after the
effective date of an increase in face amount, under
which the Policy owner may convert by transferring
all of the Policy Value in the sub-accounts to the
Fixed Account and by simultaneously changing the
allocation of all or part of future payments to the
Fixed Account.
FREE LOOK PRIVILEGE - The Policy provides for an
initial Free Look Period. The Policy owner generally
may cancel the Policy by the later of (a) 45 days
after the application for the Policy is signed, or
(b) 10 days after the Policy owner receives the
Policy. (The 10 day period may be longer, depending
upon state law for replacements or other reasons.) In
some states, the 45 day provision does not apply and
only the 10 day (or longer) provision applies. Upon
returning the Policy, the Policy owner generally will
be sent within 7 days a refund equal to the sum of
(1) the difference between any payments made,
including fees or other charges, and any amounts
allocated to the Separate Account; (2) the value of
the amounts allocated to the Separate Account on the
date the returned Policy is received at the Company's
Variable Life Service Center; and (3) any fees or
charges imposed on the amounts allocated to the
Separate Account. Where required by state insurance
laws, the Company will refund the entire premiums
paid, in lieu of the above. The refund of any premium
paid by check, however, may be delayed until the
check has cleared the Policy owner's bank.
A free look privilege also applies following a
requested increase in face amount. The Policy owner
generally has the right to cancel the increase by the
later of (a) 45 days after the application for the
increase is signed, or (b) 10 days after receipt of
the new specification pages issued for the increase
(unless state law requires a longer period). Upon
canceling the increase, the Policy owner will receive
a credit to the Policy Value of charges which would
not have been deducted but for the increase. The
amount to be credited will be refunded if the Policy
owner so requests. The Company will also waive any
surrender charge calculated for the increase.
The Policy owner may make surrenders and partial
withdrawals as described in Items 10(c), 13(a) and
17(a).
(e) If the trust is the issuer of periodic payment plan
certificates, the substance of the provisions of any
indenture or agreements with respect to lapses or
defaults by security holders in making principal
payments, and with respect to reinstatement.
POLICY LAPSE AND REINSTATEMENT - The failure to make
payments will not itself cause a Policy to lapse
unless: (1) the surrender value is insufficient to
cover the next monthly insurance protection charge,
plus loan interest accrued, or (2) the outstanding
loan exceeds the Policy value less surrender charges.
If the Policy becomes in default because of (1) or
(2), above, the Policy owner will have a 62-day grace
period to make a sufficient payment to prevent
termination. Except for the situation described in
(2), above, if, during the first 48 months after the
date of issue or the effective date of an increase in
face amount based on a request by the Policy owner,
payment is made to the Company of a net amount at
least equal to the sum of minimum monthly payments (a
monthly premium amount calculated as the monthly
average cost of the expected charges under the
Policy) for the number of months the Policy, increase
or Policy change which causes a change in the minimum
monthly payment has been in force, the Policy will
not lapse during the period, within limits. A Policy
change which causes a change in the minimum monthly
payment is a change in the face amount or the
addition or deletion of a rider. Subject to certain
conditions (including evidence of insurability
satisfactory to the Company) and the payment of
sufficient net premium, a Policy may be reinstated at
any time within three years after the expiration of
the grace period and before the final payment date
(or the maturity date if the Policy lapsed because
the outstanding loan exceeded the Policy Value less
surrender charges). See Item 17(c) for a more
detailed description of these rights.
GUARANTEED DEATH BENEFIT - If the Policy owner elects
the Guaranteed Death Benefit Rider, and the rider has
not previously been terminated, the Company
guarantees that the Policy will not lapse provided
payments are made of a sufficient amount, net of
partial withdrawals, partial withdrawal charges, and
outstanding loans. Generally, the Policy will not
lapse if, on each Policy anniversary, (a) the sum of
payments made to the Policy, less amounts withdrawn,
including partial withdrawal charges, and less any
outstanding loan equals or exceeds (b) the annual
guaranteed death benefit premiums times the number of
Policy years since the date of issue, adjusted as
applicable for policy changes. The guaranteed death
benefit premiums are currently equal to 90% of the
guideline level premium if the Level Death Benefit
Option was elected or 75% of the guideline level
premium if the Adjustable Death Benefit Option was
elected. Other conditions also apply. Once
terminated, the rider may not be reinstated.
(f) The substance of the provisions of any indenture or
agreements with respect to voting rights, together
with the names of any persons other than security
holders given the right to exercise voting rights
pertaining to the trust's securities or the
underlying securities and the relationship of such
persons to the trust.
To the extent required by law, the Company will vote
shares held by each sub-account in accordance with
instructions received from the Policy owners with
Policy value in such sub-account. Each person having
a voting interest will be provided with proxy
materials together with an appropriate form with
which to give voting instructions to the Company.
Shares held in each sub-account for which no timely
instructions are received will be voted in proportion
to the instructions received from all persons with an
interest in the sub-account furnishing instructions
to the Company with respect to the portfolios. The
Company will also vote shares held in the Separate
Account that it owns and which are not attributable
to the Policies in the same proportion.
We will compute the number of votes that a policy
owner has the right to instruct on the record date
established for the portfolio. This number is the
quotient of: (a) each Policy owner's Policy Value in
the sub-account divided by; (b) the net asset value
of one share in the portfolio in which the assets of
the sub-account are invested.
We may disregard voting instructions Policy owners
initiate in favor of any change in the investment
policies or in any investment adviser or principal
underwriter. Our disapproval of any change must be
reasonable. A change in investment policies or
investment adviser must be based on a good faith
determination that the change would be contrary to
state law or otherwise is improper under the
objectives and purposes of the portfolios. If we do
disregard voting instructions, we will include a
summary of and reasons for that action in the next
report to Policy owners. If the 1940 Act or any rules
thereunder should be amended or if the present
interpretation of the 1940 Act or such rules should
change, and as a result the Company determines that
it is permitted to vote shares of the portfolio in
its own right, whether or not such shares are
attributable to the Policies, the Company reserves
the right to do so.
The Company may, when required by state insurance
regulatory authorities, disregard voting instructions
if the instructions require that the shares be voted
so as (1) to cause a change in the sub-classification
or investment objective of one or more portfolio, or
(2) to approve or disapprove an investment advisory
contract for the portfolio. In addition, the Company
may disregard voting instructions calling for a
change in the investment policies, any investment
adviser or principal underwriter of any portfolio
which may be initiated by Policy owners, provided the
Company's disapproval of the change is reasonable
and, in the case of a change in investment policies
or investment adviser, based on a good faith
determination that such change would be contrary to
state law or otherwise inappropriate in light of the
portfolio's objectives and purposes. In the event the
Company does disregard voting instructions, a summary
of that action and the reasons for that action will
be included in the next periodic report to Policy
owners.
(g) Whether security holders must be given notice of any
changes in:
(1) the composition of the assets of the trust.
The Company reserves the right, subject to
applicable law, to make additions to,
deletions from, or substitutions for the
shares that are held in the sub-accounts of
the Separate Account or that the
sub-accounts of the Separate Account may
purchase. If the shares of a portfolio are
no longer available for investment or if in
the Company's judgment further investment in
any portfolio should become inappropriate in
view of the purposes of the Separate Account
or the affected sub-account, the Company may
redeem the shares of that underlying
portfolio and substitute shares of another
registered open-end management company. The
Company will not substitute any shares
attributable to a Policy interest in a
sub-account without notice and prior
approval of the SEC and state insurance
authorities, to the extent required by the
1940 Act or other applicable law.
The Company also reserves the right to
establish additional sub-accounts of the
Separate Account, each of which would invest
in shares corresponding to a new underlying
portfolio or in shares of another investment
company having a specified investment
objective. Subject to applicable law and any
required Commission approval, the Company
may, in our sole discretion, establish new
sub-accounts or eliminate one or more
sub-accounts if marketing needs, tax
considerations or investment conditions
warrant. Any new sub-accounts may be made
available to existing Policy owners on a
basis to be determined by the Company.
If any of these substitutions or changes are
made, the Company may by appropriate
endorsement change the Policy to reflect the
substitution or change and will notify
Policy owners of all such changes. If the
Company deems it to be in the best interest
of Policy owners, and subject to any
approvals that may be required under
applicable law, the Separate Account or any
sub-account(s) may be operated as a
management company under the 1940 Act, may
be deregistered under that Act if
registration is no longer required, or may
be combined with other sub-accounts or other
separate accounts of the Company.
(2) the terms and conditions of the securities issued
by the trust.
No change in the terms and conditions of the
Policies that affect the Policy owner's
rights will be made without notice to Policy
owners to the extent required by law.
(3) the provisions of any indenture or agreement of
the trust.
No notice to or consent from Policy owners
is required for any change in the Company's
resolution establishing the Separate
Account.
(4) the identity of the depositor, trustee or
custodian.
The depositor of the Separate Account cannot
be changed.
The Separate Account has no Trustees.
Notice to Policy owners need not be given
for the custodian to be changed.
(h) Whether the consent of security holders is required
in order for action to be taken concerning any change
in:
(1) the composition of the assets of the trust.
The Policies do not require consent of the
Policy owners when changing the underlying
securities of the Separate Account, except
as may be required by currently applicable
law or regulation.
(2) the terms and conditions of the securities issued
by the trust.
Except as appropriate to comply with federal
or state law or regulation the terms and
conditions of a Policy cannot be changed
without the consent of the Policy owner.
(3) the provisions of any indenture or agreement of
the trust.
No consent is required.
(4) the identity of the depositor, trustee or
custodian.
The depositor of the Separate Account cannot
be changed.
The Separate Account has no Trustees and no
custodian.
(i) Any other principal feature of the securities issued
by the trust or any other principal right, privilege
or obligation not covered by subdivisions (a) to (g)
or by any other item in this form.
(1) Payments - See Items 14 and 15.
(2) Death Benefits - As long as the Policy
remains in force, the Company will, upon
receipt of due proof of the Insured's death,
pay the Death Benefits of the Policy to the
named beneficiary. The Company will normally
pay the Death Benefits within seven days of
receiving due proof of the Insured's death,
but the Company may delay payments under
certain circumstances. The Death Benefits
may be received by the beneficiary in cash
or under one or more of the payment options
set forth in the Policy.
The net death benefit if the insured dies on
or before the Final Payment Date and before
the paid-up insurance option is exercised
is: (a) the death benefit provided under
either of two death benefit options, the
Level Option or Adjustable Option, whichever
is elected and in effect on the date of
death; plus (b) any additional insurance on
the Insured's life that is provided by
rider; minus (c) any outstanding loan, any
partial withdrawals and partial withdrawal
charges, and any monthly insurance
protection charges due and unpaid through
the Policy month in which the Insured dies.
The amount of the net death benefit payable
will be determined as of the date of the
Company's receipt of due proof of the
Insured's death.
The Policy provides two death benefit
options before the Final Payment Date: the
Level Option and the Adjustable Option, as
described below. (These options are not
available once the paid-up insurance option
is exercised.) The Policy owner designates
the desired option in the application. The
Policy owner may change the option once per
Policy year by written request. There is no
charge for a change in option. The effective
date of any such change will be the monthly
payment date on or following the date of
receipt of the request.
Under the Level Option, the death benefit is
equal to the greater of the face amount of
insurance or the Guideline Minimum Sum
Insured.
Under the Adjustable Option, the death
benefit is equal to the greater of: (a) the
face amount of insurance plus the Policy
value, or (b) the Guideline Minimum Sum
Insured.
The Guideline Minimum Sum Insured is equal
to a percentage of the Policy Value as set
forth in the Policy. The Guideline Minimum
Sum Insured is determined in accordance with
the Internal Revenue Code regulations to
ensure that the Policy qualifies as a life
insurance contract and that the insurance
proceeds will be excluded from the gross
income of the beneficiary. After attained
age 93, the Guideline Minimum Sum Insured
under the Policy is 101% of the Policy
Value. If the insured dies after the paid-up
insurance option is exercised, then the net
death benefit will be the paid-up insurance
amount less any outstanding loan.
If the insured dies after the Final Payment
Date, the net death benefit will be, except
as provided otherwise under the Guaranteed
Death Benefit Rider, 101% of the Policy
Value on the date we receive due proof of
death less any outstanding loan and any
partial withdrawals and partial withdrawal
charges due and unpaid. If the Policy owner
elected the Guaranteed Death Benefit Rider,
and if the Rider was not previously
terminated, then the net death benefit when
the insured dies after the Final Payment
Date is the greater of (a) the face amount
of the policy on the Final Payment Date, or
(b) 101% of the Policy Value on the date we
receive due proof of the insured's death,
less any outstanding loan. (A partial
withdrawal taken after the Final Payment
Date terminates the Guaranteed Death Benefit
Rider.)
(3) Calculation of Policy Value - See Items 44(a), 44(c), and 46(a).
--------------------------- ---
(4) Loan Provisions. See Item 21.
(5) Payment Options - Upon written request, the
surrender value or all or part of the net
death benefits may be placed under one or
more of the payment options offered by the
Company. The payment options are paid from
our General Account and are not based on the
investment experience of the Separate
Account. If the Policy owner does not make
an election, the Company will pay the
benefits in a single sum. A certificate will
be provided to the payee describing the
payment option selected.
If a payment option is selected, the
beneficiary may pay to the Company an amount
that would otherwise be deducted from the
death benefit.
The amount applied under any one payment
option for any one payee must be at least
$5,000. The periodic payments for any one
payee must be at least $50.
(6) Optional Insurance Benefit - Subject to
certain requirements, one or more of the
following additional insurance benefits may
be added by rider: Waiver of Payment Rider,
Guaranteed Insurability Rider, Children's
Insurance Rider, Living Benefits Rider, and
Guaranteed Death Benefit Rider. The cost of
these optional insurance benefits will be
deducted from Policy value as part of the
monthly insurance protection charges, except
that for the Guaranteed Death Benefit Rider
there is a one-time only charge of $25 which
is deducted from the first payment.
Information Concerning the Securities Underlying the Trust's Securities
11. Describe briefly the kind or type of securities comprising the
unit of specified securities in which security holders have an
interest.
The Policies permit net payments to be allocated either to the
Fixed Account, which is part of the Company's General Account,
or to the Separate Account. Seventeen investment divisions
("sub-accounts") are currently offered under the Policies.
Each sub-account invests exclusively in a corresponding
portfolio. The portfolios are open-end management investment
companies or portfolios of series, open-end management
companies. Each of the portfolios operates pursuant to
different investment objectives, which are summarized below:
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
organization or place of principal business activity.
Worldwide Growth 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.
The International Magnum Portfolio of the Morgan Stanley
Universal Funds, Inc., seeks long-term capital appreciation by
investing primarily in equity securities of non-U.S. issuers
domiciled in EAFE countries. (The countries in which the
portfolio will invest are those comprising the Morgan Stanley
Capital International EAFE Index (the "EAFE Index"), which
includes Australia, Japan, New Zealand, most nations located
in Western Europe and certain developed countries in Asia,
such as Hong Kong and Singapore (each an "EAFE country," and
collectively the "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.)
The Small Cap Portfolio of the Dreyfus Variable Investment
Fund seeks to maximize capital appreciation. It seeks to
achieve its objective by investing principally in common
stocks. Under normal market conditions, the portfolio will
invest at least 65% of its total assets in companies with
market capitalizations of less than $1.5 billion at the time
of purchase which the portfolio adviser believes to be
characterized by new or innovative products, services or
processes which should enhance prospects for growth in future
earnings.
The Small Cap Portfolio of the OCC Accumulation Trust seeks
capital appreciation through investments in a diversified
portfolio consisting primarily of equity securities of
companies with market capitalizations of under $1 billion.
Under normal circumstances at least 65% of the portfolios'
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, and will also include options,
warrants, bonds, notes and debentures which are convertible
into or exchangeable for, or which grant a right to purchase
or sell, such securities. In addition, the portfolio may also
purchase foreign securities provided that they are listed on a
domestic or foreign securities exchange or are represented by
American depository receipts listed on a domestic securities
exchange or traded in domestic or foreign over-the-counter
markets.
The Emerging Growth Series of the MFS Variable Insurance Trust
seeks to provide long-term growth of capital. Dividend and
interest income from portfolio securities, if any, is
incidental to the investment objective of long-term growth of
capital. The policy is to invest primarily (i.e., at least 80%
of its assets under normal circumstances) in common stocks of
companies that the portfolio adviser believes are early in
their life cycle but which have the potential to become major
enterprises (emerging growth companies). While the portfolio
will invest primarily in common stocks, the portfolio may, to
a limited extent, seek appreciation in other types of
securities such as fixed income securities (which may be
unrated), convertible securities and warrants when relative
values make such purchases appear attractive either as
individual issues or as types of securities in certain
economic environments. The portfolio may invest in
non-convertible fixed income securities rated lower than
"investment grade" (commonly known as "junk bonds") or in
comparable unrated securities, when, in the opinion of the
adviser, such an investment presents a greater opportunity for
appreciation with comparable risk to an investment in
"investment grade" securities. Under normal market conditions
the portfolio will invest not more than 5% of its nets assets
in these securities. Consistent with its investment objective
and policies described above, the portfolio may also invest up
to 25% (and generally expects to invest not more than 15%) of
its net assets in foreign securities (including emerging
market securities and Brady Bonds) which are not traded on a
U.S. exchange.
The Premier Growth Portfolio of Alliance Variable Products
Series Fund, Inc., seeks growth of capital by pursuing
aggressive investment policies. Since investments will be made
based upon their potential for capital appreciation, current
income will be incidental to the objective of capital growth.
The portfolio will invest predominantly in the equity
securities (common stocks, securities convertible into commons
stocks and rights and warrants to subscribe for or purchase
common stocks) of a limited number of large, carefully
selected, high-quality U.S. companies that, in the judgment of
the adviser, are likely to achieve superior earnings growth.
The portfolio investments in the 25 such companies most highly
regarded at any point in time by the adviser will usually
constitute approximately 70% of the portfolio's net assets.
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. The portfolio
will, under normal circumstances, invest at least 85% of the
value of its total assets in the equity securities of U.S.
companies.
The Capital Appreciation Portfolio of the Dreyfus Variable
Investment Fund seeks to provide long-term capital growth
consistent with the preservation of capital current income is
a secondary goal. It seeks to achieve its goals by investing
in common stocks of domestic and foreign issuers.
The Research Series of the MFS Variable Insurance Trust seeks
long-term growth of capital and future income. The policy is
to invest a substantial proportion of its assets in equity
securities of companies believed to possess better than
average prospects for long-term growth. Equity securities in
which the portfolio may invest include the following: common
stocks, preferred stocks and preference stocks, securities
such as bonds, warrants or rights that are convertible into
stocks and depository receipts for those securities. These
securities may be listed on securities exchanges, traded in
various over-the counter markets or have no organized markets.
A smaller proportion of the assets may be invested in bonds,
short-term obligations, preferred stocks or common stocks
whose principal characteristic is income production rather
than growth. Such securities may also offer opportunities for
growth of capital as well as income. In the case of both
growth stocks and income issues, emphasis is placed on the
selection of progressive, well-managed companies. The
portfolio's non-convertible debt investments, if any, may
consist of "investment grade" securities, and, with respect to
no more than 10% of the portfolio's net assets, securities in
the lower rated categories or securities which the adviser
believes to be a similar quality to these lower rated
securities (commonly know as "junk bonds"). Consistent with
its investment objective and policies described above, the
portfolio may also invest up to 20% of its net assets in
foreign securities (including emerging market securities)
which are not traded on a U.S. exchange.
The Growth Portfolio of the Transamerica Variable Insurance
Fund, Inc., seeks long-term capital growth. Common stock
(listed and unlisted) is the basic form of investment.
Although the portfolio invests the majority of its assets in
common stocks, the portfolio may also invest in debt
securities and preferred stocks (both having a call on common
stocks by means of a conversion privilege or attached
warrants) and warrants or other rights to purchase common
stocks. Unless market conditions would indicate otherwise, the
Growth Portfolio will be invested primarily in such
equity-type securities. When in the judgment of the
sub-adviser market conditions warrant, the Growth Portfolio
may, for temporary defensive purposes, hold part or all of its
assets in cash, debt or money market instruments. The Growth
Portfolio may invest up to 10% of its assets in debt
securities having a call on common stocks that are rated below
investment grade.
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. Except
during temporary defensive periods, the portfolio attempts to
invest 100%, and it is a fundamental policy of the portfolio
to invest at least 65%, of its total assets in dividend paying
equity securities. The adviser will favor securities it
believes also offer opportunities for capital appreciation.
The portfolio may invest up to 35% of its total assets in
money market instruments and repurchase agreements and in
excess of that amount (up to 100% of its assets) during
temporary defensive periods.
The Growth & 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, investments in other types of
securities, such as bonds, convertible bonds, preferred stock
and convertible preferred stocks may be made by the portfolio.
Purchases and sales of portfolio securities are made at such
times and in such amounts as are deemed advisable in light of
market, economic and other conditions.
The Growth with Income Series of the MFS Variable Insurance
Trust seeks reasonable current income and long-term growth of
capital and income. Under normal market conditions, the Growth
with Income Portfolio will invest at least 65% of its assets
in equity securities of companies that are believed to have
long-term prospects for growth and income. Equity securities
in which the portfolio may invest include the following:
common stocks, preferred stocks and preference stock;
securities such as bonds, warrants or rights that are
convertible into stocks; and depository receipts for those
securities. These securities may be listed on securities
exchanges, traded in various over-the-counter markets or have
no organized markets. Consistent with its investment objective
and policies described above, the portfolio may also invest up
to 75% (and generally expects to invest no more than 15%) of
its net assets in foreign securities (including emerging
market securities and Brady Bonds) which are not traded on a
U.S. exchange.
The Balanced Portfolio of the Janus Aspen Series seeks
long-term capital growth, consistent with preservation of
capital and balanced by current income. It is a diversified
portfolio that, under normal circumstances, pursues its
objective by investing 40-60% of its assets in securities
selected primarily for their growth potential and 40-60% of
its assets in securities selected primarily for their income
potential. This portfolio normally invests at least 25% of its
assets in fixed-income senior securities, which include debt
securities and preferred stocks.
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,
although 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 the
adviser deems it advisable in order to preserve capital. In
addition, the portfolio may also purchase foreign securities
provided that they are listed on a domestic or foreign
securities exchange or are represented by American depository
receipts listed on a domestic securities exchange or traded in
domestic or foreign over-the-counter markets.
The High Yield Portfolio of the Morgan Stanley Universal
Funds, Inc., seeks above-average total return over a market
cycle of three to five years by investing primarily in a
diversified portfolio of High Yield Securities, including
Corporate Bonds and other Fixed Income Securities and
Derivatives. High Yield Securities are rated below investment
grade and are commonly referred to as "junk bonds." The
portfolio's average weighted maturity will ordinarily exceed
five years and will usually be between five and fifteen years.
The Fixed Income Portfolio of the Morgan Stanley Universal
Funds, Inc., seeks above-average total return over a market
cycle of three to five years by investing primarily in a
diversified portfolio of U.S. Government and Agencies,
Corporate Bonds, mortgage backed securities, Foreign Bonds and
other Fixed Income Securities and Derivatives. The portfolio's
average weighted maturity will ordinarily exceed five years
and will usually be between five and fifteen years.
The Money Market Portfolio of the Transamerica Variable
Insurance Fund, Inc., seeks to maximize
current income from money market securities consistent
with liquidity and the preservation of
principal. The Money Market Portfolio invests primarily in
high quality U. S. dollar-denominated
money market instruments with remaining maturities of 13
months or less, including: 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 Money Market 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.
12. If the trust is the issuer of periodic payment plan
certificates and if any underlying securities were issued by
another investment company, furnish information for each such
company:
(a) Name of Company.
The sub-accounts of the Separate Account invest in a number of corresponding
portfolios managed by a number of investment advisers.
<TABLE>
<CAPTION>
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
(a) (b) (c) (d) (e)
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Name of Company Depositor Custodian Underwriter Period during which
securities of such
companies have been
the underlying
securities
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
<S> <C> <C> <C> <C>
Emerging Growth Series of MFS None Investors Bank and Trust MFS Fund None
Variable Insurance Trust Company, 89 South Street, Distributors, Inc.
Boston, MA 02111 500 Boylston Street
Boston, MA 02116
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Research Series of MFS Variable None Investors Bank and Trust MFS Fund None
Insurance Trust Company, 89 South Street, Distributors, Inc.
Boston, MA 02111 500 Boylston Street
Boston, MA 02116
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Growth with Income Series of MFS None Investors Bank and Trust MFS Fund None
Variable Insurance Trust Company, 89 South Street, Distributors, Inc.
Boston, MA 02111 500 Boylston Street
Boston, MA 02116
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
None Morgan Stanley & Co., None
Fixed Income Portfolio of Morgan Chase Global Funds Inc. 1221 Avenue of
Stanley Universal Funds, Inc. Services Company, 73 the Americas, New
Tremont Street, Boston, York, NY 10020
MA 02108
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
High Yield Portfolio of Morgan None Chase Global Funds Morgan Stanley & Co., None
Stanley Universal Funds, Inc. Services Company, 73 Inc. 1221 Avenue of
Tremont Street, Boston, the Americas, New
MA 02108 York, NY 10020
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
International Magnum Portfolio of None Chase Global Funds Morgan Stanley & Co., None
Morgan Stanley Universal Funds, Inc. Services Company, 73 Inc. 1221 Avenue of
Tremont Street, Boston, the Americas, New
MA 02108 York, NY 10020
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Premier Growth Portfolio of None State Street Bank and Alliance Fund None
Alliance Variable Products Series Trust Co. Distributors, Inc.
Fund, Inc. 225 Franklin Street 1345 Avenue of the
Boston, MA 02110 Americas, New York,
NY 10105
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Growth and Income Portfolio of None State Street Bank and Alliance Fund None
Alliance Variable Products Series Trust Co. Distributors, Inc.
Fund, Inc. 225 Franklin Street 1345 Avenue of the
Boston, MA 02110 Americas, New York,
NY 10105
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Income and Growth Portfolio of The None Custodial Trust Co. Fred Alger & Co., Inc. None
Alger American Fund 245 Park Avenue 30 Montgomery Street
New York, NY 10167 Jersey City, NJ 07302
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Worldwide Growth Portfolio of Janus None State Street Bank and None None
Aspen Series Trust
P. O. Box 0351
Boston, MA 02117
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Balanced Portfolio of Janus Aspen None State Street Bank and None None
Series Trust
P. O. Box 0351
Boston, MA 02117
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Small Cap Portfolio of OCC None State Street Bank and OCC Distributors None
Accumulation Trust Trust 2 World Financial
P.O. Box 8505 Center
Boston, MA 02266 New York, NY 10080
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Managed Portfolio of OCC None State Street Bank and OCC Distributors None
Accumulation Trust Trust 2 World Financial
P.O. Box 8505 Center
Boston, MA 02266 New York, NY 10080
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Small Cap Portfolio of Dreyfus None Mellon Bank, N.A. Premier Mutual Fund None
Variable Investment Fund One Mellon Bank Center Services, Inc.
Pittsburgh, PA 15258 60 State Street
Boston, MA 02109
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Capital Appreciation Portfolio of None Mellon Bank, N.A. Premier Mutual Fund None
Dreyfus Variable Investment Fund One Mellon Bank Center Services, Inc.
Pittsburgh, PA 15258 60 State Street
Boston, MA 02109
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Growth Portfolio of Transamerica None State Street Bank and None None
Variable Insurance Fund, Inc. Trust Company
225 Franklin Street
Boston, MA 02110
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
Money Market Portfolio of None State Street Bank and None None
Transamerica Variable Insurance Trust Company
Fund, Inc. 225 Franklin Street
Boston, MA 02110
- ------------------------------------- ------------ --------------------------- ----------------------- ------------------------
</TABLE>
Information Concerning Loads, Fees, Charges and Expenses
13. (a) Furnish the following information with respect to
each load, fee, expense or charge to which (1)
principal payments; (2) underlying securities; (3)
distributions; (4) cumulated or reinvested
distributions or income; and (5) redeemed or
liquidated assets of the trust's securities are
subject:
(A) the nature of such load, fee, expense or charge;
(B) the amount thereof: (C) the name of the person to
whom such amounts
are paid and his relationship to the trust:
(D) the nature of the services performed by such
person in consideration for such load, fee,
expense or charge.
(1) Under the Policies
PAYMENT EXPENSE CHARGE - A payment expense
charge of 4.0% of each payment will be
deducted for premium taxes imposed by
various states and local jurisdictions for
federal taxes ("DAC taxes") to compensate
the Company for its increased federal income
tax as a result of payment received in
connection with the Policy and for sales
expenses. The Company may increase this
charge if the taxes we pay for premium taxes
and/or for federal taxes described above
also increase.
MONTHLY INSURANCE PROTECTION CHARGES
DEDUCTED FROM POLICY VALUE - On the date of
issue and/or each monthly processing date
thereafter, insurance protection charges
will be deducted from the Policy value of
each Policy. The monthly insurance
protection charge deducted from Policy value
consists of a charge retained by the Company
for cost of insurance and a charge for the
cost of any additional benefits provided by
rider. Monthly insurance protection charges
will be deducted from a particular
sub-account in accordance with instructions
received from the Policy owner. If no
allocation is made by the Policy owner,
charges will be deducted pro rata from the
sub-accounts and from the Fixed Account.
The monthly insurance protection charge will
be affected by any changes in the face
amount and will be calculated separately for
the initial face amount, for any increases
in face amount, and for any benefits
provided by rider.
If the Policy owner selected the Adjustable
Option, the monthly insurance protection
charge for the initial face amount will be
equal to the applicable cost of insurance
rate multiplied by the initial face amount,
divided by 1,000. If the Policy owner
selected the Level Option, however, the
applicable cost of insurance rate will be
multiplied by the initial face amount less
the Policy value (minus charges for rider
benefits) at the beginning of the Policy
month, divided by 1,000.
If the Adjustable Option is selected, the
cost of insurance for each increase in face
amount (other than an increase caused by a
change in option) will be equal to the cost
of insurance rate applicable to that
increase multiplied by the increase in face
amount, divided by 1,000. If the Level
Option is selected, the applicable cost of
insurance rate will be multiplied by the
increase in the face amount reduced by any
Policy value (minus rider charges) in excess
of the initial face amount at the beginning
of the Policy month, divided by 1,000.
If the Guideline Minimum Sum Insured is in
effect under either death benefit option, a
monthly insurance protection charge will
also be calculated for that portion of the
Death Benefit which exceeds the current face
amount. This charge will be calculated by
multiplying the cost of insurance rate
applicable to the initial face amount times
the Guideline Minimum Sum Insured (Policy
value times the applicable percentage) less
the greater of the face amount or the Policy
value if the Policy owner selected the Level
Option (divided by 1,000), or less the face
amount plus the Policy value if the Policy
owner selected the Adjustable Option
(divided by 1,000). When the Guideline
Minimum Sum Insured is in effect, the cost
of insurance charge for the initial face
amount and for any increases will be
calculated as set forth in the preceding two
paragraphs.
The monthly insurance protection charge will
also be adjusted for any decreases in face
amount.
Monthly insurance protection charges for the
Policies will not be the same for all Policy
owners. The insurance principals of pooling
and distribution of mortality risks is based
on the assumption that each Policy owner
pays a cost of insurance charge commensurate
with the Insured's mortality risk.
Cost of insurance rates are actually based
on the sex (male, female, or unisex), age
and underwriting class of the Insured at the
date of issue, and the effective date of an
increase or date of rider, as applicable.
The cost of insurance rates are determined
at the beginning of each Policy year for the
initial face amount and for each increase in
the face amount. The cost of insurance rates
generally increase as the Insured's age
increases. The actual monthly cost of
insurance rates will be based on the
Company's expectations as to future
mortality experience. They will not,
however, be greater than the guaranteed cost
of insurance rates set forth in the Policy.
These guaranteed rates are based on the 1980
Commissioners Ultimate Standard Ordinary
Mortality Tables and the Insured's sex and
age (male rates are used for policies for
which unisex rates apply). The Tables used
for this purpose set forth different
mortality estimates for males and females
and for smokers and non-smokers. Any change
in the cost of insurance rates will apply to
all persons of the same insuring age, sex,
and underwriting class whose Policies have
been in force for the same length of time.
The underwriting class of an Insured affects
the cost of insurance rate. If the Company
places an Insured into a standard
underwriting class, the cost of insurance
will be higher than that of an underwriting
class with a lower mortality risk, and lower
than that of an underwriting class with a
higher mortality risk. After the Final
Payment Date, or after the paid-up option is
exercised, monthly insurance protection
charges will no longer be deducted.
TRANSFER CHARGES - The first twelve
transfers in a Policy year will be free of
charge. Thereafter, a transfer charge of $10
will be imposed by the Company for each
transfer request. The Company reserves the
right to increase the charge, but it will
never exceed $25.00.
CHARGE FOR INCREASE OR FOR DECREASE IN FACE
AMOUNT - For each increase or decrease in
face amount requested by the Policy owner, a
transaction charge of $40 will be deducted
pro rata from Policy value by the Company
for administrative costs. This charge is
guaranteed not to increase.
SURRENDER CHARGES - Surrender charges are
computed on the date of issue for the
initial face amount. Surrender charges apply
for ten years from the date of issue. We
impose surrender charges only if, during the
time the charge is effective, the Policy
owner requests a full surrender of the
Policy or a decrease in face amount.
New surrender charges are computed for any
increase in face amount. The surrender
charges for a face increase apply for ten
years from the date the increase is
effective. The new surrender charges
computed for an increase in face amount
apply only to the face increase.
We compute the surrender charges based on a
rate per $1,000 of face amount. The rate
which applies to a Policy is based on
whether the insured is male or female (males
rates are used if the Policy is issued using
unisex rates); the insured's age; and the
number of years during which surrender
charges have been effective. The surrender
charges rate decreases each Policy year on
the Policy anniversary with respect to the
initial face amount and, with respect to an
increase in face amount, on each 12-month
anniversary of the effective date of the
face amount increase.
We determine the insured's age as of the
date of issue for the initial face amount
for the Policy. If there is an increase in
the face amount, we determine the insured's
age on the effective date of the increase.
CHARGES ON PARTIAL WITHDRAWAL - After the
first Policy year (and before the paid-up
insurance option is exercised), partial
withdrawals in a minimum amount of $500 may
be made from the Policy value. A transaction
charge, which is the smaller of 2% of the
amount withdrawn or $25.00, will be assessed
in all cases.
A partial withdrawal charge may also be
imposed upon a partial withdrawal. For each
partial withdrawal the Policy owner may
withdraw an amount equal to 10% of the
Policy value on the date the written partial
withdrawal request is received by the
Company, less the total of any prior partial
withdrawals in that Policy year which were
not subject to the partial withdrawal
charge, without incurring a partial
withdrawal charge. Any partial withdrawal in
excess of this amount ("excess partial
withdrawal") will be subject to the partial
withdrawal charge. The partial withdrawal
charge is equal to 5% of the excess partial
withdrawal up to the amount of the surrender
charges on the date of partial withdrawal.
There will be no partial withdrawal charge
if there is no surrender charge on the date
of partial withdrawal (i.e., 10 years have
passed from the date of issue and from the
effective date of any increase in the face
amount).
The Policy's outstanding surrender charges
will be reduced by the amount of the partial
withdrawal charge deducted. The partial
withdrawal charge deducted will decrease
existing surrender charges in the following
order:
1. The surrender charge for the most recent increase in face amount;
2. The surrender charges for the next most recent increases successively;
and
3. Last, the surrender charge for the initial face amount.
CHARGES AGAINST THE SEPARATE ACCOUNT - A
daily charge currently equivalent to an
annual rate of 0.80% of the average daily
net asset value of each sub-account of the
Separate Account is imposed to compensate
the Company for its assumption of certain
mortality and expense risks and for
administrative costs associated with the
Separate Account. The rate is currently
0.65% (never to exceed 0.80%) for the
mortality and expense risk charge and 0.15%
for the administration charge. Currently,
the administration charge is waived after
the tenth policy year, subject to state law.
The administration charge is guaranteed to
be eliminated after the twentieth Policy
year.
No charges are currently made against the
sub-accounts for federal or state income
taxes. Should the Company determine that
taxes will be imposed, the Company may make
deductions from the sub-account to pay such
taxes. The imposition of such taxes would
result in a reduction of the Policy value in
the sub-accounts.
(2) Underlying Securities
In addition to the charges described above,
certain management fees and other expenses
are deducted from the assets of the
underlying portfolios. The level of fees and
expenses vary among the portfolios. The
following table shows the management fees
and other expenses of the portfolios for
1996. For more information concerning these
fees and expenses, see the prospectuses of
the portfolios.
Portfolio Expenses
(as a percentage of assets after fee waiver and/or expense reimbursement)(1)
<TABLE>
<CAPTION>
Total
Portfolio
Management Other Annual
Portfolio Fees (2) Expenses Expenses
<S> <C> <C> <C>
Janus Aspen Worldwide Growth 0.66 0.14 0.80
Morgan Stanley UF International Magnum 0.62 0.53 1.15
Dreyfus VIF Small Cap 0.75 0.04 0.79
OCC Accumulation Trust Small Cap 0.80 0.22 1.02
MFS VIT Emerging Growth 0.75 0.25 1.00
Alliance VPF Premier Growth 0.72 0.23 0.95
Dreyfus VIF Capital Appreciation 0.75 0.09 0.84
MFS VIT Research 0.75 0.25 1.00
Transamerica VIF Growth 0.75 0.10 0.85
Alger American Income & Growth 0.63 0.19 0.82
Alliance VPF Growth & Income 0.63 0.19 0.82
MFS VIT Growth with Income 0.75 0.25 1.00
Janus Aspen Balanced 0.79 0.15 0.94
OCC Accumulation Trust Managed 0.80 0.10 0.90
Morgan Stanley UF High Yield 0.27 0.53 0.80
Morgan Stanley UF Fixed Income 0.24 0.46 0.70
Transamerica VIF Money Market 0.35 0.25 0.60
</TABLE>
Transamerica may receive payments from some or all of the portfolios or their
advisers in varying amounts, that may be based on the amount of assets allocated
to the portfolios. The payments are for administrative or distribution services.
Expense information regarding the portfolios has been provided by the
portfolios. Transamerica has no reason to doubt the accuracy of that
information, but Transamerica has not verified those figures. In preparing the
table above, Transamerica has relied on the figures provided by the portfolios.
These figures are for the year ended December 31, 1996, except for Morgan
Stanley UF International Magnum, High Yield and Fixed Income Portfolios which
are estimates which assume that each portfolio's average daily net assets will
be $50 million, and except for the Transamerica VIF Money Market Portfolio which
are estimates for the year 1998, its first year of operation. Actual expenses in
future years may be higher or lower than these figures.
Notes to Fee Table:
(1) 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 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 years 1997 and 1998. Without such waivers or reimbursements, the
annual expenses for 1996 for certain portfolios would have been, as a percentage
of assets, as follows:
<TABLE>
<CAPTION>
Total Portfolio
Portfolio Management Fee Other Expenses Annual Expense
--------- -------------- -------------- --------------
<S> <C> <C> <C>
Janus Aspen Worldwide Growth 0.77 0.14 0.91
Morgan Stanley UF International Magnum 0.80 0.53 1.33
OCC Accumulation Trust Small Cap 0.80 0.26 1.06
MFS VIT Emerging Growth 0.75 0.41 1.16
Alliance VPF Premier Growth 1.00 0.23 1.23
MFS VIT Research 0.75 0.73 1.48
Transamerica VIF Growth 0.75 0.59 1.34
Alliance VPF Growth & Income 0.63 0.32 0.95
MFS VIT Growth with Income 0.75 1.32 2.07
Janus Aspen Balanced 0.92 0.15 1.07
Morgan Stanley UF High Yield 0.50 0.53 1.03
Morgan Stanley UF Fixed Income 0.40 0.46 0.86
</TABLE>
The expenses of the Transamerica VIF Growth Portfolio reflect all 12 months of
1996, including the first 10 months of 1996 when the portfolio was organized as
a separate account of Transamerica Occidental Life Insurance Company; for those
10 months, the separate account was assessed mortality and expense risk charges
which will no longer be assessed at the portfolio level. Without expense
reimbursements, the other expenses for the first year of operation for the
Transamerica VIF Money Market Portfolio are expected to be 0.80% There were no
fee waivers or expense reimbursements for the Dreyfus VIF Small Cap Portfolio,
Dreyfus VIF Capital Appreciation Portfolio, Alger American Income and Growth
Portfolio or OCC Accumulation Trust Managed Portfolio.
(2) The management fee of certain of the portfolios includes breakpoints at
designated asset levels. Further information on these breakpoints is provided in
the prospectuses for the portfolios.
(3) Distributions
No distributions are made to Policy owners
except voluntary surrenders or partial
withdrawals, or to beneficiaries except upon
payment of death proceeds. Surrenders and
partial withdrawals may be subject to the
surrender and partial withdrawal charges
described in 13(a)(1), above. Also see Item
21.
(4) Cumulated or Reinvested Distributions or Income
Distributions from the portfolios are
reinvested by sub-accounts of the Separate
Account in additional shares of the
respective portfolios, without charge, at
net asset value.
(5) Redeemed or Liquidated Assets of the Trust's
Securities
See "Surrender Charge" and "Charges on
Partial Withdrawals" under Item 13(a)(1)
above.
(b) For each installment payment type of periodic payment
plan certificate of the trust, furnish information
with respect to sales load and other deductions from
principal payments.
A payment expense charge of 4.0% of each payment will
be deducted for premium taxes imposed by various
states and local jurisdictions, for federal taxes
("DAC taxes") to compensate the Company for its
increased federal income tax as a result of payments
received in connection with the Policy, and for sales
expenses. No other deductions are made from payments
prior to allocation to the Fixed Account or the
Separate Account. All other charges and deductions
are made from Policy value or from net assets of the
Separate Account.
(c) State (1) the amount of sales load as a percentage of
the net amount invested, and (2) the amount of total
deductions as a percentage of the net amount invested
for each type of security issued by the trust.
The only deduction from payments is the 4.0%
deduction for payment expense charges as described in
(b), above. A surrender charge is calculated at
issuance of the Policy and for increases in face
amounts, but is deducted if at all, only upon
surrender or decreases in face amount within 10
Policy years from issue or from the date of increase
in face amount. Also, a transaction charge equal to
the lesser of 2% of the partial withdrawal amount or
$25 will be deducted on partial withdrawals. A
partial withdrawal charge of up to 5% of the
withdrawal amount may also be deducted on partial
withdrawals.
(d) Explain fully the reasons for any difference in the
price at which securities are offered for any class
of transactions to any class or group of officers,
including officers, directors or employees of the
deposition trustee, custodian or principal
underwriter.
Not Applicable.
(e) Furnish a brief description of any loads, fees,
expenses or charges not covered in Item 13(a) which
may be paid by security holders in connection with
the trust or its securities.
The Company reserves the right to impose a charge for
changing the net payment allocation instructions, for
changing the allocation of the monthly insurance
protection charges, or for providing more than one
projection of values during a Policy year. No such
charges are currently imposed and any such charge is
guaranteed not to exceed $25.00.
(f) State whether the depositor, principal underwriter,
custodian or trustee, or any affiliated person of the
foregoing, may receive profits or other benefits not
included in answer to Item 13(a) or 13(d) through the
sale or purchase of the trust's securities or
interests in such securities, or underlying
securities or interests in underlying securities, and
describe fully the nature and extent of such profits
or benefits.
Neither the Company, Transamerica Securities Sales
Corporation nor any affiliated person of the
foregoing may receive any profit or any other benefit
from payments under the Policy or the investments
held in the Separate Account not included in the
answer to Item 13(a) or (d) through the sale or
purchase of the Policy or shares of the portfolios,
except that (1) the Company may receive a profit to
the extent that the cost of insurance built into the
Policy exceeds the actual cost of insurance needed to
pay benefits; (2) favorable mortality or expense
experience may cause the insurance provided to be
profitable to the Company; (3) the Company will
compensate certain others, including the company's
agents, for services rendered in connection with the
distribution of the Policy, as described in Item 38,
but such payments will be made from the Fixed
Account; and (4) the investment advisers of the
respective portfolios will receive an advisory fee,
as described in Item 13(a)(2).
(g) State the percentage that the aggregate annual
charges and deductions for maintenance and other
expenses of the trust bear to the dividend and
interest income from the trust property during the
period covered by the financial statements filed
herewith.
Not Applicable. The Separate Account has no assets
as of the date of this filing.
Information Concerning the Operations of the Trust
14. Describe the procedure with respect to the applications (if
any) and the issuance and authentication of the trust's
securities, and state the substance of the provisions of any
indenture or agreement pertaining thereto.
Individuals wishing to purchase a Policy must submit a
completed application to an authorized registered agent who
will forward the application to the Company's Variable Life
Service Center. The Company generally will issue a Policy only
on the lives of Insureds age 80 and under, who supply evidence
of insurability satisfactory to the Company. Acceptance is
subject to the Company's underwriting rules, and the Company
reserves the right to reject an application for any reason.
Within limits, applicants may choose the amount of the initial
premium desired and the initial face amount of the Policy. The
Company may limit the face amount which we will issue.
Currently, the minimum specified face amount of insurance for
which a Policy may be issued is $100,000.
The Policy will be effective on the date of issue only after
all outstanding delivery requirements are satisfied and the
Company has received a sufficient payment. The date of issue
is the date used to determine all future periodic transactions
under the Policy, e.g., monthly payment date, Policy months
and Policy years. Within limits, the Company may establish an
earlier date of issue.
If a prospective Policy owner makes an initial payment of at
least one minimum monthly payment, we will issue a conditional
receipt which provides fixed conditional insurance, but not
until after all its conditions are met. Included in these
conditions are the completion of both parts of the
application, completion of all underwriting requirements, and
the proposed Insured must be insurable under Transamerica's
rules for insurance under the Policy, in the amount, and in
the underwriting class applied for in the application. After
all conditions are met, the amount of fixed conditional
insurance provided by the conditional receipt will be the
amount applied for, up to a maximum of $250,000 for persons
age 16 to 65 and insurable in a standard underwriting class,
and up to $100,000 for all other ages and underwriting
classes.
If the application is approved, the date of issue will
generally be within two days of approval. If payments are made
before the date of issuance, the payments will be allocated
initially to the Fixed Account. If the Applicant does not wish
to make any payment until the Policy is issued, or if the
amount of money paid on a prepaid application is not
sufficient to place the Policy in force, the Company will
require submission upon delivery of the Policy of sufficient
payment to place the Policy in force upon delivery of the
Policy. If the Policy is not issued, the applicant will
receive an amount equal to the payments made. No Policy will
be in force until sufficient payment is paid.
15. Describe the procedure with respect to the receipt of payments
from purchasers of the trust's securities and the handling of
the proceeds thereof, and state the substance of the
provisions of any indenture or agreement pertaining thereto.
PAYMENTS - Payments are payable only to the Company, and may
be mailed to the Company's Variable Life Service Center or
paid through an authorized agent of the Company. All payments
after the initial payment are credited to the Separate Account
or Fixed Account as of date of receipt at the Variable Life
Service Center.
The Policy owner may establish a schedule of planned payments
which will be billed by the Company at regular intervals.
Failure to pay planned payments, however, will not itself
cause the Policy to lapse. The Policy owner may also make
unscheduled payments at any time or skip planned premium
payments subject to the maximum and minimum payment
limitations described below.
The Policy owner may also elect to make payments by means of a
monthly automatic payment ("MAP") procedure. Under a MAP
procedure, amounts will be deducted each month, generally on
the 15th of the month, from the Policy owner's checking
account and applied as a payment under a Policy. The minimum
payment permitted under MAP is $50.
Payments are not limited as to frequency and number. However,
no payment (other than a payment under the MAP procedure) may
be less than $100 without the Company's consent. Moreover,
payments must be sufficient to provide a positive surrender
value on each Monthly Processing Date, or the Policy may
lapse.
The total of all payments paid can never exceed the
then-current maximum payment limitation determined by Internal
Revenue Service rules. Thus, the Company may limit the
payments received in any Policy year to an amount not less
than the "guideline level premium" determined by the Company
with respect to the Policy. In addition, the sum of the
payments paid, less any partial withdrawals, may not exceed
the greater of the guideline single premium or the sum of the
guideline level premiums to the date of payment. The guideline
premium amounts will change whenever there is any change in
the face amount, the addition or deletion of a rider, or a
change in the death benefit option. These payment limitations
do not apply to the extent necessary to prevent lapse of the
Policy during a Policy year.
If at any time a payment is paid that would result in total
payments exceeding the then current maximum premium
limitation, the Company will accept only that portion of the
payment that would make total premiums equal the maximum
limitation. Payments in excess of that amount will be applied
first to reduce any outstanding debt on the Policy and then
will be refunded to the Policy owner, and no further payments
will be accepted until allowed by the current maximum premium
limitation prescribed by Internal Revenue Service rules.
If the application is approved and the Policy is issued, the
Company will allocate the Policy Value according to the Policy
owner's instructions within two days of our approval of the
application. However, if the Policy provides for a full refund
of the initial payment under its "Right to Examine Policy"
provision as required in the Policy owner's state, the Company
will initially allocate the sub-account investments solely to
the Money Market sub-account. This allocation to the Money
Market sub-account will be for 14 days from issuance (or a
longer period if required under state law). After this, we
will allocate all amounts according to the Policy owner's
investment choices.
16. Describe the procedure with respect to the acquisition of
underlying securities and the disposition thereof, and state
the substance of the provisions of any indenture or agreement
pertaining thereto.
Each sub-account of the Separate Account invests its assets in
shares of a corresponding portfolio. Purchases and redemptions
of such shares are made at net asset value, with no deduction
for sales load.
Amounts of net payments allocated to a sub-account, transfers
to that sub-account, and reserve adjustment transfers, if any,
will be netted as of each valuation date against amounts
withdrawn from the sub-account in connection with Policy
surrenders, partial withdrawals, transfers, and death
benefits, as well as the asset charge and amounts paid to the
Company in lieu of taxes, if any. A net purchase or sale of
portfolio shares will be made for a sub-account at net asset
value. All income, dividends and realized gain distributions
of a portfolio will be reinvested in shares of the respective
portfolio at net asset value. Valuation dates currently occur
on each day on which the New York Stock Exchange is open for
trading, and on such other days where there is a sufficient
degree of trading in a portfolio's securities such that the
current net asset value of the sub-accounts may be materially
affected.
17. (a) Describe the procedure with respect to partial
withdrawal or redemption by security holders.
SURRENDER - Before the Insured's death, a Policy
owner may at any time surrender the Policy and
receive its surrender value (i.e., Policy value, less
any outstanding loan and applicable surrender
charges) upon written request signed by the Policy
owner and mailed to our Variable Life Service Center.
The surrender value will be based on the Policy value
as of the valuation date on which the request is
received at the Variable Life Service Center. A
surrender charge may be deducted when a Policy is
surrendered.
See Item 13(a), "Surrender."
The surrender value is normally payable within seven
days following the Company's receipt of the surrender
request. The Company reserves the right to defer
surrenders and partial withdrawals of amounts funded
by each sub-account during any period when (1)
trading on the New York Stock Exchange is restricted
as determined by the SEC or such Exchange is closed
for other than weekends and holidays, (2) the SEC has
by order permitted such suspension, or (3) an
emergency, as determined by the SEC, exists such that
disposal of portfolio securities or valuation of
assets of each sub-account is not reasonably
practicable.
The right is reserved by the Company to defer
surrenders and partial withdrawal of amounts
allocated to the Fixed Account for a period not to
exceed six months.
PARTIAL WITHDRAWAL - At any time after the first
Policy year (and before the paid-up insurance option
is exercised), a Policy owner may redeem a portion of
the Policy Value of his or her Policy, subject to the
limits stated below, upon written request signed by
the Policy owner and filed at the Variable Life
Service Center.
The Policy owner may allocate the amount withdrawn
among the sub-accounts and the Fixed Account. If no
allocation instructions are provided, the Company
will make a pro rata allocation.
A partial withdrawal from a sub-account will result
in cancellation of a number of Units equivalent in
value to the amount withdrawn, computed as of the
valuation date that the request is received at the
Company's Variable Life Service Center. The amount
withdrawn equals the amount requested by the Policy
owner plus any applicable charges. The Company will
normally pay the amount of the partial withdrawal
within seven days, but may delay payment under
certain circumstances described above under
"Surrender." Each partial withdrawal must be in a
minimum amount of $500. See Item 13(a), "Partial
Withdrawals."
(b) Furnish the names of any persons who may redeem or
repurchase, or are required to redeem or repurchase,
the trust's securities or underlying securities from
security holders, and the substance of the provisions
of any indenture or agreement pertaining thereto.
The Company is required to process all surrender and
partial withdrawal requests as described in Item
17(a). The portfolios will redeem their shares upon
the Company's request in accordance with the
Investment Company Act of 1940. Redeemed shares may
later be reissued.
(c) Indicate whether repurchased or redeemed securities will
be canceled or may be resold.
If a Policy is surrendered, the Policy will be
canceled and may not be reissued.
If a Policy terminates due to lapse or foreclosure,
the Policy may be reinstated as provided below.
TERMINATION - The failure to make payments will not
cause the Policy to lapse unless: (a) the surrender
value is insufficient to cover the next monthly
insurance protection charge plus loan interest
accrued; or (b) if outstanding loan exceeds the
Policy value less surrender charges. If one of these
situations occurs, the Policy will be in default. The
Policy owner will then have a grace period of 62
days, measured from the date of default, to make
sufficient payments to prevent termination. On the
date of default, the Company will send a notice to
the Policy owner and to any assignee of record. The
notice will state the amount of payment due and the
date on which it is due. Failure to make a sufficient
payment within the grace period will result in
termination of the Policy without any Policy value.
If the Insured dies during the grace period, the
Death Benefit will still be payable, but any monthly
insurance protection charges due and unpaid through
the Policy month in which the Insured dies and any
other overdue charge will be deducted from the Death
Benefit . Except for the situation described in (b)
above, if, during the first 48 months after the date
of issue or the effective date of an increase in face
amount, the Policy owner makes payments, less any
outstanding loans, partial withdrawals, and partial
withdrawal charges at least equal to the sum of the
minimum monthly payments for the number of months the
Policy, increase or Policy change which causes a
change in the minimum monthly payment has been in
force, the Policy is guaranteed not to lapse during
that period. A Policy change which causes a change in
the minimum monthly payment is a change in the face
amount or the addition or deletion of a rider. Except
for the first 48 months after the date of issue or
the effective date of an increase, payments equal to
the minimum monthly payment do not guarantee that the
Policy will remain in force.
If the Guaranteed Death Benefit Rider was elected and
was not previously terminated, the payments of a
sufficient amount, minus outstanding loans, partial
withdrawals, and partial withdrawal charges will
assure that the Policy will not lapse. On each Policy
anniversary the payments net of adjustments must
equal or exceed the required premium amounts or the
Rider will terminate. Currently, the required premium
amounts are (a) 90% of the guideline level premium
times the number of years (adjusted for Policy
changes) since issue for the level death benefit
option, or (b) 75% of guideline level premium times
the number of years since issue (adjusted for Policy
changes) for the adjustable death benefit option.
REINSTATEMENT - If the Policy has not been
surrendered and the Insured is alive, the terminated
Policy may be reinstated anytime within three years
after the date of default and before the Final
Payment Date (or the Maturity Date if the termination
was due to the outstanding loan being in excess of
the Policy Value less surrender charges, by
submitting the following to the Company: (1) a
written application for reinstatement; (2) evidence
of insurability showing the Insured is insurable
according to the Company's underwriting rules; and
(3) a payment that, after the deduction of the tax
expense charges, is large enough to cover the minimum
amount payable, as described below.
Minimum Amount Payable - If reinstatement is
requested less than 48 months either after the date
of issue of the Policy or the effective date of an
increase in the face amount, the Policy owner must
pay the lesser of the amount shown in A or B:
Under A, the minimum amount payable is the minimum
monthly payment for the three-month period beginning
on the date of reinstatement.
Under B, the minimum amount payable is the sum of
o the amount by which the surrender charge as
of the date of reinstatement
exceeds the Policy value on the date of default; plus
o monthly insurance protection charges for the
three-month period beginning on the date of
reinstatement.
If reinstatement is requested after 48 monthly
processing dates from the date of issue of the Policy
or an increase in the face amount, the Policy owner
must pay the amount shown in B above.
Surrender Charge - The surrender charge on the date
of reinstatement is the surrender charge which would
have been in effect had the Policy remained in force
from the date of issue. The Policy value less any
outstanding loan on the date of default will be
restored to the Policy to the extent it does not
exceed the surrender charge on the date of
reinstatement. Any Policy value less any outstanding
loan as of the date of default which exceeds the
surrender charge on the date of reinstatement will
not be restored.
Policy Value on Reinstatement - The Policy value on
the date of reinstatement is:
o the net payment paid to reinstate the Policy
increased by interest from the date the
payment was received at the
Company'sVariable Life Service Center;
o plus an amount equal to the Policy value
less any outstanding loan on the date of
default to the extent it does not exceed the
surrender charge on the date of
reinstatement;
o minus the monthly insurance protection
charges due on the date of reinstatement.
The Policy owner may reinstate any outstanding loan
on the date of default or foreclosure.
18. (a) Describe the procedure with respect to the
receipt, custody and disposition of the income and
other distributable funds of the trust and state the
substance of the provisions of any indenture or
agreement pertaining thereto.
Distributions with respect to the shares of a
portfolio held by a sub-account are reinvested in
shares of that portfolio at net asset value. Such
shares are added to the assets of the respective
sub-account.
(b) Describe the procedure, if any, with respect to the
reinvestment of distributions to security holders and
state the substance of the provisions of any
indenture or agreement pertaining thereto.
No distributions are made to Policy owners (or
beneficiaries) other than in connection with a death
benefit or with a Policy owner-initiated loan,
partial withdrawal or surrender of the Policy. See
Items 13(a) and 21.
(c) If any reserves or special funds are created out of
income or principal, state with respect to each such
reserve or fund the purpose and ultimate disposition
thereof, and describe the manner of handling same.
Net payments placed in the Separate Account
constitute certain reserves for benefits under the
Policy.
(d) Submit a schedule showing the periodic and special
distributions which have been made to security holders during the three years
covered by the financial statements filed herewith. State for each such
distribution the aggregate amount and amount per share.
If distributions from sources other than current
income have been made, identify each such other source and indicate whether such
distribution represents the return of principal payments to security holders.
If payments other than cash were made, describe the nature thereof, the account
charged and the basis of determining the amount of such charge.
Not Applicable. The Separate Account has not begun business operations.
19. Describe the procedure with respect to the keeping of records
and accounts of the Trust, the making of reports and the
furnishing of information to security holders, and the
substance of the provisions of any indenture or agreement
pertaining thereto.
The Company will maintain the records and books of the
Separate Account. The Company will also maintain records for
each Policy, including the number and value of units of each
sub-account credited to each Policy and the value of
accumulations in the Fixed Account.
Issuance and transfer of portfolio shares will be by book
entry only. Stock certificates of the portfolios will not be
issued to the Company or Separate Account. Shares ordered from
the portfolios will be recorded in an appropriate title for
the Separate Account or appropriate sub-account.
Policy owners will be sent promptly statements of significant
transactions such as payments, changes in specified face
amount, change in death benefit option, transfers among
sub-accounts and the Fixed Account, partial withdrawals,
increases in loan amount by the Policy owner, loan repayments,
lapse, termination for any reason, and reinstatement. An
annual statement will also be sent to the Policy owner. The
annual statement will summarize all of the above transactions
and deductions of charges during the Policy year. It will also
set forth the status of the death benefit, Policy value,
surrender value, amounts in the sub-accounts and Fixed
Account, and any Policy loan(s).
In addition, the Policy owners will be sent semi-annual
reports of the underlying portfolios and other information for
the Separate Account as required by the 1940 Act.
20. State the substance of the provisions of any indenture or
agreement concerning the trust with respect to the following:
(a) Amendments to such indenture or agreement.
Not Applicable.
(b) The extension or termination of such indenture or
agreement.
Not Applicable.
(c) The removal or resignation of the trustee or
custodian, or the failure of the trustee or custodian
to perform its duties, obligations and functions.
The Company will act as custodian of assets of the
Separate Account. The Company may appoint another
custodian. In such event, the custodial agreement
will provide that the assets owned by the Separate
Account shall be delivered directly by the Company to
a successor custodian.
(d) The appointment of a successor trustee and the
procedure if a successor trustee is not appointed.
Not Applicable.
(e) The removal or resignation of the depositor, or the
failure of the depositor to perform its duties,
obligations and functions.
There is no such provision in an indenture or
agreement. Under California law, the Company may not
abrogate its obligation under the Policies.
(f) The appointment of a successor depositor and the
procedure if a successor depositor is not appointed.
There is no such provision in any indenture or
agreement.
21. (a) State the substance of the provisions of any
indenture or agreement with respect to loans to
security holders.
Loans may be obtained by request to the Company on
the sole security of the Policy. The total amount of
loans which may be outstanding at any time is the
loan value. In the first Policy year, the loan value
is 75% of an amount equal to (a) the Policy value
less (b) surrender charges, monthly insurance
protection charges due to the end of the Policy year,
and interest on the outstanding loan to the end of
the Policy year. The loan value in the second Policy
year and thereafter is 90% of an amount equal to
Policy value minus surrender charges.
A Policy loan may be allocated among the Fixed
Account and one or more sub-accounts. If the Policy
owner does not make an allocation, the Company will
allocate the loan in the same proportion that the
portion of Policy value in the Fixed Account and the
portion of Policy value in each sub-account bear to
the total Policy value on the date the Company
receives the loan request. The portion of the Policy
value in each sub-account equal to the Policy loan
allocated to such sub-account will be transferred to
the Fixed Account, and the number of Units equal to
Policy Value so transferred will be canceled. Amounts
transferred to or held in the Fixed Account to secure
Debt will earn interest at a rate equal to an
effective annual yield of at least 6% (7.5% for
"preferred loans").
After due and unpaid interest is added to loan
amount, if the new loan amount exceeds the Policy
value in the Fixed Account, the Company will transfer
Policy value equal to that shortfall from each
sub-account to the Fixed Account as security for the
excess loan principal. The Company will allocate the
amount transferred among the sub-accounts in the same
proportion that the portion of the Policy value in
each sub-account bears to the total Policy value in
all sub-accounts.
LOAN INTEREST CHARGED - Interest accrues daily and is
payable in arrears at the annual rate of 8%. Interest
is payable at the end of each Policy year or on a pro
rata basis for such shorter period as the loan may
exist. Interest not paid when due will be added to
the loan principal and bear interest at the same rate
of interest.
REPAYMENT OF OUTSTANDING LOAN- Loans may be repaid at
any time prior to the lapse of the Policy. Upon
repayment of any outstanding loan, the portion of the
Policy value that is in the Fixed Account securing
any outstanding loan will be transferred to the
various sub-accounts and increase the portion of
Policy value in such sub-accounts in accordance with
the Policy owner's instructions. If the Policy owner
does not make a repayment allocation, the Company
will allocate Policy value in accordance with the
Policy owner's most recent payment allocation
instructions; provided, however, that loan repayments
allocated to the Separate Account cannot exceed
Policy value previously transferred from the Separate
Account to secure the outstanding loan.
FORECLOSURE - If any outstanding loan exceeds the
surrender value of the Policy, the Policy will
terminate. A notice of such pending termination will
be mailed to the last known address of the Policy
owner and any assignee. If the excess outstanding
loan is not paid within 62 days after this notice is
mailed, the Policy will terminate with no value. A
Policy may be reinstated following loan foreclosure.
(b) Furnish a brief description of any procedure or
arrangement by which loans are made available to
security holders by the depositor, principal
underwriter, trustee or custodian, or any affiliated
person of the foregoing.
See Items 10(i) and 21(a), above. No other loans are
made, except under the terms of life insurance
policies which may be issued by the depositor or
affiliated insurance companies.
(c) If such loans are made, furnish the aggregate amount
of loans outstanding at the end of the last fiscal
year, the amount of interest collected during the
last fiscal year allocated to the depositor,
principal underwriter, trustee or custodian or
affiliated person of the foregoing, aggregate amount
of loans in default at the end of the last fiscal
year covered by financial statements filed herewith.
Not Applicable.
22. State the substance of the provisions of any indenture or
agreement with respect to limitations on the liabilities of
the depositor, trustee or custodian, or any other party to
such indenture or agreement.
The Policies provide that the Company shall not be charged
with notice of any assignment of the Policy unless it is in
writing and filed at the Company's Variable Life Service
Center. The Company assumes no liability for the validity of
any assignment.
23. Describe any bonding arrangement for officers, directors,
partners or employees of the depositor or principal
underwriter of the trust, including the amount of coverage and
the type of bond.
The depositor is insured under a broad manuscript fidelity
bond program with coverage limits of $40,000,000. The lead
underwriter is Continental Casualty Company of Chicago,
Illinois.
24. State the substance of any other material provisions of any
indenture or agreement concerning the trust or its securities
and a description of any other material functions or duties of
the depositor, trustee or custodian not stated in Item 10 or
Items 14 to 23 inclusive.
Participation Agreement. The Company and the portfolios will
enter into Participation Agreements which define the terms
under which the sub-accounts of Separate Account invest in the
portfolios.
POLICY OWNER - The Policy owner is the Insured unless another
Policy owner has been named in the application for the Policy.
The Policy owner is generally entitled to exercise all rights
under a Policy while the Insured is alive, subject to the
consent of any irrevocable beneficiary (the consent of a
revocable beneficiary is not required). The consent of the
Insured is required whenever the face amount of insurance is
increased.
BENEFICIARY - The beneficiary is the person or persons to whom
the insurance proceeds are payable upon the Insured's death.
Unless otherwise stated in the Policy, the beneficiary has no
rights in the Policy before the death of the Insured. While
the Insured is alive, the Policy owner may change any
beneficiary unless the Policy owner has declared a beneficiary
to be irrevocable. If no beneficiary is alive when the Insured
dies, the Policy owner (or the Policy owner's estate) will be
the beneficiary. If more than one beneficiary is alive when
the Insured dies, they will be paid in equal shares, unless
the Policy owner has chosen otherwise. Where there is more
than one beneficiary, the interest of a beneficiary who dies
before the Insured will pass to surviving beneficiaries
proportionally.
INCONTESTABILITY - Except for fraud (where permitted by state
law) or nonpayment of premium, the Company will not contest
the validity of a Policy after it has been in force during the
Insured's lifetime for two years from the date of issue. This
provision does not apply to riders providing benefits
specifically for disability or death by accident. Except for
fraud (where permitted by state law) or nonpayment of premium,
the Company will not contest the validity of any increase in
the face amount after such increase or rider has been in force
during the Insured's lifetime for two years from its effective
date.
SUICIDE - The net death benefit will not be paid if the
Insured commits suicide, while sane or insane, generally
within two years from the date of issue. Instead, the Company
will pay the beneficiary an amount equal to all payments paid
for the Policy, without interest, less any outstanding loan
and less any partial withdrawals. If the Insured commits
suicide, while sane or insane, generally within two years from
the effective date of any increase in theface amount, the
Company's liability with respect to such increase will be
limited to a refund of the cost thereof. The beneficiary will
receive the monthly insurance protection charges paid for such
increase, along with any other net death benefit payable under
the Policy.
AGE AND SEX - If the Insured's age or sex as stated in the
application for a Policy is not correct, benefits under a
Policy will be adjusted to reflect the correct age and sex.
The adjusted benefit will be the Policy Value plus the
insurance protection amount that would have been purchased by
the most recent cost of insurance charge using the correct age
and sex. In no event will the death benefit be reduced to less
than the Guideline MinimumSum Insured. In the case of a Policy
issued on a unisex basis, this provision as it relates to
misstatement of sex does not apply.
ASSIGNMENT - The Policy owner may assign a Policy as
collateral or make an absolute assignment of the Policy. All
rights under the Policy will be transferred to the extent of
the assignee's interest. When recorded, the assignment will
take effect as of the date the written request was signed. The
Company is not bound by an assignment or release thereof,
unless it is in writing and is recorded at the
Company'sVariable Life Service Center. Any rights created by
the assignment will be subject to any payments made or actions
taken by the Company before the assignment is recorded. The
Company is not responsible for the validity of any assignment
or release.
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
Organization and Operations of Depositor
25. State the form of organization of the depositor of the trust,
the name of the state or other sovereign power under the laws
of which the depositor was organized and the date of
organization.
The Company is a stock life insurance company incorporated
under the laws of the state of California in 1906.
26. (a) Furnish the following information with respect to
all fees received by the depositor of the trust in
connection with the exercise of any functions or
duties concerning securities of the trust during the
period covered by the financial statements filed
herewith:
Not Applicable.
(b) Furnish the following information with respect to any
fee or any participation in fees received by the
depositor from any underlying investment company or
any affiliated person or investment adviser of such
company:
The Company has not received any such fee or any
participation in fees.
(1) The nature of such fee or participation.
Not Applicable.
(2) The name of the person making payments.
Not Applicable.
(3) The nature of the services rendered in
consideration for such fee or participation.
Not Applicable.
(4) The aggregate amount received during the
last fiscal year covered by the financial
statements filed herewith.
Not Applicable.
27. Describe the general character of the business engaged in by
the depositor including a statement as to any business other
than that of depositor of the trust. If the depositor acts or
has acted in any capacity with respect to any investment
company or companies other than the trust, state the name or
names of such company or companies, their relationship, if
any, to the trust, and the nature of the depositor's
activities therewith. If the depositor has ceased to act in
such named capacity, state the date of and circumstances
surrounding such cessation.
The Company is a California life insurance company licensed to
sell life insurance in the District of Columbia, Puerto Rico,
Virgin Islands and Guam and all states except New York.
The Company offers registered variable life and annuity
policies through other separate accounts registered as unit
investment trusts and one, Separate Account Fund B, as a
management investment company. The Company serves as
investment adviser to Separate Account Fund B.
Officials and Affiliated Persons of Depositor
28. (a) Furnish as at latest practicable date the
following information with respect to the depositor
of the trust, with respect to each officer, director,
or partner of the depositor, and with respect to each
natural person directly or indirectly owning or
holding with power to vote 5% or more of the
outstanding voting securities of the depositor.
(i) name and principal business address;
(ii) nature of relationship or affiliation with
depositor of the trust; (iii) ownership of all
securities of the depositor; (iv) ownership of all
securities of the trust; (v) other companies of which
each person named above is presently officer,
director or partner.
See 28(b) and 29, below.
(b) Furnish a brief statement of the business
experience during the last five years of
each officer, director or partner of the
depositor.
The principal occupations and business
experience for the last five years of
Directors and Executive Officers of the
Company are as follows:
<TABLE>
<CAPTION>
DIRECTORS AND PRINCIPAL OFFICERS OF
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
<S> <C>
Robert Abeles* Director, Executive
Vice President and Chief
Financial Officer of TOLIC
since 1996. Executive Vice
President and Chief
Financial Officer of First
Interstate Bank of
California from 1990 to
1996.
Nicki Bair* Senior Vice President
of TOLIC since 1996. Vice
President of TOLIC from
1991 to 1996.
Roy Chong-Kit* Senior Vice
President and Actuary of
TOLIC since 1997. Vice
President and Actuary of
TOLIC from 1995 to 1997.
Actuary of TOLIC from 1988
to 1995.
Bruce Clark* Senior Vice
President and Chief Actuary
of TOLIC since 1996. Vice
President and Actuary of
TOLIC from 1994 to 1996.
Vice President and
Associate Actuary of TOLIC
from 1988 to 1994.
Thomas J. Cusack* Director, Chairman, President and Chief Executive
Officer of TOLIC since 1997. Director, President and Chief
Executive Officer of TOLIC since 1995. Senior Vice President
of Transamerica Corporation from 1993 to 1995. Vice President
of Corporate Development of General Electric Company from 1989
to 1993.
James W. Dederer, CLU* Director, Executive Vice President, General
Counsel and Corporate Secretary of TOLIC since 1988.
Richard H. Finn**** Director and Executive Vice President of
Transamerica Corporation since 1993. Director, President and
Chief Executive Officer of Transamerica Finance Group, Inc.
since 1990.
David E. Gooding* Director and Executive Vice President of TOLIC since 1992.
Edgar H. Grubb**** Director, Executive Vice President and Chief
Financial Officer of Transamerica Corporation since 1993.
Senior Vice President of Transamerica Corporation 1989-1993.
Frank C. Herringer**** Director, President and Chief Executive
Officer of Transamerica Corporation since 1991.
Daniel E. Jund, FLMI* Senior Vice President of TOLIC since 1988.
Richard N. Latzer**** Director, Senior Vice President and Chief
Investment Officer of Transamerica Corporation since 1989.
Director, President and Chief Executive Officer of
Transamerica Investment Services, Inc. since 1988.
Karen MacDonald* Director, Senior
Vice President and
Corporate Actuary of TOLIC
since 1995. Senior Vice
President and Corporate
Actuary from 1992 to 1995.
Gary U. Rolle'* Director, Executive Vice President
and Chief Investment Officer of Transamerica Investment
Services, Inc. since 1981.
William N. Scott, CLU, FLMI**
Senior Vice President of
TOLIC since 1993. Vice
President of TOLIC from
1988 to 1993.
T. Desmond Sugrue* Director
and Executive Vice
President of TOLIC since
1997. Senior Vice President
of TOLIC from 1996 to 1997.
Self-employed - Consulting
from 1994 to 1996. Employed
at Bank of America from
1988 to 1993.
Claude W. Thau, FSA** Senior Vice
President of TOLIC since
1996. Vice President of
TOLIC from 1985 to 1996.
Bruce A. Turkstra* Executive Vice President and Chief
Information Officer since 1997. Chief Information Officer of
Anderson Worldwide from 1991-1997.
Nooruddin S. Veerjee, FSA* Director, President of Group Pension Division of
TOLIC since 1993. President of Insurance Products Division
since 1997.
Senior Vice President of
TOLIC from 1992 to 1993.
Vice President of TOLIC
from 1990 to 1992.
Ron F. Wagley* Senior Vice
President and Chief Agency
Officer of TOLIC since
1993. Vice President of
TOLIC from 1989 to 1993.
Robert A. Watson**** Director and Executive Vice President of
Transamerica Corporation since 1995. President and Chief
Executive Officer Westinghouse Financial Services, 1992-1995.
William R. Wellnitz, FSA*** Senior
Vice President and Actuary
of TOLIC since 1996. Vice
President and Reinsurance
Actuary of TOLIC from 1988
to 1996.
</TABLE>
*The business address is 1150 South Olive Street, Los Angeles,
California 90015.
**The business address is 1100 Walnut Street, 23rd
Floor, Kansas City, Missouri 64106.
***The business address is 401
North Tryon Street, Charlotte, North Carolina 28202.
****The business
address is 600 Montgomery Street, San Francisco, California 94111.
Companies Owning Securities of Depositor
29. Furnish as at latest practicable date the following information
with respect to each company which directly or indirectly owns,
controls or holds with power to vote 5% or more of the outstanding
voting securities of depositor.
The Company is a wholly-owned subsidiary of Transamerica
Insurance Corporation of California, 1150 South Olive Street,
Los Angeles, which in turn is a wholly-owned subsidiary of
Transamerica Corporation, 600 Montgomery Street, San
Francisco, California. Transamerica Corporation is organized
under the laws of the state of Delaware.
Controlling Persons
30. Furnish as at latest practicable date the following
information with respect to any person other than those
covered by Items 28, 29, and 42 who directly or indirectly
controls the depositor.
None.
Compensation of Officers of Depositor
31. Furnish the following information with respect to the
remuneration for services paid by the depositor during the
last fiscal year covered by financial statements filed
herewith:
(a) directly to each of the officers or partners or the
depositor directly receiving the
three highest amounts of remuneration;
None. No person received compensation for services
rendered to the trust (separate
account).
(b) directly to all officers or partners of the depositor
as a group exclusive of persons whose remuneration is
included under Item 31(a), stating separately the
aggregate amount paid by the depositor itself and the
aggregate amount paid by all the subsidiaries;
None. No person received compensation for services
rendered to the trust (separate
account).
(c) indirectly or through subsidiaries to each of the
officers or partners of the depositor:
None. No person received compensation for services
rendered to the trust (separate
account).
Compensation of Directors
32. Furnish the following information with respect to the
remuneration for services, exclusive of remuneration reported
under Item 31, paid by the depositor during the last fiscal
year covered by financial statements filed herewith:
(a) the aggregate direct remuneration to directors;
None.
(b) indirectly or through subsidiaries to directors.
Not Applicable.
Compensation to Employees
33. (a) Furnish the following information with respect to
the aggregate amount of remuneration for services of
all employees of the depositor (exclusive of persons
whose remuneration is reported in Items 31 and 32) who
received remuneration in excess of $10,000 during the
last fiscal year covered by financial statements filed
herewith from the depositor and any of its
subsidiaries.
Not applicable.
(b) Furnish the following information with respect to the
renumeration for services paid directly during the last fiscal year covered by
financial statements filed herewith to the following classes of persons
(exclusive of those persons covered by Item 33(a)): (1) Sales managers, branch
managers, district managers and other persons supervising the sale of
registrant's securities; (2) Salesmen, sales agents, canvassers and other
persons making solicitations but not in supervisory capacity; (3)
Administrative and clerical employees; and (4) others (specify). If a person
is employed in more than one capacity, classify according to predominant type
of work.
Not Applicable.
Compensation to Other Persons
34. Furnish the following information with respect to the aggregate
amount of compensation for services paid any person (exclusive
of persons whose remuneration is reported in Items 31, 32 and
33), whose aggregate compensation in connection with services
rendered with respect to the trust in all capacities exceeded
$10,000 during the last fiscal year covered by financial
statements filed herewith from the depositor and any of its
subsidiaries.
Not Applicable.
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
Distribution of Securities
35. Furnish the names of the states in which sales of the trust's
securities (a) are currently being made, (b) are presently
proposed to be made, and (c) have been discontinued, indicating
by appropriate letter the status with respect to each state.
(a) Sale of the Policies has not commenced in any state.
(b) Following the effectiveness of the Separate Account 's
registration statement under the Securities Act of
1933, and obtaining required approvals under state law,
the Company proposes issuing the Policies in the
District of Columbia, Guam, Virgin Islands, and Puerto
Rico and in all states except New York.
(c) Not Applicable.
36. If sales of the trust's securities have at any time since
January 1, 1936 been suspended for more than a month, describe
briefly the reasons for such suspension.
Not Applicable.
37. (a) Furnish the following information with respect to
each instance where subsequent to January 1, 1937, any
federal or state governmental officer, agency, or
regulatory body denied authority to distribute
securities of the trust, excluding a denial which was
merely a procedural step prior to any determination by
such officer, etc., and which denial was subsequently
rescinded.
(1) Name of officer, agency or body
None.
(2) Date of denial
Not Applicable.
(3) Brief statement of reasons given for denial
Not Applicable.
(b) Furnish the following information with regard to each
instance where, subsequent to January 1, 1937, the
authority to distribute securities of the trust has
been revoked by any federal or state governmental
officer, agency or regulatory body.
(1) Name of officer, agency or body
None.
(2) Date of revocation
Not Applicable.
(3) Brief statement of reasons given for revocation
Not Applicable.
38. (a) Furnish a general description of the method of distribution of
securities of the trust.
Transamerica Securities Sales Corporation, an affiliate
of the Company, will act as principal underwriter of
the Policies pursuant to a Distribution Agreement with
the Company and the Separate Account. Transamerica
Securities Sales Corporation is a broker-dealer and a
member of the National Association of Securities
Dealers, Inc. The policies will be sold by agents of
the Company who are registered representatives of
independent broker-dealers.
(b) State the substance of any current selling agreement
between each principal underwriter and the trust or the
depositor, including a statement as to the inception
and termination dates of the agreement, any renewal and
termination provisions, and any assignment provisions.
The Company and Separate Account will execute a
Distribution Services Agreement ("Agreement") with
Transamerica Securities Sales Corporation ("TSSC"), its
principal underwriter. Unless otherwise terminated, the
Agreement shall continue in effect from year to year.
The Agreement may be terminated by any party at any
time upon giving 60 days' written notice to the other
parties, and terminates automatically in the event of
its assignment.
(c) State the substance of any current agreements or
arrangements of each principal underwriter with
dealers, agents, salesmen, etc., with respect to
commissions and overriding commissions, territories,
franchises, qualifications, and revocations. If the
trust is the issuer of periodic payment plan
certificates, furnish schedules of commissions and the
bases thereof. In lieu of a statement concerning
schedules of commissions, such schedules of commissions
may be filed as Exhibit A(3)(c).
Principal Underwriter TSSC pays to broker-dealers who
sell the Policy commissions based on a commission
schedule. After the date of issue or an increase in
face amount, commissions will be 90% of the first-year
payments up to a payment amount we established and 5%
of any excess. After the first year, commissions will
be 2% of payments plus 0.30% annually of unloaned
Policy Value. To the extent permitted by NASD rules,
promotional incentives or payments may also be provided
to broker-dealers based on sales volumes, the
assumption of wholesaling functions or other
sales-related criteria. Other payments may be made for
other services that do not directly involve the sale of
the Policies. These services may include the
recruitment and training of personnel, production of
promotional literature, and similar services.
Information Concerning Principal Underwriter
39. (a) State the form of organization of each principal
underwriter of securities of the trust, the name of the
state or other sovereign power under the laws of which
each underwriter was organized and the date of
organization.
The principal underwriter of the policies, Transamerica
Securities Sales Corporation, was incorporated under
the laws of Maryland, February 26, 1986.
(b) State whether any principal underwriter currently
distributing securities of the trust is
a member of the National Association of Securities
Dealers, Inc. (NASD).
The Policies will be distributed only by broker-dealers
which are members of the NASD.
40. (a) Furnish the following information with respect to
all fees received by each principal underwriter of the
trust from the sale of securities of the trust and any
other functions in connection therewith exercised by
such underwriter in such capacity or otherwise during
the period covered by the financial statement filed
herewith.
None.
(b) Furnish the following information with respect to any
fee or any participation in fees received by each
principal underwriter from any underlying investment
company or any affiliated person or investment adviser
of such company:
None.
(1) The nature of such fee or participation.
None.
(2) The name of the person making payment.
None.
(3) The nature of the services rendered in
consideration for such fee or participation.
None.
(4) The aggregate amount received during the last
fiscal year covered by the financial statements
filed herewith.
None.
41. (a) Describe the general character of the business
principal underwriter, including a statement as to any
business other than the distribution of securities of
the trust. If a principal underwriter acts or has acted
in any capacity with respect to any investment company
or companies other than the trust, state the name or
names of such company or companies, their relationship,
if any, to the trust and the nature of such activities.
If a principal underwriter has ceased to act in such
named capacity, state the date of and circumstances
surrounding such cessation.
Transamerica Securities Sales Corporation is a
registered broker-dealer and a member of the NASD.
Transamerica Securities Sales Corporation acts as
principal underwriter of variable annuity and variable
life contracts issued by separate accounts of the
Company and of variable annuities issued by
Transamerica Life Insurance and Annuity Company and of
Premier Funds, Inc. The variable contracts issued by
the Company are sold through registered representatives
of affiliated broker-dealers and of independent
broker-dealers who are also licensed as insurance
agents of the Company.
(b) Furnish as at latest practicable date the address of
each branch office of each principal underwriter
currently selling securities of the trust and furnish
the name and residence address of the person in charge
of such office.
Not Applicable. The Separate Account is not yet
issuing securities.
(c) Furnish the number of individual salesmen of each
principal underwriter through whom any of the
securities of the trust were distributed for the last
fiscal year of the trust covered by the financial
statements filed herewith and furnish the aggregate
amount of compensation received by such salesmen in
such year.
Not Applicable. The Policies have not yet been issued.
42. Furnish as at latest practicable date the following information
with respect to each principal underwriter currently
distributing securities of the trust and with respect to each of
the officers, directors or partners of such underwriter
(ownership of securities of the Trust).
Not Applicable. The Policies have not yet been issued.
43. Furnish, for the last fiscal year covered by the financial
statements filed herewith, the amount of brokerage commissions
received by any principal underwriter who is a member of a
national securities exchange and who is currently distributing
the securities of the trust or effecting transactions for the
trust in the portfolio securities of the trust.
Not Applicable.
Offering Price or Acquisition Valuation of Securities of the Trust
44. (a) Furnish the following information with respect to
the method of valuation used by the trust for the
purposes of determining the offering price to the
public of securities issued the trust or the valuation
of shares or interests in the underlying securities
acquired by the holder of a periodic payment plan
certificate.
The net payment equals the payment made less the 4%
payment expense charge. Each net payment is allocated
to the Fixed Account of the Company and/or to the
sub-account(s) selected by the Policy owner.
Allocations to the sub-accounts are credited to the
Policy in the form of Units. Units are credited
separately for each sub-account. The number of Units of
each sub-account credited to the Policy is equal to the
portion of the net payment allocated to the
sub-account, divided by the dollar value of the
applicable Unit as of the valuation date the payment is
received at the Company's Variable Life Service Center
(except that other dating rules generally apply to
premiums received before the application is approved;
see PAYMENTS). The number of Units resulting from each
net premium will remain fixed unless changed by a
subsequent split of Unit value, transfer, partial
withdrawal or surrender. In addition, if the Company
deducts the monthly insurance protection charges or
other charges from Policy Value in a sub-account (as a
result of Policy owner instructions or the pro rata
allocation of charges if the Policy owner has given no
instruction), each such deduction will result in
cancellation of a number of Units equal in value to the
charge allocated to the sub-account. The dollar value
of a Unit of each sub-account varies from valuation
date to valuation date based on the investment
experience of that sub-account. That experience, in
turn, will reflect the investment performance, expenses
and charges of the respective underlying portfolios.
The value of a Unit is set at $10.00 on the first
Valuation Date of each sub-account. The value of a Unit
for a valuation period after the first Valuation Date
equals the product of the net investment factor times
the Unit Value as of the prior valuation date.
Net Investment Factor The net investment factor
measures the investment performance of a sub-account
during the valuation period that has just ended. The
net investment factor is the result of (a) plus (b),
divided by (c), minus (d) and minus (e) where:
(a) is the net asset value per share of a portfolio
held in the sub-account determined at the end of the
current valuation period;
(b) is the per share amount of any dividend or capital
gain distributions made by the portfolio on shares held
in the sub-account if the "ex-dividend" date occurs
during the current valuation period;
(c) is the net asset value per share of a portfolio
share held in the sub-account determined as of the end
of the immediately preceding valuation period;
(d) is a charge for mortality and expense risks; and
(e) is a charge for administration during a period not
exceeding the first twenty Policy years.
The net investment factor may be greater or less than
one. Therefore, the value of a Unit may increase or
decrease. The Policy owner bears the investment risk.
Allocations to the Fixed Account are not converted into
Units, but are credited interest at rates periodically
set by the Company.
(b) Furnish a specimen schedule showing the components of
the offering price of the trust's securities as of the
latest practicable date.
No Policies have been issued or offered for sale to the
public.
(c) If there is any variation in offering price of the
trust's securities to any person or classes of persons
other than underwriters, state the nature and amount of
such variation and indicate the person or classes of
persons to whom such offering is made.
At any time, the "price" of a Unit of a sub-account
will be the same for all Policy owners. However, the
cost of insurance charges for the Policies will not be
the same for all Policy owners. The insurance
principles of pooling and distribution of mortality
risks is based upon the assumption that each Policy
owner pays a cost of insurance charge commensurate with
the Insured's mortality risk, which is actuarially
determined based upon factors such as age, sex, health
and occupation. In the context of life insurance, a
uniform mortality charge (the "cost of insurance
charge") for all Insureds would discriminate unfairly
in favor of those Insureds representing greater
mortality risks to the disadvantage of those
representing lesser risks. Accordingly, there will be a
different "price" for each actuarial category of Policy
owners because different cost of insurance rates will
apply. The "price" will also vary based on net amount
at risk. The Policies will be offered and sold pursuant
to this cost of insurance schedule, the Company's
underwriting standards, and in accordance with state
insurance laws. Such laws prohibit unfair
discrimination among Insureds, but recognize that
premiums must be based upon factors such as age, health
and occupation. Tables showing the maximum cost of
insurance charges will be delivered as part of the
Policy.
45. Furnish the following information with respect to any suspension
of the redemption rights of the securities issued by the trust
during the three fiscal years covered by the financial
statements filed herewith:
(a) by whose action redemption rights were suspended;
Not Applicable.
(b) the number of days' written notice given to security
holders prior to suspension of redemption rights;
Not Applicable.
(c) reason for suspension;
Not Applicable.
(d) period during which suspension was in effect.
Not Applicable.
46. (a) Furnish the following information with respect to the
method of determining the redemption
or
partial withdrawal valuation of securities issued by the trust:
(1) The source of quotations used to determine the
value of portfolio securities.
The sub-accounts invest only in shares of the
portfolios. Shares of each are sold and redeemed
at their net asset value as next computed after
receipt of the purchase or redemption order.
Each purchase or redemption is confirmed in a
written statement of the number of shares
purchased or redeemed and the aggregate number
of shares currently held by the
respective-sub-accounts. See Item 44(a).
(2) Whether opening, closing, bid, asked or any other
price is used.
See 44(a) and 46(a)(1), above.
(3) Whether price is as of the day of sale or as of any
other time.
See 44(a) and 46(a)(1), above.
(4) A brief description of the methods used by
registrant for determining other assets and
liabilities including accrual for expenses and
taxes (including taxes on unrealized
appreciation).
Policy Value and Surrender Value - The Policy
value is the total amount available for
investment and is equal to the sum of the
accumulation in the Fixed Account and the value
of the Units in the sub-accounts. The Policy
value is used in determining the surrender value
(the Policy value less any outstanding loan and
applicable surrender charges). There is no
guaranteed minimum Policy value. Because Policy
value on any date depends upon a number of
variables, it cannot be predetermined. Policy
value and surrender value will reflect the
frequency and amount of net payments, paid,
interest credited to accumulations in the Fixed
Account, the investment performance of the
chosen sub-accounts of the Separate Account, any
partial withdrawals, any loans, any loan
repayments, any loan interest paid or credited,
and any charges assessed in connection with the
Policy.
Calculation of Policy Value - The Policy value
is determined first on the date of issue and
thereafter on each valuation date. On the date
of issue, the Policy Value is (a) the value of
the amounts allocated to the Fixed Account and
sub-account(s), net of mortality and expense
risk charges, administration charges and
portfolio expenses; minus (b) the monthly
insurance protection charge due. On each
valuation date after the date of issue the
Policy value will be:
(a) the aggregate of the values in each of the
sub-accounts on the valuation date,
determined for each sub-account by
multiplying the value of a Unit in that
sub-account on that date by the number of
such Units allocated to the Policy; plus
(b) the value in the Fixed Account (including
any amounts transferred to the Fixed
Account with respect to a loan).
Thus, the Policy value is determined by
multiplying the number of Units in each
sub-account by the value of the applicable Units
on the particular valuation date, adding the
products, and adding the amount of the
accumulations in the Fixed Account, if any. Also
see Item 44(a), above.
Because of its current tax status, the Company
does not expect to incur any federal income tax
liabilities that would be charged to the
Separate Account, and the company does not
intend to make a charge for federal income
taxes. If there is a change in tax status or in
law resulting in tax liabilities to the Company,
the Company may assess a charge against the
Policy Value. The Company may, however, incur
state and local taxes (in addition to premium
taxes) in several states. At present, these
taxes are not significant. If there is a
material change in state or local tax laws,
charges for such taxes, if any, attributable to
the Separate Account may be made.
(5) Other items which registrant deducts from the
net asset value in computing redemption value of
its securities.
Units of the sub-accounts will be redeemed at net asset value. However, under
the
Policies, a surrender or partial redemption may be subject to surrender charges.
See 13(a), "SURRENDER CHARGES" and "PARTIAL WITHDRAWAL."
(6) Whether adjustments are made for fractions.
No adjustments are made for fractions.
(b) Furnish a specimen schedule showing the components of
the redemption price to the holders of the trust's
securities as of the latest practicable date.
No policies have been issued or offered for sale to the
public.
Purchase and sale of interests in underlying securities from and to
Security Holders
47. Furnish a statement as to the procedure with respect to the
maintenance of a position in the underlying securities or interests in the
underlying securities, the extent and nature thereof and the person who
maintains such a position. Include a description of the procedure with respect
to the purchase of underlying securities or interests in the underlying
securities from security holders who exercise redemption or withdrawal rights
and the sale of such underlying securities and interests in the underlying
securities to other security holders. State whether the method of valuation of
such underlying securities or interests in underlying securities differs from
that set forth in Items 44 and 46. If any item of expenditure included in the
determination of the valuation is not or may not actually be incurred or
expended, explain the nature of such item and who may benefit from the
transaction.
All purchases and redemptions of shares of the portfolios are at
net asset value. The Company will redeem sufficient shares of
the portfolios to pay certain life insurance proceeds, benefits
at maturity, or surrender proceeds, or for other purposes
contemplated by the Policy.
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Furnish the following information as to each trustee or custodian
of the trust.
The Company maintains custody of all securities of the Separate
Account. The Separate
Account has no trustees. See Item 3.
(a) Name and principal address:
Transamerica Occidental Life Insurance Company
1150 South Olive Street
Los Angeles, CA 90015
(b) Form of organization:
Stock life insurance company.
(c) State or other sovereign power under the laws of which
the trustee or custodian was organized.
Incorporated under the laws of California.
(d) Name of governmental supervising or examining authority.
California Department of Insurance.. The Company is
also subject to examination by the
insurance departments of each state in which it does
business.
49. State the basis for payment of fees or expenses of the trustee
or custodian for services rendered with respect to the trust and
its securities, and the amount thereof for the last fiscal year.
Indicate the person paying such fees or expenses. If any fees or
expenses are prepaid, state the unearned amounts.
The Company is not paid a separate fee for expenses or services
rendered as custodian of the Separate Account.
A daily charge currently equivalent to an effective annual rate
of 0.65% of the daily net asset value of each sub-account is
imposed to compensate the Company for its assumption of certain
mortality and expense risks. Such expense risks include the
risks of increased costs associated with the custodian function.
Additionally, during the first twenty Policy years, we assess a
charge on an annual basis of 0.15% of the daily net asset value
in each sub-account for administration costs associated with the
Separate Account. Currently, we waive this charge after the
tenth Policy year.
The contingent surrender charge (See 13(a)) includes a component
for administrative services, which may be deemed to include
custodial services.
As the Separate Account has not begun business operations, no
fees have been paid.
50. State whether the trustee or custodian or any other person has
or may create a lien on the assets of the trust, and, if so,
give full particulars, outlining the substance of the provisions
of any indenture or agreement with respect thereto.
None. Under California law, the assets supporting Policy
reserves in the Separate Account may not
be charged with any liabilities arising out of any other
business of the Company.
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Furnish the following information with respect to insurance of
holders of securities:
Interests in the Separate Account are sold only to fund the
Policies. Other than the Policies themselves, no insurance is
sold to Policy owners with interests in the sub-accounts, in
connection with such interests.
(a) The name and address of the insurance company.
Transamerica Occidental Life Insurance Company
1150 South Olive Street
Los Angeles, CA 90015
(b) The types of policies and whether individual or group
policies.
The Policies are individual flexible payment variable
life insurance policies.
(c) The types of risks insured and excluded.
The Policies are offered to individuals age 80 and
under, subject to our underwriting standards. We assume
the risk that the deduction made for mortality and
expense risks will prove inadequate to cover actual
insurance costs and expenses.
(d) The coverage of the policies.
The Policies provide insurance coverage on the life of
the Insured. The minimum death benefit is stated in
each Policy. Death Benefits will be reduced by any
outstanding loans and any due and unpaid monthly
insurance protection charges.
(e) The beneficiaries of such policies and the uses to
which the proceeds of policies must be put.
The beneficiary is named by the Policy owner to receive
the death benefits. The interest of any beneficiary
will be subject to any assignment made by the Policy
owner. The Policy owner may declare a beneficiary to be
revocable (changed any time by written request) or
irrevocable (may be changed only with the written
consent of the beneficiary). The interest of a
beneficiary who dies before the Insured will pass to
surviving beneficiaries. If all beneficiaries die
before the Insured, the death benefits will pass to the
Policy owner or to the Policy owner's estate.
(f) The terms and manner of cancellation and of
reinstatement. See Item 17(c) for the manner of
cancellation and reinstatement.
(g) The method of determining the amount of premiums to be paid
by holders of securities.
See answers to Item 13(a) for amount of charges imposed
and 44(a) and 44(c) for the manner in which the
payments are determined.
(h) The amount of aggregate premiums paid to the insurance
company during the last fiscal year.
We have not yet begun issuing the Policies.
(i) Whether any person other than the insurance company
receives any part of such premiums, the name of each
such person and the amounts involved, and the nature of
the services rendered therefor.
No person other than the Company receives any part of
the amounts deducted for assumption of mortality and
expense risks. However, the Company may from time to
time enter into reinsurance agreements with other
insurance companies under which certain insurance
risks, premium income and related expenses are assumed
by such other insurance companies.
(j) The substance of any other material provisions of any
indenture or agreement of the trust relating to
insurance.
None.
VII. POLICY OF REGISTRANT
52. (a) Furnish the substance of the provisions of any
indenture or agreement with respect to the
conditions upon which and the method of selection by which particular portfolio
securities must or may be eliminated from the assets of the trust or must or
may be replaced by other portfolio securities. If an investment adviser or
other person is to be employed in connection with such selection, elimination
or substitution, state the name of such
person, the nature of any affiliation to the depositor, trustee or custodian,
and any principal underwriter, and the amount of remuneration to be received
for such services.
If any particular person is not designated in the indenture or agreement,
describe briefly
the method of selection of such person.
--------------------------------------
The investment Policy of each sub-account of the
Separate Account is to invest in a particular
portfolio.
The Company reserves the right, subject to applicable
law, to make additions to, deletions from, or
substitutions for the shares that are held in the
sub-accounts of the Separate Account or that the
sub-accounts of the Separate Account may purchase. If
the shares of a portfolio are no longer available for
investment or if in the Company's judgment further
investment in any portfolio should become inappropriate
in view of the purposes of the Separate Account or the
affected sub-account, the Company may redeem the shares
of that portfolio and substitute shares of another
registered open-end management company. The Company
will not substitute any shares attributable to a Policy
interest in a sub-account without notice and prior
approval of the SEC and state insurance authorities, to
the extent required by the 1940 Act or other applicable
law.
The Company also reserves the right to establish
additional sub-accounts of the Separate Account, each
of which would invest in shares corresponding to a new
portfolio or in shares of another investment company
having a specified investment objective. Subject to
applicable law and any required SEC approval, the
Company may, in its sole discretion, establish new
sub-accounts or eliminate one or more sub-accounts if
marketing needs, tax considerations or investment
conditions warrant. Any new sub-accounts may be deemed
available to existing Policy owners on a basis to be
determined by the Company. If the Company deems it to
be in the best interest of Policy owners, and subject
to any approvals that may be required under applicable
law, the Variable Account or sub-account may be
operated as a management company under the 1940 Act,
may be deregistered if registration is no longer
required, or may be combined with other separate
accounts of the company.
If any of these substitutions or changes are made, the
Company may by appropriate endorsement change the
Policy to reflect the substitution or change.
(b) Furnish the following information with respect to each
transaction involving the elimination of any underlying
security during the period covered by the financial
statements filed herewith.
Not Applicable.
(c) Describe the policy of the trust with respect to the
substitution and elimination of the underlying
securities of the trust with respect to:
(1) the grounds for elimination and substitution;
See 52(a), above.
(2) the type of securities which may be substituted for
any underlying security;
See 52(a), above.
(3) whether the acquisition of such substituted
security or securities would constitute the
concentration of investment in a particular
industry or group of industries or would conform
to a policy of concentration of investment in a
particular industry or group of industries;
Not Applicable.
(4) whether such substituted securities may be the
securities of any other investment company; and
See 52(a), above.
(5) the substance of the provisions of any indenture
or agreement which authorize or restrict the
policy of the registrant in this regard.
See 52(a) above.
(d) Furnish a description of any policy (exclusive of
policies covered by paragraph (a) and (b) herein) of
the trust which is deemed a matter of fundamental
policy and which is elected to be treated as such.
None.
Regulated Investment Company
53. (a) State the taxable status of the trust.
Because of its current tax status, the Company does not
expect to incur any federal income tax liabilities that
would be charged to the Separate Account, and the
Company does not intend to make a charge for federal
income taxes. The Company may, however, incur state and
local taxes (in addition to premium taxes) in several
states. At present, these taxes are not significant. If
there is a material change in state or local tax laws,
charges for such taxes, if any, attributable to the
Separate Account may be made.
See also 46(a), above.
(b) State whether the trust qualified for the last taxable
year as a regulated investment company as defined in
Section 851 of the Internal Revenue Code of 1954, and
state its present intention with respect to such
qualification during the current taxable year.
Not Applicable.
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. If the trust is not the issuer of periodic payment plan
certificates, furnish the following information with respect to
each class or series of its securities.
Not Applicable.
55. If the trust is the issuer of periodic payment plan
certificates, a transcript of a hypothetical account shall be
filed in approximately the following form on the basis of the
certificate calling for the smallest amount of payments. The
schedule shall cover a certificate of the type currently being
sold assuming that such certificate had been sold at a date
approximately ten years prior to the date of registration or to
the approximate date of organization of the trust.
Not Applicable.
56. If the trust is the issuer of periodic payment plan
certificates, furnish by years for the period covered by the
financial statements filed herewith in respect of certificates
sold during such period, the following information for each
fully paid type and each installment payment type of periodic
payment plan certificate currently being issued by the trust.
Not Applicable.
57. If the trust is the issuer of periodic payment plan
certificates, furnish by years for the period covered by
financial statements filed herewith the following information
for each installment payment type of periodic payment plan
certificate currently being issued by the trust.
Not Applicable.
58. If the trust is the issuer of periodic plan certificates furnish
the following information for each installment periodic payment
plan certificate outstanding as of the latest practicable date.
Not Applicable.
59. Financial Statements:
Financial Statements of the Separate Account
Financial statements, if any, will be contained in a
pre-effective amendment to the registration statement for the
Policy on Form S-6 filed under the Securities Act of 1933. They
are incorporated herein by reference.
Financial Statements of the Depositor
The Financial Statements of the Company will be contained in a
pre-effective amendment to the registration statement on Form
S-6 filed by the Registrant pursuant the Securities Act of 1933.
They are incorporated herein by reference.
IX. EXHIBITS
A. Furnish the most recent form of the following:
(1) Indenture
Certified Copy of vote of Board of Directors of
Transamerica Occidental Life Insurance
Company dated December 6, 1996, establishing the
Transamerica Occidental Life Separate
Account.1/
(2) Not Applicable.
(3) Distributing Contracts
(a) Distribution Agreement between the depositor
and principal underwriter. 1/
(b) Sales Agreement between principal underwriter
and broker-dealers. 1/
(c) Schedule of sales commissions. 3/
(4) Not Applicable.
(5) Form of Policy and Policy riders. 1/ 2/
(6) Organizational documents of the Company. 1/
(7) Not applicable.
(8) (a) Forms of Participation Agreements 1/ 2/
(9) Not applicable.
(10) Form of Application for Policy. 1/ 2/
B. (1) None.
(2) None.
C. None.
1/ Filed with initial Form S-6 registration statement filed by the
Separate Account on October 15, 1997 (File No. 333-37883).
2/ Filed with Pre-Effective Amendment No. 1 to the Form S-6
registration statement filed by the Separate
Account on December 24, 1997 (File No. 333-37883).
3/ Filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940 the
Depositor of the registrant has caused this registration statement to be duly
signed on behalf of the registrant in the City of Los Angeles, and State of
California, on the 9th day of January, 1998.
(SEAL) Signature___________________________________________
Transamerica Occidental Life Separate Account VUL-1
(Registrant)
By Transamerica Occidental Life Insurance Company
(Depositor)
By ________________________________________
(Name) Aldo Davanzo
(Title) Vice President
Attest ________________________________________________
(Name)
----------------------------------------------
(Title)
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities
indicated on the date(s) set forth below.
<TABLE>
<CAPTION>
Signatures Titles Date
<S> <C> <C>
______________________* Director, Executive Vice President January __, 1998
Robert Abeles and Chief Financial Officer
______________________* President, Chief Executive Officer January __, 1998
Thomas J. Cusack and Director
______________________* Director January __, 1998
Richard I. Finn
______________________* Director January __, 1998
David E. Gooding
______________________* Director January __, 1998
Edgar H. Grubb
______________________* Director January __, 1998
Frank C. Herringer
______________________* Director January __, 1998
Richard N. Latzer
______________________* Director January __, 1998
Karen MacDonald
______________________* Director January __, 1998
Gary U. Rolle'
______________________* Director January __, 1998
T. Desmond Sugrue
______________________* Director January __, 1998
Nooruddin S. Veerjee
______________________* Director January __, 1998
Robert A. Watson
</TABLE>
/s/Aldo Davanzo
*By: Aldo Davanzo
On October 9, 1997 as Attorney-in-Fact pursuant to
powers of attorney previously filed and filed herewith,
and in his own capacity as Vice President and Assistant Secretary.
<PAGE>
Exhibit Table
Exhibit A (3)(c) Commission Schedule
<PAGE>
Exhibit A (3)(c)
COMMISSION SCHEDULE
Transamerica TributeSM
Variable Universal Life Insurance Policies
A. New policies
Commissions paid on new policies are (1) first year commissions on payments; (2)
renewal year commission on payments; and (3) trail commissions on unloaned
policy values beginning in the second policy year.
1. First year commissions. Payments received at our Variable Life Service Center
between the date of issue for the policy and the day before the first policy
anniversary, inclusive, will earn first year commissions. Payments received by
us with the application for a new policy or at any other time before the date of
issue will also earn first year commissions and will be considered as received
on the date such payments are first allocated to the policy on or after the date
of issue of the policy.
First year commissions are equal to:
90% of payments made to the policy, up to and including
target premium amounts for the
policy; and
5% of payments made to the policy in excess of target
premiums.
2. Renewal year commissions on payments. Payments received by us at our Variable
Life Service Center on or after the first anniversary of a policy will earn
renewal year commissions.
Renewal year commissions on payments are equal to 2% of payments made.
3. Trail commissions. Beginning in the second policy year, trail commissions may
be earned on each policy. Trail commissions are calculated at the end of each
calendar quarter. In order to be eligible for trail commissions, the policy must
be in force on the calculation date, and the policy must be in its second or
later policy year.
Trail commissions, on an annual basis, are equal to .30% of the unloaned policy
value. The rate applied to the unloaned policy value to calculate the quarterly
trail commission in one-fourth of the annual rate and is equal to 0.75% of the
unloaned policy value.
B. Commissions on Face Increase Amounts
A portion of payments received by us at our Variable Life Service Center between
the effective date of a face increase amount requested by the policy owner
through one day before the annual anniversary of that effective date, inclusive,
may earn first year commissions. The portion of payments eligible for first year
commissions for the face increase amount is termed "face increase payment". A
face increase payment is the percentage of the payment received which is equal
to the ratio of the face increase amount to the total face amount for the
policy.
First year commission on face increase payments are equal to:
90% of face increase payments made to the policy, up to
and including target premium amounts for the face increase
amount; and
5% of payments made to the policy in excess of target
premiums for the face increase amount.
This commission schedule applies to Transamerica TributeSM VUL policies (Policy
form number TA 1031-97, offered by Transamerica Occidental Life Insurance
Company) issued on or after January 1, 1998 and which do not replace existing
policies issued by any of the Transamerica Life Companies. Commissions
applicable to replacements, conversions, or other types of internal exchanges
will be in accordance with Transamerica's rules. Policy form number may vary by
jurisdiction.
