<PAGE>
Registration No. 333-45039
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
Post-Effective Amendment No. 1
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 1
Massachusetts Mutual Variable Annuity Separate Account 4
(Exact Name of Registrant)
Massachusetts Mutual Life Insurance Company
(Name of Depositor)
1295 State Street, Springfield, Massachusetts 01111
(Address of Depositor's Principal Executive Offices)
(413) 788-8411
Thomas F. English
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: Continuous.
It is proposed that this filing will become effective (check appropriate box)
|_| immediately upon filing pursuant to paragraph (b) of Rule 485.
|X| on May 1, 1999 pursuant to paragraph (b) of Rule 485.
|_| 60 days after filing pursuant to paragraph (a) of Rule 485.
|_| on (date) pursuant to paragraph (a) of Rule 485.
If appropriate, check the following box:
|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
STATEMENT PURSUANT TO RULE 24f-2
The Registrant has registered an indefinite number or amount of its variable
annuity contracts under the Securities Act of 1933 pursuant to Rule 24f-2 under
the Investment Company Act of 1940. The Rule 24f-2 Notice for Registrant's
fiscal year ended December 31, 1998 was filed on or about March 22, 1999.
1
<PAGE>
CROSS REFERENCE TO ITEMS
REQUIRED BY FORM N-4
N-4 Item Caption in Prospectus
- -------- ---------------------
1 ....................................... Cover Page
2 ....................................... Index of Special Terms
3 ....................................... Table of Fees and Expenses
4 ....................................... Condensed Financial Information;
Performance
5 ....................................... The Company; Investment Choices
6 ....................................... Expenses; Distributors
7 ....................................... Ownership; Purchasing a Certificate;
Voting Rights; Reservation of Rights;
Certificate Value; Cover Page
8 ....................................... The Income Phase
9 ....................................... Death Benefit
10 ...................................... The Accumulation Phase;
Distributors
11 ...................................... Highlights; Withdrawals
12 ...................................... Taxes
13 ...................................... Legal Proceedings
14 ...................................... Additional Information
2
<PAGE>
Caption in Statement of
Additional Information
----------------------
15 ...................................... Cover Page
16 ...................................... Table of Contents
17 ...................................... Company
18 ...................................... Distribution; Experts
19 ...................................... Purchase of Securities Being Offered
20 ...................................... Distribution
21 ...................................... Performance Measures
22 ...................................... Annuity Payments
23 ...................................... Financial Statements
3
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
4
<PAGE>
Massachusetts Mutual Life Insurance Company
Massachusetts Mutual Variable Annuity
Separate Account 4
Panorama Premier Variable Annuity
This prospectus describes the individual certificates issued under the Panorama
Premier deferred group variable annuity contract offered by Massachusetts Mutual
Life Insurance Company. This certificate provides for accumulation of
certificate value and annuity payments on a fixed and variable basis.
You, the participant, have a number of investment choices in this certificate.
These investment choices include two fixed account options as well as the
following seventeen funds which are offered through our separate account,
Massachusetts Mutual Variable Annuity Separate Account 4.
Panorama Series Fund, Inc.
o Panorama Total Return Portfolio
o Panorama Growth Portfolio
o Panorama International Equity Portfolio
o Panorama LifeSpan Capital Appreciation Portfolio
o Panorama LifeSpan Balanced Portfolio
o Panorama LifeSpan Diversified Income Portfolio
Oppenheimer Variable Account Funds
o Oppenheimer Money Fund/VA
o Oppenheimer Bond Fund/VA
Fidelity Variable Insurance Products Fund II
o VIP II Contrafund Portfolio
American Century Variable Portfolios, Inc.
o American Century VP Income & Growth Portfolio
T. Rowe Price Equity Series, Inc.
o T. Rowe Price Mid-Cap Growth Portfolio
MML Series Investment Fund
o MML Equity Fund
o MML Blend Fund
o MML Equity Index Fund
o MML Small Cap Value Equity Fund
o MML Growth Equity Fund
o MML Small Cap Growth Equity Fund
Please read this prospectus before investing. You should keep it for future
reference. It contains important information about the Panorama Premier variable
annuity.
To learn more about the Panorama Premier certificate, you can obtain a copy of
the Statement of Additional Information (SAI), dated May 1, 1999. We filed the
SAI with the Securities and Exchange Commission (SEC) and it is legally a part
of this prospectus. The SEC maintains a Web site (http://www.sec.gov) that
contains the SAI, material incorporated by reference and other information
regarding companies that file electronically with the SEC. The Table of Contents
of the SAI is on page 31 of this prospectus. For a free copy of the SAI, or for
general inquiries, call our Annuity Service Center at (800) 366-8226 or write
to: Panorama Premier, Annuity Products, H565, P.O. Box 9067, Springfield,
Massachusetts 01102-9067.
The certificates:
o are not bank deposits.
o are not federally insured.
o are not endorsed by any bank or governmental agency.
o are not guaranteed and may be subject to loss of principal.
- --------------------------------------------------------------------------------
The SEC has not approved these contracts or determined that this prospectus is
accurate or complete. Any representation that it has is a criminal offense.
- --------------------------------------------------------------------------------
May 1, 1999.
1
<PAGE>
Table Of Contents
Highlights 4
Massachusetts Mutual Variable Annuity Separate Account 4 -
A Table of Fees and Expenses 5
The Company 9
The Panorama Premier Individual Certificate Issued under a Group
Deferred Variable Annuity Contract -
General Overview 9
Ownership 10
Contract Owner
Participant
Joint participant 10
Annuitant 10
Beneficiary 10
Purchasing a Certificate 11
Purchase Payments 11
Allocation of Purchase Payments 11
Investment Choices 12
The Separate Account 12
The Funds 12
The Fixed Accounts 15
DCA Fixed Account 15
The Fixed Account 15
Certificate Value 16
Accumulation Units 16
Transfers 16
Transfers During the Accumulation Phase 16
Transfers During the Income Phase 17
Dollar Cost Averaging Program 17
Automatic Rebalancing Program 18
Withdrawals 18
Systematic Withdrawal Program 19
Expenses 20
Insurance Charges 20
Mortality and Expense Risk Charge 20
Administrative Charge 20
Annual Certificate Maintenance Charge 20
Contingent Deferred Sales Charge 20
Free Withdrawals 22
Premium Taxes 22
Transfer Fee 22
Income Taxes 22
Fund Expenses 22
The Income Phase 23
Fixed Annuity Payments 23
Variable Annuity Payments 23
Annuity Unit Value 24
Annuity Options 24
Death Benefit 25
Death of Participant During the Accumulation Phase 25
Death Benefit Amount During the Accumulation Phase 25
Death Benefit Options During the Accumulation Phase 25
Death of Participant During the Income Phase 25
Death of Annuitant 25
Taxes 27
Annuity Certificates in General 27
Qualified and Non-Qualified Certificates 27
Withdrawals - Non-Qualified Certificates 27
Withdrawals - Qualified Certificates 28
Other Information 29
Performance 29
Standardized Total Returns 29
Nonstandardized Total Returns 29
Yield and Effective Yield 29
Related Performance 29
Year 2000 29
Distributors 30
Electronic Transmission of Application Information 30
Assignment 30
Voting Rights 30
Reservation of Rights 31
Suspension of Payments or Transfers 31
Legal Proceedings 31
Financial Statements 31
Additional Information 31
Appendix A -
Condensed Financial Information A-1
2 | Table Of Contents
<PAGE>
Index Of Special Terms
We have tried to make this prospectus as readable and understandable for you as
possible. By the very nature of the certificate, however, certain technical
words or terms are unavoidable. We have identified the following as some of
these words or terms. The page that is indicated here is where we believe you
will find the best explanation for the word or term.
Page
Accumulation Phase 9
Accumulation Unit 16
Annuitant 10
Annuity Date 23
Annuity Options 24
Annuity Payments 23
Annuity Service Center Cover Page
Annuity Unit Value 24
Certificate 9
Certificate Anniversary 25
Contract Owner 10
Free Withdrawal 22
Income Phase 9
Non-Qualified 27
Participant 10
Purchase Payment 11
Qualified 27
Separate Account 12
Tax Deferral 9
[GRAPHIC]
Index of Special Terms | 3
<PAGE>
Highlights
This prospectus describes the general provisions of the Panorama Premier
certificate. You may review a copy of the certificate upon request.
Free Look
You have a right to examine your certificate. If you change your mind about
owning your certificate, you can cancel it within 10 days after receiving it.
However, this time period may vary by state. When you cancel the certificate
within this time period, we will not assess a sales charge. You will receive
your certificate value as of the business day we receive your certificate and
written request at our Annuity Service Center. If you purchase this certificate
as an IRA or your state requires it, we will return the greater of your purchase
payments less any withdrawals you took, or the certificate value.
Contingent Deferred Sales Charge
We do not deduct a sales charge when we receive a purchase payment from you.
However, we may assess a contingent deferred sales charge if you withdraw any
part of the certificate value. The amount of the contingent deferred sales
charge depends on the amount of your purchase payments and the length of time
since you made them. The contingent deferred sales charge ranges from 7% to 0%.
Federal Income Tax Penalty
If you withdraw any of the certificate value from your non-qualified
certificate, a 10% federal income tax penalty may be applied to the amount of
the withdrawal that is ineludible in your gross income for tax purposes. Some
withdrawals may be exempt from the penalty tax. They include any amounts:
o paid on or after you reach age 59 1/2;
o paid to the beneficiary after you die;
o paid if you become totally disabled as that term is defined in the Internal
Revenue Code;
o paid in a series of substantially equal payments made annually or more
frequently, for life or a period not exceeding life expectancy;
o paid under an immediate annuity; or
o which come from purchase payments made before August 14, 1982.
The Internal Revenue Code (the Code) treats any withdrawal as first coming from
earnings and then from your purchase payments. Separate tax penalties and
restrictions apply to withdrawals under qualified certificates. Please refer to
the Taxes section of this prospectus for more information.
4 | Highlights
<PAGE>
Massachusetts Mutual Variable Annuity
Separate Account 4
Table Of Fees And Expenses
Participant Transaction Expenses
Transfer Fee:
During Accumulation Phase: We will not charge for the first 12
transfers in a calendar year; thereafter
we will assess a fee which is the lesser
of $20 or 2% of the amount transferred.
During Income Phase: We allow only 6 transfers in a calendar
year and we will not assess a fee for
these 6 transfers.
Sales Load on Purchases: 0%
Contingent Deferred Sales Charge
(as a percentage of purchase payments withdrawn):
<TABLE>
<CAPTION>
Full years since payment 0 1 2 3 4 5 6 7 or more
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage 7% 6% 5% 4% 3% 2% 1% 0%
</TABLE>
Annual Certificate Maintenance Charge: $30 per Certificate Year.
Separate Account Annual Expenses
(as a percentage of the average account value)
Mortality and Expense Risk Charge: 1.25%
Administrative Charge: 0.15%
Total Separate Account Annual Expenses: 1.40%
Table Of Fees And Expenses | 5
<PAGE>
Annual Fund Expenses
(as a percentage of average net assets as of December 31, 1998)
<TABLE>
<CAPTION>
Other Total Operating
Expenses After Expenses After
Management Expense Expense
Fees Reimbursements Reimbursements
<S> <C> <C> <C>
Oppenheimer Money Fund/VA 0.45% 0.05% 0.50%
Oppenheimer Bond Fund/VA 0.72% 0.02% 0.74%
Panorama LifeSpan Diversified Income Portfolio 0.75% 0.09% 0.84%
Panorama Total Return Portfolio 0.53% 0.02% 0.55%
Panorama LifeSpan Balanced Portfolio 0.85% 0.08% 0.93%
Panorama LifeSpan Capital Appreciation Portfolio 0.85% 0.08% 0.93%
Panorama Growth Portfolio 0.52% 0.01% 0.53%
Panorama International Equity Portfolio 1.00% 0.09% 1.09%
Fidelity's VIP II Contrafund Portfolio 0.59% 0.07%*** 0.66%***
American Century VP Income & Growth Portfolio 0.70% 0.00% 0.70%
T. Rowe Price Mid-Cap Growth Portfolio 0.85% 0.00% 0.85%
MML Small Cap Value Equity Fund 0.39% 0.05%** 0.44%
MML Equity Fund 0.37% 0.00%** 0.37%
MML Blend Fund 0.37% 0.00%** 0.37%
MML Equity Index Fund 0.30% 0.20% 0.50%
MML Growth Equity Fund 0.80% 0.11%** 0.91%*
MML Small Cap Growth Equity Fund 1.08% 0.11%** 1.19%*
</TABLE>
* The MML Growth Equity Fund and the MML Small Cap Growth Equity Fund began
operations in 1999, and therefore, had no operating expenses as of December
31, 1998. The investment manager estimates that the total operating
expenses for these Funds in 1999 will be as shown.
** We agreed to bear expenses of the MML Equity Fund, MML Blend Fund, MML
Small Cap Value Equity Fund, MML Growth Equity Fund and MML Small Cap
Growth Equity Fund (other than the management fee, interest, taxes,
brokerage commissions and extraordinary expenses) in excess of 0.11% of the
average daily net asset value of the Funds through April 30, 2000. The
expenses shown for the MML Growth Equity Fund and MML Small Cap Growth
Equity Fund include this reimbursement. If not included, the other expenses
for these Funds in 1999 are estimated to be 0.25%, for the MML Growth
Equity Fund and 0.25% for the MML Small Cap Growth Equity Fund. We do not
expect that we will be required to reimburse any expenses of the MML Equity
Fund, MML Blend Fund and MML Small Cap Value Equity Fund in 1999.
*** A portion of the brokerage commissions that the VIP II Contrafund Portfolio
pays was used to reduce the other expenses for the Portfolio. In addition,
this Portfolio has entered into arrangements with its custodian whereby
credits realized as a result of uninvested cash balances were used to
reduce custodian expenses. Without such reductions, the other expenses for
this Portfolio would have been 0.11%, increasing the total fund operating
expenses to 0.70%.
(See the funds' prospectuses for more information.)
6 | Table Of Fees And Expenses
<PAGE>
Examples
The following examples are designed to help you understand the expenses in the
contract. The examples show the cumulative expenses you would pay assuming you
invested $1,000 in a contract and allocated all of it to a fund which earned 5%
each year. All the expenses shown in the table of fees and expenses, including
the annual fund expenses, are assumed to apply. In the first example it is
assumed that you withdrew all of your money at the end of years 1, 3, 5 or 10.
<TABLE>
<CAPTION>
Year 1 3 5 10
<S> <C> <C> <C> <C>
Money Sub-Account $85 $112 $138 $233
Bond Sub-Account 88 120 150 258
LifeSpan Diversified Income Sub-Account 89 122 156 269
Total Return Sub-Account 86 114 141 238
LifeSpan Balanced Sub-Account 90 125 160 278
LifeSpan Capital Appreciation Sub-Account 90 125 160 278
Growth Sub-Account 86 113 140 236
International Equity Sub-Account 91 130 168 294
Contrafund Sub-Account 87 118 148 254
Income & Growth Sub-Account 87 118 148 254
Mid-Cap Growth Sub-Account 89 123 156 270
Small Cap Value Equity Sub-Account 85 111 135 227
Equity Sub-Account 84 109 131 219
Blend Sub-Account 84 109 131 219
Equity Index Sub-Account 85 112 138 233
Growth Equity Sub-Account 89 124 159 276
Small Cap Growth Equity Sub-Account 92 133 173 304
</TABLE>
Table Of Fees And Expenses | 7
<PAGE>
This second example assumes 1) that you did not make a withdrawal or 2) that you
decided to begin the income phase at the end of each year shown. (The income
phase is not available until the end of the 5 th contract year.)
<TABLE>
<CAPTION>
Year 1 3 5 10
<S> <C> <C> <C> <C>
Money Sub-Account $20 $63 $108 $233
Bond Sub-Account 23 70 120 258
LifeSpan Diversified Income Sub-Account 24 73 126 269
Total Return Sub-Account 21 64 111 238
LifeSpan Balanced Sub-Account 25 76 130 278
LifeSpan Capital Appreciation Sub-Account 25 76 130 278
Growth Sub-Account 21 64 110 236
International Equity Sub-Account 26 81 138 294
Contrafund Sub-Account 22 69 118 254
Income & Growth Sub-Account 22 69 118 254
Mid-Cap Growth Sub-Account 24 74 126 270
Small Cap Value Equity Sub-Account 20 61 105 227
Equity Sub-Account 19 59 101 219
Blend Sub-Account 19 59 101 219
Equity Index Sub-Account 20 63 108 233
Growth Equity Sub-Account 25 76 129 276
Small Cap Growth Equity Sub-Account 27 84 143 304
</TABLE>
The purpose of the Table of Fees and Expenses is to assist you in understanding
the various costs and expenses that you will incur. The table reflects expenses
of the separate account and the funds.
The examples reflect the $30 annual contract maintenance charge as an annual
charge of 0.086% of the assets. This charge is based on an anticipated average
contract value of $35,000.
The examples do not reflect any premium taxes. However, premium taxes may apply.
The examples should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.
There is an accumulation unit value history contained in Appendix A - Condensed
Financial Information.
8 | Table Of Fees And Expenses
<PAGE>
The Company
Massachusetts Mutual Life Insurance Company (MassMutual) is a mutual life
insurance company specially chartered by the Commonwealth of Massachusetts on
May 14, 1851. It is currently licensed to transact life, accident, and health
insurance business in all states, the District of Columbia, Puerto Rico and
certain provinces of Canada. MassMutual had consolidated statutory assets in
excess of $67 billion and estimated total assets under management of $176.8
billion as of December 31, 1998.
The Panorama Premier Individual Certificate
Issued under a Group Deferred Variable
Annuity Contract
General Overview
The annuity certificate is an ownership interest issued by us, MassMutual, to
you, the participant, under the group deferred variable annuity contract. This
annuity certificate is a contract between the participant and MassMutual. The
certificate is intended for retirement savings or other long-term investment
purposes. In exchange for your purchase payments, we agree to pay you an income
when you choose to receive it. You select the income period beginning on a date
you designate that is at least 5 years in the future. The certificate, like all
deferred annuity certificates, has two phases - the accumulation phase and the
income phase. Your certificate is in the accumulation phase until you decide to
begin receiving annuity payments. During the accumulation phase we provide a
death benefit. Once you begin receiving annuity payments, your certificate
enters the income phase.
You are not taxed on certificate earnings until you take money from your
certificate. This is known as tax deferral.
The certificate is called a variable annuity because you can choose to allocate
your purchase payments among various investment choices. Your choices include
seventeen funds and two fixed accounts. The amount of money you are able to
accumulate in your certificate during the accumulation phase depends upon the
investment performance of the funds you select as well as the interest we credit
on the fixed accounts.
At the beginning of the income phase, you can choose to receive annuity payments
on a variable basis, fixed basis or a combination of both. If you choose
variable payments, the amount of the annuity payments will fluctuate depending
on the investment performance of the funds you select for the income phase. If
you select to receive payments on a fixed basis, the payments you receive will
remain level.
The Company/General Overview | 9
<PAGE>
Ownership
Contract Owner
The contract owner is the person or non-natural person who maintains the
ownership rights stated in the contract that are not delegated to the
participants. The owner of the contract is usually an employer, trustee or other
sponsor of a group that is comprised of participants. If the contract is
purchased as part of an employee benefit plan, the plan may govern which
ownership rights are maintained by the contract owner and which are delegated to
participants.
Participant
The participant is named at time of application. The participant can be an
individual or a non-natural person. We will not issue a certificate to you if
you have reached your 85 th birthday as of the date we proposed to issue the
certificate.
As the participant of the certificate, you exercise all rights under the
certificate. The participant names the beneficiary. You may change the
participant of the certificate at any time prior to the annuity date by written
request. If you change the participant, the change is subject to our
underwriting rules. Changing the participant may result in tax consequences. On
and after the annuity date, you continue as the participant.
Joint Participant
The certificate can be owned by joint participants. Unless prohibited by state
law, only you and your spouse can be joint participants. We will not issue a
certificate to you if either proposed joint participant has reached their 85 th
birthday as of the date we proposed to issue the certificate.
Upon the death of either joint participant, the surviving spouse will be the
designated beneficiary and may continue the certificate. We will treat any other
beneficiary designation at the time of death as a contingent beneficiary. Unless
otherwise indicated on the application, both signatures will be required for all
transactions, if there are joint participants.
Annuitant
The annuitant is the person on whose life we base annuity payments. You
designate the annuitant at the time of application. We will not issue a
certificate to you if the proposed annuitant has reached his/her 85th birthday
as of the date we proposed to issue the certificate. You may change the
annuitant before the annuity date, subject to our underwriting rules. However,
the annuitant may not be changed on a certificate owned by a non-natural person.
Beneficiary
The beneficiary is the person(s) or entity you name to receive any death
benefit. You name the beneficiary at the time of application. Unless an
irrevocable beneficiary has been named, you can change the beneficiary at any
time before you die.
A beneficiary who is your surviving spouse may elect to continue the certificate
in his or her own name, elect a lump sum payment of the death benefit, or apply
the death benefit to an annuity option.
10 | Ownership
<PAGE>
Purchasing a Certificate
Purchase Payments
The minimum amount we accept for your initial purchase payment is:
o $5,000 when the certificate is bought as a non-qualified certificate; or
o $2,000 if you are buying the certificate as part of an IRA (Individual
Retirement Annuity), 401(k) or other qualified plan.
You can make additional purchase payments of $250 or more to either type of
certificate. We will accept as little as $100 if you have selected our automatic
investment plan option.
The maximum amount of cumulative purchase payments we accept without our prior
approval is based on your age when we issued the certificate. The maximum amount
is:
o $1 million up to your 76 th birthday; or
o $500,000 if age 76 or older.
If the participant is not a natural person, these purchase payment limits will
apply to the annuitant's age. If there are joint participants, age refers to the
oldest participant.
You may make your initial purchase payment, along with your complete
application, by giving them to your agent/broker. You can make additional
purchase payments:
o By mailing your check that clearly indicates your name and contract number
to our lockbox:
MassMutual Panorama Premier NY/NJ
P.O. Box 92427
Chicago, IL 60675-2427
o By instructing your bank to wire transfer funds to:
Chase Manhattan Bank, New York, New York
ABA #021000021
MassMutual Account 323065422
Ref: VA Income Contract #
Name: (Your Name)
We have the right to reject any application or purchase payment.
Allocation of Purchase Payments
When you purchase your certificate, you choose how we will apply your purchase
payments among the investment choices. If you make additional purchase payments,
we will apply them in the same way as your first purchase payment, unless you
tell us otherwise.
Once we receive your purchase payment and the necessary information at our
Annuity Service Center or lockbox, we will issue your certificate and apply your
first purchase payment within 2 business days. If you do not give us all of the
information we need, we will contact you to get it. If for some reason we are
unable to complete this process within 5 business days, we will either send back
your money or get your permission to keep it until we get all of the necessary
information.
If you add more money to your certificate by making additional purchase
payments, we will credit these amounts to your certificate on the business day
we receive them at our Annuity Service Center or lockbox. Our business day
closes when the New York Stock Exchange closes, usually 4:00 p.m. Eastern time.
If we receive your purchase payment at our Annuity Service Center or lockbox on
a non-business day or after the business day closes, we will credit the amount
to your certificate effective the next business day.
Purchasing a Certificate | 11
<PAGE>
Investment Choices
The Separate Account
We established a separate account, Massachusetts Mutual Variable Annuity
Separate Account 4 (separate account), to hold the assets that underlie the
certificates. Our Board of Directors adopted a resolution to establish the
separate account under Massachusetts insurance law on July 9, 1997. We have
registered the separate account with the Securities and Exchange Commission as a
unit investment trust under the Investment Company Act of 1940.
MassMutual owns the assets of the separate account. However, those separate
account assets equal to the reserves and other certificate liabilities are not
chargeable with liabilities arising out of any other business we may conduct.
All the income, gains and losses (realized or unrealized) resulting from these
assets are credited to, or charged against, the certificates and not against any
other certificates we may issue.
We currently divide the separate account into 17 sub-accounts. Each of these
sub-accounts invests in a fund. You bear the complete investment risk for
purchase payments that you allocate to a fund.
The Funds
Subject to state availability, the contract offers 17 funds which are listed
below. Additional funds may be added in the future.
Panorama Series Fund, Inc.
Panorama Series Fund, Inc. ("Panorama Fund") is an open-end investment company.
OppenheimerFunds, Inc. ("OFI"), an investment adviser registered with the SEC
under the Investment Advisers Act of 1940, as amended, ("Investment Advisers
Act") is the investment adviser to the Panorama Fund. It performs administrative
functions relative to the Panorama Fund, including the keeping of all records
not maintained by the custodian. OFI has operated as an investment adviser since
1959 and, together with a subsidiary, manages investment companies with $95
billion in assets and 4 million shareholder accounts as of December 31, 1998.
OFI is owned by Oppenheimer Acquisition Corporation, a holding company that is
owned in part by senior officers for OFI and controlled by MassMutual. The
address of OFI is Two World Trade Center, New York, NY 10048-0203.
OFI has engaged three subadvisors to assist in the selection of portfolio
investments for the Panorama International Equity Portfolio, the Panorama
LifeSpan Diversified Income Portfolio, the Panorama LifeSpan Balanced Portfolio,
and the Panorama LifeSpan Capital Appreciation Portfolio.
Babson-Stewart Ivory International ("Babson-Stewart"), One Memorial Drive,
Cambridge, MA 02142, is the subadviser to the Panorama International Equity
Portfolio and the international stock components of the Panorama LifeSpan
Balanced Portfolio and the Panorama LifeSpan Capital Appreciation Portfolio.
Babson-Stewart is a partnership formed in 1987 between David L. Babson & Co.,
Inc., a subsidiary of MassMutual and Stewart Ivory & Co., Ltd., located in
Edinburgh, Scotland.
Credit Suisse Asset Management, One Citicorp Center, 153 East 53 rd St., New
York, New York, is the subadviser to the high yield bond components of the three
Panorama LifeSpan Portfolios. Prior to January 12, 1999, Credit Suisse Asset
Management was called BEA Associates.
Pilgrim, Baxter & Associates ("Pilgrim Baxter"), 825 Duportail Road, Wayne, PA
19087, is the subadviser to the small cap components of the Panorama LifeSpan
Balanced Portfolio and the Panorama LifeSpan Capital Appreciation Portfolio.
Panorama LifeSpan Diversified Income Portfolio (Diversified Income Portfolio).
The Diversified Income Portfolio seeks high current income, with opportunities
for capital appreciation through a strategically allocated portfolio consisting
primarily of bonds.
12 | Investment Choices
<PAGE>
Panorama Total Return Portfolio. The Panorama Total Return Portfolio seeks to
maximize total investment return (including both capital appreciation and
income) by allocating its assets among stocks, corporate bonds, U.S. Government
securities and its instrumentalities, and money market instruments according to
changing market conditions.
Panorama LifeSpan Balanced Portfolio (Balanced Portfolio). The Balanced
Portfolio seeks a blend of capital appreciation and income through a
strategically allocated portfolio of stocks and bonds with a slightly stronger
emphasis on stocks.
Panorama LifeSpan Capital Appreciation Portfolio (Capital Appreciation
Portfolio). The Capital Appreciation Portfolio seeks long-term capital
appreciation through a strategically allocated portfolio consisting primarily of
stocks. Current income is not a primary consideration.
Panorama Growth Portfolio. The Panorama Growth Portfolio seeks long-term growth
of capital by investing primarily in common stocks with low price-earnings
ratios and better than anticipated earnings. Realization of current income is a
secondary consideration.
Panorama International Equity Portfolio. The Panorama International Equity
Portfolio seeks long-term growth of capital by investing primarily in equity
securities of companies wherever located, the primary stock market of which is
outside the United States.
Oppenheimer Variable Account Funds
Oppenheimer Variable Account Funds ("Oppenheimer Funds") is an investment
company consisting of 10 separate series of shares known as funds. The
Oppenheimer Funds are also advised by OFI.
Oppenheimer Bond Fund/VA. The Oppenheimer Bond Fund/VA seeks a high level of
current income. The Fund seeks capital growth when consistent with its primary
objective. This Fund will, under normal market conditions, invest at least 65%
of its total assets in investment grade debt securities.
Oppenheimer Money Fund/VA. The Oppenheimer Money Fund/VA seeks maximum current
income from investments in money market securities that is consistent with low
capital risk and maintenance of liquidity. The Fund invests in short-term, high
quality "money market" securities.
MML Series Investment Fund ("MML Trust")
MML Trust is a no-load, open-end, investment company having eight series of
shares each of which has different investment objectives designed to meet
different investment needs. MassMutual serves as the investment adviser to the
MML Trust.
MassMutual has entered into a subadvisory agreement with David L. Babson and
Company, Inc. ("Babson"), a controlled subsidiary of the MassMutual, whereby
Babson manages the investment of the assets of the MML Small Cap Value Equity
Fund, the MML Equity Fund, and the equity sector of the MML Blend Fund.
MassMutual has entered into a subadvisory agreement with Massachusetts Financial
Services Company ("MFS"), whereby MFS manages the investment of the MML Growth
Equity Fund.
MassMutual has entered into subadvisory agreements with J.P. Morgan Investment
Management Company Inc. ("J.P. Morgan") and Waddell & Reed Investment Management
Company ("Waddell & Reed"), whereby J.P. Morgan and Waddell & Reed each manage
50% of the portfolio of MML Small Cap Growth Equity Fund.
MassMutual has entered into a subadvisory agreement with Mellon Equity
Associates, LLP ("Mellon Equity") whereby Mellon Equity manages the investments
of the MML Equity Index Fund.
MML Small Cap Value Equity Fund. The MML Small Cap Value Equity Fund seeks
growth of capital and income over time by investing primarily in small company
stocks.
MML Equity Fund. The MML Equity Fund seeks to achieve a superior rate of return
over time from both capital appreciation and current income and to preserve
capital by investing in equity securities.
Investment Choices | 13
<PAGE>
MML Blend Fund. The MML Blend Fund seeks a high total rate of return over time,
consistent with prudent investment risk and capital preservation, by investing
in equity, fixed income and money market securities.
MML Equity Index Fund. The MML Equity Index Fund seeks investment results that
correspond to the price and yield performance of publicly traded common stocks
in the aggregate, as represented by the Standard & Poor's 500 Composite Stock
Price Index.1
1"Standard & Poor's, " Standard & Poor's 500" and "S&P 500" are trademarks of
The McGraw-Hill Companies and have been licensed for use by the Fund. The Fund
is not sponsored, endorsed, sold or promoted by Standard & Poor's, a division of
The McGraw-Hill Companies ("S&P"), or The McGraw-Hill Companies, Inc. Standard &
Poor's makes no representation regarding the advisability of investing in the
Fund.
MML Growth Equity Fund. The MML Growth Equity Fund seeks growth of capital and
income over time by investing primarily in equity securities of large companies
with long-term growth potential.
MML Small Cap Growth Equity Fund. The MML Small Cap Growth Equity Fund seeks
growth of capital over time by investing primarily in equity securities of
smaller and medium-size companies with long-term growth potential.
T. Rowe Price Equity Series, Inc.
T. Rowe Price Equity Series, Inc. is a diversified, open-end investment company
incorporated in Maryland in 1994. The T. Rowe Price Mid-Cap Growth Portfolio is
a separate series of shares of T. Rowe Price Equity Series, Inc. T. Rowe Price
Associates, Inc. (" T. Rowe Price") was founded in 1937 and is the investment
adviser to the Portfolio. Its business address is 100 East Pratt Street,
Baltimore, MD 21202.
T. Rowe Price Mid-Cap Growth Portfolio. The T. Rowe Price Mid-Cap Growth
Portfolio seeks long-term capital appreciation by investing in mid-cap stocks
with potential for above average earnings growth. T. Rowe Price defines mid-cap
companies as those with market capitalizations within the range of companies in
the S&P 400 Mid-Cap Index.
American Century Variable Portfolios, Inc.
American Century Variable Portfolios, Inc. ("American Century VP") was organized
as a Maryland corporation in 1987 and is a diversified, open-end management
investment company. American Century Investment Management, Inc. ("American
Century") is the investment manager of American Century VP. American Century has
been providing investment advisory services to investment companies and
institutional investors since it was founded in 1958. American Century's address
is American Century Tower, 4500 Main Street, Kansas City Missouri 64111.
American Century VP Income & Growth Portfolio. The American Century VP Income &
Growth Portfolio seeks dividend growth, current income and capital appreciation
by investing in common stocks.
Fidelity Variable Insurance Products Fund II
Fidelity Variable Insurance Products Fund II ("VIP II") is an open-end
management investment company, organized as a Massachusetts business trust in
1988. Fidelity's VIP II Contrafund Portfolio is a diversified fund of VIP II.
Fidelity Management & Research Company ("FMR") is the investment adviser to
Fidelity's VIP II Contrafund Portfolio. FMR is the management arm of Fidelity
Investments. Fidelity Investment has its principal business address at 82
Devonshire Street, Boston, MA 02109.
Fidelity Management & Research (U.K.) Inc. in London, England, and Fidelity
Management & Research (Far East) Inc., in Tokyo, Japan, assist FMR with foreign
investments. They each serve as subadvisors for Fidelity's VIP II Contrafund
Portfolio.
Fidelity's VIP II Contrafund Portfolio. Fidelity's VIP II Contrafund Portfolio
seeks long-term capital appreciation by investing in the securities of companies
whose value is not fully recognized by the public.
14 | Investment Choices
<PAGE>
There is no assurance that the funds will achieve their stated objective. The
fund prospectuses contain more detailed information about the funds. Current
copies of the fund prospectuses are attached to this prospectus. You should read
the information contained in the funds' prospectuses carefully before investing.
The Fixed Accounts
We offer two fixed accounts, the fixed account for Dollar Cost Averaging (the
"DCA Fixed Account") and The Fixed Account (collectively, "the fixed accounts"),
as investment options. The fixed accounts are investment options within our
general account.
Amounts that you allocate to the fixed accounts become part of our general
account assets and are subject to the claims of all our creditors. All of our
general account assets will be available to fund benefits under a certificate.
DCA Fixed Account. The DCA Fixed Account is a fixed account from which assets
are systematically transferred to any fund(s). During the accumulation phase,
you may choose to have your purchase payments allocated to the DCA Fixed Account
for the period of the DCA Fixed Account Term (DCA Term). Your election must be
in writing.
Currently, the DCA Term will not exceed 12 months. To the extent permitted by
law, we reserve the right to change the duration of the DCA Term in the future.
You may have only one DCA Term at a time.
We will only accept a purchase payment as of the beginning of a DCA Term.
Purchase payments which originate from an annuity contract or certificate issued
by us or any of our affiliates cannot be allocated to the DCA Account. You
cannot transfer current certificate values to the DCA Fixed Account. We reserve
the right to reject purchase payments.
We make scheduled monthly transfers from the DCA Fixed Account according to the
rules of our Dollar Cost Averaging Program. You may not make unscheduled
transfers or take partial withdrawals from the DCA Fixed Account. If you
withdraw the entire certificate value during a DCA term we will apply our normal
withdrawal provisions.
We reserve the right to assess a fee for processing transactions under the DCA
Fixed Account.
If you elect to make an allocation to the DCA Fixed Account at a time when your
annuity date would be less than the currently offered DCA Term, the expiration
of your DCA Term will be your annuity date. No amounts will remain in the DCA
Fixed Account after the expiration of the DCA Term.
We periodically set the interest rate we credit to the DCA Fixed Account. The
interest rate is never less than 3%. We guarantee the interest rate for the full
DCA Term.
The Fixed Account. You may allocate purchase payments to The Fixed Account. You
can also make transfers of your certificate value into The Fixed Account. You do
not participate in the investment performance of the assets in The Fixed
Account. Instead, we credit your certificate with interest at a specified rate
that we declare in advance. We guarantee this rate will be at least 3% per year.
We may credit a higher rate of interest at our discretion.
Investment Choices | 15
<PAGE>
Certificate Value
Your certificate value is the sum of your value in the separate account and the
fixed account(s).
Your value in the separate account will vary depending on the investment
performance of the funds you choose. In order to keep track of your certificate
value, we use a unit of measure called an accumulation unit. During the income
phase of your certificate we call the unit an annuity unit.
Accumulation Units
Every day we determine the value of an accumulation unit for each of the funds.
Changes in the accumulation unit value reflect the investment performance of the
fund as well as deductions for insurance and other changes.
The value of an accumulation unit may go up or down from business day to
business day.
The Statement of Additional Information contains more information on the
calculation of the accumulation unit value.
When you make a purchase payment, we credit your certificate with accumulation
units. We determine the number of accumulation units to credit by dividing the
amount of the purchase payment allocated to a fund by the value of the
accumulation unit for that fund. When you make a withdrawal, we deduct from your
certificate accumulation units representing the withdrawal amount.
We calculate the value of an accumulation unit for each investment portfolio
after the New York Stock Exchange closes each business day. Any change in the
accumulation unit value will be reflected in your certificate value.
Example:
On Monday we receive an additional purchase payment of $5,000 from you. You have
told us you want this to go to the Oppenheimer Bond Fund/VA. When the New York
Stock Exchange closes on that Monday, we determine that the value of an
accumulation unit for the Oppenheimer Bond Fund/VA is $13.90. We then divide
$5,000 by $13.90 and credit your certificate on Monday night with 359.71
accumulation units for the Oppenheimer Bond Fund/VA.
Transfers
You can transfer all or part of your certificate value. You can make transfers
by telephone. To do so, you must submit a written request. If you own the
certificate with a joint participant, we will accept telephone transfer
instructions from either you or the other participant, unless we are instructed
otherwise. We will use reasonable procedures to confirm that instructions given
to us by telephone are genuine. We may be liable for any losses due to
unauthorized or fraudulent instructions, if we fail to use such procedures. We
may tape record all telephone instructions.
Your transfer is effective on the business day we receive your request at our
Annuity Service Center. Our business day closes when the New York Stock Exchange
closes, usually 4:00 p.m. Eastern time. If we receive your transfer request at
our Annuity Service Center on a non-business day or after our business day
closes, your transfer request will be effective on the next business day.
Transfers During the Accumulation Phase
You may transfer all or part of your assets in a fund or The Fixed Account. You
can make a transfer to or from The Fixed Account and to or from any fund. You
can make 12 transfers every calendar year during the accumulation phase without
charge. If you make more than 12 transfers in a year, we will deduct a transfer
fee. The fee is $20 per transfer or, if less, 2% of the amount you transfer. The
following rules apply to any transfer during the accumulation phase:
(1) The minimum amount which you can transfer is:
o $1,000; or
o the entire value in a fund, if less.
16 | Certificate Value
<PAGE>
After a transfer, the minimum amount which must remain in the fund is $1,000
unless you transfer the entire fund value. We waive these requirements if the
transfer is made in connection with the Rebalancing Program.
(2) You must clearly indicate the amount and investment choices from and to
which you wish to transfer.
(3) During any certificate year, we limit transfers out of The Fixed Account to
the greater of $30,000 or 30% of your certificate value in The Fixed
Account as of the end of the previous certificate year. We measure a
certificate year from the anniversary of the day we issued your
certificate. Transfers out of The Fixed Account are done on a first-in,
first-out basis. In other words, amounts attributed to the oldest purchase
payments are transferred first; then amounts attributed to the next oldest
purchase payment are transferred; and so on.
(4) We do not allow transfers between competing accounts. For this purpose, we
consider The Fixed Account and the Oppenheimer Money Fund/VA "competing
accounts." We restrict other transfers involving any competing account for
certain periods:
o for a period of 90 days following a transfer out of a competing
account, you may not transfer into the other competing account.
o for a period of 90 days following a transfer into a competing account,
you may not transfer out of the other competing account.
(5) We do not count transfers made as part of the Dollar Cost Averaging
Program, the Rebalancing Program, or in determining the number of transfers
you make in a year.
Transfers During the Income Phase
You may make 6 transfers between the funds each calendar year without incurring
a fee. You cannot transfer from the general account to a fund, but you can
transfer from one or more funds to the general account once a certificate year.
The minimum amount which you can transfer is $1,000 or your entire interest in
the fund, if less. After a transfer, the minimum amount which must remain in a
fund is $1,000 unless you have transferred the entire value.
We have the right to terminate or modify these transfer provisions.
Dollar Cost Averaging Program
The Dollar Cost Averaging Program allows you to systematically transfer a set
amount from a selected fund to any of the other funds. By allocating amounts on
a regular schedule as opposed to allocating the total amount at one particular
time, you may be less susceptible to the impact of market fluctuations. The
Dollar Cost Averaging Program is available only during the accumulation phase.
Dollar Cost Averaging does not assure a profit and does not protect you against
loss in declining markets. Since Dollar Cost Averaging involves continuous
investment in securities regardless of fluctuating price levels of such
securities, you should consider your financial ability to continue the Dollar
Cost Averaging Program through periods of fluctuating price levels.
You must have a certificate value of at least $5,000 in order to participate in
the Dollar Cost Averaging Program. The minimum amount you can transfer is $250.
The minimum duration of participation in any Dollar Cost Averaging Program is
currently 6 months. You can choose the frequency at which the Dollar Cost
Averaging transfers are to be made, i.e., monthly, quarterly, semi-annually or
annually. You will also choose the specific date when the first Dollar Cost
Averaging transfer is made. However, if you select a date that is less than 5
business days from the date the election form is received at our Annuity Service
Center, we may defer the first transfer for one month. If you do not select a
start date, we will automatically start the Dollar Cost Averaging Program within
5 business days from the date we receive your election form. You may make
changes to your selection, including termination of the program, by written
request.
Certificate Value | 17
<PAGE>
If you participate in the Dollar Cost Averaging Program, we do not take the
transfers made under the program into account in determining any transfer fee.
We consider the DCA Fixed Account to be a Dollar Cost Averaging Program. You can
only participate in one Dollar Cost Averaging Program at a time. Further, if you
are participating in the Dollar Cost Averaging Program you cannot also
participate in the Rebalancing Program, the Systematic Withdrawal Plan or the
DCA Fixed Account.
The Dollar Cost Averaging option will terminate if:
o you withdraw the total certificate value;
o the last transfer you selected has been made;
o upon your death or the annuitant's death;
o there is insufficient certificate value to make the transfer; or
o we receive from you a written request to terminate the program at our
Annuity Service Center at least 5 business days prior to the next transfer
date.
We currently do not charge you for participation in the Dollar Cost Averaging
Program. However, we reserve the right to charge for this feature in the future.
We have the right to modify, terminate or suspend the Dollar Cost Averaging
Program.
Automatic Rebalancing Program
Over time, the performance of each fund may cause your allocation to shift from
your original allocation. You can direct us to automatically rebalance your
certificate to return to your original percentage allocations by selecting our
Rebalancing Program. You can tell us whether to rebalance monthly, quarterly,
semi-annually or annually. The Rebalancing Program is available only during the
accumulation phase. If you participate in the Rebalancing Program, the transfers
made under the program are not taken into account in determining any transfer
fee.
You cannot participate in the Rebalancing Program if you have purchase payments
allocated to the fixed accounts. You cannot participate in the Rebalancing
Program if you are participating in a Dollar Cost Averaging Program.
You can terminate the Rebalancing Program at anytime by giving us written
notice. Any unscheduled transfer request will automatically terminate the
Rebalancing Program election.
Example:
Assume that you want your initial purchase payment split between 2 funds. You
want 40% to be in the Oppenheimer Bond Fund and 60% to be in the Panorama Growth
Fund. Over the next 2 1/2 months the bond market does very well while the stock
market performs poorly. At the end of the first quarter, the Oppenheimer Bond
Fund now represents 50% of your holdings because of its increase in value. If
you had chosen to have your holdings rebalanced quarterly, on the first day of
the next quarter, we would sell some of your units in the Oppenheimer Bond Fund
to bring its value back to 40% and use the money to buy more units in the
Panorama Growth Portfolio to increase those holdings to 60%.
Withdrawals
During the accumulation phase you may make either partial or total withdrawals
of your certificate value. Your withdrawal is effective on the business day we
receive your written request at our Annuity Service Center. If we receive your
written request at our Annuity Service Center on a non-business day or after our
business day closes, your withdrawal request will be effective on the next
business day. We will pay any withdrawal amount within 7 days of our receipt of
your fully completed written request at our Annuity Service Center unless we are
required to suspend or postpone withdrawal payments.
Unless you instruct us otherwise, we will take any partial withdrawal
proportionally from your certificate value in the funds and The Fixed Account.
You must withdraw at least $250 or the entire value in a fund or The Fixed
Account, if less. We require that after you make a partial withdrawal you keep
at least $5,000 in a non-qualified certificate. For qualified certificates, the
18 | Certificate Value
<PAGE>
amount is $2,000. Partial withdrawals are subject to a contingent deferred sales
charge.
When you make a total withdrawal you will receive the value of your certificate:
o less any contingent deferred sales charge, if applicable;
o less any applicable premium tax;
o less any certificate maintenance charge, and
o less any purchase payments we credited to your certificate that have not
cleared the bank, until they clear the bank.
Systematic Withdrawal Program
This program provides for an automatic monthly, quarterly, semi-annual or annual
payment to you from your certificate of at least $250. Your certificate value
must be at least $25,000 to initiate the withdrawal plan. Currently, we do not
have a charge for this program, but we reserve the right to charge in the
future.
Your systematic withdrawal program will begin on the start date you selected as
long as we receive a fully completed written request at least five business days
before the start date you selected. We may defer the start of your systematic
withdrawal program for one month if your systematic withdrawal start date is
less than five days after we receive your written request. If you do not select
a start date, we will automatically begin systematic withdrawals within 5
business days after we receive your request. Your request must be in writing.
If you are participating in the Automatic Investment Plan Option, the
Rebalancing Program or a Dollar Cost Averaging Program you cannot also
participate in the Systematic Withdrawal Plan. If you terminate your Systematic
Withdrawal Plan from The Fixed Account, you may not elect a new plan involving
withdrawals from The Fixed Account for 6 months.
Your systematic withdrawal program ends if:
o you withdraw your total certificate value;
o we process the last withdrawal you selected;
o upon your death or the annuitant's death;
o your value in a selected fund or The Fixed Account is insufficient to
complete the withdrawal;
o you begin receiving annuity payments; or
o you give us a written request to terminate your program. We must receive
your request at least 5 business days before the next withdrawal date.
- --------------------------------------------------------------------------------
Income taxes, tax penalties and certain restrictions may apply to any withdrawal
you make.
- --------------------------------------------------------------------------------
[GRAPHIC]
Certificate Value | 19
<PAGE>
Expenses
There are charges and other expenses associated with the certificates that
reduce the return on your investment in the certificate. These charges and
expenses are:
Insurance Charges
Each business day we deduct our insurance charges from the assets of the
separate account. We do this as part of our calculation of the value of the
accumulation units and the annuity units. The insurance charge has two parts:
(1) the mortality and expense risk charge and (2) the administrative charge.
Mortality and Expense Risk Charge
This charge is equal, on an annual basis, to 1.25% of the daily value of the
assets invested in each fund, after fund expenses are deducted. This charge is
for:
o the mortality risk associated with the insurance benefits provided,
including our obligation to make annuity payments after the annuity date
regardless of how long all annuitants live, the death benefits, and the
guarantee of rates used to determine your annuity payments during the
income phase;
o the expense risk that the current charges will be insufficient to cover the
actual cost of administering the certificate.
The mortality and expense risk charge cannot be increased. If the mortality and
expense risk charge is not sufficient, then we will bear the loss. However, we
do expect to profit from this charge.
Administrative Charge
This charge is equal, on an annual basis, to 0.15% of the daily value of the
certificates invested in each fund, after fund expenses are deducted. We assess
this charge, together with the annual certificate maintenance charge, to
reimburse us for all the expenses associated with the administration of the
certificate and the separate account. Some of these expenses are: preparation of
the certificate, confirmations, annual reports and statements, maintenance of
certificate records, personnel costs, legal and accounting fees, filing fees,
and computer and systems costs. We can increase this charge, but the charge will
never exceed 0.25%. If we increase this charge, we will give you 90 days prior
notice.
Annual Certificate Maintenance Charge
At the end of each certificate year, we deduct $30 from your certificate as an
annual certificate maintenance charge. We may increase this charge, but it will
not exceed $60. If we increase this charge, we will give you 90 days prior
notice. Currently, we will not deduct this charge if, when we are to make the
deduction, the value of your certificate is $50,000 or more. However, we reserve
the right to increase the certificate value amount at which we will waive this
charge to $100,000 as provided by the certificate. Subject to state regulations,
we will deduct the annual certificate maintenance charge proportionately from
the investment choices you have selected. In no event, however, shall that
portion of the annual certificate maintenance charge we deducted from the fixed
account exceed $30 during any certificate year.
If you make a total withdrawal from your certificate, and the certificate value
is less than $50,000, we will deduct the full annual certificate maintenance
charge. If your certificate enters the income phase on a date other than its
certificate anniversary and the certificate value is less than $50,000, we will
deduct a pro rata portion of the charge. During the income phase, we will deduct
1/12th of the annual certificate maintenance charge from each payment regardless
of the certificate size.
Contingent Deferred Sales Charge
We do not deduct a sales charge when we receive a purchase payment. However, we
may assess a contingent deferred sales charge on any amount you withdraw that
exceeds the free withdrawal
20 | Expenses
<PAGE>
amount. We use this charge to cover certain expenses relating to the sale of the
certificate.
If you withdraw:
o from more than one investment choice, we will deduct the contingent
deferred sales charge proportionately from the amounts remaining in the
investment choice(s) you selected.
o the total value from an investment choice, we will deduct the contingent
deferred sales charge proportionately from amounts remaining in the
investment choices that still have value.
o your entire certificate value, we will deduct the contingent deferred sales
from the certificate value. You will receive a check for the net amount.
The amount of the charge depends on the amount of the purchase payments and the
length of time since you made the purchase payments. The contingent deferred
sales charge is assessed as follows:
<TABLE>
<CAPTION>
Year since Purchase
Payments were Accepted Charge
<S> <C>
1st Year 7%
2nd Year 6%
3rd Year 5%
4th Year 4%
5th Year 3%
6th Year 2%
7th Year 1%
8th Year
and thereafter 0%
</TABLE>
After your purchase payment has been in the certificate for 7 years, there is no
charge when you withdraw the purchase payment. Each purchase payment has its own
7-year sales charge period. We take withdrawals first from earnings, and then
from purchase payments. For purposes of the contingent deferred sales charge, we
treat withdrawals as coming from the oldest purchase payments first.
In addition to the free withdrawals described later in this section, we will not
impose a contingent deferred sales charge under the following circumstances.
o Upon payment of the death benefit or upon the amount applied to an annuity
payment option.
o If you surrender your certificate before April 30, 2000, and the proceeds
of the surrender are used to purchase a new group annuity issued by
MassMutual. The group annuity may be subject to charges upon surrender.
o If you redeem "excess contributions" to a plan qualifying for special
income tax treatment. These types of plans are referred to as Qualified
Plans, including Individual Retirement Annuities (IRAs). We look to the
Internal Revenue Code for the definition and description of excess
contributions.
o Owners of certain IRAs or non-qualified Flex Extra variable annuity
contracts issued by MassMutual that no longer have any contingent deferred
sales charge may exchange these certificates for a Panorama Premier
certificate. We call this the "Flex Extra Exchange Program." When you
exchange an eligible Flex Extra contract for a Panorama Premier
certificate, we do not assess a contingent deferred sales charge on the
amount that was in the original Flex Extra contract. However, if you make
any additional purchase payments they will be subject to a contingent
deferred sales charge.
o If you own an IRA or a non-qualified Account A, Account B or Account E
variable annuity contract previously issued by Connecticut Mutual Life
Insurance Company, you can exchange that contract for a Panorama Premier
certificate. We call this the CML Exchange Program. When you exchange an
eligible Account A, Account B, or Account E contract for a Panorama Premier
certificate, we do not assess a contingent deferred sales charge on the
amount that was in the original contract. However, if you make additional
purchase payments they will be subject to a contingent deferred sales
charge.
Expenses | 21
<PAGE>
The exchange programs may not be available in all states. Check with your agent.
We have the right to terminate these exchange programs at any time. If you want
more information about the exchange programs, contact your agent or us at our
Annuity Service Center (800) 366-8226.
Free Withdrawals
You may withdraw, without incurring a contingent deferred sales charge, the
greater of:
o the part of your certificate value that is earnings on the date of
withdrawal; or
o 10% of purchase payments remaining in your certificate on the withdrawal
date reduced by any free withdrawal(s) you previously took during the
current certificate year.
We take withdrawals first from any investment earnings, and then from purchase
payments. If you withdraw an amount which exceeds the free withdrawal amount, we
will reduce the amount of your remaining purchase payments. We will calculate
the contingent deferred sales charge based on your oldest purchase payments
first.
Premium Taxes
Some states and other governmental entities charge premium taxes or similar
taxes. We are responsible for the payment of these taxes and will make a
deduction from your certificate value for them. Some of these taxes are due when
your certificate value is issued, others are due when annuity payments begin.
Currently we do not charge you for these taxes until you begin receiving annuity
payments or you make a total withdrawal. We may discontinue this practice and
assess the charge when the tax is due. Premium taxes generally range from 0% to
3.5%, depending on the state.
Transfer Fee
During the accumulation phase, you can make 12 free transfers every calendar
year. If you make more than 12 transfers a calendar year, we will deduct a
transfer fee of $20 or 2% of the amount that is transferred, whichever is less.
If you request to transfer a dollar amount, we will deduct any transfer fee from
the amount transferred. If you request to transfer a percentage of your value in
an investment choice, we will deduct the transfer fee from the amount remaining
in the investment choice. If you transfer the entire amount in an investment
choice, we will deduct the transfer fee from the amount you transfer.
During the income phase, we allow 6 transfers and they are not subject to a
transfer fee. We consider all transfers made on one business day as one
transfer.
Income Taxes
We will deduct from the certificate any income taxes which we incur because of
the operation of the separate account. At the present time, we are not making
any such deductions. We will deduct any withholding taxes required by law.
Fund Expenses
There are deductions from and expenses paid out of the assets of the various
funds, which are described in the attached fund prospectuses. We may enter into
certain arrangements under which we are reimbursed by the funds' advisors,
distributors and/or affiliates for the administrative service that we provide.
22 | Expenses
<PAGE>
The Income Phase
If you want to receive regular income from your annuity, you can choose to
receive fixed and/or variable annuity payments under one of six options. You can
choose the month and year in which those payments begin. We call that date the
annuity date. Your annuity date must be the first day of a calendar month. Your
annuity date cannot be earlier than 5 years after you buy the certificate.
You choose your annuity date when you purchase your certificate. You can change
it at any time before the annuity date provided you give us 30 days written
notice. If you do not choose an annuity option, we will assume that you selected
Life Income with 10 years of payments guaranteed.
Annuity payments must begin by the earlier of:
(1) The annuitant's 90th birthday or the 90th birthday of the oldest joint
annuitant;
(2) Your 90th birthday if you are not the annuitant or the 90th birthday of the
oldest joint participant; or
(3) The latest age permitted under state law.
We make annuity payments based on the age and sex of the annuitant under all
options except Option E. We may require proof of age and sex before annuity
payments begin.
At the annuity date, you have the same fund choices that you had in the
accumulation phase. You can choose whether payments will be fixed, variable, or
a combination of both. If you do not tell us otherwise, we will base your
annuity payments on the investment allocations that are in place on the annuity
date. Therefore, any amounts in the funds will be applied to a variable payout
and any amounts in the Fixed Account will be applied to a fixed payout.
In order to avoid adverse tax consequences, you should begin to take
distributions at least equal to the minimum amount required by the IRS, no later
than the required beginning date. If your certificate is an IRA, that date
should be the year you reach age 70 1/2. For qualified plans, that date is the
later of your retirement or when you reach age 70 1/2.
If your certificate value is less than $2,000 on the annuity date, we reserve
the right to pay you a lump sum rather than a series of annuity payments. If any
annuity payment is less than $100, we reserve the right to change the payment
basis to equivalent less frequent payments.
Fixed Annuity Payments
If you choose fixed payments, the payment amount will not vary. The payment
amount will depend upon the following 5 things:
o the value of your certificate on the annuity date;
o the deduction of premium taxes, if applicable,
o the deduction of the annual certificate maintenance charge,
o the annuity option you select, and
o the age and sex of the annuitant (and the age and sex of the joint
annuitant, if any).
Variable Annuity Payments
If you choose variable payments, the payment amount will vary with the
investment performance of the funds. The first payment amount will depend on the
following 6 things:
o the value of your certificate on the annuity date;
o the deduction of premium taxes, if applicable,
o the deduction of the annual certificate maintenance charge,
o the annuity option you select,
o the age and sex of the annuitant (and the age and sex of the joint
annuitant, if any), and
o an assumed investment rate (AIR) of 4% per year.
Future variable payments will depend on the performance of the funds you
selected. If the actual performance exceeds the 4% assumed
The Income Phase | 23
<PAGE>
investment rate plus the deductions for expenses, your annuity payments will
increase. Similarly, if the actual rate is less than 4% plus the amount of the
deductions, your annuity payments will decrease.
Annuity Unit Value
In order to keep track of the value of your variable annuity payment, we use a
unit of measure called an annuity unit. We calculate the number of your annuity
units at the beginning of the income phase. During the income phase, the number
of annuity units will not change. However, the value of your annuity units will
change to reflect the investment performance of the funds you selected. The
Statement of Additional Information contains more information on how annuity
payments and annuity unit values are calculated.
Annuity Options
The following annuity options are available. After annuity payments begin, you
cannot change the annuity option or the frequency of annuity payments. In
addition, during the income phase we do not allow withdrawals.
Annuity Option A - Life Income. Under this option we make periodic payments as
long as the annuitant is alive. After the annuitant dies we stop making
payments.
Annuity Option B - Life Income with Period Certain. We will make periodic
payments for a guaranteed period, or as long as the annuitant lives, whichever
is longer. The guaranteed period may be 5, 10 or 20 years. If the beneficiary
chooses, he/she may elect a lump sum payment equal to the present value of the
remaining guaranteed annuity payments.
Annuity Option C - Joint and Last Survivor Payments. We will make periodic
payments during the joint lifetime of 2 annuitants. When one dies, we will
continue making these payments to the survivor as if both annuitants were alive.
We will not make payments after both annuitants have died.
Annuity Option D - Joint and 2/3 Survivor Annuity. We will make periodic
payments during the joint lifetime of 2 annuitants. We will continue making
payments during the lifetime of the surviving annuitant. We will compute these
payments for the surviving annuitant on the basis of two-thirds of the annuity
payment (or units) in effect during the joint lifetime. We will not make
payments after both annuitants have died.
Annuity Option E - Period Certain. We will make periodic payments for a
specified period. The specified period must be at least 5 years and cannot be
more than 30 years. If you do not want payments to continue for the remainder of
the specified period, you may elect to have an amount equal to the present value
of the remaining guaranteed annuity payments paid as a lump sum or applied to
another annuity option.
Annuity Option F - Special Income Settlement Agreement. We will pay you in
accordance with terms agreed upon in writing by both you and us.
[GRAPHIC]
24 | The Income Phase
<PAGE>
Death Benefit
Death Of Participant During The Accumulation Phase
If you or the joint participant dies during the accumulation phase, we will pay
a death benefit to your primary beneficiary. If the joint participant dies, we
will treat the surviving joint participant, if any, as the primary beneficiary.
We will treat any other beneficiary designation on record at the time of death
as a contingent beneficiary unless you have changed it in writing.
Your beneficiary may request that the death benefit be paid under one of the
death benefit options. If the beneficiary is your spouse, he or she may elect to
become the participant of the certificate at the then current certificate value,
which may be less than the death benefit. If joint participants die
simultaneously, the death benefit will become payable.
Death Benefit Amount During The Accumulation Phase
Before the date you or the oldest joint participant reaches age 75, the death
benefit during the accumulation phase will be the greater of:
(1) your purchase payments, less any withdrawals and any applicable charges; or
(2) your certificate value as of the business day we receive proof of death and
election of the payment method; or
(3) your certificate value on the most recent 3 year certificate anniversary,
plus any subsequent purchase payments, less any subsequent withdrawals
including any applicable charges. Your first certificate anniversary is one
calendar year from the date we issued your certificate.
After you or the oldest joint participant reaches age 75, the death benefit
during the accumulation period will be the greater of:
(1) the purchase payments, less any withdrawals and any applicable charges; or
(2) your certificate value as of the business day we receive proof of death and
election of the payment method; or
(3) your certificate value on the most recent 3 year certificate anniversary
prior to the participant or the oldest joint participant reaching age 75,
plus any subsequent purchase payments, less any subsequent withdrawals,
including any applicable charges. Your first certificate anniversary is one
calendar year from the date we issued your certificate.
If the certificate is owned by a non-natural person, participant means annuitant
for purposes of determining the death benefit amount.
Death Benefit Options During The Accumulation Phase
A beneficiary who is not your surviving spouse must elect to receive the death
benefit under one of the following options, in the event you die during the
accumulation phase.
Option 1 - lump sum payment of the death benefit; or
Option 2 - the payment of the entire death benefit within 5 years of the date of
death; or
Option 3 - payment of the death benefit under an annuity option over the
lifetime of the beneficiary or over a period not extending beyond the life
expectancy of the beneficiary with distribution beginning within 1 year of the
date of your death or any joint participant.
Death Benefit | 25
<PAGE>
If a lump sum payment is requested, we will pay the amount within 7 days after
we receive due proof of death and other necessary information at our Annuity
Service Center, unless we are required to suspend or delay payment. Payment to
the beneficiary, in any form other than a lump sum, may only be elected during
the 60-day period beginning with the date of receipt by us of proof of death.
Death Of Participant During The Income Phase
If you or the joint participant dies during the income phase, but the annuitant
is still alive, we will pay the remaining payments under the annuity option
elected at least as rapidly as under the method of distribution in effect at the
time of your death.
Death Of Annuitant
If the annuitant, who is not the participant or joint participant, dies during
the accumulation phase, you can name a new annuitant subject to the underwriting
rules we have in effect at the time. If you do not name an annuitant within 30
days of the death of the annuitant, you will become the annuitant. However, if
the participant is a non-natural person we will treat the death of the annuitant
as the death of the participant, and you may not name a new annuitant.
Upon the death of the annuitant on or after the annuity date, the death benefit,
if any, is as specified in the annuity option elected. We will pay death
benefits at least as rapidly as under the method of distribution in effect at
the annuitant's death.
[GRAPHIC]
26 | Death Benefit
<PAGE>
Taxes
NOTE: We have prepared the following information on taxes as a general
discussion of the subject. It is not intended as tax advice to any individual.
You should consult your own tax adviser about your own circumstances. We have
included in the Statement of Additional Information an additional discussion
regarding taxes.
Annuity Certificates In General
Annuity certificates are a means of setting aside money for future needs -
usually retirement. Congress recognized how important saving for retirement was
and provided special rules in the Internal Revenue Code (Code) for annuities.
Simply stated, these rules provide that you will not be taxed on the earnings on
the money held in your annuity certificate until you take the money out. This is
referred to as tax deferral. There are different rules as to how you are taxed
depending on how you take the money out and the type of certificate - qualified
or non-qualified (see following sections).
You, as the participant of a non-qualified annuity, will generally not be taxed
on increases in the value of your certificate until a distribution occurs -
either as a withdrawal or as annuity payments. When you make a withdrawal, you
are taxed on the amount of the withdrawal that is earnings. For annuity
payments, different rules apply. A portion of each annuity payment is treated as
a partial return of your purchase payments and is not taxed. The remaining
portion of the annuity payment is treated as ordinary income. How the annuity
payment is divided between taxable and non-taxable portions depends upon the
period over which the annuity payments are expected to be made. Annuity payments
received after you have recovered all of your purchase payments are fully
ineludible in income.
When a non-qualified certificate is owned by a non-natural person (e.g.,
corporation or certain other entities other than a trust holding the certificate
as an agent for a natural person), the certificate will generally not be treated
as an annuity for tax purposes.
Qualified And Non-Qualified Certificates
If you purchase the certificate as an individual and not under any pension plan,
specially sponsored program or an individual retirement annuity, your
certificate is referred to as a non-qualified certificate.
If you purchase the certificate under a pension plan, specially sponsored
program, or an individual retirement annuity, your certificate is referred to as
a qualified certificate. Examples of qualified plans are: deductible and
non-deductible Individual Retirement Annuities (IRAs), and pension and
profit-sharing plans, which include 401(k) plans and H.R. 10 Plans.
Withdrawals - Non-Qualified Certificates
If you take a withdrawal from your certificate, the Code treats that withdrawal
as first coming from earnings and then from your purchase payments. The
withdrawn earnings are ineludible in income.
The Code also provides that any amount received under an annuity certificate
which is included in income may be subject to a penalty. The amount of the
penalty is equal to 10% of the amount that is ineludible in income. Some
withdrawals will be exempt from the penalty. They include any amounts:
(1) paid on or after you reach age 59 1/2;
(2) paid to your beneficiary after you die;
(3) paid if you become totally disabled (as that term is defined in the Code);
(4) paid in a series of substantially equal payments made annually (or more
frequently) for life or a period not exceeding life expectancy;
Taxes | 27
<PAGE>
(5) paid under an immediate annuity; or
(6) which come from purchase payments made before August 14, 1982.
Withdrawals - Qualified Certificates
If you have no cost basis for your interest in a qualified certificate, the full
amount of any distribution is taxable to you as ordinary income. If you do have
a cost basis for your interest, a portion of the distribution is taxable,
generally based on the ratio of your cost basis to your total certificate value.
Special tax rules may be available for certain distributions from a qualified
certificate.
Section 72(t) of the Code imposes a 10% penalty tax on the taxable portion of
any distribution from qualified retirement plans, including contracts issued and
qualified under Code Sections 401 (Pension and Profit-Sharing Plans), 408
(Individual Retirement Annuities - IRAs), and 408A (Roth IRAs). Exceptions from
the penalty tax are as follows:
o distributions made on or after you reach age 59 1/2 ;
o distributions made after your death or disability (as defined in Code
Section 72(m)(7);
o after separation from service, distributions that are part of substantially
equal periodic payments made not less frequently than annually for your
life (or life expectancy) or the joint lives (or joint life expectancies)
of you and your designated beneficiary (in applying this exception to
distributions from IRAs, a separation from service is not required);
o distributions made after separation of service if you have reached age 55
(not applicable to distributions from IRAs);
o distributions made to you up to the amount allowable as a deduction to you
under Code Section 213 for amounts you paid during the taxable year for
medical care;
o distributions made to an alternate payee pursuant to a qualified domestic
relations order (not applicable to distributions from IRAs);
o distributions from an IRA for the purchase of medical insurance (as
described in Code Section 213(d)(1)(D)) for you and your spouse and
dependents if you received unemployment compensation for at least 12 weeks
and have not been re-employed for at least 60 days);
o distributions from an IRA to the extent they do not exceed your qualified
higher education expenses (as defined in Code Section 72(t)(7) for the
taxable year; and
o distributions from an IRA which are qualified first-time home buyer
distributions (as defined in Code Section 72(t)(8)).
Generally, distributions from a qualified plan must begin no later than April
1st of the calendar year following the later of (a) the year in which you attain
age 70 1/2 or (b) the calendar year in which you retire. The date set forth in
(b) does not apply to an IRA. Required distributions do not apply to a Roth IRA
during your lifetime. Required distributions must be over a period not exceeding
your life expectancy or the joint lives or joint life expectancies of you and
your designated beneficiary. If required minimum distributions are not made, a
50% penalty tax is imposed on the amount that should have been distributed.
28 | Taxes
<PAGE>
Other Information
Performance
We may advertise certain performance-related information. This information
reflects historical performance and is not intended to indicate or predict the
future performance.
Standardized Total Returns
We will show standardized average annual total returns for sub-accounts that
have been in existence for more than one year. These returns assume you made a
single $1,000 payment at the beginning of the period and withdrew the entire
amount at the end of the period. The return reflects a deduction for the
contingent deferred sales charge, the annual certificate maintenance charge and
all other separate account and certificate level charges, except premium taxes,
if any.
If a sub-account has been in existence for less than one year, we will show the
aggregate total return. This assumes you made a single $1,000 payment at the
beginning of the period and withdrew the entire amount at the end of the period.
The return reflects the change in unit value and a deduction of the contingent
deferred sales charge.
Nonstandard Total Returns
We will also show total returns based on historical performance of the
sub-accounts and underlying funds. We may assume the certificates were in
existence prior to their inception date, September 1, 1998, which they were not.
Total return percentages include all fund level and separate account level
charges. They do not include a contingent deferred sales charge, certificate
maintenance charge, or premium taxes, if any. If these charges were included,
returns would be less than those shown.
Total Returns compare the value of an accumulation unit at the beginning of a
period with the value of an accumulation unit at the end of the period.
Average Annual Total Returns measure this performance over a period of time
greater than one year. Average annual total returns compare values over a given
period of time and express the percentage as an average annual rate.
Yield and Effective Yield
We may also show yield and effective yield for the Oppenheimer Money Fund/VA
over a seven-day period, which we then "annualize". This means that when we
calculate yield, we assume that the amount of money the investment earns for the
week is earned each week over a 52-week period. We show this as a percentage of
the investment. We calculate the "effective yield" similarly, but when we
annualize the amount, we assume the income earned is re-invested. Therefore, the
effective yield is slightly higher that the yield because of the compounding
effect.
Related Performance
Some of the funds available to you are similar to mutual funds offered in the
retail marketplace. These funds generally have the same investment objectives,
policies and portfolio managers as the retail mutual funds and usually were
formed after the retail mutual funds. While these funds generally have identical
investment objectives, policies and portfolio managers, they are separate and
distinct from retail mutual funds. In fact, performance of these funds may be
dramatically different from the performance of the retail mutual funds. This is
due to differences in the funds' sizes, dates shares of stocks are purchased and
sold, cash flows and expenses. You should remember that retail mutual fund
performance is not the performance of the funds available in this certificate
and is not an indication of future performance of these funds.
Year 2000
Like other businesses and governments around the world, we could be adversely
affected if the computer systems used by us and those with which we do business
do not properly recognize the year 2000. This is commonly known as the "Year
2000 issue".
Other Information | 29
<PAGE>
In 1996, we began an enterprise-wide process of identifying, evaluating and
implementing changes to computer systems and applications software to address
the Year 2000 issue on our own behalf and on behalf of our subsidiaries. We are
addressing the Year 2000 issue internally with modifications to existing
programs and conversions to new programs. We are also seeking assurances from
vendors, customers, service providers, governments and others with which we
conduct business, to determine their year 2000 readiness.
The costs related to the Year 2000 issue are currently being expensed, and when
measured against net gain from operations, are not material to us.
Distributors
MML Distributors, LLC (MML Distributors) serves as principal underwriter for the
certificates. MML Investors Services, Inc. (MMLISI) serves as co-underwriter for
the certificates. Their purpose as underwriters is to distribute the
certificates. MML Distributors and MMLISI are wholly-owned subsidiaries of
MassMutual. Both are located at 1414 Main Street, Springfield, Massachusetts
01144-1013.
We will pay commissions to broker-dealers who sell the certificates. Currently,
we pay an amount up to 7% of purchase payments. As an alternative, we may pay a
commission of 1.2% of certificate values each certificate year. We also may pay
a commission that is a combination of purchase payments and certificate value.
These alternatives could exceed 7%.
From time to time, MML Distributors may enter into special arrangements with
certain broker-dealers. These special arrangements may provide for the payment
of higher compensation to such broker-dealers for selling the certificates.
Electronic Transmission Of Application Information
Upon agreement with a limited number of broker-dealers, we will accept
electronic data transmissions of application information. Our Annuity Service
Center will accept this information at the time the initial purchase payment is
transmitted by wire. Please contact your representative for more information.
Assignment
You can assign the certificate at any time during your lifetime. We will not be
bound by the assignment until we receive written notice of the assignment. We
will not be liable for any payment or other action we take in accordance with
the certificate before we receive notice of the assignment. You may be subject
to tax consequences if you assign your certificate.
If the certificate is issued pursuant to a qualified plan, there may be
limitations on your ability to assign the certificate. If you assign your
certificate, your rights may only be exercised with the consent of the assignee
of record. We require consent of any irrevocable beneficiary before we assign
proceeds.
Voting Rights
We are the legal owner of the fund shares. However, when a fund solicits proxies
in conjunction with a vote of shareholders, it is required to obtain from you
and other participants, instructions as to how to vote those shares. When we
receive those instructions, we will vote all of the shares, for which we have
not received voting instructions, in proportion to those instructions. This will
also include any shares that we own on our own behalf. If we determine that we
are no longer required to comply with the above, we will vote the shares in our
own right.
During the accumulation phase of your certificate and while the annuitant is
living, we determine the number of shares you may vote by dividing your
certificate value in each fund, if any, by $100. Fractional shares are counted.
During the income phase or after the annuitant dies, we determine the number of
shares you may vote based on our liability for future variable monthly annuity
payments.
30 | Other Information
<PAGE>
Reservation Of Rights
We reserve the right to:
o substitute another fund for one of the funds you selected, and
o add or eliminate sub-accounts.
If we exercise any of these rights, we will receive prior approval from the
Securities and Exchange Commission, if necessary. We will also give you notice
of our intent to exercise any of these rights.
Suspension Of Payments Or Transfers
We may be required to suspend or postpone payments for withdrawals or transfers
from the funds for any period when:
o the New York Stock Exchange is closed (other than customary weekend and
holiday closings); or
o trading on the New York Stock Exchange is restricted;
o an emergency exists as a result of which disposal of shares of the funds is
not reasonably practicable or we cannot reasonably value the shares of the
funds;
o during any other period when the Securities and Exchange Commission, by
order, so permits for your protection.
We reserve the right to defer payment for a withdrawal from The Fixed Account
for the period permitted by law but not for more than six months.
Legal Proceedings
We are currently not involved in any legal proceedings that might adversely
impact the certificates.
Financial Statements
We have included our financial statements and those of the separate account in
the Statement of Additional Information.
Additional Information
For further information about the certificate, you may obtain a Statement of
Additional Information. You can call the telephone number indicated on the cover
page or you can write to us. For your convenience we have included a form for
that purpose.
The Table of Contents of this statement is as follows:
1. Company
2. Custodian
3. Assignment of Certificate
4. Distribution
5. Purchase of Securities Being Offered
6. Accumulation Units and Unit Value
7. Transfers During the Income Phase
8. Payment of Death Benefit
9. Annuity Payments
10. Federal Tax Matters
11. Performance Measures
12. Experts
13. Financial Statements
[GRAPHIC]
Other Information | 31
<PAGE>
To: Massachusetts Mutual Life Insurance Company
Annuity Products, H565
P.O. Box 9067
Springfield, Massachusetts 01102-9067
Please send me a Statement of Additional Information for MassMutual's Panorama
Premier.
Name ________________________________________________
Address ________________________________________________
________________________________________________
City ___________________State__________ Zip _________
Telephone ________________________________________________
| 33
<PAGE>
Appendix A -
Condensed Financial Information
The following schedules include accumulation unit values for the periods
indicated. This data has been extracted from the separate account's audited
financial statements. This information should be read in conjunction with the
separate account's audited financial statements and related notes that are
included in the Statement of Additional Information.
Accumulation Unit Values
<TABLE>
<CAPTION>
Sub-Account Dec 31, 1998 1998(a)
<S> <C> <C>
Money 11.150105 10.00
Bond 11.725305 10.00
LifeSpan Diversified Income 12.046624 10.00
Total Return 13.876594 10.00
LifeSpan Balanced 12.983356 10.00
LifeSpan Capital Appreciation 13.619392 10.00
Growth 15.669692 10.00
International Equity 13.961844 10.00
Contrafund 12.598281 10.00
Income & Growth 12.423410 10.00
Mid-Cap Growth 13.076410 10.00
Small Cap Value Equity 11.164329 10.00
</TABLE>
Accumulation Units Outstanding
<TABLE>
<CAPTION>
Sub-Account Dec 31, 1998
<S> <C>
Money 113,305
Bond 59,397
LifeSpan Diversified Income 19,531
Total Return 64,846
LifeSpan Balanced 53,713
LifeSpan Capital Appreciation 3,418
Growth 29,056
International Equity 13,535
Contrafund 18,660
Income & Growth 39,253
Mid-Cap Growth 15,476
Small Cap Value Equity 8,742
</TABLE>
(a) Commencement of public offering was September 1, 1998.
Appendix A | A-1
<PAGE>
PART B
INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
6
<PAGE>
PANORAMA PREMIER
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
(Depositor)
MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 4
(Registrant)
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1999
This is not a prospectus. This Statement of Additional Information should be
read in conjunction with the prospectus dated May 1, 1999, for the individual
certificates under a group deferred annuity contract with flexible purchase
payments which are referred to herein.
For a copy of the prospectus call 1-800-366-8226 or write: Massachusetts Mutual
Life Insurance Company, Panorama Premier, Annuity Products, H565, P.O. Box 9067,
Springfield, MA 01101.
TABLE OF CONTENTS
Company............................................................. 2
Custodian........................................................... 2
Assignment of Certificate .......................................... 2
Distribution........................................................ 3
Purchase of Securities Being Offered ............................... 3
Accumulation Units and Unit Value .................................. 3
Transfers During The Income Phase .................................. 4
Payment of Death Benefit ........................................... 4
Annuity Payments ................................................... 5
Performance Measures................................................ 5
Federal Tax Matters ................................................ 11
Experts............................................................. 16
Financial Statements ............................................... final pages
1
<PAGE>
COMPANY
Massachusetts Mutual Life Insurance Company ("MassMutual") is a mutual life
insurance company specially chartered by the Commonwealth of Massachusetts on
May 14, 1851. It is currently licensed to transact life, accident, and health
insurance business in all states, the District of Columbia, Puerto Rico and
certain provinces of Canada. MassMutual had consolidated statutory assets in
excess of $67 billion, and estimated total assets under management in of $176.8
billion as of December 31,1998.
CUSTODIAN
The shares of the underlying funds purchased by the sub-accounts are held by
MassMutual as custodian of Massachusetts Mutual Variable Annuity Separate
Account 4 (the "separate account").
ASSIGNMENT OF CERTIFICATE
MassMutual will not be charged with notice of any assignment of a certificate or
of the interest of any beneficiary or of any other person unless the assignment
is in writing and MassMutual receives the original or a true copy thereof at its
Home Office. MassMutual assumes no responsibility for the validity of any
assignment.
While the certificates are generally assignable, all non-tax qualified
certificates must carry a non-transferability endorsement which precludes their
assignment. For qualified certificates, the following exceptions and provisions
should be noted:
(1) No person entitled to receive annuity payments under a certificate or
part or all of the certificate's value will be permitted to commute, anticipate,
encumber, alienate or assign such amounts, except upon the written authority of
the participant given during the annuitant's lifetime and received in good order
by MassMutual at its Annuity Service Center. To the extent permitted by law, no
certificate nor any proceeds or interest payable thereunder will be subject to
the annuitant's or any other person's debts, contracts or engagements, nor to
any levy or attachment for payment thereof;
(2) If an assignment of a certificate is in effect on the maturity date,
MassMutual reserves the right to pay to the assignee in one sum the amount of
the certificate's maturity value to which he is entitled, and to pay any balance
of such value in one sum to the participant, regardless of any payment options
which the participant may have elected. Moreover, if an assignment of a
certificate is in effect at the death of the annuitant prior to the maturity
date, MassMutual will pay to the assignee in one sum, to the extent that he is
entitled, the greater of (a) the total of all purchase payments, less the net
amount of all partial redemptions, and (b) the accumulated value of the
certificate, and any balance of such value will be paid to the beneficiary in
one sum or applied under one or more of the payment options elected;
(3) Certificates used in connection with a tax-qualified retirement plan
must be endorsed to provide that they may not be sold, assigned or pledged for
any purpose unless they are owned by the trustee of a trust described in Section
401(a) or by the administrator of an annuity plan described under Section 403(a)
of the Code; and
(4) Certificates issued under a plan for an Individual Retirement Annuity
pursuant to Section 408 of the Code must be endorsed to provide that they are
non-transferable. Such certificates may not be sold, assigned, discounted, or
pledged as collateral for a loan or as security for the performance of an
obligation or for any other purpose by the annuitant to any person or party
other than MassMutual, except to a former spouse of the annuitant in accordance
with the terms of a divorce decree or other written instrument incident to a
divorce.
Assignments may be subject to federal income tax.
2
<PAGE>
DISTRIBUTION
MML Distributors, LLC ("MML Distributors") is the principal underwriter of the
contract and certificates. MML Distributors is a limited liability corporation.
MML Investors Services, Inc. ("MMLISI") is the co-underwriter of the contract
and certificates. Both MML Distributors and MMLISI are broker-dealers registered
with the Securities and Exchange Commission and members of the National
Association of Securities Dealers, Inc. MML Distributors and MMLISI are indirect
wholly-owned subsidiaries of Massachusetts Mutual Life Insurance Company.
Pursuant to the Underwriting and Servicing Agreement, both MML Distributors and
MMLISI will receive compensation for their activities as underwriters for the
separate account. No compensation was paid to MMLISI in 1998. No compensation
was paid to MML Distributors in 1998. Commissions will be paid through MMLISI
and MML Distributors to agents and selling brokers for selling the contract and
certificates. During 1998, commissions paid were $187,385.
MML Distributors may enter into selling agreements with other broker-dealers
which are registered with the Securities and Exchange Commission and are members
of the National Association of Securities Dealers, Inc. ("selling brokers"). The
contract and certificates are sold through agents who are licensed by state
insurance officials to sell the contract and certificates. These agents are also
registered representatives of selling brokers or of MMLISI.
MML Distributors does business under different variations of its name; including
the name MML Distributors, L.L.C. in the states of Illinois, Michigan, Oklahoma,
South Dakota, and Washington, and the name MML Distributors, Limited Liability
Company in the states of Maine, Ohio, and West Virginia.
The offering is on a continuous basis.
PURCHASE OF SECURITIES BEING OFFERED
Interests in the Separate Account are sold to Participants as accumulation
units. Charges associated with such securities are discussed in the Expenses
section of the prospectus for the certificate. The certificate does not offer
any special purchase plan or exchange program not discussed in the prospectus.
(For a discussion of instances when sales charges will be waived, see the
Contingent Deferred Sales Charge section of the prospectus.)
ACCUMULATION UNITS AND UNIT VALUE
During the accumulation phase, accumulation units shall be used to account for
all amounts allocated to or withdrawn from the sub-accounts of the separate
account as a result of purchase payments, withdrawals, transfers, or fees and
charges. MassMutual will determine the number of accumulation units of a
sub-account purchased or canceled. This will be done by dividing the amount
allocated to (or the amount withdrawn from) the sub-account by the dollar value
of one accumulation unit of the sub-account as of the end of the business day
during which the transaction is received at the annuity service center.
The accumulation unit value for each sub-account was set on the date such
sub-account became operative. Subsequent accumulation unit values for each
sub-account are determined for each day in which the New York Stock Exchange is
open for business ("business day") by multiplying the accumulation unit value
for the immediately preceding business day by the net investment factor for the
sub-account for the current business day.
The net investment factor for each sub-account is determined by dividing A by B
and subtracting C where:
A is (i) the net asset value per share of the funding vehicle or portfolio of a
funding vehicle held by the sub-account for the current business day; plus (ii)
any dividend per share declared on behalf of such funding vehicle or portfolio
of a funding vehicle that has an ex-dividend date within the current business
day; less (iii) the cumulative charge or credit for taxes reserved which is
determined by MassMutual to have resulted from the operation or maintenance of
the sub-account.
3
<PAGE>
B is the net asset value per share of the funding vehicle or portfolio held by
the sub-account for the immediately preceding business day.
C is the cumulative charge for the mortality and expense risk charge and for the
administrative charge. The accumulation unit value may increase or decrease from
business day to business day.
TRANSFERS DURING THE INCOME PHASE
Transfers of annuity reserves between sub-accounts will be made by converting
the number of annuity units attributable to the annuity reserves being
transferred to the number of annuity units of the sub-account to which the
transfer is made, so that the next annuity payment if it were made at that time
would be the same amount that it would have been with out the transfer.
Thereafter, annuity payments will reflect changes in the value of the new
annuity units.
The amount transferred to the general account from a sub-account will be based
on the annuity reserves for the participant in that sub-account. Transfers to
the general account will be made by converting the annuity units being
transferred to purchase fixed annuity payments under the annuity option in
effect and based on the age of the annuitant at the time of the transfer.
See the Transfers During the Income Phase section in the prospectus for more
information about transfers during the income phase.
PAYMENT OF DEATH BENEFIT
MassMutual will require due proof of death before any death benefit is paid. Due
proof of death will be:
1. a certified death certificate;
2. a certified decree of a court of competent jurisdiction as to the finding
of death; or
3. any other proof satisfactory to MassMutual.
All death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.
The beneficiary designation in effect on the date we issue the certificate will
remain in effect until changed. Unless the participant provides otherwise, the
death benefit will be paid in equal shares to the beneficiary(ies) as follows:
1. to the primary beneficiary(ies) who survive the participant's and/or the
annuitant's death, as applicable; or if there are none
2. to the contingent beneficiary(ies) who survive the participant's and/or the
annuitant's death, as applicable; or if there are none
3. to the estate of the participant.
You may name an irrevocable beneficiary(ies). In that case, a change of
beneficiary requires the consent of any irrevocable beneficiary. If an
irrevocable beneficiary is named, the participant retains all other contractual
rights.
See the Death Benefit section in the prospectus for more information on death
benefits.
4
<PAGE>
ANNUITY PAYMENTS
A variable annuity payment is an annuity with payments which; (1) are not
predetermined as to dollar amount; and (2) will vary in amount with the net
investment results of the applicable sub-accounts of the separate account.
Annuity Payments also depend upon the age of the annuitant and any joint
annuitant and the assumed interest factor utilized. The annuity table used will
depend upon the annuity option chosen. The dollar amount of annuity payments
after the first is determined as follows;
1. The dollar amount of the first annuity payment is divided by the value
of an annuity unit as of the annuity date. This establishes the number
of annuity units for each annuity payment. The number of annuity units
remains fixed during the annuity period.
2. For each sub-account, the fixed number of annuity units is multiplied
by the annuity unit value on each subsequent annuity payment date.
3. The total dollar amount of each variable annuity payment is the sum of
all sub-account variable annuity payments.
The number of annuity units is determined as follows:
1. The number of annuity units credited in each sub-account will be determined
by dividing the product of the portion of the certificate value to be
applied to the sub-account and the annuity purchase rate by the value of
one annuity unit in that sub-account on the annuity date. The purchase
rates are set forth in the variable annuity rate tables in the certificate.
2. For each sub-account, the amount of each annuity payment equals the product
of the annuitant's number of annuity units and the annuity unit value on
the payment date. The amount of each payment may vary.
The value of any annuity unit for each sub-account of the separate account was
set on the date such sub-account became operative. The sub-account annuity unit
value at the end of any subsequent valuation period is determined as follows:
1. The net investment factor for the current business day is multiplied by the
value of the annuity unit for the sub-account for the immediately preceding
business day.
2. The result in (1) is then divided by an assumed investment rate factor. The
assumed investment rate factor equals 1.00 plus the assumed investment rate
for the number of days since the preceding business day. The assumed
investment rate is based on an effective annual rate of 4%.
The value of an annuity unit may increase or decrease from business day to
business day. See the Income Phase section in the prospectus for more
information.
PERFORMANCE MEASURES
MassMutual may advertise certain performance-related information. This
information reflects historical performance and is not intended to indicate or
predict future performance.
Standardized Average Annual Total Return
MassMutual will show standardized average annual total returns for each
sub-account that has been in existence for more than one year. These returns
assume you made a single $1,000 payment at the beginning of the period and
withdrew the entire amount at the end of the period. The return reflects a
deduction for the contingent deferred sales charge, the annual certificate
maintenance charge and all other fund, separate account and certificate level
charges, except premium taxes, if any.
5
<PAGE>
If a sub-account has been in existence for less than one year, we will show the
aggregate total return. This assumes you made a single $1,000 payment at the
beginning of the period and withdrew the entire amount at the end of the period.
The return reflects the change in unit value and a deduction of the contingent
deferred sales charge.
The following tables show the standardized average annual total return for the
sub-accounts for the period ended December 31,1998.
<TABLE>
<CAPTION>
Since Inception*
<S> <C>
Money Sub-Account -5.74%
Bond Sub-Account -5.17
LifeSpan Diversified Income Sub-Account -3.55
Total Return Sub-Account 6.34
LifeSpan Balanced Sub-Account 3.58
LifeSpan Capital Appreciation Sub-Account 6.49
Income & Growth Sub-Account 17.15
Growth Sub-Account 11.61
Contrafund Sub-Account 18.90
Small Cap Value Equity Sub-Account 4.60
Mid-Cap Growth Sub-Account 23.71
International Equity Sub-Account 6.76
</TABLE>
* This return is an aggregate total return for the period 9/1/98 to 12/31/98. It
reflects the change in unit value and a deduction for the contingent deferred
sales charge.
Non-Standard Total Returns
MassMutual will also show total returns based on historical performance of the
sub-accounts and underlying funds. MassMutual may assume the certificates were
in existence prior to their inception date, which they were not. Total return
percentages include all fund level and separate account level charges. They do
not include a contingent deferred sales charge, certificate maintenance charge,
or premium taxes, if any. If these charges were included, returns would be less
than those shown.
Total Returns compare the value of an accumulation unit at the beginning of a
period with the value of an accumulation unit at the end of the period.
Average Annual Total Returns measure this performance over a period of time
greater than one year. Average annual total returns compare values over a given
period of time and express the percentage as an average annual rate.
The performance figures discussed below, are calculated on the basis of the
historical performance of the funds, and may assume the certificates were in
existence prior to their inception date, September 1, 1998, (which they were
not). Beginning on the certificate inception date, actual accumulation unit
values are used for the calculations.
6
<PAGE>
Average Annual Total Returns
For Periods Ending 12/31/98
<TABLE>
<CAPTION>
Since
Portfolio (Inception) 1 Year 3 Years 5 Years 10 Years Inception
- --------------------- ------ ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C>
Oppenheimer Money* (4/3/85) ................................... 3.80% 3.84% 3.65% 4.14% 4.41%
Oppenheimer Bond (4/3/85) ..................................... 5.32% 5.44% 5.52% 7.69% 8.01%
Panorama LifeSpan Diversified Income (9/1/95) ................. 3.42% 6.49% NA NA 7.50%
Panorama Total Return (9/30/82) ............................... 9.35% 11.55% 10.62% 12.14% 12.08%
Panorama LifeSpan Balanced (9/1/95) ........................... 4.69% 8.96% NA NA 9.84%
Panorama LifeSpan Cap. Appreciation (9/1/95) .................. 5.01% 10.52% NA NA 11.53%
American Century VP Income & Growth (10/30/97) ................ 25.10% NA NA NA 28.87%
Panorama Growth (1/21/82) ..................................... 6.92% 16.09% 15.85% 16.38% 16.09%
Fidelity's VIP Fund II Contrafund (1/3/95) .................... 28.17% 23.32% NA NA 26.83%
MML Small Cap Value Equity (6/1/98) ........................... NA NA NA NA -13.66%
T. Rowe Price Mid-Cap Growth (12/31/96) ....................... 20.38% NA NA NA 18.76%
Panorama International Equity (5/1/92) ........................ 17.74% 11.89% 8.77% NA 8.67%
</TABLE>
* Although the Oppenheimer Money Fund/VA commenced operations on 4/3/85, the
information necessary to calculate returns is available for 1987 and later
years.
Performance information for the sub-accounts may be: (a) compared to other
variable annuity separate accounts or other investment products surveyed by
Lipper Analytical Services, a nationally recognized independent reporting
service or similar service that rank mutual funds and other investment companies
by overall performance, investment objectives and assets; (b) compared to
indices; (c) tracked by other ratings services, companies, publications or
persons who rank separate accounts or other investment products on overall
performance or other criteria; and (d) included in data bases that can be used
to produce reports and illustrations by organizations such as CDA Wiesenberger.
Performance figures will be calculated in accordance with standardized methods
established by each reporting service.
MassMutual may also show yield and effective yield for the Money Sub-Account
over a seven-day period, which MassMutual then "annualizes". This means that
when MassMutual calculates yield, it assumes that the amount of money the
investment earns for the week is earned each week over a 52-week period.
MassMutual shows this as a percentage of the investment. MassMutual calculates
the "effective yield" similarly but when it annualizes the amount, MassMutual
assumes the income earned is re-invested. Therefore, the effective yield is
slightly higher than the yield because of the compounding effect.
These figures reflect a deduction for all fund, separate account and certificate
level charges assuming the certificate remains inforce. The figures do not
reflect the contingent deferred sales charge or premium tax deductions (if any),
which if included would reduce the percentages reported.
The 7-day yield and effective yield for the Money Sub-Account for the period
ended December 31, 1998 are as follows:
<TABLE>
<CAPTION>
Before Deduction of Annual Maintenance Charge
- ---------------------------------------------
<S> <C>
7-Day Yield ........................... 1.35%
7-Day Effective Yield ................. 1.36%
</TABLE>
<TABLE>
<CAPTION>
After Deduction of Annual Maintenance Charge
- --------------------------------------------
(Annual Maintenance Charge is 0.086%)
<S> <C>
7-Day Yield .......................... 1.26%
7-Day Effective Yield ................ 1.27%
</TABLE>
7
<PAGE>
PANORAMA PREMIER HYPOTHETICAL PROJECTIONS
PANORAMA GROWTH
$10,000 purchase payment made December 31, 1988
<TABLE>
<CAPTION>
Non-Standardized
----------------
Accumulated Calendar Year
Date Payment Value Total Return
- ---- ------- ----- ------------
<S> <C> <C> <C>
12/31/88 $10,000 $10,000
12/31/89 $13,362 33.62%
12/31/90 $12,105 -9.41%
12/31/91 $16,387 35.37%
12/31/92 $18,108 10.51%
12/31/93 $21,632 19.46%
12/31/94 $21,235 -1.83%
12/31/95 $28,780 35.53%
12/31/96 $33,765 17.32%
12/31/97 $42,045 24.52%
12/31/98 $44,923 6.85%
</TABLE>
PANORAMA TOTAL RETURN
$10,000 purchase payment made December 31, 1988
<TABLE>
<CAPTION>
Non-Standardized
----------------
Accumulated Calendar Year
Date Payment Value Total Return
- ---- ------- ----- ------------
<S> <C> <C> <C>
12/31/88 $10,000 $10,000
12/31/89 $12,098 20.98%
12/31/90 $11,959 -1.15%
12/31/91 $15,158 26.75%
12/31/92 $16,414 8.29%
12/31/93 $18,791 14.48%
12/31/94 $18,232 -2.97%
12/31/95 $22,362 22.65%
12/31/96 $24,198 8.21%
12/31/97 $28,319 17.03%
12/31/98 $30,939 9.25%
</TABLE>
OPPENHEIMER BOND
$10,000 purchase payment made December 31, 1988
<TABLE>
<CAPTION>
Non-Standardized
----------------
Accumulated Calendar Year
Date Payment Value Total Return
- ---- ------- ----- ------------
<S> <C> <C> <C>
12/31/88 $10,000 $10,000
12/31/89 $11,122 11.22%
12/31/90 $11,780 5.92%
12/31/91 $13,612 15.55%
12/31/92 $14,252 4.70%
12/31/93 $15,857 11.26%
12/31/94 $15,304 -3.49%
12/31/95 $17,627 15.18%
12/31/96 $18,183 3.16%
12/31/97 $19,560 7.57%
12/31/98 $20,570 5.16%
</TABLE>
8
<PAGE>
OPPENHEIMER MONEY
$10,000 purchase payment made December 31, 1988
<TABLE>
<CAPTION>
Non-Standardized
----------------
Accumulated Calendar Year
Date Payment Value Total Return
- ---- ------- ----- ------------
<S> <C> <C> <C>
12/31/88 $10,000 $10,000
12/31/89 $10,753 7.53%
12/31/90 $11,426 6.27%
12/31/91 $11,934 4.44%
12/31/92 $12,199 2.22%
12/31/93 $12,383 1.52%
12/31/94 $12,670 2.31%
12/31/95 $13,171 3.95%
12/31/96 $13,648 3.62%
12/31/97 $14,145 3.64%
12/31/98 $14,653 3.59%
</TABLE>
PANORAMA INTERNATIONAL EQUITY
$10,000 purchase payment made since inception (May 13, 1992)
<TABLE>
<CAPTION>
Non-Standardized
----------------
Accumulated Calendar Year
Date Payment Value Total Return
- ---- ------- ----- ------------
<S> <C> <C> <C>
5/13/92 $10,000 $10,000
12/31/92 $ 9,492 -5.08%
12/31/93 $11,379 19.88%
12/31/94 $11,311 -0.61%
12/31/95 $12,302 8.77%
12/31/96 $13,699 11.35%
12/31/97 $14,573 6.38%
12/31/98 $17,128 17.53%
</TABLE>
PANORAMA LIFESPAN CAPITAL APPRECIATION
$10,000 purchase payment made since inception (Sept. 1, 1995)
<TABLE>
<CAPTION>
Non-Standardized
----------------
Accumulated Calendar Year
Date Payment Value Total Return
- ---- ------- ----- ------------
<S> <C> <C> <C>
9/1/95 $10,000 $10,000
12/31/95 $10,659 6.59%
12/31/96 $12,319 15.58%
12/31/97 $13,641 10.73%
12/31/98 $14,290 4.76%
</TABLE>
PANORAMA LIFESPAN BALANCED
$10,000 purchase payment made since inception (Sept. 1, 1995)
<TABLE>
<CAPTION>
Non-Standardized
----------------
Accumulated Calendar Year
Date Payment Value Total Return
- ---- ------- ----- ------------
<S> <C> <C> <C>
9/1/95 $10,000 $10,000
12/31/95 $10,571 5.71%
12/31/96 $11,774 11.39%
12/31/97 $12,998 10.39%
12/31/98 $13,576 4.44%
</TABLE>
9
<PAGE>
PANORAMA LIFESPAN DIVERSIFIED INCOME
$10,000 purchase payment made since inception (Sept. 1, 1995)
<TABLE>
<CAPTION>
Non-Standardized
----------------
Accumulated Calendar Year
Date Payment Value Total Return
- ---- ------- ----- ------------
<S> <C> <C> <C>
9/1/95 $10,000 $10,000
12/31/95 $10,540 5.40%
12/31/96 $11,060 4.94%
12/31/97 $12,241 10.67%
12/31/98 $12,629 3.17%
</TABLE>
FIDELITY VIP II CONTRAFUND
$10,000 purchase payment made since inception (Jan. 3, 1995)
<TABLE>
<CAPTION>
Non-Standardized
----------------
Accumulated Calendar Year
Date Payment Value Total Return
- ---- ------- ----- ------------
<S> <C> <C> <C>
1/3/95 $10,000 $10,000
12/31/95 $13,781 37.81%
12/31/96 $16,435 19.26%
12/31/97 $20,084 22.20%
12/31/98 $25,704 27.98%
</TABLE>
T. ROWE PRICE MID-CAP GROWTH
$10,000 purchase payment made since inception (Dec. 31,1996)
<TABLE>
<CAPTION>
Non-Standardized
----------------
Accumulated Calendar Year
Date Payment Value Total Return
- ---- ------- ----- ------------
<S> <C> <C> <C>
12/31/96 $10,000 $10,000
12/31/97 $11,685 16.85%
12/31/98 $14,037 20.13%
</TABLE>
AMERICAN CENTURY VP INCOME & GROWTH
$10,000 purchase payment made since inception (Oct. 30, 1997)
<TABLE>
<CAPTION>
Non-Standardized
----------------
Accumulated Calendar Year
Date Payment Value Total Return
- ---- ------- ----- ------------
<S> <C> <C> <C>
10/30/97 $10,000 $10,000
12/31/97 $10,754 7.54%
12/31/98 $13,421 24.79%
</TABLE>
MML SMALL CAP VALUE EQUITY
$10,000 purchase payment made since inception (June 1, 1998)
<TABLE>
<CAPTION>
Non-Standardized
----------------
Accumulated Calendar Year
Date Payment Value Total Return
- ---- ------- ----- ------------
<S> <C> <C> <C>
6/1/98 $10,000 $10,000
12/31/98 $ 8,568 -14.32%
</TABLE>
The performance figures discussed above reflect historical results of the funds
and are not intended to indicate or to predict future performance.
10
<PAGE>
FEDERAL TAX STATUS
General
Note: The following description is based upon MassMutual's understanding of
current federal income tax law applicable to annuities in general. MassMutual
cannot predict the probability that any changes in such laws will be made.
Purchasers are cautioned to seek competent tax advice regarding the possibility
of such changes. MassMutual does not guarantee the tax status of the
certificates. Purchasers bear the complete risk that the certificates may not be
treated as "annuity certificates" under federal income tax laws. It should be
further understood that the following discussion is not exhaustive and that
special rules not described herein may be applicable in certain situations.
Moreover, no attempt has been made to consider any applicable state or other tax
laws.
Section 72 of the Code governs taxation of annuities in general. An participant
is generally not taxed on increases in the value of a certificate until
distribution occurs, either in the form of a lump sum payment or as annuity
payments under the annuity option selected. For a lump sum payment received as a
total withdrawal (total surrender), the recipient is taxed on the portion of the
payment that exceeds the cost basis of the certificate. For non-qualified
certificates, this cost basis is generally the purchase payments, while for
qualified certificates there may be no cost basis. The taxable portion of the
lump sum payment is taxed at ordinary income tax rates.
For annuity payments, a portion of each payment in excess of an exclusion amount
is includible in taxable income. The exclusion amount for payments based on a
fixed annuity option is determined by multiplying the payment by the ratio that
the cost basis of the certificate (adjusted for any period or refund feature)
bears to the expected return under the certificate. The exclusion amount for
payments based on a variable annuity option is determined by dividing the cost
basis of the certificate (adjusted for any period certain or refund guarantee)
by the number of years over which the annuity is expected to be paid. Payments
received after the investment in the certificate has been recovered (i.e. when
the total of the excludable amount equals the investment in the certificate) are
fully taxable. The taxable portion is taxed at ordinary income tax rates. For
certain types of qualified plans there may be no cost basis in the certificate
within the meaning of Section 72 of the Code. Participants, annuitants and
beneficiaries under the certificates should seek competent financial advice
about the tax consequences of any distributions.
MassMutual is taxed as a life insurance company under the Code. For federal
income tax purposes, the separate account is not a separate entity from
MassMutual, and its operations form a part of MassMutual.
Diversification
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of variable annuity certificates. The Code provides that a
variable annuity certificate will not be treated as an annuity certificate for
any period (and any subsequent period) for which the investments are not, in
accordance with regulations prescribed by the United States Treasury Department
("Treasury Department"), adequately diversified. Disqualification of the
certificate as an annuity certificate would result in the imposition of federal
income tax to the Participant with respect to earnings allocable to the
certificate prior to the receipt of payments under the certificate. The Code
contains a safe harbor provision which provides that annuity certificates such
as the certificate meet the diversification requirements if, as of the end of
each quarter, the underlying assets meet the diversification standards for a
regulated investment company and no more than fifty-five percent (55%) of the
total assets consist of cash, cash items, U.S. Government securities and
securities of other regulated investment companies.
On March 2, 1989, the Treasury Department issued Regulations (Treas.
Reg.1.817-5), which established diversification requirements for the investment
portfolios underlying variable certificates such as the certificate. The
regulations amplify the diversification requirements for variable certificates
set forth in the Code and provide an alternative to the safe harbor provision
described above. Under the regulations, an investment portfolio will be deemed
adequately diversified if: (1) no more than 55% of the value of the total assets
of the portfolio is represented by any one investment; (2) no more than 70% of
the value of the total assets of the portfolio is represented by any two
investments; (3) no more than 80% of the value of the total assets of the
portfolio is represented by any three
11
<PAGE>
investments; and (4) no more than 90% of the value of the total assets of the
portfolio is represented by any four investments.
The Code provides that, for purposes of determining whether or not the
diversification standards imposed on the underlying assets of variable
certificates by Section 817(h) of the Code have been met, "each United States
government agency or instrumentality shall be treated as a separate issuer."
MassMutual intends that all investment portfolios underlying the certificates
will be managed in such a manner as to comply with these diversification
requirements.
The Treasury Department has indicated that the diversification regulations do
not provide guidance regarding the circumstances in which participant control of
the investments of the separate account will cause the participant to be treated
as the participant of the assets of the separate account, thereby resulting in
the loss of favorable tax treatment for the certificate. At this time it cannot
be determined whether additional guidance will be provided and what standards
may be contained in such guidance.
The amount of participant control which may be exercised under the certificate
is different in some respects from the situations addressed in published rulings
issued by the Internal Revenue Service in which it was held that the policy
participant was not the participant of the assets of the separate account. It is
unknown whether these differences, such as the participant's ability to transfer
among investment choices or the number and type of investment choices available,
would cause the participant to be considered as the participant of the assets of
the separate account resulting in the imposition of federal income tax to the
participant with respect to earnings allocable to the certificate prior to
receipt of payments under the certificate.
In the event any forthcoming guidance or ruling is considered to set forth a new
position, such guidance or ruling will generally be applied only prospectively.
However, if such ruling or guidance was not considered to set forth a new
position, it may be applied retroactively resulting in the participant being
retroactively determined to be the participant of the assets of the separate
account.
Due to the uncertainty in this area, MassMutual reserves the right to modify the
certificate in an attempt to maintain favorable tax treatment.
Multiple Certificates
The Code provides that multiple non-qualified annuity certificates which are
issued within a calendar year to the same participant by one company or its
affiliates are treated as one annuity certificate for purposes of determining
the tax consequences of any distribution. Such treatment may result in adverse
tax consequences including more rapid taxation of the distributed amounts from
such combination of certificates. Participants should consult a tax adviser
prior to purchasing more than one non-qualified annuity certificate in any
calendar year.
Certificates Owned by Other than Natural Persons
Under Section 72(u) of the Code, the investment earnings on premiums for the
certificates will be taxed currently to the participant if the participant is a
non-natural person, e.g., a corporation or certain other entities. Such
certificates generally will not be treated as annuities for federal income tax
purposes. However, this treatment is not applied to a certificate held by a
trust or other entity as an agent for a natural person nor to certificates held
by qualified plans. Purchasers should consult their own tax counsel or other tax
adviser before purchasing a certificate to be owned by a non-natural person.
Tax Treatment of Assignments
An assignment or pledge of a certificate may be a taxable event. Participants
should therefore consult competent tax advisers should they wish to assign or
pledge their certificates.
12
<PAGE>
Income Tax Withholding
All distributions or the portion thereof which is includible in the gross income
of the participant are subject to federal income tax withholding. Generally,
amounts are withheld from periodic payments at the same rate as wages and at the
rate of 10% from non-periodic payments. However, the participant, in most cases,
may elect not to have taxes withheld or to have withholding done at a different
rate.
Effective January 1, 1993, certain distributions from retirement plans qualified
under Section 401 of the Code, which are not directly rolled over to another
eligible retirement plan or individual retirement account or individual
retirement annuity, are subject to a mandatory 20% withholding for federal
income tax. The 20% withholding requirement generally does not apply to: a) a
series of substantially equal payments made at least annually for the life or
life expectancy of the participant or joint and last survivor expectancy of the
participant and a designated beneficiary or for a specified period of 10 years
or more; or b) distributions which are required minimum distributions; or c) the
portion of the distributions not includible in gross income (i.e., returns of
after-tax contributions). The 20% withholding requirement also does not apply to
hardship distributions from a 401(k) plan made after December 31, 1998.
Participants should consult their own tax counsel or other tax adviser regarding
withholding requirements.
Tax Treatment of Withdrawals - Non-Qualified Certificates
Section 72 of the Code governs treatment of distributions from annuity
certificates. It provides that if the certificate value exceeds the aggregate
purchase payments made, any amount withdrawn will be treated as coming first
from the earnings and then, only after the income portion is exhausted, as
coming from the principal. Withdrawn earnings are includible in gross income. It
further provides that a ten percent (10%) penalty will apply to the income
portion of any premature distribution. However, the penalty is not imposed on
amounts received: (a) after the taxpayer reaches age 59 1/2; (b) after the death
of the participant; (c) if the taxpayer is totally disabled (for this purpose
disability is as defined in Section 72(m)(7) of the Code); (d) in a series of
substantially equal periodic payments made not less frequently than annually for
the life (or life expectancy) of the taxpayer or for the joint lives (or joint
life expectancies) of the taxpayer and his or her beneficiary; (e) under an
immediate annuity; or (f) which are allocable to purchase payments made prior to
August 14, 1982.
With respect to (d) above, if the series of substantially equal periodic
payments is modified before the later of your attaining age 59 1/2 or 5 years
from the date of the first periodic payment, then the tax for the year of the
modification is increased by an amount equal to the tax which would have been
imposed (the 10% tax penalty), but for the exception, plus interest for the tax
years in which the exception was used.
The above information does not apply to qualified certificates. However,
separate tax withdrawal penalties and restrictions may apply to such qualified
certificates. (See "Tax Treatment of Withdrawals - Qualified Certificates"
below.)
Qualified Plans
The certificates offered herein are designed to be suitable for use under
various types of qualified plans. Taxation of participants in each qualified
plan varies with the type of plan and terms and conditions of each specific
plan. Participants, annuitants and beneficiaries are cautioned that benefits
under a qualified plan may be subject to the terms and conditions of the plan
regardless of the terms and conditions of the certificates issued pursuant to
the plan. Some retirement plans are subject to distribution and other
requirements that are not incorporated into MassMutual's administrative
procedures. Participants and beneficiaries are responsible for determining that
contributions, distributions and other transactions with respect to the
certificates comply with applicable law. Following are general descriptions of
the types of qualified plans with which the certificates may be used. Such
descriptions are not exhaustive and are for general informational purposes only.
The tax rules regarding qualified plans are very complex and will have differing
applications depending on individual facts and circumstances. Each purchaser
should obtain competent tax advice prior to purchasing a certificate issued
under a qualified plan.
13
<PAGE>
Certificates issued pursuant to qualified plans include special provisions
restricting certificate provisions that may otherwise be available as described
herein. Generally, certificates issued pursuant to qualified plans are not
transferable except upon surrender or annuitization. Various penalty and excise
taxes may apply to contributions or distributions made in violation of
applicable limitations. Furthermore, certain withdrawal penalties and
restrictions may apply to surrenders from qualified certificates. (See "Tax
Treatment of Withdrawals - Qualified Certificates" below.)
On July 6, 1983, the Supreme Court decided in Arizona Governing Committee v.
Norris that optional annuity benefits provided under an employer's deferred
compensation plan could not, under Title VII of the Civil Rights Act of 1964,
vary between men and women. The certificates sold by MassMutual in connection
with qualified plans will utilize annuity tables that do not differentiate on
the basis of sex. Such annuity tables will also be available for use in
connection with certain non-qualified deferred compensation plans.
a. H.R. 10 Plans
Section 401 of the Code permits self-employed individuals to establish qualified
plans for themselves and their employees, commonly referred to as "H.R. 10" or
"Keogh" plans. Contributions made to the plan for the benefit of the employees
will not be included in the gross income of the employees until distributed from
the Plan. The tax consequences to participants may vary depending upon the
particular plan design. However, the Code places limitations and restrictions on
all plans including on such items as: amount of allowable contributions; form,
manner and timing of distributions; transferability of benefits; vesting and
nonforfeitability of interests; nondiscrimination in eligibility and
participation; and the tax treatment of distributions, withdrawals and
surrenders. (See "Tax Treatment of Withdrawals - Qualified Certificates" below.)
Purchasers of certificates for use with an H.R. 10 Plan should obtain competent
tax advice as to the tax treatment and suitability of such an investment.
b. Individual Retirement Annuities
Section 408(b) of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity"
("IRA"). Under applicable limitations, certain amounts may be contributed to an
IRA which will be deductible from the individual's gross income. These IRAs are
subject to limitations on eligibility, contributions, transferability and
distributions. (See "Tax Treatment of Withdrawals - Qualified Certificates"
below.) Under certain conditions, distributions from other IRAs and other
Qualified Plans may be rolled over or transferred on a tax-deferred basis into
an IRA. Sales of certificates for use with IRAs are subject to special
requirements imposed by the Code, including the requirement that certain
informational disclosure be given to persons desiring to establish an IRA.
Purchasers of certificates to be qualified as Individual Retirement Annuities
should obtain competent tax advice as to the tax treatment and suitability of
such an investment.
Roth IRAs
Section 408A of the Code provides that beginning in 1998, individuals may
purchase a new type of non-deductible IRA, known as a Roth IRA. Purchase
payments for a Roth IRA are limited to a maximum of $2,000 per year. Lower
maximum limitations apply to individuals with adjusted gross incomes between
$95,000 and $110,000 in the case of single taxpayers, between $150,000 and
$160,000 in the case of married taxpayers filing joint returns, and between $0
and $10,000 in the case of married taxpayers filing separately. An overall
$2,000 annual limitation continues to apply to all of a taxpayer's IRA
contributions, including Roth IRA and non-Roth IRAs.
Qualified distributions from Roth IRAs are free from federal income tax. A
qualified distribution requires that an individual has held the Roth IRA for at
least five years and, in addition, that the distribution is made either after
the individual reaches age 59 1/2, on the individual's death or disability, or
as a qualified first-time home purchase, subject to a $10,000 lifetime maximum,
for the individual, a spouse, child, grandchild, or ancestor. Any distribution
which is not a qualified distribution is taxable to the extent of earnings in
the distribution. Distributions are treated as made from contributions first and
therefore no distributions are taxable until distributions exceed the amount of
contributions to the Roth IRA. The 10% penalty tax and the regular IRA
exceptions to the 10% penalty tax apply to taxable distributions from a Roth
IRA.
14
<PAGE>
Amounts may be rolled over from one Roth IRA to another Roth IRA. Furthermore,
an individual may make a rollover contribution from a non-Roth IRA to a Roth
IRA, unless the individual has adjusted gross income over $100,000 or the
individual is a married taxpayer filing a separate return. The individual must
pay tax on any portion of the IRA being rolled over that represents income or a
previously deductible IRA contribution. However, for rollovers in 1998, the
individual may pay that tax ratably over the four taxable year period beginning
with tax year 1998.
Purchasers of certificates to be qualified as a Roth IRA should obtain competent
tax advice as to the tax treatment and suitability of such an investment.
c. Corporate Pension and Profit-Sharing Plans
Sections 401(a) and 401(k) of the Code permit corporate employers to establish
various types of retirement plans for employees. These retirement plans may
permit the purchase of the certificates to provide benefits under the plan.
Contributions to the plan for the benefit of employees will not be includible in
the gross income of the employees until distributed from the plan. The tax
consequences to participants may vary depending upon the particular plan design.
However, the Code places limitations and restrictions on all Plans including on
such items as: amount of allowable contributions; form, manner and timing of
distributions; transferability of benefits; vesting and nonforfeitability of
interests; nondiscrimination in eligibility and participation; and the tax
treatment of distributions, withdrawals and surrenders. (See "Tax Treatment of
Withdrawals - Qualified Certificates" below.) Purchasers of certificates for use
with Corporate Pension or Profit Sharing Plans should obtain competent tax
advice as to the tax treatment and suitability of such an investment.
Tax Treatment of Withdrawals - Qualified Certificates
In the case of a withdrawal under a qualified certificate, a ratable portion of
the amount received is taxable, generally based on the ratio of the individual's
cost basis to the individual's total accrued benefit under the retirement plan.
Special tax rules may be available for certain distributions from a qualified
certificate. Section 72(t) of the Code imposes a 10% penalty tax on the taxable
portion of any distribution from qualified retirement plans, including
certificates issued and qualified under Code Sections 401 (H.R. 10 and Corporate
Pension and Profit-Sharing Plans), and 408 (Individual Retirement Annuities) and
408A (Roth IRAs). To the extent amounts are not includible in gross income
because they have been rolled over to an IRA or to another eligible qualified
plan, no tax penalty will be imposed. The tax penalty will not apply to the
following distributions: (a) if distribution is made on or after the date on
which the participant or annuitant (as applicable) reaches age 59 1/2; (b)
distributions following the death or disability of the participant or annuitant
(as applicable) (for this purpose disability is as defined in Section 72(m) (7)
of the Code); (c) after separation from service, distributions that are part of
substantially equal periodic payments made not less frequently than annually for
the life (or life expectancy) of the participant or annuitant (as applicable) or
the joint lives (or joint life expectancies) of such participant or annuitant
(as applicable) and his or her designated beneficiary; (d) distributions to an
participant or annuitant (as applicable) who has separated from service after he
has attained age 55; (e) distributions made to the participant or annuitant (as
applicable) to the extent such distributions do not exceed the amount allowable
as a deduction under Code Section 213 to the participant or annuitant (as
applicable) for amounts paid during the taxable year for medical care; (f)
distributions made to an alternate payee pursuant to a qualified domestic
relations order; (g) distributions from an Individual Retirement Annuity for the
purchase of medical insurance (as described in Section 213(d)(1)(D) of the Code)
for the participant or annuitant (as applicable) and his or her spouse and
dependents if the participant or annuitant (as applicable) has received
unemployment compensation for at least 12 weeks (this exception will no longer
apply after the participant or annuitant (as applicable) has been re-employed
for at least 60 days); (h) distributions from an Individual Retirement Annuity
made to the participant or annuitant (as applicable) to the extent such
distributions do not exceed the qualified higher education expenses (as defined
in Section 72(t)(7) of the Code) of the participant or annuitant (as applicable)
for the taxable year; and (i) distributions from an Individual Retirement
Annuity made to the participant or annuitant (as applicable) which are qualified
first-time home buyer distributions (as defined in Section 72(t)(8)of the Code.)
The exceptions stated in (d) and (f) above do not apply in the case of an
Individual Retirement Annuity. The exception stated in (c) above applies to an
Individual Retirement Annuity without the requirement that there be a separation
from service.
15
<PAGE>
With respect to (c) above, if the series of substantially equal periodic
payments is modified before the later of your attaining age 59 1/2 or 5 years
from the date of the first periodic payment, then the tax for the year of the
modification is increased by an amount equal to the tax which would have been
imposed (the 10% penalty tax) but for the exception, plus interest for the tax
years in which the exception was used.
Generally, distributions from a qualified plan must begin no later than April
1st of the calendar year following the later of (a) the year in which the
employee attains age 70 1/2 or (b) the calendar year in which the employee
retires. The date set forth in (b) does not apply to an Individual Retirement
Annuity. Required distributions do not apply to a Roth IRA during the lifetime
of the Participant. Required distributions must be over a period not exceeding
the life expectancy of the individual or the joint lives or life expectancies of
the individual and his or her designated beneficiary. If the required minimum
distributions are not made, a 50% penalty tax is imposed as to the amount not
distributed.
Section 457 Deferred Compensation ("Section 457") Plans
Employees of (and independent contractors who perform services for) certain
state and local governmental units, or certain tax-exempt employers, may
participate in a Section 457 plan of the employer, allowing them to defer part
of their salary or other compensation. The amount deferred, and accrued income
thereon, will not be taxable until it is paid or otherwise made available to the
employee.
The maximum amount that can be deferred under a Section 457 plan in any tax year
is generally one-third of the employee's includible compensation, up to $8,000
(in 1998). Includible compensation means earnings for services rendered to the
employer which are includible in the employee's gross income, excluding the
contributions under the Section 457 plan or a Tax-Sheltered Annuity. Certain
catch-up deferrals are permitted during the last three (3) years before an
employee attains normal retirement age. The certificate purchased is issued to
the employer, and the employee has no rights or vested interest in the
certificate. All certificate value must be held for the exclusive benefit of the
employee, and payments can only be made in accordance with Section 457 plan
provisions. Presently, tax-free transfers of assets in a Section 457 plan can
only be made to another Section 457 plan in certain limited cases.
Purchasers of certificates for use with Section 457 plans should obtain
competent tax advice as to the tax treatment and suitability of such an
investment.
EXPERTS
We have included the financial statements of MassMutual and Massachusetts Mutual
Variable Annuity Separate Account 4 - Panorama Premier in this Statement of
Additional Information in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
PricewaterhouseCoopers LLP's report on the statutory financial statements of
MassMutual includes explanatory paragraphs relating to the use of statutory
accounting practices rather than generally accepted accounting principles.
PricewaterhouseCoopers LLP is located in Springfield, Massachusetts 01101.
16
<PAGE>
Report Of Independent Accountants
To the Contract Owners of Panorama Premier Segment of
Massachusetts Mutual Variable Annuity Separate Account 4 and
The Board of Directors of Massachusetts Mutual Life Insurance Company
In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of each of the sub-accounts of the
Panorama Premier segment of Massachusetts Mutual Variable Annuity Separate
Account 4 (hereafter referred to as "the Account") at December 31, 1998, the
results of each of their operations and the changes in each of their net assets
for the period September 1, 1998 (Commencement of Operations) through December
31, 1998, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Account's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of investments owned at
December 31, 1998 by correspondence with the investment companies, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Springfield, Massachusetts
February 25, 1999
F-1
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 4 - Panorama Premier
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1998
<TABLE>
<CAPTION>
ASSETS
Investments, at Market (Notes 3A and 3B):
<S> <C>
Total Return Sub-Account
471,770 shares (Cost $871,387) $ 901,082
Growth Sub-Account
139,381 shares (Cost $434,130) 455,775
International Equity Sub-Account
120,526 shares (Cost $176,343) 189,226
LifeSpan Diversified Income Sub-Account
201,454 shares (Cost 232,684) 235,702
LifeSpan Balanced Sub-Account
579,935 shares (Cost $708,662) 742,317
LifeSpan Capital Appreciation Sub-Account
34,257 shares (Cost $44,736) 46,589
Money Sub-Account
1,178,186 shares (Cost $1,178,186) 1,178,186
Bond Sub-Account
56,364 shares (Cost $688,299) 694,402
Income & Growth Sub-Account
79,019 shares (Cost $506,765) 535,747
Mid-Cap Growth Sub-Account
14,202 shares (Cost $177,296) 202,658
Contrafund Sub-Account
9,499 shares (Cost $210,381) 232,156
Small Cap Value Equity Sub-Account
11,465 shares (Cost $94,610) 97,352
----------
Total investments 5,511,192
----------
Dividends receivable 2,303
----------
Total assets 5,513,495
----------
Payable to Massachusetts Mutual Life Insurance Company 7,650
----------
NET ASSETS $5,505,845
==========
</TABLE>
<TABLE>
<CAPTION>
Net assets: Units Unit Value Net assets
----- ---------- ----------
<S> <C> <C> <C>
Total Return Sub-Account 64,846 13.876594 $ 899,842
Growth Sub-Account 29,056 15.669692 455,299
International Equity Sub-Account 13,535 13.961844 188,974
LifeSpan Diversified Income Sub-Account 19,531 12.046624 235,283
LifeSpan Balanced Sub-Account 53,713 12.983356 697,375
LifeSpan Capital Appreciation Sub-Account 3,418 13.619392 46,551
Money Sub-Account 113,305 11.150105 1,263,363
Bond Sub-Account 59,397 11.725305 696,448
Income & Growth Sub-Account 39,253 12.423410 487,656
Mid-Cap Growth Sub-Account 15,476 13.076410 202,371
Contrafund Sub-Account 18,660 12.598281 235,084
Small Cap Value Equity Sub-Account 8,742 11.164329 97,599
----------
$5,505,845
==========
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 4 - Panorama Premier
STATEMENT OF OPERATIONS
For The Period September 1, 1998 (Commencement of Operations) Through December
31, 1998
<TABLE>
<CAPTION>
LifeSpan LifeSpan
Total International Diversified LifeSpan Capital
Return Growth Equity Income Balanced Appreciation Money
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
Dividends (Note 3B) $ -- $ -- $ -- $ -- $ -- $ -- $ 6,236
Expenses
Mortality and expense risk fees (Note 4) 1,250 465 264 419 1,179 33 1,834
-------- -------- -------- -------- -------- -------- --------
Net investment income (loss) (Note 3C) (1,250) (465) (264) (419) (1,179) (33) 4,402
-------- -------- -------- -------- -------- -------- --------
Net realized and unrealized
gain on investments
Net realized gain on investments
(Notes 3B, 3C and 6) 13,844 1,155 52 162 39 -- --
Change in net unrealized
appreciation of investments 29,695 21,646 12,883 3,016 33,655 1,852 --
-------- -------- -------- -------- -------- -------- --------
Net gain on investments 43,539 22,801 12,935 3,178 33,694 1,852 --
-------- -------- -------- -------- -------- -------- --------
Net increase in net assets
resulting from operations $ 42,289 $ 22,336 $ 12,671 $ 2,759 $ 32,515 $ 1,819 $ 4,402
======== ======== ======== ======== ======== ======== ========
<CAPTION>
Small Cap
Income Mid-Cap Value
Income & Growth Growth Contrafund Equity
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Investment income
Dividends (Note 3B) $ -- $ 1,914 $ 2,082 $ -- $ 349
Expenses
Mortality and expense risk fees (Note 4) 1,159 624 284 244 101
-------- -------- -------- -------- --------
Net investment income (loss) (Note 3C) (1,159) 1,290 1,798 (244) 248
-------- -------- -------- -------- --------
Net realized and unrealized
gain on investments
Net realized gain on investments
(Notes 3B, 3C and 6) 177 1,248 5 -- --
Change in net unrealized
appreciation of investments 6,103 28,981 25,361 21,775 2,742
-------- -------- -------- -------- --------
Net gain on investments 6,280 30,229 25,366 21,775 2,742
-------- -------- -------- -------- --------
Net increase in net assets
resulting from operations $ 5,121 $ 31,519 $ 27,164 $ 21,531 $ 2,990
======== ======== ======== ======== ========
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 4 - Panorama Premier
STATEMENT OF CHANGES IN NET ASSETS
For The Period September 1, 1998 (Commencement of Operations) Through December
31, 1998
<TABLE>
<CAPTION>
LifeSpan LifeSpan
Total International Diversified LifeSpan Capital
Return Growth Equity Income Balanced Appreciation
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets
Operations:
Net investment income (loss) $ (1,250) $ (465) $ (264) $ (419) $ (1,179) $ (33)
Net realized gain on investments 13,844 1,155 52 162 39 --
Change in net unrealized
appreciation of investments 29,695 21,646 12,883 3,016 33,655 1,852
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations 42,289 22,336 12,671 2,759 32,515 1,819
----------- ----------- ----------- ----------- ----------- -----------
Capital transactions:
Net contract payments 667,381 179,656 102,741 85,973 511,750 21,986
Withdrawal of funds (1,000) -- -- -- (3,457) --
Transfer due to payment
(reimbursement) of accumulation
unit value fluctuation (271) 808 184 82 2,084 (5)
Transfers between Sub-Accounts
and the Fixed Account 191,443 252,499 73,378 146,469 154,483 22,751
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from capital transactions 857,553 432,963 176,303 232,524 664,860 44,732
----------- ----------- ----------- ----------- ----------- -----------
Total increase 899,842 455,299 188,974 235,283 697,375 46,551
NET ASSETS, at beginning of the year -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS, at end of the year 899,842 455,299 188,974 235,283 697,375 46,551
=========== =========== =========== =========== =========== ===========
<CAPTION>
Small Cap
Income Mid-Cap Value
Money Income & Growth Growth Contrafund Equity
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets
Operations:
Net investment income (loss) $ 4,402 $ (1,159) $ 1,290 $ 1,798 $ (244) $ 248
Net realized gain on investments -- 177 1,248 5 -- --
Change in net unrealized
appreciation of investments -- 6,103 28,981 25,361 21,775 2,742
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations 4,402 5,121 31,519 27,164 21,531 2,990
----------- ----------- ----------- ----------- ----------- -----------
Capital transactions:
Net contract payments 3,040,665 417,054 208,711 75,282 76,270 51,029
Withdrawal of funds -- -- -- -- -- --
Transfer due to payment
(reimbursement) of accumulation
unit value fluctuation 246 1,150 1,305 (397) 584 (143)
Transfers between Sub-Accounts
and the Fixed Account (1,781,950) 273,123 246,121 100,322 136,699 43,723
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from capital transactions 1,258,961 691,327 456,137 175,207 213,553 94,609
----------- ----------- ----------- ----------- ----------- -----------
Total increase 1,263,363 696,448 487,656 202,371 235,084 97,599
NET ASSETS, at beginning of the year -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS, at end of the year 1,263,363 696,448 487,656 202,371 235,084 97,599
=========== =========== =========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 4 - Panorama Premier
Notes To Financial Statements
1. HISTORY
Massachusetts Mutual Variable Annuity Separate Account 4 ("Separate Account
4") is a separate investment account established on July 9, 1998 by
Massachusetts Mutual Life Insurance Company ("MassMutual"). Separate
Account 4 is used exclusively for MassMutual's Individual Certificate
issued under a Group Deferred Variable Annuity Contract with Flexible
Purchase Payments (the "Certificates"), known as Panorama Premier.
Separate Account 4 operates as a registered unit investment trust pursuant
to the Investment Company Act of 1940.
2. INVESTMENT OF SEPARATE ACCOUNT 4's ASSETS
Separate Account 4 maintains twelve Sub-Accounts. Each Sub-Account invests
in corresponding shares of either the: MML Series Investment Fund ("MML
Trust"), Panorama Series Fund, Inc. ("Panorama Fund"), Oppenheimer Variable
Account Funds ("Oppenheimer Trust"), American Century Variable Portfolios,
Inc. ("American Century"), T. Rowe Price Equity Series, Inc., ("T. Rowe
Price Equity Series") and Fidelity Variable Insurance Products Fund II
("Fidelity VIP II").
The MML Trust is a no-load, open-end, management investment company
registered under the Investment Company Act of 1940. One of six of its
separate series is available to the Separate Account 4's contractowners:
MML Small Cap Value Equity Fund. MassMutual serves as investment manager of
each of the MML Funds pursuant to an investment management agreement. David
L. Babson & Company, Inc. a controlled subsidiary of MassMutual serves as
the investment sub-adviser to the MML Small Cap Value Equity Fund.
The Panorama Fund is an open-end, diversified, management investment
company registered under the Investment Company Act of 1940 with six of its
portfolios currently available to the Separate Account 4's contractowners:
Panorama Total Return Portfolio, Panorama Growth Portfolio, Panorama
International Equity Portfolio, Panorama Life-Span Diversified Income
Portfolio, Panorama Life Span Balanced Portfolio and Panorama LifeSpan
Capital Appreciation Portfolio. OppenheimerFunds, Inc. ("OFI"), a
controlled subsidiary of MassMutual, serves as the investment adviser to
the Panorama Fund. OFI has engaged three Sub-Advisers to assist in the
selection of portfolio investments for the Panorama International Equity
Portfolio, Panorama LifeSpan Diversified Income Portfolio, Panorama
LifeSpan Balanced Portfolio and the Panorama LifeSpan Capital Appreciation
Portfolio. Babson-Stewart Ivory International serves as the investment
Sub-Adviser to the Panorama International Equity Portfolio and the
international stock components of the Panorama LifeSpan Balanced Portfolio
and the Panorama LifeSpan Capital Appreciation Portfolio. BEA Associates
serves as the investment Sub-Adviser to the high yield bond components of
the three Panorama LifeSpan Portfolios. Pilgrim, Baxter & Associates serves
as the investment Sub-Adviser to the small cap components of the Panorama
LifeSpan Balanced Portfolio and the Panorama LifeSpan Capital Appreciation
Portfolio.
Oppenheimer Trust is an open-end, diversified, management investment
company registered under the Investment Company Act of 1940 with two of its
Funds currently available to the Separate Account 4's contractowners:
Oppenheimer Money Fund and Oppenheimer Bond Fund. OFI serves as investment
manager to the Oppenheimer Trust.
American Century Variable Portfolios, Inc. is an open-end, diversified,
management investment company with one of its portfolios currently
available to the Separate Account 4's contractowners: American Century VP
Income & Growth. American Century Investment Management, Inc. is the
investment manager to the American Century VP Income & Growth Portfolio.
T. Rowe Price Equity Series is an open-end, diversified, investment company
with one of its series of shares currently available to the Separate
Account 4's contractowners: the T. Rowe Price Mid-Cap Growth Portfolio. T.
Rowe Price Associates, Inc. is the investment manager to the T. Rowe Price
Mid-Cap Growth Portfolio.
Fidelity VIP II is an open-end, diversified, management investment company
registered under the Investment Company Act of 1940 with one of its
portfolios available to the Separate Account 4's contractowners: the VIP II
Contrafund Portfolio. Fidelity Management & Research Company ("FMR") is the
investment manager to the VIP II Contrafund Portfolio. Fidelity Management
& Research (U.K.) Inc. and Fidelity Management & Research (Far East) Inc.,
serve as the investment Sub-Adviser to the VIP II Contrafund Portfolio.
F-5
<PAGE>
Notes To Financial Statements (Continued)
In addition to the twelve Sub-Accounts, contractowners may also allocate
funds to either of two Fixed Accounts: the Fixed Account and the Fixed
Account for Dollar Cost Averaging ("DCA Fixed Account"), which are part of
MassMutual's General Account. Because of exemptive and exclusionary
provision, interests in the two Fixed Accounts, are not registered under
the Securities Act of 1933. Also, the Fixed Accounts are not registered as
an investment company under the Investment Company Act of 1940.
3. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Segment in preparation of the financial statements in
conformity with generally accepted accounting principles.
A. Investment Valuation
Investments are stated at market value which is the net asset value per
share of each of the respective underlying portfolios.
B. Accounting for Investments
Investment transactions are accounted for on the trade date and identified
cost is the basis followed in determining the cost of investments sold for
financial statement purposes. Dividend income is recorded on the
ex-dividend date.
C. Federal Income Taxes
Operations of Separate Account 4 form a part of the total operations of
MassMutual and the Separate Account 4 is not taxed separately. MassMutual
is taxed as a life insurance company under the provisions of the 1986
Internal Revenue Code, as amended. MassMutual will not be taxed as a
"regulated investment company" under Subchapter M of the Internal Revenue
Code. Under existing federal law, no taxes are payable on investment income
and realized capital gains attributable to contracts which depend on the
Separate Account 4's investment performance. Accordingly, no provision for
federal income tax has been made. MassMutual may, however, make such a
charge in the future if an unanticipated change of current law results in a
company tax liability attributable to Separate Account 4.
D. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
4. CHARGES
There are no deductions for sales charges made from purchase payments.
However, if a withdrawal is made, a contingent deferred sales charge may be
assessed by MassMutual. Any premium taxes relating to the Certificates may
be deducted from the purchase payments or contract value when annuity
payments or withdrawals are made. Premium taxes generally range from 0% to
3.5%.
There is also an annual certificate maintenance charge of $30 per
Certificate imposed each year for the expenses incurred by MassMutual for
the establishment and maintenance of the Certificates and related
administrative expenses.
For assuming mortality and expense risks, MassMutual deducts a charge
equal, on an annual basis, to 1.25% of the average daily net asset value of
the Separate Account's assets. MassMutual also deducts an administrative
charge equal, on an annual basis, to .15% of the average daily net assets
of the Separate Account. These charges cover expenses in connection with
the administration of the Separate Account and the Certificates.
5. DISTRIBUTION AGREEMENTS
MML Distributors, LLC ("MML Distributors"), a wholly-owned subsidiary of
MassMutual, serves as principal underwriter for the Certificates pursuant
to an underwriting and servicing agreement among MML Distributors, and
MassMutual. MML Distributors is registered with the Securities and Exchange
Commission (the "SEC") as a broker-dealer under the Securities Exchange Act
of 1934 and is a member of the National Association of Securities Dealers,
Inc. (the "NASD"). MML Distributors may enter into selling agreements with
other broker-dealers who are registered with the SEC and are members of the
NASD in order to sell the Certificates.
F-6
<PAGE>
Notes To Financial Statements (Continued)
MML Investors Services, Inc. ("MMLISI"), a wholly-owned subsidiary of
MassMutual, serves as co-underwriter for the Certificates pursuant to
underwriting and servicing agreements between MMLISI and MassMutual. MMLISI
is registered with the SEC as a broker-dealer under the Securities Exchange
Act of 1934 and is a member of the NASD. Registered representatives of
MMLISI sell the Certificates as authorized variable life insurance agents
under applicable state insurance laws.
Pursuant to underwriting and servicing agreements, commissions or other
fees due to registered representatives for selling and servicing the
Certificates are paid by MassMutual on behalf of MML Distributors or
MMLISI. MML Distributors and MMLISI also receive compensation for their
actions as underwriters of the Certificates.
6. PURCHASES AND SALES OF INVESTMENTS
<TABLE>
<CAPTION>
LifeSpan LifeSpan
Total International Diversified LifeSpan Capital
For The Year Ended Return Growth Equity Income Balanced Appreciation Money Bond
December 31, 1998 Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
- ------------------ ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cost of purchases $1,274,336 $ 449,319 $ 176,651 $ 247,522 $ 709,581 $ 44,736 $2,394,224 $ 713,112
Proceeds from sales $ 416,793 $ 16,344 $ 360 $ 15,000 $ 958 $ -- $1,216,038 $ 24,990
<CAPTION>
Small Cap
Income Mid-Cap Value
For The Year Ended & Growth Growth Contrafund Equity
December 31, 1998 Sub-Account Sub-Account Sub-Account Sub-Account
- ------------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Cost of purchases $ 520,600 $ 177,319 $ 210,390 $ 94,610
Proceeds from sales $ 15,083 $ 28 $ 9 $ --
</TABLE>
7. NET INCREASE IN ACCUMULATION UNITS
<TABLE>
<CAPTION>
For The Period
September 1, 1998 LifeSpan LifeSpan
(Commencement of Total International Diversified LifeSpan Capital
Operations) Through Return Growth Equity Income Balanced Appreciation Money
December 31, 1998 Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
- ----------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Units purchased 50,549 12,103 8,099 7,203 41,420 1,700 273,609
Units withdrawn (75) -- -- -- (277) -- --
Units transferred between divisions 14,372 16,953 5,436 12,328 12,570 1,718 (160,304)
-------- -------- -------- -------- -------- -------- --------
Net increase 64,846 29,056 13,535 19,531 53,713 3,418 113,305
Units, at beginning of the year -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Units, at end of the year 64,846 29,056 13,535 19,531 53,713 3,418 113,305
======== ======== ======== ======== ======== ======== ========
<CAPTION>
For The Period
September 1, 1998 Small Cap
(Commencement of Income Mid-Cap Value
Operations) Through Bond & Growth Growth Contrafund Equity
December 31, 1998 Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
- ----------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Units purchased 35,801 17,974 6,991 6,750 4,699
Units withdrawn -- -- -- -- --
Units transferred between divisions 23,596 21,279 8,485 11,910 4,043
-------- -------- -------- -------- --------
Net increase 59,397 39,253 15,476 18,660 8,742
Units, at beginning of the year -- -- -- -- --
-------- -------- -------- -------- --------
Units, at end of the year 59,397 39,253 15,476 18,660 8,742
======== ======== ======== ======== ========
</TABLE>
F-7
<PAGE>
Report Of Independent Accountants
To the Board of Directors and Policyholders of
Massachusetts Mutual Life Insurance Company
We have audited the accompanying statutory statements of financial position of
Massachusetts Mutual Life Insurance Company as of December 31, 1998 and 1997,
and the related statutory statements of income and changes in policyholders'
contingency reserves, and of cash flows for each of the three years in the
period ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described in Note 1, these financial statements were prepared in conformity
with accounting practices prescribed or permitted by the Division of Insurance
of the Commonwealth of Massachusetts, which practices differ from generally
accepted accounting principles. The effects on the financial statements of the
variances between the statutory basis of accounting and generally accepted
accounting principles, although not reasonably determinable, are presumed to be
material.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements audited by us do not present fairly, in
conformity with generally accepted accounting principles, the financial position
of Massachusetts Mutual Life Insurance Company as of December 31, 1998 and 1997,
or the results of its operations or its cash flows for each of the three years
in the period ended December 31, 1998.
In our opinion, the financial statements audited by us present fairly, in all
material respects, the financial position of Massachusetts Mutual Life Insurance
Company as of December 31, 1998 and 1997, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1998, on the basis of accounting described in Note 1.
PricewaterhouseCoopers LLP
Springfield, Massachusetts
February 25, 1999
FF-1
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION
December 31,
1998 1997
-------- --------
(In Millions)
Assets:
Bonds $ 25,215.8 $ 23,508.2
Common stocks 296.3 354.7
Mortgage loans 5,916.5 5,245.8
Real estate 1,739.8 1,697.7
Other investments 2,263.7 1,963.8
Policy loans 5,224.2 4,950.4
Cash and short-term investments 1,123.3 1,941.2
----------- -----------
41,779.6 39,661.8
Other assets 1,306.2 1,169.7
----------- -----------
43,085.8 40,831.5
Separate account assets 19,589.7 16,803.1
----------- -----------
$ 62,675.5 $ 57,634.6
=========== ===========
See notes to statutory financial statements.
FF-2
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION, Continued
December 31,
1998 1997
-------- --------
(In Millions)
Liabilities:
Policyholders' reserves and funds $ 35,277.0 $ 33,783.2
Policyholders' dividends 1,021.6 954.1
Policyholders' claims and other benefits 332.4 353.4
Federal income taxes 634.9 436.5
Asset valuation and other investment reserves 1,053.4 973.4
Other liabilities 1,578.9 1,457.9
----------- -----------
39,898.2 37,958.5
Separate account liabilities 19,588.5 16,802.8
----------- -----------
59,486.7 54,761.3
Policyholders' contingency reserves 3,188.8 2,873.3
----------- -----------
$ 62,675.5 $ 57,634.6
=========== ===========
See notes to statutory financial statements.
FF-3
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Years Ended December 31,
1998 1997 1996
-------- -------- --------
(In Millions)
<S> <C> <C> <C>
Revenue:
Premium income $ 7,482.2 $ 6,764.8 $ 6,328.6
Net investment income 2,956.8 2,870.2 2,834.4
Fees and other income 154.0 126.7 117.2
--------- --------- ---------
10,593.0 9,761.7 9,280.2
--------- --------- ---------
Benefits and expenses:
Policyholders' benefits and payments 5,873.9 6,583.8 6,048.2
Addition to policyholders' reserves and funds 2,299.6 826.8 945.2
Operating expenses 509.5 450.8 428.0
Commissions 299.3 315.3 335.5
State taxes, licenses and fees 88.1 81.5 96.4
Merger restructuring costs - - 66.1
--------- --------- ---------
9,070.4 8,258.2 7,919.4
--------- --------- ---------
Net gain before federal income taxes and dividends 1,522.6 1,503.5 1,360.8
Federal income taxes 199.3 284.4 276.7
--------- --------- ---------
Net gain from operations before dividends 1,323.3 1,219.1 1,084.1
Dividends to policyholders 982.9 919.5 859.9
--------- --------- ---------
Net gain from operations 340.4 299.6 224.2
Net realized capital gain (loss) 25.4 (42.5) 40.3
--------- --------- ---------
Net income $ 365.8 $ 257.1 $ 264.5
========= ========= =========
</TABLE>
See notes to statutory financial statements.
FF-4
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF CHANGES
IN POLICYHOLDERS' CONTINGENCY RESERVES
<TABLE>
<CAPTION>
Years Ended December 31,
1998 1997 1996
-------- -------- --------
(In Millions)
<S> <C> <C> <C>
Policyholders' contingency reserves,
beginning of year $2,873.3 $2,638.6 $2,600.9
-------- -------- --------
Increases (decreases) due to:
Net income 365.8 257.1 264.5
Net unrealized capital gain (loss) 17.4 119.1 (1.7)
Change in asset valuation and other investment reserves (81.0) (76.0) (142.4)
Change in prior year policyholders' reserves 8.6 (55.4) (72.2)
Other 4.7 (10.1) (10.5)
-------- -------- --------
315.5 234.7 37.7
-------- -------- --------
Policyholders' contingency reserves,
end of year $3,188.8 $2,873.3 $2,638.6
======== ======== ========
</TABLE>
See notes to statutory financial statements.
FF-5
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31,
1998 1997 1996
-------- -------- --------
(In Millions)
<S> <C> <C> <C>
Operating activities:
Net income $ 365.8 $ 257.1 $ 264.5
Addition to policyholders' reserves and funds,
net of transfers to separate accounts 1,472.8 421.3 426.7
Net realized capital (gain) loss (25.4) 42.5 (40.3)
Other changes 15.4 (108.1) (286.1)
--------- --------- ---------
Net cash provided by operating activities 1,828.6 612.8 364.8
--------- --------- ---------
Investing activities:
Loans and purchases of investments (15,981.2) (12,292.7) (10,171.5)
Sales or maturities of investments and receipts
from repayment of loans 13,334.7 12,545.7 8,539.3
--------- --------- ---------
Net cash provided by (used in) investing activities (2,646.5) 253.0 (1,632.2)
--------- --------- ---------
Increase (decrease) in cash and short-term investments (817.9) 865.8 (1,267.4)
Cash and short-term investments, beginning of year 1,941.2 1,075.4 2,342.8
--------- --------- ---------
Cash and short-term investments, end of year $ 1,123.3 $ 1,941.2 $ 1,075.4
========= ========= =========
</TABLE>
See notes to statutory financial statements.
FF-6
<PAGE>
Notes To Statutory Financial Statements
Massachusetts Mutual Life Insurance Company ("the Company") is a mutual life
insurance company and as such has no shareholders. The Company's primary
business is individual life insurance, annuity and disability income
products distributed primarily through career agents. The Company also
provides either directly or through its subsidiaries, a wide range of
pension products and services, as well as investment services to
individuals, corporations and institutions in all 50 states and the District
of Columbia.
On March 1, 1996, the operations of the former Connecticut Mutual Life
Insurance Company ("Connecticut Mutual") were merged into the Company. This
merger was accounted for under the pooling of interests method of
accounting. For the purposes of this presentation, these financial
statements reflect historical amounts giving retroactive effect as if the
merger had occurred on January 1, 1996 in conformity with the practices of
the National Association of Insurance Commissioners ("NAIC") and the
accounting practices prescribed or permitted by the Division of Insurance of
the Commonwealth of Massachusetts. In 1996, merger-related expenses totaling
$66.1 million were recorded in the Statutory Statement of Income. On the
merger date, policyholders' reserves attributable to disability income
contracts were strengthened by $75.0 million, investment reserves for real
estate were increased by $49.8 million and net prepaid pension assets were
increased by $10.4 million with all adjustments reflected as a charge to
policyholders' contingency reserves.
On March 31, 1996, the Company sold MassMutual Holding Company Two, Inc., a
wholly-owned subsidiary, and its subsidiaries, including Mirus Life
Insurance Company (formerly the MML Pension Insurance Company; currently
doing business as "UniCARE"), which comprised the Company's group life and
health business, to WellPoint Health Networks, Inc. The Company received
total consideration of $402.2 million ($340.0 million in cash and $62.2
million in notes receivable) and recognized a before tax gain of $187.9
million. The Company, pursuant to a 1994 reinsurance agreement, cedes its
group life, accident and health business to UniCARE.
1. SUMMARY OF ACCOUNTING PRACTICES
The accompanying statutory financial statements, have been prepared in
conformity with the statutory accounting practices of the NAIC and the
accounting practices prescribed or permitted by the Division of Insurance of
the Commonwealth of Massachusetts and are different in some respects from
financial statements prepared in accordance with generally accepted
accounting principles ("GAAP"). The more significant differences are as
follows: (a) acquisition costs, such as commissions and other costs directly
related to acquiring new business, are charged to current operations as
incurred, whereas GAAP would require these expenses to be capitalized and
recognized over the life of the policies; (b) policy reserves are based upon
statutory mortality, morbidity and interest requirements without
consideration of withdrawals, whereas GAAP reserves would be based upon
reasonably conservative estimates of mortality, morbidity, interest and
withdrawals; (c) bonds are generally carried at amortized cost whereas GAAP
generally requires they be reported at fair value; (d) deferred income taxes
are not provided for book-tax timing differences as would be required by
GAAP, and (e) payments received for universal and variable life products,
variable annuities and investment related products are reported as premium
income and changes in reserves, whereas under GAAP, these payments would be
recorded as deposits to policyholders' account balances.
In March 1998, the NAIC adopted the Codification of Statutory Accounting
Principles ("Codification"). Codification provides a comprehensive guide of
statutory accounting principles for use by insurers in all states and is
expected to become effective no later than January 1, 2001. The effect of
adopting Codification shall be reported as an adjustment to policyholders'
contingency reserves on the effective date. The Company is currently
reviewing the impact of Codification; however, since the Division of
Insurance of the Commonwealth of Massachusetts has not approved
Codification, the ultimate impact cannot be determined at this time.
FF-7
<PAGE>
Notes To Statutory Financial Statements (Continued)
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, as well as disclosures of contingent assets and liabilities at
the date of the financial statements. Management must also make estimates
and assumptions that affect the amounts of revenues and expenses during the
reporting period. Future events, including changes in the levels of
mortality, morbidity, interest rates and asset valuations, could cause
actual results to differ from the estimates used in these financial
statements.
Certain 1997 and 1996 amounts have been reclassified to conform with the
current year presentation.
The following is a description of the Company's principal accounting
policies and practices.
A. Investments
Bonds and stocks are valued in accordance with rules established by the
NAIC. Generally, bonds are valued at amortized cost, preferred stocks in
good standing at cost, and common stocks, except for unconsolidated
subsidiaries, at fair value.
Mortgage loans are valued at unpaid principal net of unamortized premium or
discount. The Company discontinues the accrual of interest on mortgage loans
which are delinquent more than 90 days or when collection is uncertain. Real
estate is valued at cost less accumulated depreciation, impairment
allowances and mortgage encumbrances. Encumbrances totaled $63.5 million in
1998 and $14.2 million in 1997. Depreciation on investment real estate is
calculated using the straight-line and constant yield methods.
Policy loans are carried at the outstanding loan balance less amounts
unsecured by the cash surrender value of the policy.
Short-term investments are stated at amortized cost, which approximates fair
value.
Investments in unconsolidated subsidiaries and affiliates, joint ventures
and other forms of partnerships are included in other investments on the
Statutory Statement of Financial Position and are accounted for using the
equity method.
In compliance with regulatory requirements, the Company maintains an Asset
Valuation Reserve ("AVR") and an Interest Maintenance Reserve ("IMR"). The
AVR and other investment reserves stabilize the policyholders' contingency
reserves against fluctuations in the value of stocks, as well as declines in
the value of bonds, mortgage loans and real estate investments. The IMR
captures after-tax realized capital gains and losses which result from
changes in the overall level of interest rates for all types of fixed income
investments and interest related hedging activities. These interest rate
related gains and losses are amortized into income using the grouped method
over the remaining life of the investment sold or over the remaining life of
the underlying asset. Net realized after tax capital gains of $189.1 million
in 1998, $95.4 million in 1997 and $73.1 million in 1996 were charged to the
IMR. Amortization of the IMR into net investment income amounted to $40.3
million in 1998, $31.0 million in 1997, and $26.9 million in 1996.
Realized capital gains and losses, less taxes, not includible in the IMR,
are recognized in net income. Realized capital gains and losses are
determined using the specific identification method. Unrealized capital
gains and losses are included in policyholders' contingency reserves.
B. Separate Accounts
Separate account assets and liabilities represent segregated funds
administered and invested by the Company for the benefit of pension,
variable annuity and variable life insurance contractholders. Assets consist
principally of marketable securities reported at fair value. Premiums,
benefits and expenses of the separate
FF-8
<PAGE>
Notes To Statutory Financial Statements (Continued)
accounts are reported in the Statutory Statement of Income. The Company
receives administrative and investment advisory fees from these accounts.
Net transfers to separate accounts of $821.3 million, $355.7 million and
$636.5 million in 1998, 1997 and 1996, respectively, are included in the
addition of policyholders' reserves and funds.
C. Non-admitted Assets
Assets designated as "non-admitted" (principally certain furniture,
equipment and other receivables) are excluded from the Statutory Statement
of Financial Position by an adjustment to policyholders' contingency
reserves.
D. Policyholders' Reserves and Funds
Policyholders' reserves for life insurance contracts are developed using
accepted actuarial methods computed principally on the net level premium and
the Commissioners' Reserve Valuation Method bases using the American
Experience and the 1941, 1958 and 1980 Commissioners' Standard Ordinary
mortality tables with assumed interest rates ranging from 2.5 to 6.75
percent.
Reserves for individual annuities, guaranteed investment contracts and
deposit administration and immediate participation guarantee contracts are
based on accepted actuarial methods principally at interest rates ranging
from 2.25 to 11.25 percent. Reserves for policies and contracts considered
investment contracts have a carrying value of $7,734.6 million and $8,077.9
million at December 31, 1998 and 1997, respectively with a fair value of
$7,940.6 million and $8,250.0 million at December 31, 1998 and 1997,
respectively, as determined by discounted cash flow projections.
Disability income policy reserves are generally calculated using the two-
year preliminary term, net level premium and fixed net premium methods and
various morbidity tables.
The Company made certain changes in the valuation of policyholders' reserves
which increased policyholders' contingency reserves by $8.6 million in 1998
and decreased policyholders' contingency reserves by $55.4 million and $72.2
million in 1997 and 1996, respectively.
E. Premium and Related Expense Recognition
Life insurance premium revenue is recognized annually on the anniversary
date of the policy. Annuity premium is recognized when received. Disability
income premiums are recognized as revenue when due. Commissions and other
costs related to issuance of new policies, maintenance and settlement costs
are charged to current operations when incurred.
F. Policyholders' Dividends
The Board of Directors annually approves dividends to be paid in the
following year. These dividends are allocated to reflect the relative
contribution of each group of policies to policyholders' contingency
reserves and consider investment and mortality experience, expenses and
federal income tax charges. The liability for policyholders' dividends is
equal to the estimated amount of dividends to be paid in the following
calendar year.
FF-9
<PAGE>
Notes To Statutory Financial Statements (Continued)
G. Cash and Short-term Investments
For purposes of the Statutory Statement of Cash Flows, the Company considers
all highly liquid investments purchased with a maturity of twelve months or
less to be short-term investments.
H. Policyholders' Contingency Reserves
Policyholders' contingency reserves represent surplus of the Company as
reported to regulatory authorities and are intended to protect policyholders
against possible adverse experience.
2. SURPLUS NOTES
The Company issued surplus notes of $100.0 million at 7.50 percent and $250.0
million at 7.625 percent in 1994 and 1993, respectively. These notes are
unsecured and subordinate to all present and future indebtedness of the
Company, policy claims and prior claims against the Company as provided by
the Massachusetts General Laws. Issuance was approved by the Commissioner of
Insurance of the Commonwealth of Massachusetts ("the Commissioner").
All payments of interest and principal are subject to the prior approval of
the Commissioner. Sinking fund payments are due as follows: $62.5 million in
2021, $87.5 million in 2022, $150.0 million in 2023 and $50.0 million in
2024.
Interest on the notes issued in 1994 is scheduled to be paid on March 1 and
September 1 of each year, to holders of record on the preceding February 15
or August 15, respectively. Interest on the notes issued in 1993 is scheduled
to be paid on May 15 and November 15 of each year, to holders of record on
the preceding May 1 or November 1, respectively. Interest expense is not
recorded until approval for payment is received from the Commissioner.
Interest of $26.6 million was approved and paid in 1998, 1997 and 1996.
The proceeds of the notes, less a $24.4 million reserve in 1998, and a $28.3
million reserve in 1997 for contingencies associated with the issuance of the
notes, are recorded as a component of the Company's policyholders'
contingency reserves as permitted by the Division of Insurance. These surplus
note reserves are included in asset valuation and other investment reserves
on the Statutory Statement of Financial Position.
3. BENEFIT PLANS
The Company provides multiple benefit plans to employees, agents and retirees
including retirement plans and life and health benefits.
Retirement Plans
The Company has two non-contributory defined benefit plans covering
substantially all of its employees. One plan includes active employees and
retirees previously employed by Connecticut Mutual Life Insurance Company
which merged with MassMutual in 1996; the other plan includes all other
eligible employees and retirees. Benefits are based on the employees' years
of service, compensation during the last five years of employment and
estimated social security retirement benefits. The Company accounts for these
plans following Financial Accounting Standards Board Statement No. 87,
"Employers' Accounting for Pensions". Accordingly, as permitted by the
Massachusetts Division of Insurance, the Company has recognized a pension
asset of $216.0 million and $157.4 million at December 31, 1998 and 1997,
respectively. Company policy is to fund pension costs in accordance with the
requirements of the Employee Retirement Income Security Act of 1974 and,
based on such requirements, no funding was required for the years ended
December 31, 1998, and 1997. The assets of the plans are invested in the
Company's general account and separate accounts.
FF-10
<PAGE>
Notes To Statutory Financial Statements (Continued)
The Company also has defined contribution plans for employees and agents. The
Company funds the plans by matching employee contributions, subject to
statutory limits. Company contributions and any earnings on them are vested
based on years of vesting service using a graduated vesting schedule in 20
percent increments over a five-year period.
Life and Health
Life and health insurance benefits are provided to employees and agents
through group insurance contracts. Substantially all of the Company's
employees and agents may become eligible for continuation of certain of these
benefits if they retire as active employees or agents of the Company. The
Company adopted the National Association of Insurance Commissioners'
accounting standard for post retirement life and health benefit costs,
requiring these benefits to be accounted for using the accrual method for
employees and agents eligible to retire and current retirees. The initial
transition obligation of $137.9 million is being amortized over twenty years
through 2012. During 1998, the Company transferred the administration of the
retiree life and health plan benefit obligations and supporting assets to an
unconsolidated subsidiary.
The status of the defined benefit plans as of December 31 is as follows:
Retirement Life and Health
1998 1997 1998 1997
---- ---- ---- ----
(In Millions)
Accumulated benefit obligation
at December 31 $ 822.8 $ 663.1 $ 185.6 $ 145.9
Fair value of plan assets
at December 31 1,160.2 1,154.2 21.0 21.7
--------- --------- -------- --------
Funded status $ 337.4 $ 491.1 $ (164.6) $ (124.2)
========= ========= ======== ========
The following rates were used in determining the actuarial present value of the
accumulated benefit obligations.
<TABLE>
<CAPTION>
Retirement Life and Health
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Discount rate 6.75% 7.25% 6.75% 7.25%
Increase in future compensation
levels 4.00-5.00% 4.00-5.00% 5.00% 5.00-5.50%
Long-term rate of return on assets 9.00-10.00% 9.00-10.00% 6.75% 6.75%
Assumed increases in medical cost
Rates in the first year - - 7.00% 6.25-9.50%
declining to - - 4.25% 4.75-5.00%
within - - 5 years 5 years
</TABLE>
A one percent increase in the annual assumed inflation rate in medical cost
rates would increase the 1998 accumulated postretirement benefit liability and
benefit expense by $9.2 million and $1.1 million, respectively. A one percent
decrease in the annual assumed inflation rate in medical costs rates would
decrease the 1998 accumulated postretirement benefit liability and benefit
expense by $8.5 million and $1.0 million, respectively.
FF-11
<PAGE>
Notes To Statutory Financial Statements (Continued)
The expense charged to operations for all employee benefit plans is $32.1
million in 1998, $23.9 million in 1997 and $38.1 million in 1996. In 1997,
there was a significant reduction in plan participants in the Connecticut
Mutual Plan which resulted in recognition of a pension plan curtailment gain
of $10.7 million.
4. RELATED PARTY TRANSACTIONS
The company has management and service contracts or cost sharing arrangements
with various subsidiaries and affiliates whereby the Company, for a fee, will
furnish a subsidiary or affiliate, as required, operating facilities, human
resources, computer software development and managerial services. Fees earned
under the terms of the contracts or arrangements were $205.0 million and
$137.3 million for 1998 and 1997, respectively.
The Company has reinsurance agreements with its subsidiaries, C.M. Life
Insurance Company and MML Bay State Life Insurance Company, including stop-
loss and modified coinsurance agreements on life insurance products. Total
premiums assumed on these agreements were $38.4 million in 1998, $40.9
million in 1997 and $44.1 million in 1996.
5. FEDERAL INCOME TAXES
Provision for federal income taxes is based upon the Company's estimate of
its current tax liability. No deferred tax effect is recognized for temporary
differences that may exist between financial reporting and taxable income.
Accordingly, the reporting of miscellaneous temporary differences, such as
reserves, acquisition costs and restructuring costs and of permanent
differences such as the equity tax, resulted in effective tax rates which
differ from the statutory tax rate.
The Company plans to file its 1998 federal income tax return on a
consolidated basis with its eligible life affiliates and non-life affiliates.
C.M. Life Insurance Company, which is not an eligible life affiliate, files a
separate return. The Company and its eligible life insurance and non-life
affiliates are subject to a written tax allocation agreement, which allocates
the group's consolidated tax liability for payment purposes. Generally, the
agreement provides that affiliates with losses shall be compensated for the
use of their losses and credits by other affiliates.
The Internal Revenue Service has completed examining the Company's income tax
returns through the year 1992 for Massachusetts Mutual and 1995 for
Connecticut Mutual, and is currently examining Massachusetts Mutual for the
years 1993 and 1994. The Company believes adjustments which may result from
such examinations will not materially affect its financial position.
Components of the formula authorized by the Internal Revenue Service for
determining deductible policyholder dividends have not been finalized for
1998 or 1997. The Company records the estimated effects of anticipated
revisions in the Statutory Statement of Income.
Federal tax payments were $152.4 million in 1998, $353.4 million in 1997 and
$330.7 million in 1996.
6. INVESTMENTS
The Company maintains a diversified investment portfolio. Investment policies
limit concentration in any asset class, geographic region, industry group,
economic characteristic, investment quality or individual investment. In the
normal course of business, the Company enters into commitments to purchase
privately placed bonds and to issue mortgage loans.
FF-12
<PAGE>
Notes To Statutory Financial Statements (Continued)
A. Bonds
The carrying value and estimated fair value of bonds are as follows:
<TABLE>
<CAPTION>
December 31, 1998
-----------------
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
---------- ---------- ---------- ----------
(In Millions)
<S> <C> <C> <C> <C>
U. S. Treasury securities $ 4,945.3 $ 473.0 $ 20.4 $ 5,397.9
and obligations of U. S.
government corporations
and agencies
Debt securities issued by 41.2 1.5 1.3 41.4
foreign governments
Mortgage-backed securities 3,734.4 188.0 13.9 3,908.5
State and local governments 360.5 33.2 7.9 385.8
Corporate debt securities 14,133.3 845.3 118.4 14,860.2
Utilities 885.8 102.6 0.3 988.1
Affiliates 1,115.3 0.6 0.9 1,115.0
----------- ---------- -------- -----------
TOTAL $ 25,215.8 $ 1,644.2 $ 163.1 $ 26,696.9
=========== ========== ======== ===========
<CAPTION>
December 31, 1997
-----------------
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
---------- ---------- ---------- ----------
(In Millions)
<S> <C> <C> <C> <C>
U. S. Treasury securities $ 6,241.0 $ 470.5 $ 10.3 $ 6,701.2
and obligations of U. S.
government corporations
and agencies
Debt securities issued by 83.5 4.4 3.0 84.9
foreign governments
Mortgage-backed securities 3,008.7 187.9 9.0 3,187.6
State and local governments 361.9 23.9 .6 385.2
Corporate debt securities 12,148.9 765.2 46.9 12,867.2
Utilities 871.8 100.1 2.2 969.7
Affiliates 792.4 2.8 1.0 794.2
----------- ---------- -------- -----------
TOTAL $ 23,508.2 $ 1,554.8 $ 73.0 $ 24,990.0
=========== ========== ======== ===========
</TABLE>
FF-13
<PAGE>
Notes To Statutory Financial Statements (Continued)
The carrying value and estimated fair value of bonds at December 31, 1998 by
contractual maturity are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without prepayment penalties.
Estimated
Carrying Fair
Value Value
--------- ---------
(In Millions)
Due in one year or less $ 556.5 $ 560.7
Due after one year through five years 4,150.6 4,270.5
Due after five years through ten years 8,622.8 9,045.0
Due after ten years 5,319.5 5,999.6
--------- ---------
18,649.4 19,875.8
Mortgage-backed securities, including
securities guaranteed by the U.S.
Government 6,566.4 6,821.1
--------- ---------
TOTAL $25,215.8 $26,696.9
========= =========
Proceeds from sales of investments in bonds were $11,663.4 million during
1998, $11,427.8 million during 1997 and $6,390.7 million during 1996. Gross
capital gains of $331.8 million in 1998, $200.7 million in 1997 and $188.8
million in 1996 and gross capital losses of $47.3 million in 1998, $68.8
million in 1997 and $255.5 million in 1996 were realized on those sales,
portions of which were included in the IMR. The estimated fair value of non-
publicly traded bonds is determined by the Company using a pricing matrix and
quoted market prices for publicly traded bonds.
B. Stocks
Common stocks, except for unconsolidated subsidiaries, had a cost of $238.4
million in 1998 and $250.3 million in 1997.
C. Mortgages
The fair value of mortgage loans, as determined from a pricing matrix for
performing loans and the estimated underlying real estate value for non-
performing loans, was $6,178.8 million and $5,039.1 million at December 31,
1998 and 1997, respectively.
The Company had restructured loans with book values of $126.6 million, and
$202.3 million at December 31, 1998 and 1997, respectively. These loans
typically have been modified to defer a portion of the contractual interest
payments to future periods. Interest deferred to future periods totaled $0.1
million in 1998, $5.1 million in 1997 and $2.2 million in 1996. At December
31, 1998, scheduled commercial mortgage loan maturities were as follows:
1999 - $341.0 million; 2000 - $333.0 million; 2001 - $305.2 million; 2002 -
$210.6 million; 2003 - $299.0 million; and $3,106.4 million thereafter.
D. Policy Loans
Policy loans are recorded at cost as it is not practicable to determine the
fair value since they do not have a stated maturity.
E. Other
Preferred stocks in good standing had fair values of $116.0 million in 1998
and $145.5 million in 1997, using a pricing matrix for non-publicly traded
stocks and quoted market prices for publicly traded stocks.
FF-14
<PAGE>
Notes To Statutory Financial Statements (Continued)
The carrying value of investments which were non-income producing for the
preceding twelve months was $13.2 million and $5.7 million at December 31,
1998 and 1997, respectively.
7. PORTFOLIO RISK MANAGEMENT
The Company manages its investment risks, primarily to reduce interest rate
and duration imbalances determined in asset/liability analyses. The fair
values of these financial instruments, described below, which are not
recorded in the financial statements, unless otherwise noted, are based upon
market prices or prices obtained from brokers. The Company does not hold or
issue these financial instruments for trading purposes.
The notional amounts described do not represent amounts exchanged by the
parties and, thus, are not a measure of the exposure of the Company. The
amounts exchanged are calculated on the basis of the notional amounts and the
other terms of the instruments, which relate to interest rates, exchange
rates, security prices or financial or other indexes.
The Company utilizes interest rate swap agreements, options, and purchased
caps and floors to reduce interest rate exposures arising from mismatches
between assets and liabilities and to modify portfolio profiles to manage
other risks identified. Under interest rate swaps, the Company agrees to an
exchange, at specified intervals, between streams of variable rate and fixed
rate interest payments calculated by reference to an agreed-upon notional
principal amount. Gains and losses realized on the termination of contracts
are deferred and amortized through the IMR over the remaining life of the
associated contract. IMR amortization is included in net investment income on
the Statutory Statement of Income. Net amounts receivable and payable are
accrued as adjustments to investment income and included in other assets on
the Statutory Statement of Financial Position. At December 31, 1998 and 1997,
the Company had swaps with notional amounts of $4,382.0 million and $3,220.2
million, respectively. The fair values of these instruments were $84.1
million at December 31, 1998 and $20.9 million at December 31, 1997.
Options grant the purchaser the right to buy or sell a security or enter into
a derivative transaction at a stated price within a stated period. The
Company's option contracts have terms of up to fifteen years. The amounts
paid for options purchased are amortized into investment income over the life
of the contract on a straight-line basis. Unamortized costs are included in
other investments on the Statutory Statement of Financial Position. Gains and
losses on these contracts are recorded at the expiration or termination date
and are deferred and amortized through the IMR over the remaining life of the
option contract. At December 31, 1998 and 1997, the Company had option
contracts with notional amounts of $12,704.4 million and $5,388.2 million,
respectively. The Company's credit risk exposure was limited to the
unamortized costs of $92.5 million and $59.0 million, which had fair values
of $161.9 million and $99.6 million at December 31, 1998 and 1997,
respectively.
Interest rate cap agreements grant the purchaser the right to receive the
excess of a referenced interest rate over a stated rate calculated by
reference to an agreed upon notional amount. Interest rate floor agreements
grant the purchaser the right to receive the excess of a stated rate over a
referenced interest rate calculated by reference to an agreed upon notional
amount. Amounts paid for interest rate caps and floors are amortized into
investment income over the life of the asset on a straight-line basis.
Unamortized costs are included in other investments on the Statutory
Statement of Financial Position. Amounts receivable and payable are accrued
as adjustments to investment income and included in the Statutory Statement
of Financial Position as other assets. Gains and losses on these contracts,
including any unamortized cost, are recognized upon termination and are
deferred and amortized through the IMR over the remaining life of the
associated cap or floor agreement. At December 31, 1998 and 1997, the company
had agreements with notional amounts of $4,337.9 million and $3,348.6
million, respectively. The Company's credit risk exposure on these agreements
is limited to the unamortized costs of $22.7 million and $18.2 million at
December 31, 1998 and 1997, respectively. The fair values of these
instruments were $43.9 million and $23.4 million at December 31, 1998 and
1997, respectively.
FF-15
<PAGE>
Notes To Statutory Financial Statements (Continued)
The Company enters into forward U.S. Treasury, and Government National
Mortgage Association ("GNMA") and Federal National Home Mortgage Association
("FNMA") commitments for the purpose of managing interest rate exposure. The
Company generally does not take delivery on forward commitments. These
commitments are instead settled with offsetting transactions. Gains and
losses on forward commitments are recorded when the commitment is closed and
amortized through the IMR over the remaining life of the asset. At December
31, 1998 and 1997, the Company had U. S. Treasury, GNMA and FNMA purchase
commitments which will settle during the following year with contractual
amounts of $603.4 million and $1,100.7 million, respectively. The fair values
of these commitments were $604.1 million and $1,117.6 million, including net
unrealized gains of $0.7 million and $16.9 million at December 31, 1998 and
1997, respectively.
The Company utilizes other agreements to reduce exposures to various risks.
Notional amounts relating to these agreements totaled $384.2 million and
$385.6 million at December 31, 1998 and 1997, respectively. The fair values
of these instruments resulted in an unrealized gain of $7.2 million at
December 31, 1998 and an unrealized loss of $6.8 million at December 31,
1997.
The Company is exposed to credit-related losses in the event of
nonperformance by counterparties to derivative financial instruments. This
exposure is limited to contracts with a positive fair value. The amounts at
risk in a net gain position were $272.5 million and $146.7 million at
December 31, 1998 and 1997, respectively. The Company monitors exposure to
ensure counterparties are credit worthy and concentration of exposure is
minimized. Additionally, collateral positions have been obtained with
counterparties when considered prudent.
8. INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES
MassMutual has two primary insurance subsidiaries, C.M. Life, which primarily
writes variable annuities and universal life insurance, and MML Bay State,
which primarily writes variable life and annuity business. MassMutual's
wholly-owned non-insurance subsidiary MassMutual Holding Company, Inc.
("MMHC") owns subsidiaries which include retail and institutional asset
management, registered broker dealer and international life and annuity
operations.
MassMutual accounts for the value of its investments in subsidiaries at their
underlying net equity. Operating results for such subsidiaries are reflected
as net unrealized capital gains in the Statement of Changes in Policyholders'
Contingency Reserves. Net investment income is recorded by MassMutual to the
extent that dividends are declared by the subsidiaries. The Company holds
debt issued by MMHC and its subsidiaries of $1,111.3 million and $792.4
million at December 31, 1998 and 1997, respectively.
Below is summarized financial information for the unconsolidated subsidiaries
as of December 31 and for the year then ended:
1998 1997
-------- --------
(In Millions)
Domestic Life Insurance Subsidiaries:
Total revenue $ 1,151.4 $ 1,086.9
Net income (loss) $ (3.2) $ 1.1
Assets $ 4,741.4 $ 3,766.8
Other Subsidiaries:
Total revenue $ 1,137.4 $ 967.2
Net income $ 73.6 $ 75.4
Assets $ 2,839.5 $ 2,018.8
FF-16
<PAGE>
Notes To Statutory Financial Statements (Continued)
9. REINSURANCE
The Company has reinsurance agreements with other insurance companies in the
normal course of business. In addition, the Company cedes the remainder of
its group life and health business to UniCARE. Premiums, benefits to
policyholders and provisions for future benefits are stated net of
reinsurance. The Company remains liable to the insured for the payment of
benefits if the reinsurer cannot meet its obligations under the reinsurance
agreements. Total premiums ceded were $183.9 million in 1998, $294.6 million
in 1997 and $793.5 million in 1996.
10. BUSINESS RISKS AND CONTINGENCIES
The Company is subject to insurance guaranty fund laws in the states in
which it does business. These laws assess insurance companies amounts to be
used to pay benefits to policyholders and claimants of insolvent insurance
companies. Many states allow these assessments to be credited against future
premium taxes. The Company believes such assessments in excess of amounts
accrued will not materially affect its financial position, results of
operations or liquidity.
The Company is involved in litigation arising in and out of the normal
course of its business. Management intends to defend these actions
vigorously. While the outcome of litigation cannot be foreseen with
certainty, it is the opinion of management, after consultation with legal
counsel, that the ultimate resolution of these matters will not materially
affect its financial position, results of operations or liquidity.
11. SUBSIDIARIES AND AFFILIATED COMPANIES
A summary of ownership and relationship of the Company and its subsidiaries
and affiliated companies as of December 31, 1998 is illustrated below. The
Company provides management or advisory services to these companies.
Subsidiaries are wholly-owned, except as noted.
Parent
------
Massachusetts Mutual Life Insurance Company
Subsidiaries of Massachusetts Mutual Life Insurance Company
-----------------------------------------------------------
CM Assurance Company
CM Benefit Insurance Company
C.M. Life Insurance Company
MassMutual Holding Company
MassMutual of Ireland, Limited
MML Bay State Life Insurance Company
MML Distributors, LLC
MassMutual Mortgage Finance, LLC
Subsidiaries of MassMutual Holding Company
------------------------------------------
GR Phelps & Co., Inc.
MassMutual Holding Trust I
MassMutual Holding Trust II
MassMutual Holding MSC, Inc.
MassMutual International, Inc.
MML Investor Services, Inc.
FF-17
<PAGE>
Notes To Statutory Financial Statements (Continued)
Subsidiaries of MassMutual Holding Trust I
------------------------------------------
Antares Capital Corporation - 99.4%
Charter Oak Capital Management, Inc. - 80.0%
Cornerstone Real Estate Advisors, Inc.
DLB Acquisition Corporation - 85.8%
Oppenheimer Acquisition Corporation - 89.36%
Subsidiaries of MassMutual Holding Trust II
-------------------------------------------
CM Advantage, Inc.
CM International, Inc.
CM Property Management, Inc.
HYP Management, Inc.
MMHC Investments, Inc.
MML Realty Management
Urban Properties, Inc.
MassMutual Benefits Management, Inc.
Subsidiaries of MassMutual International, Inc.
----------------------------------------------
Compensa de Seguros de Vida S.A. - 33.5%
MassLife Seguros de Vida (Argentina) S.A.
MassMutual International (Bermuda) Ltd.
Mass Seguros de Vida (Chile) S.A. - 33.5%
MassMutual International (Luxembourg) S.A.
MassMutual Holding MSC, Inc.
----------------------------
MassMutual Corporate Value Limited - 40.93%
9048 - 5434 Quebec, Inc.
1279342 Ontario Limited
Affiliates of Massachusetts Mutual Life Insurance Company
---------------------------------------------------------
MML Series Investment Fund
MassMutual Institutional Funds
Oppenheimer Value Stock Fund
FF-18
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS
Financial Statements Included in Part A
Condensed Financial Information
Financial Statements Included in Part B
The Registrant
Report of Independent Accounts
Statement of Assets and Liabilities as of December 31, 1998
Statement of Operations for the year ended December 31, 1998
Statement of Changes in Net Assets for the period September 1, 1998
(commencement of operations) through December 31, 1998
Notes to Financial Statements
The Depositor
Reports of Independent Accountants
Statutory Statements of Financial Position as of December 31, 1998 and
1997
Statutory Statements of Income for the years ended December 31, 1998,
1997 and 1996
Statutory Statements of Changes in Policyholders' Contingency Reserves
for the years ended December 31, 1998, 1997 and 1996
Statutory Statements of Cash Flows for the years ended December 31,
1998, 1997 and 1996
Notes to Statutory Financial Statements
(b) EXHIBITS
Exhibit 1 Resolution of Board of Directors of the Company
authorizing the establishment of the Separate
Account.(1)
Exhibit 2 Not Applicable.
Exhibit 3(i) Principal Underwriting Agreement.(3)
(ii) Underwriting and Servicing Agreement.(3)
Exhibit 4 (i) Form of Group Annuity Contract.(1)
(ii) Form of Individual Certificate.(1)
Exhibit 5 (i) Form of Group Annuity Application.(1)
(ii) Form of Individual Certificate Application.(1)
Exhibit 6 (i) Copy of Articles of Incorporation of the Company.(1)
(ii) Copy of the Bylaws of the Company.(1)
9
<PAGE>
Exhibit 7 Not Applicable.
Exhibit 8 (i) Form of Participation Agreement with Oppenheimer
Variable Account Funds, Inc. (2)
(ii) Form of Participation Agreement with Panorama
Series Fund, Inc. (2)
(iii) Form of Participation Agreement with American
Century Variable Portfolios, Inc. (3)
(iv) Form of Participation Agreement with Variable
Insurance Products Fund II. (3)
(v) Form of Participation Agreement with T. Rowe
Equity Series, Inc. (3)
Exhibit 9 Opinion and Consent of Counsel.*
Exhibit 10 (i) Consent of Independent Accountants,
PricewaterhouseCoopers LLP.*
(ii) Powers of Attorney. (4)
(iii) Powers of Attorney for Robert J. O'Connell and
Thomas B. Wheeler. (5)
(iv) Power of Attorney for Roger G. Ackerman. (3)
Exhibit 11 Not Applicable.
Exhibit 12 Not Applicable.
Exhibit 13 Schedule of Computation of Performance.*
Exhibit 14 None.
(1) Incorporated by reference to Registrant's initial Registration Statement
(No. 333-45039) filed on January 28, 1998.
(2) Incorporated by reference to Registration Statement No. 333-22557, filed on
February 28, 1997.
(3) Incorporated by reference to Registrant's Pre-Effective Amendment No. 1 to
Registration Statement No. 333-45039, filed on June 4, 1998.
(4) Incorporated by reference to Initial Registration Statement No. 333-22557,
filed on January 28, 1997.
(5) Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
Statement File No. 333-65887, filed on Form S-6 on January 28, 1999.
* Filed herewith.
10
<PAGE>
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
Name, Position, Business Address Principal Occupation(s ) During Past Five Years
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Roger G. Ackerman, Director Corning, Inc.
One Riverfront Plaza, HQE 2 Chairman and Chief Executive Officer (since 1996)
Corning, NY 14831 President and Chief Operating Officer (1990-1996)
- ------------------------------------------------------------------------------------------------------------------------------------
James R. Birle, Director Resolute Partners, LLC
2 Soundview Drive Chairman (since 1997), Founder (1994)
Greenwich, CT 06836 President (1994-1997)
Blackstone Group
General Partner (1988-1994)
- ------------------------------------------------------------------------------------------------------------------------------------
Gene Chao, Director Computer Projections, Inc.
733 SW Vista Avenue Chairman, President and CEO (since 1991)
Portland, OR 97205
- ------------------------------------------------------------------------------------------------------------------------------------
Patricia Diaz Dennis, Director SBC Communications Inc.
175 East Houston, Room 5-A-70 Senior Vice President - Regulatory and Public Affairs (since 1998)
San Antonio, TX 78205 Senior Vice President and Assistant General Counsel (1995-1998)
Sullivan & Cromwell
Special Counsel (1993-1995)
U.S. Department of State
Asst. Secy. of State for Human Rights and Human. Affrs. (1992-1993)
- ------------------------------------------------------------------------------------------------------------------------------------
Anthony Downs, Director The Brookings Institution
1775 Massachusetts Ave., N.W. Senior Fellow (since 1977)
Washington, DC 20036-2188
- ------------------------------------------------------------------------------------------------------------------------------------
James L. Dunlap, Director Ocean Energy, Inc.
1201 Louisiana, Suite 1400 Vice Chairman (since 1998)
Houston, TX 77002-5603 United Meridian Corporation
President and Chief Operating Officer (1996-1998)
Texaco, Inc.
Senior Vice President (1987-1996)
- ------------------------------------------------------------------------------------------------------------------------------------
William B. Ellis, Director Yale University School of Forestry and Environmental Studies
31 Pound Foolish Lane Senior Fellow (since 1995)
Glastonbury, CT 06033 Northeast Utilities
Chairman of the Board (1993-1995) and Chief Executive
Officer (1983-1993)
- ------------------------------------------------------------------------------------------------------------------------------------
Robert M. Furek, Director Resolute Partners LLC
1 State Street, Suite 2310 Partner (since 1997)
Hartford, CT 06103 State Board of Trustees for the Hartford School System
Chairman (since 1997)
Heublein, Inc.
President and Chief Executive Officer (1987-1996)
- ------------------------------------------------------------------------------------------------------------------------------------
Charles K. Gifford, Director BankBoston, N.A.
100 Federal Street Chairman and Chief Executive Officer (since 1996)
Boston, MA 02110 President (1989-1996)
BankBoston Corporation
Chairman (since 1998) and Chief Executive Officer (since 1995)
President (1989-1996)
- ------------------------------------------------------------------------------------------------------------------------------------
William N. Griggs, Director Griggs & Santow, Inc.
75 Wall Street, 20th Floor Managing Director (since 1983)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
New York, NY 10005
- ------------------------------------------------------------------------------------------------------------------------------------
George B. Harvey, Director Pitney Bowes
One Landmark Square, Suite 1905 Chairman, President and CEO (1983-1996)
Stamford, CT 06901
- ------------------------------------------------------------------------------------------------------------------------------------
Barbara B. Hauptfuhrer, Director Director of various corporations (since 1972)
1700 Old Welsh Road
Huntingdon Valley, PA 19006
- ------------------------------------------------------------------------------------------------------------------------------------
Sheldon B. Lubar, Director Lubar & Co. Incorporated
700 North Water Street, Suite 1200 Chairman (since 1977)
Milwaukee, WI 53202
- ------------------------------------------------------------------------------------------------------------------------------------
William B. Marx, Jr., Director Lucent Technologies
5 Peacock Lane Senior Executive Vice President (1996-1996)
Village of Golf, FL 33436-5299 AT&T Multimedia Products Group
Executive Vice President and CEO (1994-1996)
AT&T Network Systems Group
Executive Vice President and CEO (1993-1994)
Group Executive and President (1989-1993)
- ------------------------------------------------------------------------------------------------------------------------------------
John F. Maypole, Director Peach State Real Estate Holding Company
55 Sandy Hook Road - North Managing Partner (since 1984)
Sarasota, FL 34242
- ------------------------------------------------------------------------------------------------------------------------------------
Robert J. O'Connell, Director, President MassMutual
and Chief Executive Officer President and Chief Executive Officer (since 1999)
1295 State Street American International Group, Inc.
Springfield, MA 01111 Senior Vice President (1991-1998)
AIG Life Companies
President and Chief Executive Officer (1991-1998)
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas B. Wheeler, Director and MassMutual
Chairman of the Board Chairman of the Board (since 1996)
1295 State Street President (1988-1996) and Chief Executive Officer (1988-1999)
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
Alfred M. Zeien, Director The Gillette Company
Prudential Tower Chairman and Chief Executive Officer (since 1991)
Boston, MA 02199
- ------------------------------------------------------------------------------------------------------------------------------------
Executive Vice Presidents:
- ------------------------------------------------------------------------------------------------------------------------------------
Lawrence V. Burkett, Jr. MassMutual
1295 State Street Executive Vice President and General Counsel (since 1993)
Springfield, MA 01111 Senior Vice President and Deputy General Counsel (1992-1993)
- ------------------------------------------------------------------------------------------------------------------------------------
Peter J. Daboul MassMutual
1295 State Street Executive Vice President and Chief Information Officer (since 1997)
Springfield, MA 01111 Senior Vice President (1990-1997)
- ------------------------------------------------------------------------------------------------------------------------------------
John B. Davies MassMutual
1295 State Street Executive Vice President (since 1994)
Springfield, MA 01111 Associate Executive Vice President (1994-1994)
General Agent (1982-1993)
- ------------------------------------------------------------------------------------------------------------------------------------
Daniel J. Fitzgerald MassMutual
1295 State Street Executive Vice President (since 1994)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Springfield, MA 01111 Corporate Financial Operations (1994-1997)
Senior Vice President (1991-1994)
- ------------------------------------------------------------------------------------------------------------------------------------
James E. Miller MassMutual
1295 State Street Executive Vice President (since 1997 and 1987-1996)
Springfield, MA 01111 UniCare Life & Health
Senior Vice President (1996-1997)
- ------------------------------------------------------------------------------------------------------------------------------------
John V. Murphy MassMutual
1295 State Street Executive Vice President (since 1997)
Springfield, MA 01111 David L. Babson & Co., Inc.
Executive Vice President and Chief Operating Officer (1995-1997)
Concert Capital Management, Inc.
Chief Operating Officer (1993-1995)
Liberty Financial Companies
Senior Vice President and Chief Financial Officer (1977-1993)
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph M. Zubretsky MassMutual
1295 State Street Executive Vice President and Chief Financial Officer (since 1997)
Springfield, MA 01111 HealthSource
Chief Financial Officer (1996-1996)
Coopers & Lybrand
Partner (1990-1996)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The assets of the Registrant, under state law, are assets of MassMutual.
The registrant may also be deemed to be under common control with other separate
accounts established by MassMutual and its life insurance subsidiaries, C.M.
Life Insurance Company and MML Bay State Life Insurance Company, which are
registered as unit investment trusts under the Investment Company Act of 1940.
The discussion that follows indicates those entities owned directly or
indirectly by Massachusetts Mutual Life Insurance Company:
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
CORPORATE ORGANIZATION
A. DIRECT SUBSIDIARIES OF MASSMUTUAL
MassMutual is the sole owner of each subsidiary unless otherwise indicated.
1. CM Assurance Company, a Connecticut corporation which operates as a life
and health insurance company. This subsidiary is inactive.
2. CM Benefit Insurance Company, a Connecticut corporation which operates as a
life and health insurance company. This subsidiary is inactive.
13
<PAGE>
3. C.M. Life Insurance Company, a Connecticut corporation which operates as a
life and health insurance company.
4. MML Bay State Life Insurance Company, a Connecticut corporation which
operates as a life and health insurance company.
5. MML Distributors, LLC, a Connecticut limited liability company which
operates as a securities broker-dealer. (MassMutual - 99%; G.R. Phelps &
Co., Inc. - 1%)
6. MassMutual of Ireland, Limited, a corporation organized in the Republic of
Ireland which formerly operated to provide claims service to holders of
MassMutual group life and accident and health insurance contracts. This
subsidiary is inactive and will be dissolved in the near future.
7. MassMutual Holding Company, a Delaware corporation which operates as a
holding company for certain MassMutual entities.
8. MassMutual Mortgage Finance, LLC, a Delaware limited liability company
which makes, acquires, holds and sells mortgage loans.
B. MASSMUTUAL HOLDING COMPANY GROUP
MassMutual Holding Company is the sole owner of each subsidiary or
affiliate unless otherwise indicated.
1. G.R. Phelps & Co, Inc., a Connecticut corporation which formerly operated
as a securities broker-dealer. This subsidiary is inactive and expected to
be dissolved.
2. MML Investors Services, Inc., a Massachusetts corporation which operates as
a securities broker-dealer. (MassMutual Holding Company - 86%; G.R. Phelps
& Co., Inc. - 14%)
3. MassMutual Holding MSC, Inc., a Massachusetts corporation which operates as
a holding company for MassMutual positions in investment entities organized
outside of the United States. This subsidiary qualifies as a "Massachusetts
Security Corporation" under Chapter 63 of the Massachusetts General Laws.
4. MassMutual Holding Trust I, a Massachusetts business trust which operates
as a holding company for separately-staffed MassMutual investment
subsidiaries.
5. MassMutual Holding Trust II, a Massachusetts business trust which operates
as a holding company for non-staffed MassMutual investment subsidiaries.
6. MassMutual International, Inc., a Delaware corporation which operates as a
holding company for those entities constituting MassMutual's international
insurance operations.
C. MML INVESTORS SERVICES, INC. GROUP
Set forth below are the direct and indirect subsidiaries of MML Investors
Services, Inc. The parent is the sole owner of each subsidiary unless
otherwise indicated.
Direct Subsidiaries of MML Investors Services, Inc.
1. MML Insurance Agency, Inc., a Massachusetts corporation which operates as
an insurance broker.
14
<PAGE>
2. MML Securities Corporation, a Massachusetts corporation which operates as a
"Massachusetts Security Corporation" under Section 63 of the Massachusetts
General Laws.
Direct Subsidiaries of MML Insurance Agency, Inc.
1. DISA Insurance Services of America, Inc., an Alabama corporation which
operates as an insurance broker.
2. Diversified Insurance Services of America, Inc., a Hawaii corporation which
operates as an insurance broker.
3. MML Insurance Agency of Mississippi, P.C., a Mississippi corporation which
operates as an insurance broker.
4. MML Insurance Agency of Nevada, Inc., a Nevada corporation which operates
as an insurance broker.
5. MML Insurance Agency of Ohio, Inc. an Ohio corporation which operates as an
insurance broker. (Controlled by MML Insurance Agency, Inc. through a
voting trust agreement.)
6. MML Insurance Agency of Texas, Inc., a Texas corporation which operates as
an insurance broker. (Controlled by MML Insurance Agency, Inc. through an
irrevocable proxy arrangement.)
D. MASSMUTUAL HOLDING MSC, INC. GROUP
MassMutual Holding MSC, Inc. is the sole owner of each subsidiary or
affiliate unless otherwise indicated.
1. MassMutual Corporate Value Limited, a Cayman Islands corporation which
holds a 90% ownership interest in MassMutual Corporate Value Partners
Limited, another Cayman Islands corporation operating as a high-yield bond
fund. (MassMutual Holding MSC, Inc. - 46%)
2. 9048-5434 Quebec, Inc., a Canadian corporation which operates as the owner
of Hotel du Parc in Montreal, Quebec, Canada.
3. 1279342 Ontario Limited, a Canadian corporation which operates as the owner
of Deerhurst Resort in Huntsville, Ontario, Canada.
E. MASSMUTUAL HOLDING TRUST I GROUP
Set forth below are the direct and indirect subsidiaries and affiliates of
MassMutual Holding Trust I. The parent is the sole owner of each subsidiary
unless otherwise indicated.
Direct Subsidiaries of MassMutual Holding Trust I
1. Antares Capital Corporation, a Delaware corporation which operates as a
finance company. (MassMutual Holding Trust I - 99%)
2. Charter Oak Capital Management, Inc., a Delaware corporation which operates
as a manager of institutional investment portfolios. (MassMutual Holding
Trust I - 80%)
3. Cornerstone Real Estate Advisers, Inc., a Massachusetts corporation which
operates as an investment adviser.
15
<PAGE>
4. DLB Acquisition Corporation, a Delaware corporation which operates as a
holding company for the David L. Babson companies (MassMutual Holding Trust
I - 85%).
5. Oppenheimer Acquisition Corp., a Delaware corporation which operates as a
holding company for the Oppenheimer companies (MassMutual Holding Trust I -
89%).
Direct Subsidiary of DLB Acquisition Corporation
David L. Babson and Company Incorporated, a Massachusetts corporation which
operates as an investment adviser.
Direct Affiliates of David L. Babson and Company Incorporated
1. Babson Securities Corporation, a Massachusetts corporation which operates
as a securities broker-dealer.
2. Babson-Stewart Ivory International, a Massachusetts general partnership
which operates as an investment adviser. (David L. Babson and Company
Incorporated - 50%).
3. Potomac Babson Incorporated, a Massachusetts corporation which operates as
an investment adviser (David L. Babson and Company Incorporated - 60%).
Direct Subsidiary of Oppenheimer Acquisition Corp.
OppenheimerFunds, Inc., a Colorado corporation which operates as the investment
adviser to the Oppenheimer Funds.
Direct Subsidiaries of OppenheimerFunds, Inc.
1. Centennial Asset Management Corporation, a Delaware corporation which
operates as investment adviser and general distributor of the Centennial
Funds.
2. HarbourView Asset Management Corporation, a New York corporation which
operates as an investment adviser.
3. OppenheimerFunds Distributor, Inc., a New York corporation which operates
as a securities broker-dealer.
4. Oppenheimer Partnership Holdings, Inc., a Delaware corporation which
operates as a holding company.
5. Oppenheimer Real Asset Management, Inc., a Delaware corporation which is
the sub-adviser to a mutual fund investing in the commodities markets.
6. Shareholder Financial Services, Inc., a Colorado corporation which operates
as a transfer agent for mutual funds.
7. Shareholder Services, Inc., a Colorado corporation which operates as a
transfer agent for various Oppenheimer and MassMutual funds.
Direct Subsidiary of Centennial Asset Management Corporation
Centennial Capital Corporation, a Delaware corporation which formerly sponsored
a unit investment trust.
Direct Affiliate of Cornerstone Real Estate Advisers, Inc.
16
<PAGE>
Cornerstone Office Management, LLC, a Delaware limited liability company which
serves as the general partner of Cornerstone Suburban Office, L.P. (Cornerstone
Real Estate Advisers, Inc. - 50%; MML Realty Management Corporation - 50%).
F. MASSMUTUAL HOLDING TRUST II GROUP
MassMutual Holding Trust II is the sole owner of each subsidiary.
1. CM Advantage, Inc., a Connecticut corporation which serves as a general
partner of real estate limited partnerships. The subsidiary is largely
inactive and will be dissolved in the near future.
2. CM International, a Delaware corporation which is the issuer of
collateralized mortgage obligation securities.
3. CM Property Management, Inc., a Connecticut corporation which serves as the
general partner of Westheimer 335 Suites Limited Partnership. The
partnership holds a ground lease with respect to hotel property in Houston,
Texas.
4. HYP Management, Inc., a Delaware corporation which operates as the "LLC
Manager" of MassMutual High Yield Partners II LLC, a high yield bond fund.
5. MassMutual Benefits Management, Inc., a Delaware corporation which supports
MassMutual with benefit plan administration and planning services.
6. MMHC Investment, Inc., a Delaware corporation which is a passive investor
in MassMutual/Darby CBO IM, Inc., MassMutual/Darby CBO LLC, MassMutual High
Yield Partners II LLC, and other MassMutual investments.
7. MML Realty Management Corporation, a Massachusetts corporation which
formerly operated as a manager of properties owned by MassMutual.
8. Urban Properties, Inc., a Delaware corporation which serves as a general
partner of real estate limited partnerships and as a real estate holding
company.
Direct Affiliate of MMHC Investment, Inc.
MassMutual/Darby CBO IM Inc., a Delaware corporation which operates as the "LLC
Manager" of MassMutual/Darby CBO LLC, a collateralized bond obligation fund.
(MMHC Investment, Inc. - 50%)
Direct Affiliate of MML Realty Management Corporation
Cornerstone Office Management, LLC, a Delaware limited liability company which
serves as the general partner of Cornerstone Suburban Office, L.P. (MML Realty
Management Corporation - 50%; Cornerstone Real Estate Advisers, Inc. - 50%).
G. MASSMUTUAL INTERNATIONAL, INC. GROUP
Set forth below are the direct or indirect subsidiaries and affiliates of
MassMutual International, Inc. The parent is the sole owner of each
subsidiary or affiliate unless otherwise indicated.
Direct Affiliates of MassMutual International, Inc.
17
<PAGE>
1. MassMutual Internacional (Argentina) S.A., a corporation organized in the
Argentine Republic which operates as a holding company. (MassMutual
International, Inc. - 99%; MassMutual Holding Company - 1%)
2. MassMutual Internacional (Chile) S.A., a corporation organized in the
Republic of Chile which operates as a holding company. (MassMutual
International, Inc. - 99%; MassMutual Holding Company - 1%)
3. MassMutual International (Bermuda) Ltd., a corporation organized in Bermuda
which operates as a life insurance company.
4. MassMutual International (Luxembourg) S.A., a corporation organized in the
Grand Duchy of Luxembourg which operates as a life insurance company.
(MassMutual International, Inc. - 99%; MassMutual Holding Company - 1%)
5. MassLife Seguros de Vida, S.A., a corporation organized in the Argentine
Republic which operates as a life insurance company. (MassMutual
International, Inc. - 99.9%)
Direct Subsidiaries of MassMutual Internacional (Argentina) S.A.
MassMutual Services S.A., a corporation organized in the Argentine Republic
which operates as a service company. (MassMutual Internacional (Argentina) S.A.
- - 99%; MassMutual International, Inc. - 1%)
Direct Affiliate of MassMutual Internacional (Chile) S.A.
1. Mass Seguros de Vida S.A., a corporation organized in the Republic of Chile
which operates as a life insurance company. (MassMutual Internacional
(Chile) S.A. - 33.5%)
2. Origen Inversiones S.A., a corporation organized in the Republic of Chile
which operates as a holding company. (MassMutual Internacional (Chile) S.A.
- 33.5%)
Direct Subsidiary of Origen Inversiones S.A.
Compania de Seguros Vida Corp S.A., corporation organized in the Republic of
Chile which operates as an insurance company. (Origen Inversiones S.A. - 99%)
H. REGISTERED INVESTMENT COMPANY AFFILIATES
Each of the following entities is a registered investment company sponsored by
MassMutual or one of its affiliates.
1. DLB Fund Group, a Massachusetts business trust which operates as an
open-end investment company advised by David L. Babson and Company
Incorporated. MassMutual owns at least 25% of each series of shares issued
by the fund.
2. MML Series Investment Fund, a Massachusetts business trust which operates
as an open-end investment company. All shares issued by the trust are owned
by MassMutual and certain of its affiliates.
3. MassMutual Corporate Investors, a Massachusetts business trust which
operates as a closed-end investment company. MassMutual serves as
investment adviser to the trust.
4. MassMutual Institutional Funds, a Massachusetts business trust which
operates as an open-end investment company. All shares issued by the trust
are owned by MassMutual.
18
<PAGE>
5. MassMutual Participation Investors, a Massachusetts business trust which
operates as a closed-end investment company. MassMutual serves as
investment adviser to the trust.
6. Oppenheimer Series Fund, Inc., a Maryland corporation which operates as an
open-end investment company. MassMutual and affiliates own a majority of
certain series of shares issued by the fund.
7. Panorama Series Fund, Inc., a Maryland corporation which operates as an
open-end investment company. All shares issued by the fund are owned by
MassMutual and certain affiliates. MassMutual is the investment adviser to
each of the following investment companies, and as such may be deemed to
control them.
1. MassMutual Corporate Investors, a registered closed-end Massachusetts
business trust.
2. MassMutual Participation Investors, a registered closed-end Massachusetts
business trust.
3. MML Series Investment Fund, a registered open-end Massachusetts business
trust, all of the shares are owned by separate accounts of MassMutual and
companies controlled by MassMutual.
4. MassMutual Institutional Funds, a registered open-end Massachusetts
business trust, all of the shares are owned by MassMutual.
5. MassMutual/Carlson CBO N.V., a Netherlands Antilles corporation that issued
Collateralized Bond Obligations on or about May 1, 1991, which is owned
equally by MassMutual interests (MassMutual and MassMutual Holding MSC,
Inc.) and Carlson Investment Management Co.
6. MassMutual Corporate Value Partners, Limited, an off-shore unregistered
investment company.
7. MassMutual High Yield Partners LLC, a high yield bond fund organized as
Delaware limited liability company.
8. MassMutual/Darby CBO, LLC, a Delaware limited liability company that
operates as a fund investing in high yield debt securities of U.S. and
emerging market issuers. MassMutual owns 1.79%, MMHL, Inc. owns 44.91% and
MassMutual High Yield Partners, LLC owns 2.39% of the ownership interest in
this Company.
ITEM 27. NUMBER OF CONTRACT OWNERS
As of March 4, 1999, there were 205 Separate Account 4 Contracts in force.
ITEM 28. INDEMNIFICATION
The Bylaws of the Company provide that:
MassMutual directors and officers are indemnified under its by-laws. No
indemnification is provided with respect to any liability to any entity which is
registered as an investment company under the Investment Company Act of 1940 or
to the security holders thereof, where the basis for such liability is willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office.
19
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
MassMutual pursuant to the foregoing provisions, or otherwise, MassMutual has
been advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by MassMutual
of expenses incurred or paid by a director, officer or controlling person of
MassMutual in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, MassMutual will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
Item 29. Principal Underwriters
(a) MML Distributors, LLC, a controlled subsidiary of MassMutual,
acts as principal underwriter for registered separate accounts
of MassMutual, C.M. Life and MML Bay State.
(b)(1) MML Distributors, LLC, is the principal underwriter for the
contracts. The following people are officers and member
representatives of the principal underwritier.
OFFICERS AND MEMBER REPRESENTATIVES
MML DISTRIBUTORS, LLC
<TABLE>
<S> <C> <C>
Kenneth M. Rickson Member Representative One Monarch Place
G.R. Phelps & Co., Inc. 1414 Main Street
Springfield, MA 01144-1013
Margaret Sperry Member Representative 1295 State Street
Massachusetts Mutual Springfield, MA 01111-0001
Life Insurance Co.
Kenneth M. Rickson Chief Executive Officer, One Monarch Place
President, and Main OSJ 1414 Main Street
Supervisor Springfield, MA 01144-1013
John E. Forrest Vice President One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Michael L. Kerley Vice President One Monarch Place
Assistant Secretary 1414 Main Street
Springfield, MA 01144-1013
Ronald E. Thomson Vice President One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
James T. Bagley Treasurer 1295 State Street
Springfield, MA 01111
Bruce C. Frisbie Assistant Treasurer 1295 State Street
Springfield, MA 01111-0001
Raymond W. Anderson Assistant Treasurer 140 Garden Street
</TABLE>
20
<PAGE>
<TABLE>
<S> <C> <C>
Hartford, CT 06154
Ann F. Lomeli Secretary 1295 State Street
Springfield, MA 01111-0001
Marilyn A. Sponzo Chief Legal Officer One Monarch Place
Assistant Secretary 1414 Main Street
Springfield, MA 01144-1013
Robert Rosenthal Compliance Officer One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Melissa Thompson Registration Manager One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Ruth B. Howe Director of Continuing One Monarch Place
Education 1414 Main Street
Springfield, MA 01144-1013
Peter D. Cuozzo Variable Life Supervisor and 140 Garden Street
Hartford OSJ Supervisor Hartford, CT 06154
Anne Melissa Dowling Large Corporate Markets 140 Garden Street
Supervisor Hartford, CT 06154
</TABLE>
(b)(2) MML Investors Services, Inc. is the co-underwriter of the
contracts. The following people are the officers and directors
of the co-underwriter.
MML INVESTORS SERVICES, INC.
OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
OFFICER BUSINESS ADDRESS
<S> <C>
Kenneth M. Rickson One Monarch Place
President 1414 Main Street
Springfield, MA 01144-1013
Michael L. Kerley One Monarch Place
Vice President, Chief Legal Officer, 1414 Main Street
Chief Compliance Officer, Assistant Springfield, MA 01144-1013
Secretary
Ronald E. Thomson One Monarch Place
Vice President, Treasurer 1414 Main Street
Springfield, MA 01144-1013
Ann F. Lomeli 1295 State Street
Secretary/Clerk Springfield, MA 01111
John E. Forrest One Monarch Place
Vice President 1414 Main Street
National Sales Director Springfield, MA 01144-1013
Marilyn A. Sponzo One Monarch Place
Assistant Secretary 1414 Main Street
Springfield, MA 01144-1013
James Furlong One Monarch Place
</TABLE>
21
<PAGE>
<TABLE>
<S> <C>
Chief Operations Officer 1414 Main Street
Springfield, MA 01144-1013
James T. Bagley One Monarch Place
Controller 1414 Main Street
Springfield, MA 01144-1013
David Deonarine One Monarch Place
Sr. Registered Options Principal 1414 Main Street
Compliance Registered Options Principal Springfield, MA 01144-1013
Nicholas J. Orphan 245 Peach Tree Center Ave., Suite 2330
Regional Supervisor (South) Atlanta, GA 30303
Robert W. Kumming 1295 State Street
Retirement Services Regional Springfield, MA 01111
Supervisor (East/Central)
Peter J. Zummo 1295 State Street
Retirement Services Regional Springfield, MA 01111
Supervisor(South/West)
Bruce Lukowiak 6263 North Scottsdale Rd., Suite 222
Regional Supervisor (West) Scottsdale, AZ 85250
Gary L. Greenfield 1 Lincoln Center, Suite 1490
Regional Supervisor (Central) Oakbrook Terrace, IL 60181
Burvin E. Pugh, Jr. 1295 State Street
Chief Agency Field Force Supervisor Springfield, MA 01111
John P. McCloskey 1295 State Street
Regional Supervisor (East) Springfield, MA 01144
Robert J. O'Connell 1295 State Street
Chairman of the Board of Directors Springfield, MA 01144
Susan Alfano 1295 State Street
Director Springfield, MA 01111
Lawrence V. Burkett, Jr. 1295 State Street
Director Springfield, MA 01111
John B. Davies 1295 State Street
Director Springfield, MA 01111
Anne Melissa Dowling 140 Garden Street
Director Hartford, CT 01654
Gary T. Huffman 1295 State Street
Director Springfield, MA 01111
Douglas J. Jangraw 140 Garden Street
Director Hartford, CT 01654
Burvin E. Pugh, Jr. 1295 State Street
Director Springfield, MA 01111
</TABLE>
(c) See the section captioned "Distribution" in the Statement of Additional
Information.
22
<PAGE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books, or other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the rules promulgated thereunder
are maintained by the Registrant at 140 Garden Street, Hartford, CT.
ITEM 31. MANAGEMENT SERVICES
Not Applicable.
ITEM 32. UNDERTAKINGS
a. Registrant hereby undertakes to file a post-effective amendment to this
registration statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are never more
than sixteen (16) months old for so long as payment under the variable
annuity contracts may be accepted.
b. Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the Prospectus, a space that
an applicant can check to request a Statement of Additional Information, or
(2) a postcard or similar written communication affixed to or included in
the Prospectus that the applicant can remove to send for a Statement of
Additional Information.
c. Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statement required to be made available under
this Form promptly upon written or oral request.
d. Massachusetts Mutual Life Insurance Company hereby represents that the
fees and charges deducted under the individual certificates under the group
deferred variable annuity contract with flexible purchase payments
described in this Registration Statement in the aggregate, are reasonable
in relation to the services rendered, the expenses expected to be incurred,
and the risks assumed by Massachusetts Mutual Life Insurance Company.
23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
caused this Post-Effective Amendment No. 1 to Registration Statement No.
333-45039 to be signed on its behalf by the undersigned thereunto duly
authorized, all in the city of Springfield and the Commonwealth of
Massachusetts, on the 22nd day of April, 1999.
MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 4
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY (Depositor)
By: /s/ Robert J. O'Connell*
-------------------------
Robert J. O'Connell, President and Chief Executive Officer
Massachusetts Mutual Life Insurance Company
/s/ Richard M. Howe On April 22, 1999, as Attorney-in-Fact pursuant to
- ------------------- powers of attorney.
*Richard M. Howe
As required by the Securities Act of 1933, this Post-Effective Amendment
No. 1 to Registration Statement No. 333-45039 has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Robert J. O'Connell* President and Chief Executive Officer April 22, 1999
- ---------------------------
Robert J. O'Connell
/s/ Joseph M. Zubretsky* Executive Vice President, April 22, 1999
- --------------------------- Chief Financial
Joseph M. Zubretsky Officer & Chief Accounting Officer
/s/ Roger G. Ackerman* Director April 22, 1999
- ---------------------------
Roger G. Ackerman
/s/ James R. Birle* Director April 22, 1999
- ---------------------------
James R. Birle
/s/ Gene Chao* Director April 22, 1999
- ---------------------------
Gene Chao, Ph.D.
/s/ Patricia Diaz Dennis* Director April 22, 1999
- ---------------------------
Patricia Diaz Dennis
/s/ Anthony Downs* Director April 22, 1999
- ---------------------------
Anthony Downs
/s/ James L. Dunlap* Director April 22, 1999
- ---------------------------
James L. Dunlap
/s/ William B. Ellis* Director April 22, 1999
- ---------------------------
William B. Ellis, Ph.D.
/s/ Robert M. Furek* Director April 22, 1999
- ---------------------------
Robert M. Furek
</TABLE>
24
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Charles K. Gifford* Director April 22, 1999
- ---------------------------
Charles K. Gifford
/s/ William N. Griggs* Director April 22, 1999
- ---------------------------
William N. Griggs
/s/ George B. Harvey* Director April 22, 1999
- ---------------------------
George B. Harvey
/s/ Barbara B. Hauptfuhrer* Director April 22, 1999
- ---------------------------
Barbara B. Hauptfuhrer
/s/ Sheldon B. Lubar* Director April 22, 1999
- ---------------------------
Sheldon B. Lubar
/s/ William B. Marx, Jr.* Director April 22, 1999
- ---------------------------
William B. Marx, Jr.
/s/ John F. Maypole* Director April 22, 1999
- ---------------------------
John F. Maypole
/s/ Thomas B. Wheeler* Director April 22, 1999
- ---------------------------
Thomas B. Wheeler
/s/ Alfred M. Zeien* Director April 22, 1999
- ---------------------------
Alfred M. Zeien
/s/ Richard M. Howe On April 22, 1999, as Attorney-in-Fact pursuant to
- --------------------------- powers of attorney.
*Richard M. Howe
</TABLE>
25
<PAGE>
REPRESENTATION BY REGISTRANT'S COUNSEL
As counsel to the Registrant, I, James M. Rodolakis, have reviewed this
Post-Effective Amendment No. 1 to Registration Statement No. 333-45039, and
represent, pursuant to the requirement of paragraph (e) of Rule 485 under the
Securities Act of 1933, that this Amendment does not contain disclosures which
would render it ineligible to become effective pursuant to paragraph (b) of said
Rule 485.
/s/James M. Rodolakis
- ---------------------------
James M. Rodolakis
Counsel
Massachusetts Mutual Life Insurance Company
26
<PAGE>
INDEX TO EXHIBITS
Exhibit 9 Opinion and Consent of Counsel
Exhibit 10(i) Consent of Independent Accountants, PricewaterhouseCoopers LLP
Exhibit 13 Schedule of Computation of Performance
27
<PAGE>
EXHIBIT 9 Opinion of and Consent of Counsel
April, 1999
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Re: Post-Effective Amendment No. 1 to Registration Statement
No. 333-45039 filed on Form N-4
Ladies and Gentlemen:
This opinion is furnished in connection with the filing of Post-Effective
Amendment No. 1 to Registration Statement No. 333-45039 on Form N-4 under the
Securities Act of 1933 for Massachusetts Mutual Life Insurance Company's
("MassMutual") individual certificates issued under a group deferred variable
annuity contract (the "Certificate"). Massachusetts Mutual Variable Annuity
Separate Account 4 issues the Certificate.
As an attorney for MassMutual, I provide legal advice to MassMutual in
connection with the operation of its variable products. In such role I am
familiar with the Pre-Effective Amendment for the Certificate. In so acting, I
have made such examination of the law and examined such records and documents as
in my judgment are necessary or appropriate to enable me to render the opinion
expressed below. I am of the following opinion:
1. MassMutual is a valid and subsisting corporation, organized and operated
under the laws of the Commonwealth of Massachusetts and is subject to regulation
by the Massachusetts Commissioner of Insurance.
2. Massachusetts Mutual Variable Annuity Separate Account 4 is a separate
account validly established and maintained by MassMutual in accordance with
Massachusetts law.
3. All of the prescribed corporate procedures for the issuance of the
Certificate have been followed, and all applicable state laws have been complied
with.
I hereby consent to the use of this opinion as an exhibit to this Pre-Effective
Amendment.
Very truly yours,
/s/ James M. Rodolakis
- ---------------------------
James M. Rodolakis
Counsel
28
<PAGE>
EXHIBIT 10(i) CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Massachusetts Mutual Life Insurance Company
We consent to the inclusion in this Post-Effective Amendment No. 1 to the
Registration Statement of Massachusetts Mutual Variable Annuity Separate Account
4 - Panorama Premier on Form N-4 (Registration No. 333-45039), of our report
dated February 25, 1999 on our audit of Massachusetts Mutual Variable Annuity
Separate Account 4 - Panorama Premier and of our report dated February 25, 1999,
on our audits of the statutory financial statements of Massachusetts Mutual Life
Insurance Company, which includes explanatory paragraphs relating to the use of
statutory accounting practices, which differ from generally accepted accounting
principles. We also consent to the reference to our Firm under the caption
"Experts" in the Statement of Additional Information.
PricewaterhouseCoopers LLP
Springfield, Massachusetts
April 27, 1999
29
<PAGE>
Exhibit 13 Schedule of Computation of Performance
SCHEDULE OF COMPUTATION OF PERFORMANCE
The following examples are calculated in accordance with the methods described
in the Prospectus and Statement of Additional Information:
1. Standardized Since Inception Return
Assuming experience from the Growth Sub-Account, on a $ 1,000 Purchase
Payment on 9/1/1998, and fully redeemed on 12/31/1997
A $30 Annual Contract Maintenance Charge was assessed on 12/31/1998. For
this calculation, it is prorated among Sub-Accounts, with 20.6% allocated
to the Growth Sub-Account
The Deferred Sales Charge for a Contract on 12/31/1998 would have been 7%.
The free withdrawal provision was also applicable.
<TABLE>
<CAPTION>
Dates Accumulation Unit Values
<S> <C>
9/1/1998 13.142701
12/31/1998 15.669692
</TABLE>
The Standardized Since Inception Return for the period 9/1/98 - 12/31/98: 11.61%
Accumulated Value on 12/31/1998
((1000 /13.142701) x 15.669692) -.206*30 $1,186.09
Surrender-Free Amount on 12/31/1998
Greater of (1186.09 - 1000) and (.10 x 1000) $186.09
Ending Redeemable Value on 12/31/1998
1186.09 - .07 x (1186.09 - 186.09) $1,116.09
Standardized Since Inception Return, 9/1/199 - 12/31/1998
((1116.09 /1000) - 1 ) x 100 11.61%
Note: Returns are not annualized for periods less than 1 year.
2. Annualized Accumulation Unit Value(AUV) Return
For a one year period, the annualized AUV return is equal to the percentage
change in accumulation unit values.
For periods greater than one year, the annualized AUV return is an average
annual change in accumulation unit values, based on the percentage change.
Assuming experience from the Oppenheimer Bond Sub-Account
Unit Value 12/31/1995 10.00114700
Unit Value 12/31/1998 11.72530500
Percentage Change in Unit Values for the 3 year period
ending 12/31/98 17.24%
(11.725305 - 10.001147) /10.001147 x 100
Annualized AUV Return for the 3 year period ending 12/31/98 5.44%
((1.1724 /to the power of/ (1/3)) - 1) x 100
The symbol /to the power of/ is being used to denote exponentiation.
30
<PAGE>
3. Non-Standardized Average Annual Total Return
Assuming a single payment of $10,000 made 10 years ago (or Since Inception
date, if less than 10). The growth of $10,000 reflects annual
administrative charge of $30 but does not reflect contingent deferred sales
charges or premium taxes
Assuming experience from the Oppenheimer Bond Sub-Account
Single Purchase Payment 12/31/88 $10,000
Accumulated Value 12/31/98 $20,570
Average Annual Total Return 7.48%
((20,570/ 10,000) /to the power of/ (1/10) - 1) x 100
The symbol /to the power of/ is being used to denote exponentiation.
4. Non-Standardized Annual (or Calendar Year) Total Return
The growth of $10,000 reflects annual administrative charge of $30 but does
not reflect contingent deferred sales charges or premium taxes.
Assuming experience from the Oppenheimer Bond Sub-Account
Single Purchase Payment 12/31/88 $10,000
Accumulated Value 12/31/97 $19,560
Accumulated Value 12/31/98 $20,570
One Year Total Return for Calendar Year 1998 5.16%
((20570 - 19560) /19560) x 100%
5. 7-day Money Market Yield and Effective Yield
Assuming experience from the Money Market Sub-Account
For the period ending 12/31/98
Unit Value 12/24/98 11.14722000
Unit Value 12/28/98 11.14698900
Unit Value 12/31/98 11.15010500
To get the change in value from 12/24/98 to 12/31/98,
take 100% of the change from 12/24/98 to 12/28/98:
((11.14698900 /11.14722000) -1) -0.000021
Change in value from 12/28/98 to 12/31/98:
(11.150105 /11.146989) -1 0.00028
Combine to get change in value from 12/24/98 to 12/31/98:
(-.000021 + .00028) 0.000259
Before Annual Contract Maintenance Charge deduction:
Yield: .000259 x (365/7) x 100 = 1.35%
Effective Yield: ((1.000259) /to the power of/ (365/7) -1 ) x 100 = 1.36%
The symbol /to the power of/ is being used to denote exponentiation.
Annual Contract Maintenance Charge deduction is: 0.086%
After Annual Contract Maintenance Charge deduction:
Yield: 1.26%
Effective Yield: 1.27%
31
