<PAGE> 1
SUPPLEMENT DATED DECEMBER 30, 1999
TO PROSPECTUS
DATED NOVEMBER 10, 1999
for
VARIABLE ADJUSTABLE LIFE INSURANCE POLICY
issued by
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
and
WRL SERIES LIFE CORPORATE ACCOUNT
Effective December 31, 1999, the subaccounts investing in PIMCO Variable
Insurance Trust Mid-Cap Growth Portfolio and PIMCO Variable Insurance Trust
Small-Cap Value Portfolio will not be available. Please disregard any mention of
these Portfolios throughout the Prospectus.
At page 9 under the paragraph titled, "Percent of Premium Load," the first two
sentences are replaced as follows:
During the first Policy Year, Western Reserve deducts 9.5% of each premium
received up to the Target Premium and 3.0% of each premium received in excess of
the Target Premium. During Policy Years 2-7, Western Reserve deducts 9.5% of
each premium received up to the Target Premium and 7.5% of each premium received
in excess of the Target Premium. The maximum percent of premium load deduction
is 11.5% of each premium received up to the Target Premium in the first 7 Policy
Years.
At page 9 under the paragraph titled, "Deferred sales charge," the following
sentence is added at the end:
Currently, the deferred sales charge is equal to 0% in all Policy Years.
At page 9 under the paragraph titled, "Mortality and Expense Risk Charge," the
existing paragraph is replaced as follows:
On each Monthly Deduction Day, Western Reserve currently deducts a mortality and
expense risk charge equal to an annual rate of 0.35% of the Cash Value in all
Policy Years. The maximum annual rate of this charge in any Policy Year is 0.90%
of the Cash Value in the Subaccounts.
At pages 15-16, the Hypothetical Illustrations are replaced with the
illustrations attached to this supplement.
At page 23 under "Payment of Premiums," the name of the bank in the wiring
instructions is changed from First National Bank of Maryland to Allfirst.
At page 34 under "Percent of Premium Load," the first two sentences are replaced
as follows:
During the first Policy Year, Western Reserve deducts 9.5% of each premium
received up to the Target Premium and 3.0% of each premium received in excess of
the Target Premium. During Policy Years 2-7, Western Reserve deducts 9.5% of
each premium received up to the Target Premium and 7.5% of each premium received
in excess of the Target Premium. The maximum percent of premium load deduction
is 11.5% of each premium received up to the Target Premium in the first 7 Policy
Years.
At page 35 under the paragraph titled, "Deferred Sales Charge," the following
sentence is added at the end:
Currently, the deferred sales charge is equal to 0% in all Policy Years.
Page 1 of 10
<PAGE> 2
At page 36 under "Mortality and Expense Risk Charge," the first paragraph is
replaced as follows:
Western Reserve deducts a monthly charge from the Cash Value to compensate it
for mortality and expense risks that it assumes under the Policy. In all Policy
Years the monthly charge is equivalent to an effective annual rate of 0.35%. The
charge is calculated as a percentage of the average Cash Value on each Valuation
Day during the Policy Month preceding the Monthly Deduction Day. The guaranteed
rate for this charge is equivalent to an effective annual rate of 0.90%.
At pages 46-50, the statutory basis financial information (including the balance
sheet, statement of operations, statement of changes in capital and surplus, and
statement of cash flow), and notes to financial statements for the six months
ended June 30, 1999 are replaced with the financial information and notes to
financial statements for the nine months ended September 30, 1999 attached to
this supplement.
Page 2 of 10
<PAGE> 3
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
Male Issue Age 35
Face Amount: $250,000 Guaranteed Issue Class
Annual Premium: $10,320 Life Insurance Option III
Using Current Cost of Insurance Rates, M&E risk charges, and monthly policy
charges
<TABLE>
<CAPTION>
LIFE INSURANCE BENEFIT
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS AND NET
POLICY ACCUMULATED ANNUAL INVESTMENT RETURN OF
YEAR AT 5% 0% (Gross) 6% (Gross) 12% (Gross)
-.907% (Net) 5.093% (Net) 11.093% (Net)
<S> <C> <C> <C> <C>
1 10,836 260,320 260,320 260,320
2 22,214 270,640 270,640 270,640
3 34,160 280,960 280,960 280,960
4 46,705 291,280 291,280 291,280
5 59,876 301,600 301,600 301,600
6 73,706 311,920 311,920 311,920
7 88,227 322,240 322,240 322,240
8 103,474 332,560 332,560 368,519
9 119,484 342,880 342,880 426,411
10 136,294 353,200 353,200 488,258
15 233,825 404,800 509,293 849,552
20 358,303 456,400 665,429 1,342,572
30 719,931 559,600 971,853 2,979,656
40 1,308,986 662,800 1,318,330 6,388,927
50 2,268,495 766,000 1,761,751 13,877,218
60 3,831,433 lapse 2,374,774 31,003,348
</TABLE>
<TABLE>
<CAPTION>
CASH VALUE NET CASH VALUE
END OF ASSUMING HYPOTHETICAL GROSS AND NET ASSUMING HYPOTHETICAL GROSS AND NET
POLICY ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
YEAR 0% (Gross) 6% (Gross) 12% (Gross) 0% (Gross) 6% (Gross) 12% (Gross)
-.907% (Net) 5.093% (Net) 11.093% (Net) -.907% (Net) 5.093% (Net) 11.093% (Net)
<S> <C> <C> <C> <C> <C> <C>
1 8,947 9,412 9,959 9,566 10,031 10,579
2 17,996 19,407 21,128 18,615 20,026 21,747
3 26,965 29,827 33,445 27,584 30,447 34,064
4 35,874 40,713 47,055 35,874 40,713 47,055
5 44,730 52,094 62,106 44,730 52,094 62,106
6 53,536 63,998 78,759 53,536 63,998 78,759
7 62,286 76,445 97,182 62,286 76,445 97,182
8 71,492 89,999 118,115 71,492 89,999 118,115
9 80,621 104,157 141,196 80,621 104,157 141,196
10 89,672 118,952 166,641 89,672 118,952 166,641
15 133,639 202,906 338,467 133,639 202,906 338,467
20 174,759 305,243 615,859 174,759 305,243 615,859
30 243,569 578,484 1,773,605 243,569 578,484 1,773,605
40 266,673 962,285 4,663,450 266,673 962,285 4,663,450
50 122,573 1,480,463 11,661,527 122,573 1,480,463 11,661,527
60 lapse 2,178,692 28,443,439 lapse 2,178,692 28,443,439
</TABLE>
The hypothetical rates of return shown above are illustrative only and should
not be deemed a representation of past or future investment rates of return.
Actual rates of return may be more or less than those shown and will depend on
a number of factors, including the investment allocations made by an Owner and
the actual investment experience of the Portfolios. The Cash Value, Net Cash
Value and Life Insurance Benefit for a Policy would be different from those
shown if the actual rates of return averaged 0.00%, 6.00%, and 12.00% over a
period of years, but also fluctuated above or below those averages for
individual Policy Years. No representations can be made that these hypothetical
rates of return can be achieved for any one year or sustained over any period
of time.
Page 3 of 10
<PAGE> 4
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
Male Issue Age 35
Face Amount: $250,000 Guaranteed Issue Class
Annual Premium: $10,320 Life Insurance Option III
Using Guaranteed Cost of Insurance Rates, M&E risk charges, and monthly policy
charges
<TABLE>
<CAPTION>
LIFE INSURANCE BENEFIT
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS AND NET
POLICY ACCUMULATED ANNUAL INVESTMENT RETURN OF
YEAR AT 5% 0% (Gross) 6% (Gross) 12% (Gross)
-.907% (Net) 5.093% (Net) 11.093% (Net)
<S> <C> <C> <C> <C>
1 10,836 260,320 260,320 260,320
2 22,214 270,640 270,640 270,640
3 34,160 280,960 280,960 280,960
4 46,705 291,280 291,280 291,280
5 59,876 301,600 301,600 301,600
6 73,706 311,920 311,920 311,920
7 88,227 322,240 322,240 322,240
8 103,474 332,560 332,560 332,560
9 119,484 342,880 342,880 378,312
10 136,294 353,200 353,200 431,878
15 233,825 404,800 442,277 731,443
20 358,303 456,400 561,995 1,111,471
30 719,931 559,600 753,565 2,208,259
40 1,308,986 662,800 908,694 4,084,178
50 2,268,495 lapse 1,044,010 7,366,041
60 3,831,433 lapse 1,195,673 13,456,658
</TABLE>
<TABLE>
<CAPTION>
CASH VALUE NET CASH VALUE
END OF ASSUMING HYPOTHETICAL GROSS AND NET ASSUMING HYPOTHETICAL GROSS AND NET
POLICY ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
YEAR 0% (Gross) 6% (Gross) 12% (Gross) 0% (Gross) 6% (Gross) 12% (Gross)
-.907% (Net) 5.093% (Net) 11.093% (Net) -.907% (Net) 5.093% (Net) 11.093% (Net)
<S> <C> <C> <C> <C> <C> <C>
1 8,312 8,754 9,274 8,931 9,373 9,893
2 16,430 17,747 19,354 17,049 18,366 19,974
3 24,426 27,067 30,408 25,046 27,687 31,028
4 32,296 36,723 42,532 32,296 36,723 42,532
5 40,030 46,720 55,828 40,030 46,720 55,828
6 47,622 57,067 70,414 47,622 57,067 70,414
7 55,065 67,774 86,421 55,065 67,774 86,421
8 63,225 79,769 104,965 63,225 79,769 104,965
9 71,218 92,187 125,269 71,218 92,187 125,269
10 79,037 105,044 147,399 79,037 105,044 147,399
15 115,241 176,206 291,412 115,241 176,206 291,412
20 145,141 257,796 509,849 145,141 257,796 509,849
30 168,798 448,551 1,314,440 168,798 448,551 1,314,440
40 49,533 663,281 2,981,152 49,533 663,281 2,981,152
50 lapse 877,319 6,189,951 lapse 877,319 6,189,951
60 lapse 1,096,948 12,345,558 lapse 1,096,948 12,345,558
</TABLE>
The hypothetical rates of return shown above are illustrative only and should
not be deemed a representation of past or future investment rates of return.
Actual rates of return may be more or less than those shown and will depend on
a number of factors, including the investment allocations made by an Owner and
the actual investment experience of the Portfolios. The Cash Value, Net Cash
Value and Life Insurance Benefit for a Policy would be different from those
shown if the actual rates of return averaged 0.00%, 6.00%, and 12.00% over a
period of years, but also fluctuated above or below those averages for
individual Policy Years. No representations can be made that these hypothetical
rates of return can be achieved for any one year or sustained over any period
of time.
Page 4 of 10
<PAGE> 5
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
BALANCE SHEET - STATUTORY BASIS
AS OF SEPTEMBER 30, 1999
(IN THOUSANDS)(UNAUDITED)
<TABLE>
<CAPTION>
ADMITTED ASSETS
<S> <C>
Cash and invested assets:
Cash and short-term investments $ 13,761
Bonds 148,987
Common stock, at market 1,942
Mortgage loans on real estate 9,757
Home office properties, at cost less accumulated
depreciation 34,869
Investment real estate 11,145
Policy loans 158,604
Due from broker 139
--------------
Total cash and invested assets 379,204
Premiums deferred and uncollected 896
Accrued investment income 2,388
Transfers from separate accounts 411,496
Receivable from affiliate 10,881
Cash surrender value of life insurance policies 47,063
Federal income tax benefit 5,745
Other assets 20,629
Separate account assets 8,534,982
--------------
Total admitted assets 9,413,284
==============
</TABLE>
Page 5 of 10
<PAGE> 6
<TABLE>
<CAPTION>
LIABILITIES AND CAPITAL AND SURPLUS
Liabilities:
<S> <C>
Aggregate reserves for policies and contracts:
Life 276,045
Annuity 262,702
Policy and contract claim reserves 10,738
Other policyholders' funds 31,015
Remittances and items not allocated 13,863
Asset valuation reserve 3,639
Interest maintenance reserve 8,557
Short-term note payable to affiliate 57,100
Payable to affiliate 4,457
Other liabilities 56,719
Separate account liabilities 8,530,170
--------------
Total liabilities 9,255,005
Capital and surplus:
Common stock, $1.00 par value, 1,500 shares
authorized, issued and outstanding 1,500
Paid-in surplus 120,107
Unassigned surplus 36,672
--------------
Total capital and surplus 158,279
--------------
Total liabilities and capital and surplus 9,413,284
==============
</TABLE>
Page 6 of 10
<PAGE> 7
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
STATEMENT OF OPERATIONS - STATUTORY BASIS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(IN THOUSANDS)(UNAUDITED)
<TABLE>
<CAPTION>
Revenues:
<S> <C>
Premiums and other considerations, net of reinsurance
Life $413,159
Annuity 750,935
Net investment income 29,984
Amortization of interest maintenance reserve 1,312
Commissions and expense allowances on
reinsurance ceded 22,854
Other income 137,368
------------
1,355,612
Benefits and expenses:
Benefits paid or provided for:
Life 27,903
Surrender benefits 495,122
Other benefits 24,684
Increase (decrease) in aggregate reserves for
policies and contracts:
Life 44,449
Annuity (2,716)
Other (1,921)
------------
587,521
Insurance expenses:
Commissions 184,457
General insurance expenses 82,091
Taxes, licenses and fees 13,809
Transfer to separate accounts 467,412
Other expenses (74)
------------
747,695
------------
1,335,216
------------
Gain from operations before federal income
tax expense and net realized capital losses on
investments 20,396
Federal income tax expense 3,019
------------
Gain from operations before net realized
capital losses on investments 17,377
Net realized capital losses on investments
(net of related federal income taxes and
amounts transferred to interest maintenance
reserve) (4)
------------
Net Income 17,373
============
</TABLE>
Page 7 of 10
<PAGE> 8
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
STATEMENT OF CHANGES IN CAPITAL AND SURPLUS - STATUTORY BASIS
(IN THOUSANDS)(UNAUDITED)
<TABLE>
<CAPTION>
TOTAL
COMMON PAID-IN UNASSIGNED CAPITAL AND
STOCK SURPLUS SURPLUS SURPLUS
------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at January 1, 1999 $ 1,500 $ 120,107 $ 21,973 $ 143,580
Net gain 0 0 17,373 17,373
Net unrealized gains 0 0 854 854
Change in non-admitted assets 0 0 1,301 1,301
Change in asset valuation reserve 0 0 (791) (791)
Change in surplus in separate
accounts 0 0 (2,990) (2,990)
Other adjustments 0 0 (1,048) (1,048)
------------------------------------------------------
Balance at September 30, 1999 1,500 120,107 36,672 158,279
======================================================
</TABLE>
Page 8 of 10
<PAGE> 9
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
STATEMENT OF CASH FLOW - STATUTORY BASIS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(IN THOUSANDS)(UNAUDITED)
<TABLE>
<CAPTION>
OPERATING ACTIVITIES
<S> <C>
Premiums and other considerations, net of reinsurance $1,324,369
Net investment income 30,255
Life and accident and health claims (26,276)
Surrender benefits to policyholders (495,122)
Other benefits to policyholders (25,199)
Commissions, other expenses and other taxes (282,761)
Federal income taxes, excluding tax on capital gains (14,049)
Other, net (60,422)
Net transfers to separate accounts (513,760)
--------------
Net cash used in operating activities (62,965)
INVESTING ACTIVITIES
Proceeds from investments sold, matured or repaid:
Bonds and preferred stocks 66,416
Mortgage loans on real estate 158
--------------
66,574
Cost of investments acquired:
Bonds and preferred stocks 30,439
Real estate 286
Policy loans 45,623
Other 208
--------------
76,556
--------------
Net cash used in investing activities (9,982)
--------------
FINANCING ACTIVITIES
Borrowed money 12,900
--------------
Net cash provided by financing activities 12,900
Decrease in cash and short-term investments (60,047)
Cash and short-term investments at beginning of year 73,808
--------------
Cash and short-term investments at end of year 13,761
==============
</TABLE>
Page 9 of 10
<PAGE> 10
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
NOTES TO FINANCIAL STATEMENTS - STATUTORY BASIS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(IN THOUSANDS)(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited statutory basis financial statements have been
prepared in accordance with statutory accounting principles for interim
financial information and the instructions to Article 10 of Regulation S-X.
Accordingly, they do not include all the information and notes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the nine month period ended September 30, 1999 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1999. For further information, refer to the accompanying statutory
basis financial statements and notes thereto for the year ended December 31,
1998.
Page 10 of 10
